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C11517—
 HANDBOOK
OF THE

LAW OF TRUSTS
BY

GEORGE GLEASON^OGERT
PROFESSOB OF LAW IN THE COBNELL
UNIVEBSITT COIXEGE OF LAW

ST. PAUL, MINN.

Vv^EST PUBLISHING CO.

1921
 l(2i^ )¥Q c./

GOPYETOHT, 1921
X BY
WEST PUBLISHING COMPANX
(BOGEBT/rKUSTS)
 To

'ED,WIN H. WOODRUPF
this book
is gratefully dedicated
 PREFACE

The object of this book is to give to practitioners and students a cona-

pact summary of the fundamental principles of the American law

relating to trusteeships.It is hoped that lawyers will be able by the
use of the book to obtain ready information on the large, outstanding
problems in the field, and to gain starting points for research into the
more recondite and complicated questions. The law student will, it
is believed, find in the book: sufficient material ,to furnish him that

giroundwork which is the maximum possible of attainment in his

preliminary studies.
Space limitations have prevented detailed treatment of the English
law and extended discussion of matters of principle. These must be
reserved for a text-book which purports to be all-inclusive.
In the arrangement of topics the author has varied somewhat from
the standard analysis. This change has been made partly with the
purpose of facilitating the work of the reader in finding the law and
partly because it has appealed to the author as logical. An effort has
been made to classify the material under headings which represent
the principal practical problems arising in the administration of trusts,
as well as to develop the trust relation in sequence from beginning to
end. The chapters on the trust purpose are illustrative of these de-
partures from the customary outline. What may be the trust purpose
is a frequently occurring question in practical affairs, and the trust
purpose is one element of the trust relationship which logically de-
serves treatment.
Some statutory matters have been dealt with in considerable detail,
as, for example, the Statute of Frauds. Effort has, been made to set
forth as far as possible the peculiarities existing in the states which
have statutpry trust systems, as, for instance. New York, Michigan,
and California. The important distinction between the states which
have modified and partially codified the law of trusts, and those ju-
risdictions which retain the English system almost wholly untouched
by legislation, is not always appreciated. Certain rules of property
(vii)
Vni PREFACE

which sometimes intimately affect trusts have been discussed, although

perhaps not usually treated in works on trusts. These are the rules
regarding remoteness of vesting, suspension of the power of aliena-
tion, and accumulations.

References to articles in leading law periodicals have been inserted

with an attempt at completeness. The value of these carefully pre-
pared monographs on narrow points of law is increasingly apparent to
bench, bar, and the law school world.
George G. Bogert.
DOBNELL UNIVEESITT UOIXEGE OP IjAW,
Ithaca, N. Y., March, 1921.
 TABLE OF CONTENTS

CHAPTER I

INTRODUCTION AND HISTORY

Section Page
1. Definition of Fundamental Terms 1-5
2. Origin of Uses and Trusts 6-!>
3. Uses and Trusts Before tUe Statute of Uses »-10
4. The Statute of Uses 10-12
5. The Effect of the Statute of Uses 12-14
6. Trusts in America 14-15

CHAPTER II

DISTINCTIONS BETWEEN TRUSTS AND OTHER RELATIONS

7. Debt 16-24
8. Bailment 25-26
9. Equitable Charge 26-28
10. Assignment of a Chose in Action 29-30
11. Executorship , 30-32
12. Agency 32-34
13. Guardianship 34^5
14. Powers 35-36
15. Promoters and Officers of Corporations 36-38
16. Wills 38-39-
17. Contract 40-42

CHAPTER III

CREATION OF EXPRESS TRUSTS

18. Express and Implied Trusts 43-44
19. Language Necessary 44-54
20. —
Formality Statute of Frauds 54^64
21. Formality— Statute of Wills 64-65
22. Consideration 65-68
23. Disposition of Trust Instrument 68-71
24. Notice of the Trust -. 71-72
25. Acceptance 73-75
26. Disposition of Trust Property 75-77
27. Savings Bank Trusts 78-91
BoGEET Tbusts (ix)
 TABLE OF CONTENTS

CHAPTER IV
CREATION OF RESULTING TRUSTS
Section P^se
28. Introduction to Implied Trusts 92-94
29. Underlying Principle of Resulting Trusts 94-95
30. Statute of Frauds 95
31. Voluntary Conveyances 96-97
32. Imperfect or Illegal Declarations of Tfust 98-100
33. Payment of Consideration for Conveyance to Another 100-112
34. Use of Trust Funds for Purchase of Property 113-115

CHAPTER V
CREATION OF CONSTRUCTIVE TRUSTS
35. Definition 116-117
36. Statute of Frauds 118
371 Constructive Trusts Not Based on Fraud 118-120
38. Actual Fraud 121-122
39. Violation of Voidable Promise as Fraud 122-133
40. Violation of Parol Promise Made to Secure Gift by Will or
Intestacy 133-141
41. Fraud Conclusively Presumed —Benefit Obtained by Fiduciary
While Acting for Principal 141-144
42. Rebuttable Presumption of Fraud—Direct Transfer from
Principal to Fiduciary ; . 144-150
43. Miscellaneous Implied Trusts 150-151

CHAPTER VI
THE TRUST PURPOSE—PRIVATE TRUSTS
44. Trusts Classified as to Purpose 152-153
45. Passive Trusts 153-157
46. —
Active Trusts Validity of Purpose 157-160
47. —
Active Trusts Statutory Restrictions 160-165
48. Rule against Remoteness 165-171
49. Rule Against Suspension of Pov^er of Alienation 171-176
50. Rule Against Accumulations 176-180
51. Spendthrift Trusts 180-187
52. Fraudulent Purpose 187-188

CHAPTER VII
THE TRUST PURPOSE—CHARITABLE TRUSTS
53. Definition 189-194
54. History— Statute of Charitable Uses 194-199
55. Indefiniteness of Purpose 200-204
56. Religious Purposes 204-207
 TABLE OF CONTENTS XI

Section Page
57. Gifts Masses...
for 208-211
58. Educational Purposes 211-214
59. Eleemosynary Purposes 214-218
60. Miscellaneous Public Benefits 218-220
61. Cemetery Lots and Monuments 220-223
62. Purposes Not Charitable 223-225
63. The Cy Pres Doctrine ; 225-231
64. The Rule Against Remoteness 231-235
65. The Rule Against Restraints on Alienation 235-236
66. The Rule Against Accumulations i 236-239
67. Other Statutory Restrictions on Charitable Ti-usts 239-241
68. Effect of Partial Invalidity 241-242
69. Conflict of Laws 242-243

CHAPTER VIII
THE SETTLOR
70. Qualifications of Settlor 244r-246
71. Settlor's Rights —Construction and Enforcement of Trust 246-247
72. Settlor's Rights—Revocation or Modification 248-250

CHAPTER IX
^ THE SUBJECT-MATTER
73. The Subject-Matter of the Trust 251-252

CHAPTER X
THE TRUSTEE: HIS QUALIFICATIONS, APPOINTMENT AND
REMOVAL
74. The Trustee —
His Qualifications 253-261
75. Trust will Not Fail for Want of Trustee 261-262
76. Original Appointment of Trustee 263-264
77. Trustee's Bond 264r-267
78. Acceptance by Trustee... 267-270
79. Resignation by Trustee 271-273
SO. Removal of Trustee 273-279
81. Death of Trustee 279-282
82. —
Vacancies in Trusteeship Appointment of Successors 282-288

CHAPTER XI
THE POWERS OF THE TRUSTEE
83. Powers of Trustee Classified ',
289-291
84. Estate of Trustee 291-293
85. Custody of Trust Res 293-294
xii TABLE OP CONTENTS

Section ^^^®
86. Repairs and Improvements 294-295
87. Power to Bind Estate in Contract or Tort 296-304
,88. Power to Sell 305-309
89. Power to Mortgage 310-812
90. Power to Lease 312-314
91. Power to Represent Beneflciary 314-318
92. Miscellaneous Implied Powers 318-319
93. Maintenance of Actions 319-320
94. Powers as Affected by Peculiarity of Trustee's Status 320-324
95. Discretionary Powers may Not be Delegated. 325-326
96. The Court's Supervision of Powers 326-328

CHAPTER XII
THE DUTIES OF THE TRUSTEE
97. General Standards of Skill and Honesty 329-330
98. Dutyto Execute the Trust 331
99. Dutyto Act Solely in Interest of the Beneflciary 332-338
100. Possession and Custody of Trust Property 338-344
101. Investments 345-367
102. Expenditures 367-377
103. Payments to Beneliciaries 377-396
104. Duty to Account 396-400
105. —
Duty to Account Charges against Trustee 401-402
106. —
Duty to Account Credits to the Trustee 402-407
307. —
Duty to Account Compensation of Trustee 407-421

CHAPTER XIII
THE INTEREST OF THE CESTUI QUE TRUST—ITS NATURE AND
INCIDENTS
108. Necessity of Beneficiary 422-423
109. Who may be a Cestui que Trust? 424-427
110. A Right in Personam or in Rem? 427-430
111. Incidents of the Cestui que Trsst's Right 430-436
112. Liability for Debts ^ 437-445
113. The Right of Cestui que Trust against the Trustee 445-451
114. The Rights of Cestui que Trust against Third Persons 451-4:61

CHAPTER XIV
THE REMEDIES OF THE CESTUI QUE TRUST— HOW ENFORCED OR
BARRED
115. Action by Trustee or by Cestui que Trust? 462-465
116. In What Court? 466-470
117. Conditions Precedent 470-472
118. Venue 472-473
119. Parties 473-476
 TABLE OF CONTENTS XUl

Section Page
120. Personal LiabUity of 4;he Trustee 476-500
121. Personal LiablUty of Third Person 501-503
122. Personal Liability and lien 5O4r-505
123. Personal Liability or Recovery of the Trust Res 505-507
124. Recovery of the Trust Res or its Substitute 508-535
125. Control of the Trust Administration 535-538
126. Remedy Barred by Act or Omission of Cestui Que Trust '.
538-549
127. Remedy Barred by the Statute of Limitations 549-563

CHAPTER XV
THE TERMINATION OP THE TRUST
128. Methods of Extinction 564-583

TABLE OF CASES CITED

(Page 585)

INDEX
(Page 657)

T
 HANDBOOK
OF THE

LAW OF TRUSTS
CHAPTER I

INTRODUCTION AND HISTOBT

1. Definition of fundamental terms.
2. Origin of uses and trusts.
8. Uses and trusts before tlie Statute of Uses.
4. The Statute of Uses.
5. The effect of the Statute of Uses.
6. Trusts in America.

DEFINITION OF FUNDAMENTAL TERMS

1. A trust is a relationship in which one person is the holder oi
the title to property, subject to an equitable obligation to
keep or use the property for the benefit of another.^
The settlor of a trust is the person who intentionally causes
the trust to come into existence.
The trustee is the person who holds the title for the benefit of
another.
The trust property^ is the thing, real or personal, the title to
which the trustee holds, subject to the rights of another.
The cestui que trust is the person for whose benefit the trust
property is held or used by the trustee.

1 Other definitions of a trust are the following:

"Atrust, in the words applied to the use, may be said to be 'A confi-
dence reposed in some other, not issuing out of the land, but as a thing
collateral, annexed in privity to the estate of the land and to the person
torching the land, for which cestui que trust has no remedy but by sub-
poena in chancery.*" Lewin, Trusts (12th Ed.) 11, referring to Co. Litt,
•
272, b.
"A trust is an equitable obligation, either expressly undertaken, or con-
structively imposed by the court, under which the obligor (who is called
BOGEBT TEUSTS —^1
2 INTRODUCTION AND HISTcIeT (Ch. 1

The trusts treated herein should not be confused with the mo-
nopolies or combinations called "trusts," -or with the positions
which are loosely called "places of trust." The monopolistic
trusts wer^ originally so called beca{ise the stock of the combin-
ing ^corporations was transferred to technical trustees to accom-
plish a centralization of control.^In common parlance, to be in
a position of "trust" or to be a "trustee" often means merely to
occupy a station where elements of confidence and responsibility
exist." The one trusted in this sense may be an agent, a servant,
a partner, a guardian, or a trustee. He is not necessarily in the
technical trust relation.
It is not intended that the definitions of the essential terms
here given shall be final or exhaustive. The nature and inci-
dents of the trust will be developed throughout the book, and'

a trustee)is bound to deal with certain property over whicli he has con-
trol (and which is called the trust property), for the benefit of certain
persons (who are called the beneficiaries or cestuis que trust), and of whom
he may or may not himself be one." Underbill, Trusts (3d Ed.) 1, 2.
"A trust is an obligation imposed, either expressly or by implication of
law, whereby the obligor is bound to deal with property over which he ha^
control for the benefit of certain persons, of whom he may himself be one,
and any one of whom may enforce the obligation." Hart, What Is a Trust?
15 Law Quart. Rev. 301.
"A trust, in its technical sense, is the right, enforceable solely in equity,
to the beneficial enjoyment of property of which the legal title is in an-
other." Bispham, Equity (5th Ed.) 77.
"A trust may be defined as a property right held by one party for the
use of another." Keplinger v. Keplinger, 185 Ind. 81, 113 N. E. 292, 298.
"A trust, in its simplest sense, is a confidence reposed in one person, called
a trustee,, for the benefit of another, called the cestui que trust, with re-
spect to property held by the former for the benefit of the latter." Dow-
land V. Staley, 201 111. App. 6, 7.
For other definitions, see Teal
Pleasant Grove Local Union, No. 204,
v.
200 Ala. 23, 75 South. 335 Bank of Italy, 33 Cal. App. 515, 165
; Keeney v.
Pac. 735; Drudge v. Citizens' Bank of Akron, 64 Ind. App. 217, 113 N. E.
440; Frost v. Frost, 165 Mich. 591, 131 N. W. 60; Ward v. Buchanan, 22
N. M. 267, 160 Pac. 356 Templeton v. Bockler, 73 Or. 494, 144 Pac. 405.
;

These and many other definitions of the trust seem concerned rather
with the duty or obligation of the trustee, or the right of the cestui, than
with the trust. The trust in its modern sense is conceived to be the re-
lationship or status in which are concerned certain property, and persons,
and incidental to which are certain rights and duties. The whole bundle
of property, persons, rights, and duties makes up the trust.
It is often
said that a trustee holds the trust property "subject to a trust,"
but it
would seem to be more accurate to state that he holds it subject to
the
duties of a trustee.
2 Jenks, The Trust Problem, 111.

8 See Thompson v. Thompson, 178 Iowa, 1289, 160 N. W. 922.

§ 1) DEFINITION OP FUNDAMENTAL TERMS 3

the meaning of the elementary terms more fully explained. But-

a certain rough, general description of the trust and its parts is
necessary before one can proceed to trace the history of trusts
and distinguish them from other similar relationships.
The Trust Property . .

It should first be noticed that specific property, real or person-

al, is always an element of the trust. In certain somewhat anal-
ogous relations men only, or men 'and any property, may be
involved, as, for example, in agency, where A. may be the agent
of B. for the performance of personal services, which have no
connection with any property, or no connection with- any par-
ticular property. But the trust presupposes fixed, ascertained
property, to be handled or held' by the trustee. What may be
the trust property and how it may become such are matters to
be dealt with later. The trust property is sometimes called the
trust res, the corpus, the subject or subject-matter, of the trust.
It is sometimes said that the legal title to the trust property
is always in the trustee. His title may be a legal or an equitable
one, dependent on the nature of the title which the settlor, in
express trusts, or the law in implied trusts, has seen fit to give
him. Thus, if the settlor has a fee-simple estate in certain lands,
and conveys his interest to A. to hold in trust for B., A., the
trustee, will be seised of the legal estate; but, if the settlor has
contracted to buy land for which he,.has paid the purchase price,
but a deed of which he has not yet received, and the settlor trans-
fers his interest in the land to A. in trust for B., A., the trustee,
will hold merely the equitable title of the contract vendee of the
land. It is because of this possibility of legal or equitable owner-
ship that the definition given above merely states that the trus-
tee is a title holder, without regard to the court in which his title
will be recognized. In a great majority of trusts the trustee has
the legal title to the trust property.
The Trust Parties^
I It is customary to think of three persons as connected with ev-
ery trust, namely, the settlor, the trustee, and the cestui que trust.
But since, where the settlor declares himself a trustee, settlor
and trustee are one and the same person, a trust may exist with
only two parties. Since a man ca,nnot be under an obligation to
himself, the same individual cannot be settlor, trustee, and ces-
tui, and the trust persons can never be less than two.* But a

* In certain rare instances private trusts have been sustained, where there
were no human cestuis que trust, as where the trust was for the benefit
of specified dogs or horses. In re Dean, 41 Ch. Div. 552. In these cases,
4 INTRODUCTION AND HISTORY (Ch. 1

Sole trustee may be one of a number of cestuis que trust, and one
of several joint trustees may be the sole cestui." There are no
limitations upon the maximum number of persons who may be
connected with a trust, except the limitations of convenience.
In some trusts there is no settlor. These are the implied trusts
created by the law, because it is presumed that the parties intended
a trust to exist, or for the purpose of accomplishing justice.* In
these implied trusts no individual intentionally brings a trust
into being. The court gives life to the trust. But the acts of one
or more persons have caused the court to decree the. trust's ex-
istence. Such persons are not settlors. Their acts merely afford
the reasons which the courts give for declaring the existence of
the trust. Hence, in the definition of the word "settlor" given
above the word "intentionally" is used, so that the doers of acts
which unintentionally result in the declaration of a trust by a .

court may not be included within the class of settlors. -

The settlor is also sometimes called the creator of the trust, or

the trustor. The phrase cestui que trust' is synonymous with
beneficiary of the trust.
The Tmst Rights and Duties
The trustee holds the property "for the benefit of" the cestui que
trust. It is unnecessary now to consider how the cestui' may ob-
tain that benefit. The methods vary greatly, according to the
terms of the particular trust; In one case the trustee may have no
duty, except to hold, the property, and the cestui que trust may
take the profits directly. In another instance the trustee may be
charged with the obligation of detailed management, and the ces-
tui que trust may receive the benefits indirectly. The means of
obtaining the benefits for the cestui are not at this point impor-
tant. The fundamental principle is that somehow the benefit is
his,

if the settlor and trustee were identical, the number of trust persons might
be reduced to one. See post, § 59.
6 Post, § 74.
« Post, § 28.
Pronounced as if speUed "cestwe kuh trust." Anderson, Diet, of Law,
1

162. The words are Norman French. The plural is properly "cestuis que
trust," although frequently spelled "cestui que trustent," "cestui que trusts,"
or "cestuis que trustent" by the courts. See City of Marquette v. Wilkinson
119 Mich. 413, 78 N. W. 474, 43 L. B. A. 480. For a discussion of the origin)
meaning, and proper form of ','cestui que use't and "cestui que trust" see
a note by Charles Sweet, Esq., in 26 Law Quart. Rev. 19Q, in which the
views of Prof. Maitland are 'set forth. The author says: ".'Cestui que
use,' therefore, means 'he for whose benefit,' and 'cestui que trust' means
'he upon trust for whom,' certain property is held."
§ 1) DEFINITION OF FUNDAMENTAL TERMS 5

The duty of -the trustee is enforceable by the cestui que trust.

This quality distinguishes the trust in some jurisdictions from cer-
tain possible contracts. Thus, if A. promises B., for a considera-
tion running from B. to A., that he (A.) will hold certain property
for the benefit of C, C. will in some jurisdictions have no right to
enforce the performance of A.'s promise, because C. is a stranger
to the promise.* But, if A. declares himself a trustee of property
^

for C, C. may every wherei enforce the trust against A., regardless
of privity. This quality of enforceability by the cestui que trust,
notwithstanding a lack of privity, is a characteristic of the trust.
The trustee's obligation is said to be "equitable." Originally it
was recognized only by the English Court of Chancery, which
alone admini,stered the rules and applied the principles of equity.
Many definers of the trust make enforceability Jn a court of chan-
cery or eiquity a part of their definition. But in the present state
of the law it is deemed preferable to define the trustee's obliga-
tion as equitable, and to omit any reference to the court in which
this obligation maybe enforced. In England and in many Amer-
ican states the separate Court of Chancery has been abolished, and
both legal and equitable obligations are enforced by the same
court. On the other hand, in a few states the separate court of
equity is maintained.* The trustee's obligation is based on equi-
table principles, whether enforced by a court having both legal and
equitable jurisdiction, or by a court having solely equitable func-
tions. It seems' wiser to on;iit all reference to the forum of enforce-
ment. ^

Whether the right which the cestui hasa property right in

is

the subject-matter of the trust (a right in rem), or merely a per-

sonal right against the trustee (a right in personam), is a question
much debated. The arguments pro and con are stated in a later
section, dealing with the nature of the interest of the cestui que
trusf."

8 Wald's Pollock pn Contracts (3d Ed.) 243 et seq.

9 For a discussion of the effect of constitutional changes on the separate
existence of the court of equity, see 1 Pomeroy'S' Eq. Juris. §§ 40-42. The
conclusion there reached is that the separate chancery court existed then
(1005) only in Alabama, Delaware, Mississippi, New Jersey, and Tennessee.
lopost, § no.
 ; —

INTKODUCTION AND HISTOKT (Ch.l

ORIGIN OF USES AND TRUSTS

2. Trusts, in their early development in England, were divided in-
to two classes, namely, special or active trusts, and gen-
eral, simple, or passive trusts. The latter were generally
called uses. Prior to 1535, uses constituted by far the
more important class of trusts.
Uses were introduced into England shortly after the Norman
Conquest (1066 A. D.).
They were patterned after the German treuhand or salman.
The principal objects of their introduction were
(a) To avoid the burdens of holding the legal title to land, such
as the rights of the lord under feudal tenvir^ the rights of
creditors, and the rights of dower and curtesy;
(b) To enable
religious houses to obtain the profits of land, not-
witiistanding the mortmain acts
(c) To secure greater freedom in conveying land inter vivos;
(d) To obtain power to dispose of real property by will.
The use was a trust in which the trustee had no active duties,
but was merely a receptacle of the legal title for the cestui
que trust.

The words "use" and "trust" are employed as synonyms fre-

quently by writers and judges. However, there is a distinction in
their meanings. Prior to the Statute of Uses (1535) there existed'
in England a relationship known as a trust. Trusts were of two
classes, namely, active or special, and passive, simple, or general.
In cases where a trustee held property for some temporary purpose
and with active duties to perform, the trust was called active or
special. Thus, if A. conveyed land to B. for ten years, to take the
profits of the land and apply them to the use of C, B. was an ac-
tive or special trustee. These trusts were comparatively rare pri-
or to the Statute of Uses. But if the legal title was transferred to
one as a permanent holder for the benefit of another, but with no
positive duties of care or management, the trust was called gen-
eral, simple, or passive, or a use. Thus, an enfeoffment of A. and
his heirs to the use of B. and his heirs would create a use or gen-
eral trust.^^ Uses were far more common than special trusts pri-
or to the Statute of Uses. Indeed, by the time of Henry (1413- V
1422) they were the rule rather than the exceptioh in landhold-
ing.''

11 Bacon, Uses, 8, 9; Sanders, Uses and Trusts, 3-7.'

12 Digby, History of I^w of Eeal Property, 320.
§ 2) ORIGIN OF USES AND TRUSTS 7

Uses and were introduced into England shortly after

trusts
the Norman Conquest.^^ Recent scholars agree that they were
modeled after the German treuhand or salman, rather than after
the Roman fidei-commissum.^* Under the Roman law it was not
possible to give property by will to certain persons, as, for instance,
persons not Roman citizens.'-" It became customary among the
Romans to devise property to one capable of taking it, with a re-
quest that he deliver it to a desired devisee who was incompetent
to take directly. This was the creation of a fidei-commissum.
The obligation of the devisee to the desired beneficiary in this re-
lationship was not at first legally enforceable, but later became so.
This confidence was analogous in many ways to the English trust
or use, but differed in that it arose by wHl only.
Trusts 'are not known to the modern civil law.^'
"The feoffee to uses of the early English law corresponds point
by point to the salman of the early German law, as described by
Beseler fifty years ago. The salman, like the feoffee, was a per-
son to whom land was transferred in order that he might make a
conveyance according to his grantor's directions."^'
It was said by an English lawyer many years ago that the pa-
rents of the trust were Fraud and Fear and the Court of Conscience
was its nurse.^* Certain it is that the reasons for the introduction
of uses and trusts were not in all cases honorable. The common
law of England attached to the holding of the legal title to land
many burdens. As the feudal system prevailed when uses arose,
the lord of the land was entitled to a "relief," or money payment,
when the land descended to an heir of full age; to the rights of
"wardship" and "marriage" when the heir was a minor; and to
"aids" upon the marriage of a daughter of the lord, the knighting
of his eldest son, or when the lord was held to ransom. These
burdens, and others of a similar nature, fell upon the holder of
I

13 Ames, Origin of Uses and Trusts, 2 Select ^ssays in Anglo-American

Legal History, 737, 741 ; Maltland, The Origin of Uses, 8 Harv. Law Rev.
127, 129 ;Development of Trusts, G. H. J. Hurst, 136 L. T. 76.
14 Ames, Origin of Uses and Trusts, 2 Select Essays in Anglo-American
Legal History, 739, 740; Maitland, The Origin of Uses, 8 Harv. Law Eev.
127, 136. The earlier view was that the use was an evolution of the fidei-
commissum. Story, tiq. Juris. §§ 966, 967 Pomeroy,. Eq. Juris. §§ 976-978.
;

IB Digby, History of Law of Keal Property, 317.

16 Thus in Louisiana, whose, system is founded on the civil law, trusts

were not recognized (Marks v. Loewenberg, 143 La. 196, 78 South. 444) until
Act 107 of 1920 legalized them. Under this statute the trust term cannot
exceed ten years after the death of the donor or the majority of a minor bene-
ficiary.
17 Holmes, Early English Equity, 2 Select Essays in Anglo-American Legal
History, 705, 707.
18 Attorney General v. Sands, Hard. 488, 491.
 INTRODUCTION AND HISTOET (Ch.l

the legal title. '

By enfeoffing another of the legal title and re-
~

serving only the use, the tenant escaped such exactions. "The
legal ownership, however, represented by the feoffee to uses, was
subject to the incidents of tenure, livhich could be enforced against
the land, but by vesting the seisin in two or more feoffees joiiitly,
whose number was renewed from time to time, and the survivor
of whom took the whole legal estate, the burdens incident to the
descent of land were generally avoided."^®
So, ,too, upon the commission of certain crimes the holders of
'

the legal title suffered a forfeiture,' which could be avoided by vest-

ing the legal estate in another and retaining only the use. And
, the common law gave no remedy to a' creditor against the inter-
est of a cestui que use. Some dishonest persons escaped payment
of their debts by a transfer of lapd to a feoffee to uses.- The in-
cidents of dower and curtesy attached only to the legal estate.
A husband, desiring to prevent the attaching of a dower interest
in a prospective wife, could accomplish the result by a conveyance
to a feoffee to uses. And a corresponding fraud could be worked
by a wife with respect to her husband's estate by the curtesy of
the law of England.
Not only was the equitable estate ,of cestui que use free from
dangers and duties, but it could be held by a large and influential
'
class which could not hold the legal estate in lands, namely, re- ,

ligious corporations. The mortmain acts forbade the alienation of

land to Religious corporations, and thus prevented the religious
orders from acquiring directly the real property they needed, and
which charitably minded persons often desired to give them. Fur-
thermore, certain of the orders had taken the vows of poverty,
and could not consistently hold property in their own names. By
a conveyance of land to an individual, to be held for the use of
the religious order, however, the monks and friars could have the
benefit of the land, though not the seisin. In the opinion of some
scholars, the religious bodies were the first to employ the use ex-
tensively.''"
The equitable estate or use was also more easily dealt with and
transferred than the legal estate. The latter could be conveyed
only by feoffment with livery of seisin, fine, or recovery. Pub-
licity was essential. The use, on the other hand, could be created ^

and transferred secretly, and with little or no ceremony. This

capacity for secret transfer favored fraud on later purchasers of
the land and encouraged the employment of the use by the un-

181 Tiffany, Real Property, 200.

20 Maitland, The Origin of Uses, 8 Harv. Law Rev. 127, 130; Jenks, Short
History of English Law, 96.
§ 3) USEa AND TKUSTS BEFORE THE STATUTE OF USES 9

scrupulous. Likewise the use was capable of being 'disposed of'

by will. The legal estate was not so disposable at that period.
To be able to control land after death was no doubt a great incen-
tive to the creation of uses.

USES AND TRUSTS BEFORE THE STATUTE OF USES

3. Originally uses and trusts were not enforceable in any court,
J
but were piu-ely honorary.
The courts o£ law did not recognize the claims of the cestui
que trust, because no writ existed for that purpose.
Chancery began to enforce uses and trusts in the early part of
the fifteenth century.

Early English law was extremely rigid. Forms and techni-

calities were strictly observed. The courts of common law gave
no remedy, unless a writ fitted exactly to the case could be found.
The introduction of new remedies through the Idw courts was a
matter of great difficulty.^^ The interests of cestui que use wei-e
not protected by the common-law courts, because no writ existed
to fit the case. Uses were a hpvelty. The ecclesiastical courts had
no jurisdiction to enforce them. Therefore, for many years uses
and trusts existed as honorary obligations, but had no legal stand-
ing. If the trustee saw fit to deny that he held the property as
trustee, ^nd to appropriate it to his own use, he might do so with
impunity.^^ Fiduciary relations with res|)ect to money and chat-
tels were early enforced by the common-law courts, but these were
the so-called "common-law trusts," and riot uses. If money were
delivered to A., to be paid to B., the common-law action of account
lay.^' If a chattel were delivered to another for the use of a third,
detinue could be brought by the beneficiary.^*
But the development of the Court of Chancery wrought a change.
About the time that uses and trusts were arising, it became the
,

custom to petition the king or his^ council for relief in cases where
the law coufts gave no remedy. If no writ was available, or if the
opponent was powerful enough to prevent justice, the aggrieved
suitor besought the king or his council for a special and extra-legal
dispensation. Of this council the Chancellor was a member, and

21 Spence, History of the Court of Chancery, 2 Select Essays in Anglo-

American Legal History, 219.
2 2 Ames, Lectures on Legal History, 236, 237.
28 Anonymous, iear Book, 6 Henry IV, folio 7, i)lac. 33; Ames' Cases on
Trusts (2d Ed.) p. 1.
24 Ames, Origin of Uses and Trusts, 2 Select Essays in Anglo-American
Legal History, 743. •
,
 ; —
1
>

10 INTRODUCTION AND HISTOKT (Ch. 1

about the time of the reign of Edward I (1272-1307) it became usu-

al to refer these-petitions to the Chancellor for consideration. The
Chancellor became the custodian of the king's conscience, and his^
court the court of conscience. Equity and fairness were supposed
,

to rule there, rather than technicality.

It was natural that cestuis que trust who had been injured, due
to a failure of their trustees to hold the property for their use,
should apply to the Chancellor for relief. At some time early in
the fifteenth century the justice of these petitions bf^gan^ to be rec-
ognized by chancery, and uses and trusts were enforced.^° The
Chancellors of those days were churchmen, and ^heir consciences
were naturally shocked by the inequity of allowing a trustee to
make away with his beneficiary's property. Probably, too, the
common-law trust appealed to the Chancellor as a quasi-prece-
dent. The process by which the Chancellor acted was known as
a subpoena. It commanded the defendant to ^o or refrain from
doing a certain act. The relief was personal and specific, not
rnerely money damages. Hence it is often said that cestui que
trust has a remedy only by subpoena.

THE STATUTE OF USES

4. The Statute of Uses provided that, wherever any person should
thereafter be seised of land to the use of another, the lat-
ter should be deemed the legal owner of such lands, and
the taker subject to a use should have no interest in the
lands.
The object of this statute was to convert the equitable interest of
the cestui que use into a legal interest, and thus
(a) Prevent the loss of feudal rights by landlords
(b) Obviate fraud on creditors, alienees, dowresses, and tenants
by the curtesy;
(c) Probably to injure the religious orders which were the bene-
ficiaries of uses.

By
the beginning of the sixteenth century uses and trusts had
come to involve serious inconveniences and frauds. It has been
said that the principal objects of their introduction were to relieve
Ipndowners of the burdens of feudal landholding, to enable reli-
gious orders to have the benefit of land, and to effect greater free-
dom in the conveyance of real property. These advantages obtain-
ed from uses were abused. From time to time prior to the Statute

2 5 Ames, Origin of Uses and Trusts, 2 Select Essays in

Anglo-American
Legal History, -741, 742.
§ 4) THE STATUTJ;' OF USES 11

of Uses acts in aid of creditors, purchasers, and landowner^ de-

frauded by uses, and against the holding of lands to the use of reli-
gious houses, were enacted by Parliament,"^ but they wer^ inef-
fective. The preamble to the statute catalogues the evils thought
to be caused by the use in 1535.^'
Aside from the reasons named in the statute itself, there was, ac-
cording .to some authorities,"^ the desire on the pajrt of Henry VIII
to destroy the monasteries and confiscate their property, which he
thought could best be accomplished by abolishing the method by
which they held land, namely, the use.
The famous Statute of Uses (27 Henry VIII, c. 10) was enacted
in 1535."' Its object was to abolish uses, and this it proposed to do
by wiping out the estate of the feoffee to uses, and giving to the

2 6Digby, History of the Law of Real Property, 318, 319; Cruise, Uses,
34-^7.
2 7 "Where by the common laws of this realm, lands, tenements, and he'v

ditaments be not devisable by testament, nor ought to be transferred froT

one to another, but by solemn livery and seisin, matter of record, writing
sufficient made bona fide, without covin or fraud, yet nevertheless divers
and sundry imaginations, subtle inventions, and practices have been used,
whereby the hereditaments of this' realm have been conveyed from one to
another by fraudulent feoffments, fines, recoveries, and other assurances
craftily made to secret uses, intents, and trusts, and also by wills and
testaments sometimes made by nude parolx and words, sometimes by signs
and tokens, and sometimes by writing, and for the most part made by such
persons as be visited with sickness, in their extreme agonies and pains,
or at such time as they have had scantly any good memory or remembrance;
at which times they, being provoked by greedy and covetous persons lying in
wait about them, do many times dispose indiscreetly and unadvisedly their
lands and inheritances; by reason whereof, and by occasion of which fraud-
ulent feoffments, fines, recoveries, and other like assurances to uses, con-
fidences, and trusts, divers and many heirs have been unjustly at sundry
times disinherited, and lords have lost their wards, marriages, reliefs, har-
riots, escheats, aids, pur fair fits dhivalier and pur file marier, and scantly
any person can be certainly assured of any lands by them purchased, nor
know surely against whom they shall use their actions or execution for
their rights, titles and duties ; also men married have lost their tenancies
by the curtesy, women their dowers; manifest perjuries by trial of such
secret wills and uses have been committed; the king's highness halii lost
the profits and advantages of the lands of persons attainted, and of the
lands craftily put in feoffment to the use of aliens born, and also the profits
of waste for a year and a day of felons attainted, and ,the lor^s their es-
cheats thereof. * * * " Preamble to St. 27 Henry VIII, c; 10, as quoteci
in Digby, History of the Law of Real Property, 347, 348.
28 Jenks, Short Hist, of English Law, 99. Holdsworth is opposed to this
viewi Causes Which Shaped the Statute of Uses,. 26 Harv. Law Eiev. 108,
121.
29For a discussion of the events leading up to its passage, see Ht)lds worth,
Causes Which Shaped the Statute of Uses, 26 Harv. Law Kev. 108.
 —

12 , INTRODUCTION AND HISTOBT ' l(Ch- ^

former holder of the use the entire legal estate. The statute ''exe-
cuted the use," in the phrase of the day. Instead of leaving it to
the feoffee to uses to transfer the legal title to the cestui que use
when the latter required it, the law transferred such interest imme-
diately on the creation of the use.^" By this "transmutation of the
use into possession" it was thought that this troublesome class of
equitable interests would cease to exist, and that all estates in
lands would be subject to the same burdens, the same rules of ten-
ure and conveyance. There would be no uses in land, because the
law would change them to legal interests at the instant of their
birth.

THE EFFECT OF THE STATUTE OF USES

5. The Statute of Uses did not have its intended effect because
(a) Byvirtue of its express provisions, and because of the con-
struction given it by the courts of law, certain equitable in-
terests were not converted into legal interests,' namely, eq-
uitable interests in personal property, uses of estates less,
than freehold, active trusts, and uses upon uses;
(b) These equitable interests not so converted into legal inter-
ests were recognized and enforced by the Court of Chan-
cery as trusts after the Statute of Uses, and form the basis-
of the modern law of trusts.

«»The active portion of the statute was as follows: "That where any
person or persons stand or be seized, or at any time hereafter shall hap-
pen to be seized, of and in any honours, castles, manors, lands, tenements^
rents, services, reversions, remainders or other hereditaments to the use, con-
fidence or trust of any .other person or persons, or of any body politick, by
reason of any bargain, sale, feoffment, pne, recovery, covenant, contract,,
agreement, will or otherwise, by any manner means whatsoever it be; that
in every such case all and every such person or persons, and bodies politick,
that have or hereafter shall have any such use, confidence or trust, in fee-
simple, fee tail, for term of life or for years, or otherwise, or any use, con-
fidence or trust, in remainder or reverter, shall from henceforth stand and
be seized, deemed and adjudged in lawful seisin, estate and possession of
and in the same honours, castles, manors, lands, tenements, rents, services,
reversions, remainders and hereditaments, with their appurtenances, to aU
intenta, constructions and purposes in the law, of and in such like estates
as they had or shall have in use, truSt or confidence of or in the same;
and' that the estate, title, right and possession that was in such person or
persons that were, or hereafter shall be seized of any lands, tenements or
hereditaments, to the use, confidence or trust of any such person or persons,
or of any body politick, be from henceforth clearly deemed and adjudged
to be in him or them that have, or hereafter shall have, such use, confi-
dence or trust, after such quality, manner, form and condition as they had
before, in or to the use, confidence or trust that was in .them." As quoted i»
Sf-ott, Cases on Trusts, 3, 4.
 § 5) THE EFFECT OF THE STATUTE OF USES 13

- To the common-law judges, who alone had to do with legal es-

tates, fell the task of construing the Statute of Uses, and determin-
ing when the statute executed the use and glave to the cestui que
use the legal estate. It was evident from the express words of the
statute that uses in personalty were not included. The statute
spoke only of real property. And since it referred only to instanc-
es in which the feoiifee to uses was "seized," it was readily held
that the statute had no application to interests in real property oth-
er than freeholds. Therefore, a gift to A. of a term for five years,
to the use df B., was not affected by that statute. The statute was
held, also, not to apply to active trusts but only to passive or gen-
eral trusts. Duties of administration required the legal title in the
trustee. Thus, if land were conveyed to A. for life, to collect the
profits thereof and pay them to B. and his heirs, the trust would be
active, and the statute would not execute the use, but leave the le-
gal estate in A. and the equitable interest in B. separately.
Lastly, the courts-of law held that the statute did not affect a use
upon a use. It could operate only once. After siich operation, its
force was spent. Thus, if lands were conveyed to A. and his
heirs, to the use of B. and his heirs, to the use of C. and his heirs,
the statute was held to transfer the use of B. into possession and
give him the legal estate, but not to convert thp use of C. into pos-
session and destroy B.'s legal estate.^^ This construction has gener-,
ally been thought to be a mere quibble, which improperly caused a
partial destruction ''of the statute. ^^ But one scholar of high re-
pute has pointed out that the use upon a use was held void by the
Court of Chancery before the passage of the Statute of Uses, and
that, therefore, the decision of the common-law courts in Tyrrel's
Case was entirely correct.^^ Where a use upon a use was at-
tempted, the second party named would not be seised of land to the
use of the third party, but rather of a use for his benefit, so that log-
ically a case would not be presented for the operation of the stat-
ute as to the second use.^*
A large number of uses and trusts were, as shown above, left un-
affected by the, Statute of Uses and were recognized and enforced
by chancery. The name "trust" was; after the Statute of Uses, ap-
si Tyrrel's Case, Dyer, 155 (1557).
82 Jenks, Short History of English Law, 100. "By this means, a statute
made upon great consideration, introduced in a solemn and pompous man-
ner, by this strict construction, has had no other effect than to add, at
most, three words ["to the use"] to a conveyance." Lord Hardwicke, Hop-
kins V. Hopkins, 1 Atk. 581, 591.
33 Ames, The Origin of Use^ and Trusts; 2 Select Essays in Anglo-Ameri-
can Legal History, 747 et seq.
3* See Perry, Trusts (6th Ed.) § 301.
14 INTRODUCTION AND HISTORY (Ch. 1

plied to all the equitable interests so sustained, whether they had

before been denominated uses or trusts. Perhap^ the Court of
Chancery had no desire to stimulate the enactment of a second
Statute of Uses by continuing the name "use." Perhaps it felt that
the Statute of Uses had transferred to the law courts jurisdiction
over uses.^" It will be seen that the interests thus supported by ,

chancery after the Statute of Uses, and called "trusts," were com-
posed of the old active or special trusts and that part of the old
general trusts or uses which the statute did not destroy. These" in-
terests are the modern trusts, which form the basis of the present
English and American systems.

TRUSTS IN AMERICA
6. The English system of equity jurisprudence, of which the trust
was a par^, was adopted almost bodily by, the American
states.

Just as the colonists of the thirteen original states adopted sub-

stantially entire the common law of England, so they took over
with little change the English scheme of equity jurisprudence, a
part of which was the system of trusts. The development of chan-
cery in colonial America, however, was slow and difficult. In Mas-
sachusetts no equity court existed for any substantial 'time until
1877.^° Redress in extraordinary cases was had only through peti-
tion to the Legislature. In minor cases the Legislature doled out
to the common-law courts from time to time meager equity pow-
ers, but no inclusive jurisdiction. In Pennsylvania no court of
chancery was founded until 1836. ''^ The law courts often worked
out equitable relief through their own forms. In New York, in
1701, by an ordinance of Governor and council, the Governor was
appointed chancellor.'' The Legislature and people objected to
this method of forming the new court and sought its abolition.
This movement failed, but the court was thereafter unpopular and
little patronized. In Virginia chancery was -at first administered
by the Governor and council and later by the general court and

85 See 17 Mich. Law Rev. 8T, for a discussion of the

reasons for the
survival of the trust. It is there suggested that the statute did not
con-
template the active trust vchich was then rare and little developed.
'
8 6 Chancery in Mas.sachusetts, E. H. Woodruff, 5 Law
Quart. Rev. 370.
3 7 The Administration of Equity through Common-Law Forms
in Penn-
sylvania, S. G. Fisher, 2 Select Essays in Anglo-American Legal
History
810.
38 History of New :Eork, Wm. Smith (Yates' Ed.) 385-389; preface to vol.
1, Johns. Ch. Rep.
 ;;;

§ 6) TRUSTS IN AMERICA 15

county courts. In the other colonies the governor, aided by his

council, usually exercised the powers of a chancellor.^'
Towards the close of the eighteenth century, when trusts came
into more common use in America, the English system had been
well developed, and was naturally adopted in substantial entirety
by the American colonial and early state chancellors. The first
state rjsports show that, considering the poverty and newness of
America, trusts were involved in litigation with a fair "measure of
frequency.*"
During the nineteenth century several American states by .stat-
utes somewhat changed the law of trusts as received from England,
Especially with respect to the trust purpose and the rule against
perpetuities; but these amendments of the English system have
been relatively of minor importance.

3 » Courts of Chancery in the American Colonies,

S.' D. Wilson, 2 Select
Essays in Anglo-American Legal History, 779.
*oin the following cases, decided before 1800, a trust was discussed or
construed: Connecticut, Bacon v. Taylor, Kirby, 368 (1788) MaryloMd, State
;

ex rel Hindman v. Reed, 4 Har. & McH. 6 (1797); Reeder v. Cartwright,

2 Har. & McH. 469 (1790); Swearingham v. StuU's Ex'rs, 4 Har. & McH.
38 (1797); Ridgely v. Carey, 4 Har. & McH. 167 (1798); Dorsey's Ex'rs v.
Dorsey's Adm'r, 4 Har. & McH. 231 (1798); Hatcheson v. TUden, 4 Har.
& McH. 279 (1799) Bank of Columbia v.- Ross, 4 Har. c& McH. 456 (1799)
;

New Jersey, Arrowsmith v. Van Harlingen's Ex'rs, 1 N. J. Law, 26 (1790)

Green v. Beatty, 1 N. J. Law, 142 (1792); New York, Jackson v. Sternbergh,
1 Johns. Gas. 153 (1799) Neilson v. BUght, 1 Johns. Cas. 205 (1799/; North
;

^Carolina, Hogg's Ex'rs v. Ashe, 2 N. C. 480 (1797) ; Pennsylvania, Ken-

nedy V. Fury, 1 Dall. 72, 1 L. Ed. 42 (1783) Field v. Biddle, 2 Dall. 171,
;

1 L. Ed. 335 (1792) Knight v. Reese, 2 Dall. 182, 1 L. Ed. 340 (1792)
;

Cox's Lessee v. Grant, 1 Yeates, 164 (1792) Fogler's Lessee v. Evig, 2

;

Yeates, 1J.9 (1796); Lee's Lessee v. Tiernan, Add. 348 (1798) South Caro-
;

lina, Lindsay v. Lindsay's Adm'rs, 1 Desaus. 150 (1787) ; Bethune v. Beres-

ford, 1 Desaus. 174 (1790); Stock's Ex'x v. Stocky Ex'r, 1 Desaus. 194 (1791);
Gadsden's Ex'rs v. Lord's Ex'rs, 1 Desaus. 208 (1791); Wilson v. Wilson,
1 Desaus. 219 (1791); Vi/rgima, McCayty v. McCarty's Ex'rs, 2 Va. Col.
Dec. 34 (1733); Hill v. Hill's Ex'rs, 2 ya. Col. Dec. 60 (1736); Coleman
V. Dickenson, 2 Va. Col. Dec. 119 (1740) ;Pendleton v. Whiting, Wythe
38 (1791).
 ; — "

(Ch. 2
16 DISTINCTIONS BETWEEN TRUSTS AND OTHER RELATIONS

CHAPTER II

DISTINCTIONS BETWEEN TRUSTS AND OTHER RELATIONS

7. Debt.
8. Bailment.
9. Equitable Charge.
10. Assignment of a Chose In Action.
,
11. Executorship.
12. Agency.
13. Guardianship.
'
14. Powers.
15. Promoters and Officers of Corporations.
16. Wills.
17. Contract.

DEBT
7. The trust is distinguished from a debt in, that i

(a)The trust involves specific subject-matter, whereas the debt

does not -

/ (b) The trustee's obligations are equitable, while the debtor's are
legal;
(c) The trustee occupies a fiduciary relation, but the debtor does
not.

The Trust Requires a Definite Sttbject '

The property which the trustee controls for the benefit of his
<;estui que trust is always definite property. A debtor does not owe*
his creditor definite money. He owes him any money. If A. be a
trustee for B., A. always owns specific property, as, for example,
the Jones farm, or certain five thousand one-dollar bills. A. may
have the power under the trust to change the form of the invest-
ment, and to buy a bond with the bills originally received ; but the
bond then becomes the specific subject-matter. On the other hand,
if A. borrow $5,000 from B., it is obvious that A. may satisfy his

obligation to B. by returning any bills or coin. He need not return

the, identical bills or coin received from B., nor their substitutes,
in case he invests the money so received from B.
The results of this contrast between trust and debt are striking.,
If the debtor lose any particular article through negligence or ac-
cident, he will not be absolved from payment of his debt but, if ;
'

the trust property be lost or destroyed 'without the fault of the

trustee, his obligation is wiped out.^
Again, each creditor is obliged to share pro rata with his fellow

1 Shoemaker v. Hinze, 53 Wis. 116, 10 N. W. 86.

§ 7) DEBT 17

creditors all the property of his bankrupt debtor,* even though the
debtor have in his hands and capable of identification certain specif-
ic money lent him or goods sold him. On the other hand, the
cestui que trust may take from the assets of the bankrupt trustee
the specific trust property, if he can identify it."
The statute of limitations begins to run against the creditor's
claim from the origin of the relation of debtor and creditor^i e.,
from the maturity of the debt—because the sole duty of the debtor
is to pay his debt, and that obligation, of course, arose at the due
date fixed in the promise to pay. But, by contrast, \the statute of
limitations does not commence to operate against a trustee until he
has repudiated the tryst obligation,* for, as long as he is carrying
out the trust, no cause of action exists against him. A trust may
last for fifty years, without a destruction of the cestui's rights, if no
repudiation has taken'place. A debt will be barred everywhere aft-
er the lapse of such a period of time since its matitrity. This distinc-
tion is based on the difference in the duties of debtor and trustee.
In the case of the former, a cause of action exists against him nor-
mally ; in the case of the latter, abnormally.
A debtor may, with certain exceptions imnecessary to mention
here, do as he likes with the money he receives from his creditor,
or with his property generally. A trustee will be guilty of the
crime of embezzlement, if he coi;ivert to his own use the trust
funds." The specific nature of the trust property requires him to
keep it separate from private use.
Debt a Legal, Trust an Equitable, Obligation
As previously stated, the trust is an obligation' resting solely
on equitable principles, and originally enforceable only in chancery.
In a great variety of ways equity will ^act upon the trustee, and
compel him to do or refrain from doing certain acts. The debtor's,
duties, however, ,are legal, and are enforced by an action ^o recov-
er the amount of the debt ordinarily. Equity may, of course, aid
the creditor; but the primary method of enforcement is by legal
remedies. When a trustee states his accounts with the cestui, and
admits that a certain sum is due him, the trustee may change to a
debtor.*
No Element of the Fiduciary in Debt
The debtor's obligations are all self-imposed. He agrees to pay
the creditor $100 on January 1st. That is his only duty to the

2 City of Sturgis v. Meade County Bank, 38 S. D. 317, 161 N. W. 327.

" Post, § 124.
* Post, § 127.
» People V. Meadows, 199 N. Y. 1, 92 N, E. 128. > -

«Post, § 116.
BOGEBT TBUSTS —2
 :

18 BETWEEN TRUSTS AND OTHER RELATIONS (Ch. 2

DISTINCTIONS

creditor. There is no relationship of trust and confidence between

debtor and creditor. The law imposes no obligation on the debt-
or to deal with the creditor with any more than ordinary fairness.
The debtor may look out for himself, and take advantage of the
creditor, if he can legally do so. In opposition to this the trustee
is a fiduciary, whose obligations are not only those which he
has vol-
untarily assumed by express agreement, but also those which the
law imposes on him, whether he will or no. Those law-imposed
duties are that the trustee treat the cestui with the utmost fairness
and frankness, conceal nothing from him, and take no advantage of
him. To illustrate A debtor may buy from his creditor any prop-
:

erty which the latter will sell him, and which he (the debtor) can
pay for. But a cestui que trust may avoid a sale from himself
to his trustee, unless the latter can prove the transaction was abso- -

lutely fair and open.'' ^

Because of this element of good faith, a trustee is subject to ar-
rest under some statutes making fiduciaries so liable, where a mere
debtor would not be.^
Between Debt arid Trust
Practical Distinctions
In the following situations difficulty is sometimes experienced
in determining whether there is a debt or a trust
(a) Where negotiable paper is deposited for collection;
(b) Where agents and factors receive money for their principals;
(c) Where money is delivered to be applied to a specific purpose.

Collection of Negotiable Paper

The cases of negotiable paper deposited for collection may be
divided into three classes, namely: (1) Cases where the paper is
uncollected at the time the dispute arises, and the contending par-
ties are the depositor of the paper and the collecting bank; (2)
cases where the paper has been collected when the rights of the
parties are fixed, and the litigants afe depositor and collector; (3)
cases where the rights of a subagent of the original collector are
involved.
The majority of the courts which have considered the first class
of cases, namely, those of uncollected paper in the hands of the
original collector, have declared the relationship that of principal
and agent, and have said that no title passed to the collector by
virtue of the deposit of such paper for collection.* Little or no at-

'
Post, § 42,
Code Civ. Proe. N. Y. § 549 Wallace & Sons v. Castle, 14 Hun (N. Y.) 106.
8 ;

» Giles V. Perkins, 9 East, 12 Commercial Nat. Bank v. Armstrong, 148

;

U. S. 50, 13 Sup. Ct. 533, 37 L. Ed. 363 St. Louis & S. F. R. Co. v. Johnston,
;

133 U. S. 566, 10 Sup. Ct. 390, 33 L. Ed. 683; Ricbardson v. New Orleans
§ 7) DEBT 19

tentioii seems to have been paid to the form of the indorsement to

the collector, whether general and unqualified, or restrictive. This
would seem to be an influential factor. An unrestrictive indorse-
ment would pass title to the instrument to the collector, and, since
ordinarily he would not also be the beneficial owner, he would seem
to be properly a trustee. But if the indorsement were restrictive,
in that it was "for collection," title would not pass to the collector,
although he would have power to sue on the instrument, and he
would be a mere agent.^" Occasionally the collecting bank, prior
to collection, is called a trustee,^^ or a bailee of the paper.^^
Whether called agent, trustee, or bailee, the result reached by
these courts is the same. The depositor may take back the uncol-
lected paper, unless the collector has transferred it to an innocent
purchaser for value. Since the property concerned is n^egotiable
paper, it matters not whether the right of the depositor is an equi-
table or a legal one. Either would be cut off by a negotiation to
a bona fide purchaser for value.^*
In a few cases it has been held that the collector, prior to collec-
tion, was a debtor of the depositor of the negotiable paper. In
these instances immediate, unconditional credit was given to the de-
positor for the amount of the paper. In some cases the indorse-
ment was restrictive, "for collection" only,^* while in others the in-
dorsement was general.^"
As to the second class mentioned above, namely those cases
where the collector has received the money and the contest is be-
tween depositor and collector, there is a conflict of authority. It
would seem logica' that the collecting bank should be regarded as a

Coffee Co., 102, Fed. 7i55, 43 C. C. A. 583; Balbach v. Frelinghuysen (C. 0.)
15 Fed. 675 ; Manufacturers' Nat. Bank v. Continental Bank, 148 Mass. 553, 20
N. E. 193, 2 L. E. A. 699, 12 Am. St. Rep. 598 Bank of America v. Waydell,
;

187 N. X. 115, 79 N. E. 857 ; National Butchers' & Drovers' Bank v. Hubbell,

117 N. T. 384, 22 N. E. 1031, 7 L. R. A. 852, 15 Am. St. Rep. 515; Scott v.
Ocean Bank in City of New York, 23 N. Y. 289 ; Hazlett v. Commercial Nat.
Bank, 132 Pa. 118, 19 Atl. 55 Second Nat. Bank of Columbia v. Cummings,
;

89 Tenn. 609, 18 S. W. 115, 24 Am. St. Rep. 618.

i» Negotiable Instruments Law, § 37; 1 Daniel, Neg. Inst. (601 Ed.) § 698d.
1 Jones V. Kilbreth, 49 Ohio St. 401, 3l N. E. 346.
f
12 Beal V. City of Somerville, 50 Fed. 647, 1 C. C." A. 598, 17 L. R. A. 291.
13 There is some ambiguity in the discussion of the relationship here exist-

ing. Thus, one writer speaks of the collector as an "agent, i. e., trustee"
(Ames, Cases on Trusts [2d Ed.] 18, 19), and another calls the collector an
"agent or trustee" (Tiffany, Banks and Banking, 28).
1* First Nat. Bank of Elkhart v. Armstrong (C. C.) 39 Fed. 231; AyVes v.
Farmers' & Merchants' Bank, 79 Mo. 421, 49 Am. Rep. 235.
1= Car stairs v. Bates, 3 Camp. 301; Hoffman v. First Nat. Bank of Jersey
City, 46 N. J. Law, 604 ; Metropolitan Nat. Bank of New York v. ^Loyd, 90 N.
Y. 530.
 ;

(Ch. 2
20 DISTINCTIONS BETWEEN TRUSTS AND OTHEE RELATIONS

debtor after collection in most cases, since it does not, in the ordi- .

nary instance, keep separate the bills and coins received for the
.collected paper! As a rule the collecting bank expects to pay the
depositor any funds which it has conveniently at hand. It expects
to haye the right to use the particular bills and coins received as
the proceeds of -the collection for its own purposes, and to substi-
tute others when payment is Such inci-
mad'e to the depositor.
dents are' inconsistent with a trust, which always founded
is on def-
inite subject-matter. Many courts have held the collector to be a
mere debtor after collection.^*
the other hand, however, upo^n varying degrees of evidence
On >

of an intent to keep the collected funds separate, it has been held

in many cases that the collector was a trustee of the amount col-
lected."

i'8 Mackersy v. Ramsays, 9 Clark & F. 818 ; Bank of Commerce v. Russell,

Fed. Cas. No. 884; Nixon State Bank v. First State Bank of Bridgeport,
380 Ala. 291, 60 South. 868; Plumas County Bank v. Bank of Rideout,
Smith & Co., 165 Cal. 126, 131 Pac. 360, 47 L. R. A. (N. S.) 552 Gonyer v.
;

Williams, 168 Cal. 452, 143 Pac. 736 ; Cronheim v. Postal Telegraph-Cable Co.,
10 Ga. App. 716, 74 S. E. 78 ; Citizens' Nat. Bank of Daijville, Ky., v. Haynes,
144 Ga. 490, 87 S. E. 399 Tinkham v. Heyworth, 31 111. 519 ; Union Nat.
;

Bank v. Citizens' Bank, 153 Indv 44, 54 N. E. 97 ; American Nat. Bank v.

Owensboro Savings Bank & Trust Co.'s Receiver, 146 Ky. 194, 1^ S. W. 239,
38 L. R. A. (N. S.) 146; Alexander County Nat. Bank v. Conner, 110 Miss.
653, 70 South. 827; Gordon v. Rasines, 5 Misc. Rep. 192, 25 N. Y. Supp. 767:
North Carolina Corporation Commission v. Merchants' & Farmers' Bank, 137
N. C. 697, 50 S. E. 308; Commercial & Farpers' Nat. Bank of Baltimore v.
Davis, 115 N. C. 226, 20 S. E. 370 Schafer v. Olson, 24 N. D. 542, 139 N. W.
;

983, 43 L. R. A. (N. S.) 762, Ann. Cas. 1915C, 653; In re Bank of Oregon, 32
Or. 84, 51 Pac. 87 ; Akin v. Jones, 93 Tenn. 353, 27 S. W. 669, 25 L. R. A. 523,
'

42 Am. St. Rep. 921 Bowman v. First Nat. Bank, 9 Wash. 614, 38 Pac. 211,
;

43 Am. St. Rep. 870 Hallam v. TiUinghast, 19 Wash. 20, 52 Pac. 329.
;

In the follov^ing cases an agreement for weekly or other periodic remit-

tances of the collected funds showed clearly that the collector was at liberty
to satisfy his obligation with any money, and hence the collector was held to
be a debtor after collection ; People v. City Bank of Rochester, 93 N. Y. 582
'

National Butchers' & Drovers' Bank v. Hubbell, 117 N. Y. 384, 22 N. E. 1031,

7 L. R. A. 852, 15 Am. SI. Rep. 515; McCormick Harvesting Mach. Co. v.
Yankton Sav. Bank, 15 S. D. 1^6, 87 N. W. 974. ,

1' American Can Co. v. Williams, 178 Fed. 420, 101 C. C. A. 634; Western
German Bank v. Norvell, 134 Fed. 724, 09 C. C. A. 330; State Nat. Bank of
Little Rock v. First Nat. Bank of Atchison, Kan., 124 Ark. 531, 187 S. W.
673 ; Henderson v. O'Conor, 106 Cal. 385, 39 Pac. 786 ; Kansas State Bank v.
First State Bank, 62 Kan. 788, 64 Pac. 684 ; German Fire Ins. Co. v. Kimble,
66 Mo. App. 370; Griffin v. Chase, 36 Neb. 328, 54 N. W. 572; Anheuser-
Busch Ass'n V. Morris, 36 Neb. 31, 53 N. W. 1037; Thompson v. Gloucester
City Sav. -Insti (N. J. Ch.) 8 Atl. 97;' Arnot v. Bingham, 55 Hun, 553, 9
N. Y. Supp. 68; People v. Bank of Dansville, 39 Hun (N. Y.) 187; Warren-
Scharf Asphalt Paving Co. v. Dunn, 8 App. Div. 205, 40 N. Y. Supp. 209;
 ;

§ 7) DEBT 21

Occasionally a memorandum for separation^' or a provision for

immediate remittance of the collected fund** has given more se-
cure basis for the declaration of a trust.
The third situation, under the analysis given above, is that
wrhere the collector or agent with whom the paper is originally de-
posited forwards it to a subagent for collection. Two questions
may arise while the subagent bank has the paper or its proceeds,
namely: Is the agent bank a debtor or trustee? and is the sub-
agent bank debtor or trustee?
With reference to the first question, it would seem that the agent
bank, the original collector, should have no responsibility, either
as debtor or trustee, if it has used due care in selecting the sub-
agerit, and the latter has in his possession the paper or its pro-
ceeds. 'The agent in such a situation ought not to be held to be a
debtor, because he has received no money belonging to the deposi-
tor as a result of the collection nor should he be considered a trus-
;

tee, because there is no trust res in his hands. Some counts have
adopted this view.^" But others haye held the agent bank liable

In re Commercial Bank, 4 Ohio Dec. 108 Mad River Nat. Bank of Springfield
;

V. Melhorn, 8 Ohio Cir. Ct. K. 191; White v. Commercial & Farmers' Bank,
60 S. C. 122, 38 S. E. 453 Piano Mfg. Co. v. Auld, 14 S. D. 512, 86 N. W. 21,
;

86 Am. St. Rep. 769 ; Continental Nat. Bank v. Weems, 69 Tex. 489, 6 S. W.
802, 5 Am. St. Rep. 85; First Nat. Bank v. Union Trust Co. (Tex. Civ. App.)
155 S. W. 989.
In the following cases the collected funds were held to have been trust
funds in the hands of the collector, but the trust could not be ^enforced be-'
cause of the Inability to trace the'fiinds into the assets of the collector:
Illinois Trust & Savings Bank v. First Nat. Bank (C. C.) 15 Fed. 858; G.
Ober & Sons Co. v. Cochran, 118 Ga. 396, 45 S. E. 382 Kansas State Bank v.
;

First State Bank, 62 Kan. 788, 64 Pac. 634; In re Seven Corners Bank, 58
Minn. 5, 59 N. W. 633 Frank v. Bingham, 58 Hun, 580, 12 N. Y. Supp. 767
;

In re Commercial Bank, 4 Ohio Dec. 108; Nonotuck Silk Co. v. Flanders, 87

Wis. 237, 58 N. W. 383.
If the collection is made after the insolvency of the collecting bank, it is
held that the agency to collect is revoked and the funds are held in trust.
Lippitt V. Thames Loan & Trust Co., 88 Conn. 185, 90 Atl. 369; First Nat.
Bank of Raton v. Dennis, 20 N. M. 96, 146 Pac. 948.
is First Nat. Bank v. Armstrong (C. C.) 36 Fed. 59.
19 Philadelphia Nat. Bank v. Dowd (0. C.) 38 Fed. 172, 2 L. R. A. 480;

National Butchers' & Drovers' Bank v. Wilkinson, 10 N. Y. St. Rep. 290;

Hunt V. Townsend (Tex. Civ. App.) 26 S. W. 310.
20 First Nat. Bank of Pawnee City v. Sprague, 34 Neb. 318, 51 N. W. 846,
15 li. R. A. 498, 33 Am. St. Rep. 644; Falls City Woolen Mills v. Louisville
Nat. Banking Co., 145 Ky. 64, 140 S. W. 66; Daly v. Butchers' & Drovers'
Bank, 56 Mo. 94, 17 Am. Rep. .663; Indig v. National City Bank of Brooklyn,
80 N. T. 100. ,
22 DISTINCTIONS BETWEEN TRUSTS AND OTHER RELATIONS (Gn. 2
\

to the depositor as a debtor, upon the failure of the subagent

bank."
After the subagent bank has remitted to the agent bank \>y send-
ing cash or its equivalent, or -by crediting the agent bank on an ac-
count, the agent bank would seem properly to be held to be a debt-
or of the depositor, and so many cases have held.^^
The second question presented under the third class of cases
here to be discussed is regarding the relation of the subagent to
the depositor. If the subagent- has the paper or its proceeds in his
—
hands that is, has not remitted to the agent or credited the agent
— some courts have held the subagent a trustee for the depositor,^'
while others have called the subagent an "agent" of the depositor,
ari~d have stated that the title to the paper remained constantly in

the depositor.^* Occasionally the view has been taken that the
subagent assumed the position of debtor upon the collection o"f the
paper.^'
Whatever the name they have applied to the subagent, in a great
majority of the cases the courts have allowed the depositor to fol-
low the proceeds of the paper into the hands of the subagent, if
capable of identification, and the paper into the hands of all except
bona fide purchasers for value. As in the case of the agent bank,
so with the subagent, it would seem logically that the subagent
should be held to be a trustee, when the form of the indorsement

i'l Simpson
v. Waldby, 63 Mich. 439, 30 N. W. 199; Power v. First Nat.
Bank, 6 Mont. 251, 12 Pac. 597; St. Nicholas Bank of New York v. State
Nat. Bank, 128 N. Y. 26, 27 N. E. 849, 13 L. R. A. 241 Bradstreet v. Everson,
;

72 Pa. 124, 13 Am. Rep. 665.

22 Mackersy v. Ramsays, 9 Clark & F. SIS; Commercial Nat.
Bank v. Arm-
strong, 148 U. S. 50, 13 Sup. Ct. 533, 37 L. Ed. 363; Fifth Nat. Bank v.
Armstrong (C. C.) 40 Fed. 46; First Nat. Bank v. Armstrong (C. C.) 42 Fed.
193 Briggs v. Central Nat. Bank of New York, 89 N. Y. 182, 42 Am. Rep. 2S5.
;

The decision in Blair v. Hill, 50 App. Div. 33, 63 N. Y. Supp. 670, that the
agent bank became a trustee of the moneys delivered to it by the subagent
bank, seems erroneous.
23 Holder v. Western German Bank, 136
Fed. 90, 68 C. C. A. 554; "National
Exch. Bank v. Beal (C. C.) 50 Fed. 355; State v. Bank of Commerce of
Grand Island, 61 Neb. 181, 85 N. W. 43, 52 L. R. A. 858.
2* Manufacturers' Nat. Bank v. Continental Bank, 148 Mass.
553, 20 N. E.
193, 2 L. R. A. 699, i2 Am. St. Rep. 598; Bank of Sherman v. Weiss, 67 Tex.
331, 3 S. W. 299. In Gilpin v. Columbia Nat. Bauk, 220 N. Y. 406, 115 N.
B. 982, L. R. A. 1917F, 864, the depositor sued the subagent bank for its negli-
gence in failing properly to present the note for payment. It was held that
the defendant bank was the agent of the first bank and not of the plaintiff
depositor, and hence no recovery for defendant's negligence was allowed.
2 5 Old Nat. Bank v. German- American Bank, 155
U. S. 556, 15 Sup. Ot.
221, 39 L. Ed. 259 ; San Francisco Nat. Bank v. American Nat. Bank of Los
Angeles, 5 Cal. App. 408, 90 Pac. 558.
§ 7) DBBT 23

was such as to give it title, as in the case of a general indorse-

ment, but should be held a technical agent when the indorsement
was restrictive and did not give the subagent title to the paper.
Once the subagent remits properly to the agent or properly cred-
its himself on a joint account, of course, the subagent relieves him-
self from all obligation to the depositor.

Money Paid to Agents or Factors

Where money is paid to one for the use of another, or as the
proceeds of another's property sold, it is sometimes 'difficult to dis-
tinguish trust from debt. The general rule, however, is that siich
persons as commission agents receiving the proceeds of goods
sold,^* insurance agents collecting prerniums,^' an agent to sell
bonds,^* and a collector of rents^° are trustees of the money so com-
ing into their hands. But an attorney collecting money for a cli-
ent is not a trustee, but rather a debtor.^"
Money Paid for a Special Purpose . ,

Where money or other property is by one to another,

delivered
to be applied to a special purpose, it is sometimes difficult to ascer-
tain whether the receiver of the property holds the particular thing
transferred subject to a trust to apply it to the use named, or
whether he becomes the absolute owner of the property, subject
merely to a debt or contract obligation. I Either result may be ef-
fected by the use of appropriate language.^ Which is attained in
any given case is a question of construction. y
A transaction frequently resorted to is the payment of money by
one to another to enable the latter to pay a bill of exchange or note
of the former. It is generally held that such an action creates a
trust,^^ although the payment of interest by the receiver of the
money, or other exceptional circumstance, has been held to make
the receiver merely a debtor.^^

2 6 Union Stockyards Nat. Bank v. Gillespie, 137 U. S. 411, 11 Sup. Ct. 118,

34 L. Ed. 724; Wallace & Sons v. Castle, 14 Hun (N. Y.) 106; Baker v. New
York Nat. Exch. Bank, 100 N. Y. 31, 2 N. E. 452, 53 Am. Rep. 150; Boyle v.
Northwestern Nat. Bank, 125 Wis. 498, 103 N. W. 1123, 104 N. W. 917, 1 L.
R. A. (N. S.) 1110, 110 Am. St. Rep. 844.
2 7 Dillon V. Connecticut Mut. Life Ins. Co., 44 Md. 386; Central Nat. Bank
V. Connecticut Mut. Life Ins. Co., 104 U. S. 54, 26 L. Ed. 693.
2 8 Van Alen v. American Nat. Bank, 52 N. Y. 1.
29 Farmers' & Mechanics' Nat. Bank v. King, 57 P^. 202, 98 Am. Dec. 215.
30 Jackson V. Moore, 72 App. Div. 217, 76 N. Y. Supp. 164.
SI Farley v. Turner, 26 L. J. Ch. 710; Massey v. Fisher (C. C.) 62 Fed. 958;
Peak V. EUicott, 30 Kan. 156, 1 Pac. 499, 46 Am. Rep. 90; People v. City Bank
of Rochester, 96 N. Y. 32; Rabel v. Griffin, 12 Daly (N. Y.) 241.
3 2 Ex parte Broad, 13 Q. B. Div. 740; In re Barned's Banking Co., 39 L. J.

Ch. 635 ; Francis v. Gisborn, 30 Utah, 67, 83 Pac. 571.

 ;

24 BETWEEN TEUSTS AND OTHER RELATIONS (Ch. 2

DISTINCTIONS

Money left for investment has generally been considered a trust

fund,^' unless the elenient of interest payment pending actual in-
vestment indicated a debt.^* A
delivery of a check and cash to a
bank, the sum represented thereby to be transmitted to Italy and
there placed to the credit of the depositor in a bank, has been held
to create a trust.*'
The receipt of money under a promist to discharge the payor's
debt to a third person has sometimes^ been held to create a trust,**
and in other instances to establish a mere contract obligation.*'
Adeposit to cover advances may-be construed as either a debt**/
or a trust,*" dependent on the peculiar circumstances of each case.
The payment of interest on the amount paid usually indicates a
debt, but the presumption arising from such payment may be over-
come by other features of the case.**
Whether the payee of the money is a debtor or trustee ought to
depend in each case upon the presence or absence of intent to keep
the money paid separate and to apply. the particular bills and coins
received to the use agreed upon. If any money may be so applied,
there is no res on which to base the trust, and a debt or contract
obligation aldne will be present.
The same parties may at different times sustain the relation of
debtor and creditor and trustee and cestui que trust,*^ as where a
railroad company becomes a debtor on the declaration,- of a divi-
dend and changes to a trustee upon the placing of an amount suffi-
cient to pay the dividend in a special deposit in a bank.**
\

83 Hitchcock Cosper, 164 Ind. 633, 78 N. E. 264; Harrion v. Smith, 83

V.
Mo. 210, 53 Am. Eep. 571 ; Rusling v. Eusling, 42" N. J. Eq. 594, 8 Atl. 534
Cavin v. Gleason, 105 N. Y. 256, 11 N. E. 504; Merino v. Munoz, 5 App. Div.
71, 38 N. Y. Supp. 678; Keller v. "Washington, 83 W. Va. 659, 98 S. E. 880.
3* Pittsburgh Nat. Bank of Commerce v. McMurray, 98 Pa. 538.
s^Legniti v. Mechanics &' Metals Nat. Bank of New York, 186 App. Div.
105, 173 N. T. Supp. 814.
3 Michigan S. S. Co. v. Thornton, 136 Fed. 134, 69 0. C. A. 132.
s''
Steele v. Clark, 77 111. 471.
S8 Butler v. Sprague, 66 N. Y.
392.
89 Boca V. Byrne, 145 N. Y. 182, 39 N. E. 812, 45
Am. St. Eep. 599.
*" City of Centralia v. United States Nat. Bank of Centralia,
Wash. (D. C.)
221 Fed. 755; Blair v. Follfinsbee, 67 111. App. 144; Price v. Dawson, 111
Mich. 279, 69 N. W. 650. Gutch v. Fosdick, 48 N. J. Eq. 353, 22 Atl. 590, 27
Am. St. Eep. 473;' Budd v. Walker, 113 N. Y. 637, 21 N. E. 72; Hamer v.
Sidway, 124 N. Y. 538, 27 N. E. 256, 12 L. R. A. 463, 21 Am. St. Rep 693-
Sam V. Ludtke (Tex. Civ. App.) 203 S. W. 98. In re Eshbach's Estate, 197
Pa. 153, 46 Atl. 905, is a peculiar case.
*i Brackett's Adm'r v.
Boreing's Adm'r, 131 Ky. 751, 110 S. W. 276 33 Ky.
Law Eep. 292; In re Central Trust Co., 1 Ohio N. P. 169. '

*2 In re Le Blanc, 14 Hun (N. Y.) 8.

 — ; ;

8) ,
BAILMENT 25

BAILMENT
8. A bailment differs from a trust
(a) In the nature of the rights of the person intrusted with the
property, the bailee having no title to the thing bailed
(b) In the nature of the property which may be its subject-
matter ;

(c) In the nature of the rights of the person intrusting the prop-
erty, the bailor retaining full ownership of ;the thing bailed.
\ i

Similarities in Two Relations

Bailment and trust are in some respects similar. In each the
owner of property places it in the control of another, usually for a
temporary purpose. Some definitions of bailment would seem to
make it a form of trust.**
Distinctions; The One Trusted
But there are marked differences. The most prominent is the
contrast between the rights with which the holder of the property
is invested. The trustee is the owner of the subject-matter of the
trust. On the other hand, the bailee is not the holder of any title^
to the bailed property. He does not own it. His rights over it are
confined to temporary rights of possession. He may keep it for a
time and perhaps during that time have ^the use and benefit of it
but under no circumstances can he have a permanent right to en-
joy the property. "A bailment exists whenever the ownership and
the possession of specific corporeal chattels are lawfully severed
from each other. In a trust of personal property, the legal owner-
ship passes to the trustee, and he has something more than tare
possession. In cases of bailment the l^gal ownership is in the bail-
or, and the bailee simply has possession, which may or may not be
for some specific purp'ose." ** '

This distinction may be illustrated. The legal ownership of the

43 "Bailment, from the French 'bailler,' to deliver, is a delivery of goods

in trust, upon a contract, expressed or implied, that the trust shall be faith-
fully executed on the part of the bailee." Blackstone's Com. 451. The fol-
lowing definition of bailment would seem preferable: "A bailment is the
transfer of the possession of personal property, without a transfer of owner-
ship, for the accomplishment of a certain purpose, whereupon the property is-
to be redelivered or delivered over to a third persqn." Hale, Bailments and
Carriers, 5, 6.
** Doyle V. Burns, 123 Iowa, 488, 497, 99 N. W. 195. Thus the intended
grantee in a deed, who leaves money with a bank to be paid to the grantor on
the presentation of the deed, does not create a trust, But rather is a bailor.
Citizens' Bank & Trust Co. v. Hale (Okl.) 177 Pac. 366.
 ;

26 DISTINCTIONS BETWEEN TRUSTS AND OTHER RELATIONS (Ch. 2

trustee gives him capacity to pass to a bona fide purchaser for val-
ue a title freed from the trust. But ordinarily, if a bailee attempt
to sell the bailed goods to another, even though that other give
value and in good faith consider the bailee the owner, the purchas-
er will acquire no title as against the bailor.*' The bailee's rights
are not those of ownership, and he cannot transfer such rights to
another.*"
Property Intrusted
Bailment is concerned exclusively with personal property, while
a trust may have as its subject any property, real or personal.
Perso'n Intrusting
The discussion of the rights of bailee and trustee will have sug-
gested corresponding differences between the in-terests of bailor
and cestui que trust, namely, that the bailor is -the legal owner of
the bailed goods, while the cestui que trust is regarded as having
merely a claim against the trustee, or at most an equitable interest
in the trust res. It only remains to add that the bailor's rights are
legal rights, enforceable only by courts of law, or law divisions of
courts having double jurisdiction, while the cestui's rights are eq-
uitable. Occasionally it has been important for jurisdictional rea-
sons to determine whether a relationship was a trust or a bail-
ment.*^
The degree of care which the cestui que trust may demand of his
trustee is uniform, and is that which a reasonably prudent man
would exercise in the administration of his own business. The
bailor may expect extraordinary, ordinary, or slight care, depend-
ent on the character of the bailment, whether for the sole benefit of
the bailee, for mutual benefit, or for the sole benefit of the bailor.

EQUITABLE CHARGE
9. An equitable charge is distinguished from a trust by^
(a) Its lack of fiduciary relationship
(b) The presence in it of beneficial ownership.

Exception must be made in the eases of sales by sellers left in posses-

*=
sion, sales within the factors' acts, and sales in market overt in England.
See Uniform Sales Act, §§ 23, 25; English Sale of Goods Act, § 22.
*« For a discussion of the distinction between bailment
and trust, see
Maitland, Equity, 45-48.
*' Ashley's Adm'rs v. Denton, 1 Litt.
(Ky.) 86. See, also, Ogden v. Larra-
bee, 57 111. 389, in which it was held that the transfer of notes and mortgages,
with full power to collect the same, for the purpose of discharging a debt
and returning the balance, created a trust, and not a pledge; the latter
being one form of a bailment. '
v
§ 9) EQUITABLE CHARGE 27

Similarities
An equitable charge bears many striking resemblances to a trust.
In both relations the holder of the property is, seized of a title, gener-
ally legal. In both the claimant or beneficiary has rights enforceable in
equity.** In both a purchaser of the property with' notice of the
burden attached will hold it subject to the claim of the beneficiary.
Thus, if A. devise land to B., "subject to the payment of an annui-
ty of $500 to C," B. will hold subject to equitable rights to the en-
joyment of $500 income resting in C, just as if A. had devised the
land to B., "in trust to pay C. $500 a year." In the first instance,
as well as in the second, X., a purchaser with knowledge of the
terms of the devise to B., will take it subject to the burden in favor
of C.*='

Dissimilarities
But the
relations are not equivalent."" A
trustee is a fiduciary.
He alone can perform the duties of the trust. To transfer the trust
property to another, except in exercise of a power of sale, would be
a breach of the trust. In the ordinary, case" the trustee is expected
to retain the trust property and perform the trust duties personal-
ly. By contrast, the holder of property subject to a charge has no
personal relation to the beneficiary of the charge. He may sell the
property to a stranger, and pass on the burden of payiftg the
charge, in 'so far as the liability of the land to pay is concerned.
Such an act will be no breach of any duty to the beneficiary of the
charge. And so, too, the holder subject to a charge may deal with
the charged property and with the beneficiary of the charge as
with a stranger's property and a stranger, buying in the charge

*8 In the case of an equitable charge, the beneficiary of the charge, if the

instrument show such intent, may have a remedy against the holder of the
property by way of an action at law, as well as the equitable claim against
the property. The acceptance of the gift with a charge attached raises an
.

implied promise, under some circumstances, to pay the amount of the charge.
WiUiams v. Nichol, 47 Ark. 254, 1 S. W. 243; Lord v. Lord, 22 Conn. 595;
Adams v. Adams, 14 Allen (Mass.) 65; Birdsall v. Hewlett, 1 Paige (N. Y.)
32, 19 Am. Dee. 392; Harris v. Fly, 7 Paige (N. 1.) 421; Kelsey v. Western,
2 N. Y. 500; Gridley v. Gridley, 24 N. Y. 130;- Loder v. Hatfield, 71 N. Y.
92 Brown v. Knapp, 79 N. Y. 136 Eedfield v. Redfield, 126 N. Y. 466, 27 N.
; ;

E. 1032.
^OvWolfe V. Croft, 11 East. L. E. (Can.) 532; Harris v. Fly, 7 Paige (N. Y.)
421. But a purchaser of the land from the holder subject to a charge per-
sonally binding on such holder is/ entitled to have the remedies against such
holder exhausted before relief is sought in equity against the property. Kel-
sey V. "Western, 2 N. Y. 500.
so For a discussion of the distinctions between equitable charges and

trusts, see 3 Pomeroy, Eq. Jurisprudence ,(3d Ed.) § 1033, note; 19 Am. &
Eng. Encyc. Law (2d Ed.) 1348.
28 DISTINCTIONS BETWEEN TRUSTS AND OTHER RELATIONS (Ch. 2

and taking any advantage of the beneficiary which is lawful. A

sale of the trust property to the trustee, on the other hand, is void-
able by the cestui que trust, and the trustee must show the utmost
good faith in order to sustain the sale.
In the second place, the holder subject to an equitable charge
is a beneficial holder; whereas the trustee is not. If B. receive
property subject to a charge of $500 a year in favor of C, and the
property produces $1,000, a year, B. may retain the surplus $500
for his own use. Contrariwise, if B. were a trustee of the same-
property for the purpose of paying C. $500 a year, B. could not
keep the extra $500, but would be obliged to hold it for the bene-
fit of the creator of the trust, or for his heirs or next of kin, if the
settlor were dead. The holder subject to a charge is entitled to
all benefits from the property beyond the amount necessary to sat-
isfy the charge. The trustee is never entitled to any beneficial use
of the trust property."^
It is often important to decide whether a relation is a trust or an
equitable charge, because of the statute of limitations. °^ The stat-
ute does not begin to run against the cestui's rights until there has
been a repudiation of the trust ; biit the statute commences to op-
erate against an equitable charge from the time when it becomes
due.
No set formula will always create a charge and refute* the notion
of a trust. The courts seek the creator's intent, whether it be to
riiake a beneficial gift of the property, subject to an incumbrance,
or to place upon the shoulders of the recipient of the property a
fiduciary relation."^

»i King V. Denlson, 1 Ves. & B. 260; In re West, [1900] 1 Ch. 84; Wood-
bury V. Hayden, 211 Mass. 202, 97 N. E. 776.
6 2 Hodge V. Churchward, 16 Sim. 71; Loder v. Hatfield, 71 N. Y. 92;
Merton v. O'Brien, 117 Wis. 437, 94 N. W. 340.
6 3 In the following cases the wording was construed to create an equi-

table charge: king v. Denison, 1 Ves. & B. 260 (subject to payment of an-
nuities) ; Wood V. Cox, 2 Myl. & O. 684 ("trusting and wholly confiding that
he will act in strict conformity with my wishes" ) Hodge v. Churchward, 16
;

Sim. 71 (paying £10 a year) Wolfe v. Croft, 11 East'. L. K. (Can.) 532 Mer-
; ;

chants' Nat. Bank v. Crist, 140 Iowa, 308, 118 N. W. 394, 23 L. R. A. (JST. S.)
526, 132 Am. Rep. 267 (support made a lien) ; Lang v. Everllng, 3 Misc.
St.
Rep. 530, 23 N. Y. Supp. 329 ("upon the express condition that") ; Loder v.
Hatfield, 71 N. X. 92 ("on the following conditions and proviso") ; Chew v.
Sheldon, 214 N. Y. 344, 108 N. E. 552, Ann. Cas. 1916D, 1268 (subject to a duty
to support daughter) ; Dixon v. Helena Soc. of Free Methodist Church of
North America (Gkl.) 166 fac. 114 (direction to a devisee to pay a legacy).
In the following instances the courts ^ound a trust : Buffinton v. Maxam,
140 Mass. 557. 5 N. E. 519 (for the support of) ; Baker v. Brown, 146 Mass.
369, 15 N. E. 783 (subject to the condition that) ; Woodbury v. Hayden, 211
 10) ASSIGNMENT OF A CHOSE IN ACTION 29

ASSIGNMENT OF A CHOSE IN ACTION

10. An assignment of a chose in action at common law differs from
a trust in which the subject-matter is a chose in action, in
that—
(a) The assignee's remedy is solely at law, while the cestui que
trust's is equitable;
(b) The assignor's duty is purely negative, whereas a trustee
always has some positive duty.

Similarities
'
At corjimon law a chose in action was not assignable, in the
sense that the assignee could sue upon it in his own name. He
could enforce it only bj' an action in the name of the assignor. The
legal title to the chose in action remained in the assignor, while the
assignee received merely a power of attorney to enforce the claim
in the name of the assignor. In nearly all American jurisdictions
statutes requiring actions to be brought in the name of the real
party in interest, or making choses in action assignable, now en-
able the assignee to sue in his own name.^*
Yet recent decisions in a few states indicate that in some cases it
is still necessary for the. assignee to sue in his assignor's name."

Mass. 202, 97 N. E. 776 (to be used as far as necessary for the support and
maintenance of) Pierce v. McKeehan, 3 Watts & S. (Pa.) 280 (subject to
;

the maintenance of) Hoyt v. Hoyt, 77 Vt. 2M, 59 Atl. 845 (on condition
;

that) Barnes v. Dow, 59 Vt. 530, 10 Atl. 258.

;

In the following cases neither an equitable charge nor a trust was held
to exist, the recipient of the property taking It absolutely : Zimmer v. Sen-
nott, 134 111. 505, 25 N. E. 774 (upon condition that) Dee v. Dee, 212 111.
;

338, 72 N. E. 429 (for the benefit of) ; Crandall v. Hoysradt, 1 Sandf. Ch.
(N. Y.) 40 (for the maintenance of).
BiReios V. Mardis. 18 Cal. App. 276, 122 Pae. 1091; Eambo v. Armstrong,
45 Colo. 124, 100 Pac. 586; Birdsall v. Coon, 157 Mo. App. 439, 139 S. W.
(Mo.) 243 Sternberg & Co. v. Lehigh Val. E. Co., 80 N. J. Law. 468, 78 Atl.
;

1135 ; N. Y. Code Civ. Proc. § 449 Continental Oil & gotten Co. v. E. Van
;

Winkle Gin & Machine Works, 62 Tex. Civ. App. 422, 131 S. W. 415 Caroz- ;

za V. Boxley, 203 Fed. 673, 122 C. C. A. 69 (construing a Virginia statute) ;

Hankwitz v. Barrett, 143 Wis. 639, 128 N. W. 430. In two important states
the change was made but recently. See Oilman v. American Producers' Con-
trolling Co., 180 Mass. 319, 62 N. E. 267 (construing St. 1897, c. 402), and
Neyens v. Hossack, 142 111. App. 327 (construing section 18 of Practice Act
of 1907 [Laws 1907-08, p. 448]).
05 Snead v. Bell, 142 Ala. 449, 38 South. 259 (1904) Boqua v. Marshall,
;

88 Ark. 373, 114 S. W. 714 (1908) Durant Lumber Co. v. Sinclair & Simms
;

Lumber Co., 2 Ga. App. 209, 58 S. E. 485 (1907) Ci-oyle v. Guelich, 35 Pa.
;

Super. Ct. 356 (1908) Martin & Garrett v. Mask, 158 JJ. 0. 436, 74 S. E. 343,
;

41 L. B. A. (N. S.) 641 (1912).

 —

30 DISTINCTIONS BETWEEN TRUSTS 'AND OTHER RELATIONS (Ch. 2

Wherever such is the case, the assignor resembles a trustee of a

chose in action, in ,that he holds the title to property the ben-
eficial interest in which belongs to another. Both assignor and
trustee own something, which they are not entitled to use for their
benefit, but solely for the benefit of another, namely, the assignee
or the cestui que trust.
Distinctions
But, while both assignee and cestui que trust are entitled to, the
benefit of property, the title to which is in another, their meth-
ods of obtaining that benefit dififer. The cestui que trust's iright

is equitable. assignee's interest is legal, namely, a power

The
of attorney to sue on the chose in action in a court of law, and it
is only in cases where the assignor threatens to collect the claim
for his own benefit, or where some other extraordinary circum-
stance endangers the collection by the assignee suing at law in the
name of the assignor, that the assignee may resort to equity.^'
Secondly, the assignor has the sole duty of refraining from ac-
tion which will prevent the collection of the chose in action by the
assignee. The assignor has no positive duty. On the other hand,
in active trusts the trustee has the duty of collection of the chose
in action for the cestui que trust, and, if the trustee refuse to col-
lect, the cestui may go into equity and join the debtor and trus-
tee as defendants.^^ In passive trusts the trustee has at least the
positive duty of conveyance to the beneficiary.

EXECUTORSHIP
11. An executor" differs from a trustee, in that
(a) Therights of the legatee against the executor are legal, en-
forced through a probate or law court, while the cestui que
trust's remedy is equitable;
(b) The executor's duties toward the property in his control are
temporary duties of collection, conversion into money, and
disbursement, whereas the trustee has more permanent
functions of administration and management.

Executors ahd trustees often bear great likenesses to each other

because of the title which each holds to definite property, the

»« Hammond v. Messenger, 9 Sim. 327; Hay ward v. Andrews, 106 U. S.

672, 1 Sup. Ct. 544, 27 L. Ed. 271 ; Walker v. Brooks, 125 Mass. 241 ; Carter
T. United Ins. Co., 1 Johns. Ch. (N. T.) 463.
"s'Thomassen v. Van Wyngaarden, 65 Iowa, 687, 22 N. W. 927; Fogg v
Middletpn, 2 Hill Eq. (S. C.) 591.
68 The position of administrators is identical with
that of executors in this
 ;

§ 11) EXECUTORSHIP 31

right to the enjoyment of which is in another. Indeed, an execu-

torship is sometimes called in a nontechnical sense a trust.^" If A.
bequeaths $5,000 to B. and appoints C. his executor, C. becomes,,
upon the death of A., the holder of the legal title to the $5,000, but
subject to the right on B.'s part to have the $5,000 paid over to him
in due time. If A. had, on the other hahd,-by his will created C.
a trustee of $5,000 for B., C. would likewise hold the legal title to
th^ $5,000, but subject to a right on B.'s part that it be used for
B.'s benefit. Often it is difficult to tell whether the person who is
to deal with the property for another's benefit is merely an execu-
tor, or has a double capacity, and has trust duties to perform after
the completion of his executorial functions, or allongside such func-
tions.

Distinctions
Ifthe officer be an executor, the rights of the claimant against
him are legal, and will be enforced through probate or law courts ;
while if the officer be a trustee, as wS have seen, it is only princi-
ples of the Court of Chancery which enable the claimant, the ces-
tui que trusl, to obtain the benefit of tne property.
Whether the officer in question is an executor or a trustee can
only be told by an examination of the work which the testatqr ex-
pects him to perform. An executor is required only to collect his
testator's property, reduce it to cash, so far as is necessary for the
payment of debts and legacies, and pay the debts and legacies. An
executor is not ordinarily, expedted to invest the funds, collect the
income, and make periodic payments over a long series of years.
Such duties of more or less permanent administration mark the
trustee.^" "The distinction between the office of executor and that

regard, and what is here said of the latter will apply equally to the former.
There apt to be little doubt, however, as to whether a given officer is an
is
administrator or a trustee, since, if a man die intestate, there will be no op-
portunity' for a declaration of a trust. For a case in which an administrator
was held to be a true trustee, see Rubey v. Barnett, 12 Mo. 3, 49 Am. Dec.
112. .
'
>

6»In re Crawford's Estate,^21 Ohio Cir. Ct. K. 554, 563.

*" In the following cases the duties of officers appointed by will were con-
sidered for the purpose of determining whether a trustee or an executor had
been created : Jones v. Broadbent, 21 Idaho, 555, 123 Pae. 476 Dingman v.
;

Beall, 213 111. 238, 72 N. E. 729 Fenton v. Hall, 235 111. 552, 85 N. B. 936
;

Drake v. Price, 5 N. Y. 430 In re Leonard, 168 App. Div. 12, 153 N. T. Supp.
;

852 Teel v. Hilton, 21 R. I. 227, 42 Atl. 1111.

;

The trust does not merge in the executorship because of the union of both
offices in the same person. West v. Bailey, 196 Mo. 517, 94 S. W. 517. If a
will calls for the performance of duties properly pertaining to a trustee and
none is appointed, the executor will be considered a trustee. Bean v. Com-
monwealth, 186 Mass. 348, 71 N. E. 784 In re Fritsch, 80 Misc. Rep. 385, 142
;
 ;

32, DISTINCTIONS BETWEEN TEUSTS AND OTHER KELATIONS (Ch.2

of,a testamentary trustee lies in the duties imposed upon them re-
spectively. The duty of an executor as such, and his duty as a
trustee of an express trust under the will, are entirely different. As
executor, it is his duty to collect the property, and pay_ the debts
and general legacies ; while; as trustee, it is his duty to invest and
manage the particular fund or trust estate in accordance with the
°^
•directions-of the will."
It is often of material importance to define the officer accurately
as trustee or executor, since the statute of limitations has different
application with respect to the two relations,*^ and the powers of
trustees are joint, whereas one executor may act for all.**

AGENCY
12. Agency and trust resemble each other, in that bo|th are rela-
tions of trust and confidence. Their points of difference
are:
(a) That an agent is ordinarily not the ownerof property for the
benefit of his principal, while a trustee always holds the ti-
tle to property for his cestui que trust;
(b) That agency is genersdly a personal relation, dependent on
the will and continued existence of both parties, whereas
a trust is ordinarily an impersonal, indestructible relation
(c) That the agent is a mere instrument in the hands of the prin-
cipal, and incvurs no personal responsibility when the agen-
cy is disclosed, but the trustee binds himself personally by
' his official contracts.

Points of Similarity
It is probable that both agency and trust arose from the same ill-
defined intermediary relation.** Agency was molded by the- courts
of law and received one set of characteristics. The trust was. fos-
tered by chancery and developed along different lines. But, though

N. Y. Supp. 555. Where one person is executor and trjastee, and the execu-
tor's duties cease and those trustee begin, no formal transfer from one
of,
officer to the other is necessary. Goodsell v. McElroy Bros. Co., 86 Conn. 402,
85 Atl. 509. Where no time Is fixed for the change from executorship to
trusteeship, the duties will be presumed to be exercised at the same time. In
re McDowell, 178 App. Div. 243, 164 N. Y. Supp. 1024.
siRedfleld, Surrogates' Courts (7th Ed.) § 514. ,

8^ Scott V. Jones, 4 Clark & F. 382 ; Maitland, Equity, 48.

83 Pease v.' National Lead Co., 162 App. Div. 766, 147 N. Y. Supp. 989.
6 4 "The germ of agency is hardly to be distinguished from the
germ of an-
other institution, which in our English law has an eventful future before it,
the 'use, trust, or confidence.'" 2 Pollock & Maitland, History of English
 3

§ 12) AGENCY 33

wide apart now, each possesses the element of trust and confidence.
Each is a fiduciary relation. Both agents and trustees are placed
in positions of intimacy, where it is easy for them to tkke advan-
tage of those who have trusted them. Because of this fiduciary el-*^
ement, agents and trustees are under a common prohibition against
acting for their private interests when managing the affairs of
those for whom they act. For example, neither can purchase the
property which is the subject of his dealings, if the principal or
cestui que trust objects."^ And they are classed together as
"fiduciaries" under statutes making such persons liable to arrest in
given cases." This common feature has led sorne authors to con-
fuse the two relationships,*^ and others to call the agent a "quasi
trustee" '* but the distinctions stated below show good reasons
;

'
for keeping them separate.

Points of Difference ,

It has been seen that an essential feature of the trust is the own-
ership by the trustee of property for the benefit of the cestui que
trust. The agent, on the other hand, need own no property. He
acts for his principarl, and often cares for, or transports, or sells
'
property ; but it is ordinarily** property to which the legal and eq-
uitable titles are in the principal.
A trust is indestructible and irrevocable by its settlor, in the, ab-
sence of a power of revocation expressly reserved.'"' Once a ttust
is fully created, it must continue throughout the term provided.
The death of the settlor or of the trustee will not affect the life of
the trust.^* If the latter die, a new trustee will succeed him. On
the contrary, an agency is revocable at the option of the principal,
unless it be coupled with an interest, and is revoked by the death
of either party.''* The personality of the particular parties with

8= Bain v. Brown, 56 N. Y. 285; Copeland v. Mercantile Ins. Co., 6 Pick.

(Mass.) 198; Story, Agency (9th Ed.) S 211.
88 Code Civ. Proci N. T. § 549.
67 "The terms 'trustee' and 'agent' are frequently used in a loose way, as
though those terms marked off absolutely distinct and separate duties and
liabilities. All trustees, however, are agents; but all agents are not trustees.
A trustee is an agent and something more." Ewell's Evans on Agency, 349.
88 Marvin v. Brooks, 94 N. X. 71.
89 There seems to be no reason why a principal may not transfer the legal
title to property to his agent for the purposes of the agency; but such
agencies are not common, and the courts would probably be apt to declare a
trust created,
7 Kraft v. NeufEer, 202 Pa. 558, 52 Atl. 100.
71 Lyle V. Burke, 40 Mich. 499.
72 Viser v. Bertrand, 16 Ark. 296; Eowe v. Rand, 111 Ind. 206, 12 N. B.

3T7; Flaherty v. O'Connor, 24 B. I. 587, 54 Atl. 376.

BOGEET TEUSTS —
 34 DISTINCTIONS BETWEEN TRUSTS AND OTHER RELATIONS (Ch. 2

whom the relation begins is of the essence, and no others can be

substituted therefor.
Furthlermore, the agent, contracting in the name of his principal,
incurs no personal responsibility for the performance of his con-
tracts. The trustee is personally liable upon contracts made in the
performance of the trust, though he has the right of inde'mnity, and
the cestui que 'trust is not responsible on such contracts.'^ The
agent is a mere tool or instrument in the principal's hands, but the
trustee is' a separate, responsible party.
It should be noticed that the principal's rights against the agent
are legal rights, and that ordinarily his remedy is in a court of
law.''* The cestui's rights are equitable.
Frequent occasions arise for making this distinction between
trust and agency.''"

GUARDIANSHIP
13. Guardianship resembles trusteeship, in that it is a fiduciary re-
lation, but it is distinguished by the guardian's lack of ti-
tle to the property concerned.

Guardians (sometimes called committees or curators) of infants,

spendthrifts, and in,competents resemble trustees by virtue of the

''Taylor v. Davis, 110 U. S. 330, 335, 4 Sup. Ct. 147, 28 L. Ed. 163;
Shepard v. Abbott, 179 Mass. 300, 60 N. E. 782 Hartley v. PbUlips, 198 Pa.
;

9, 47 Atl. 929.
A
principal may, however, obtain an accounting from his agent in equity.
''*

Warren v. Holbrook, 95 Mich. 185, 54 N. W. 712, 35 Am. St. Rep. 554 ; Marvin
V. Brooks, 94 N. Y. 71.
'°In the following cases the question was one of revocation: Viser v.
Bertrand, 16 Ark. 296; Kowe v. Band, 111 Ind. 206, 12 N. E. 377; Lyle v.
Burke, 40 Mich. 499. In others the problem was one of personal liability by
agent or trustee. Shepard v. Abbott, 179 Mass. 300, 60 N. E. 782 Hartley v. ;

Phillips, 198 Pa. 9, 47 Atl. 929 ;. Taylor v. Davis, 110 U. S. 330, 4 Sup. Ct. 147,
28 L. Ed. 163. In Coggeshall v. Coggeshall, 2 Strob. (S. C.) 51, the occasion
for distinction was a question of evidence, while in Weer v. Gand, 88 111. 490,
the preference of a claim against an estate depended upon the distinction be-
tween agency and trust.
That the officer is called a "trustee" has not prevented the courts from
finding that he was in fact an agent. Viser v. Bertrand, 16 Ark. 296 ; Eowe
V. Band, 111 Ind. 206, 12 N. E. 377.
Where A. sent a check to B., payable to the order of B., to be used in pay-
ing an assessment against realty, and B. deposited it to his own credit and
gave a clerk his own check to pay the assessment, and -the clerk embezzled
the proceeds of this second check; and thereafter A. and B. died; it was
held that B. was not a trustee, but a mere agent, and the agency was revok-
ed by death. Title Gi^arantee & Trust Co. y. Haven, 214 N. Y. 4G8 108 N
\E. 819.
 § 14) POWERS 35

relation of trust and confidence which they sustain to their wards.

Both guardians and trustees control property of others, toward
whom the most scrupulous honesty and good faith must be observ-
ed. The guardian, as the trustee, when acting ofificially, must act
'solely for his beneficiary and never in his own interest. If a guard-
ian purchase outstanding claims against his ward's property, for
example, he can derive no benefit therefrom. The purchase will
inure to the benefit of the ward."
A guardian is sometimes said to be a strict trustee.''' But the
better view in America is that the guardian has no title to the prop-
erty of his ward, but only a right to its possession and a power to
deal with it in certain ways.'* (

The lack of title to the property of his ward distinguishes the

guardian from the true trustee, since the latter always holds the title to
some property for the benefit of his cestui.
Guai-dianships are dealt with largely in courts of probate or sur-
rogate's courts, whereas trusts are the special province of 'chancery.

POWERS
14. A beneficial power bears no resemblance to a trust. A power
in trust is a trust in which the trust res is a power to dis-
pose of property, '

Powers are "beneficial" and "in trust." A power is beneficial

"where no person other than the grantee has, by the terms of its

^e Lee v. Fox, 6 Dana (Ky.) 171, 176.

'''-Eversley,Domestic Relations (2d Ed.) 659; Tiffany, Persons and Domes-
tic Kelations, 319; Schouler, DomesUc Relations (5th Ed.) § 322. "The
view I take of this case is that the relation of guardian and ward is strictly
that of trustee and cestui que trust. I look on it as a peculiar relation of
trusteeship, and this appears from the case of Duke of Beaufort v. Berty.
A guardian is not only a trustee of the property, as in an ordinary case of
trustee, but he is also the guardian of the person of the infant, with many
duties to perform, such as to see to his education, and maintenance." Mathew
V. Brise, 14 Beav. 341, 345.
7 8 Longmire v. Pilkington, 37 Ala. 296, 297; Welles v. Cowles, 4 Conn. 189,

10 Am. Dec. 115 MuUer v. Benner, 69 111. 108 Hutchins v." Dresser, 26 Me.
; ;

76, 78; Moore Hazelton, 9 Allen (Mass.) 102, 104; Manson v. Felton, 13
v.
Pick. (Mass.) 206, 211; Rollins v. Marsh, 128 Mass. 116, 118; Grist v. Fore-
.^and, 36 Miss. 69; Judson v. Walker, 155 Mo. 166, 55 S. W. 1083; Seilert v.
McAnally, 223 Mo. 505, 515, 122 S. W. 1064, 135 Am.. St. Rep. 522 ;Newtoa,
V. Nutt, 58 N. H. 599, 601 ; McDuffie T. Mclntyre, 11 S. C. 551, 560, 32 Am.
Rep. 500; Woerner, The American Law of Guardianship, 172. But see Mc-
CoU V. Weatherly, 5 Strob. (S. O.) 72; Hunter v. Lawrence's Adm'r, 11 Grat.
(Va.) Ill, 62 Am. Dec. 640. In- the following cases the right of the guardian
36 DISTINCTIONS BETWEEN TRUSTS AND OTHER RELATIONS (Ch. 2

creation, any interest in its execution." " A power is in trust when

another than the grantee of it is entitled to any benefit from its exe-
cution.'" It is obvious that a beneficial power has no likeness to
a trust. The holder of the power has a right which exists solely
for his own benefit. He is no more like a trustee than the abso-
lute owner of a horse. Thus, if A. be given a life estate in real
property, with a general power of disposal, by deed or will, A.'s
power is his own property, as much as his life estate.

The donee of a power He is not vested

in trust is a trustee.
with the legal title to corporeal property for the benefit of anoth-
er, but he is intrusted with an incorporeal right over property for
the benefit of another. Thus, if A. devise real property to B. for
life,. subject to a power in B. to dispose of the property by will in

favor of B.'s children, B; is the holder of a power in trust, and the

beneficiaries are his children. B. is a trustee, just as he would be
if the legal title in fee to the land had been given him to hold for

the benefit of his children.

Many cases have arisen in which the courts have had some diffi-

culty in deciding whether a given instrument created a trust or a

power; *^ but the difficulty has been in ascertaining the intent of

the testator ordinarily, and not in keeping clear the nature of trusts \

and powers.

PROMOTERS AND OFFICERS OF CORPORATIONS.

15. Promoters and officers of corporations are in relations of trust
and confidence toward the stockholders and the- corpora-
'

tion, but are not technical trustees for either the stock-
holders or corporation, because they do not hold title to
any specific property to the benefit of which the latter are
entitled.

is said tobe a power coupled witli an interest: Lincoln v. Alexander, 52

Cal. 482, 28Am. Eep. 639 ; Van Doren v. Everitt, 5 N. J. Law, 528, 8 Am.
Dec. 615; People v. Byron, 3 Johns. Cas. (N. Y.) 53; Pepper v. Stone, 10
Vt. 427.
^» New York Eeal Property Law (Consol. Laws, c. 50) § 136.
'"New York Keal Property Law (Consol. Laws, c. 50) §S 137, 138.
81 In re Campbell's Estate, 149 Cal. 712, 87 Pac. 573^ Allen v. McFarland,
150 lU. 455, 37 N. E. 1006; Thi^me v. Zumpe (Ind.) 51 N. E. 86; Haug v.
Seliumacher, 166 N. Y. 506, 60 N. E. 245; Post v. Hover, 33 N. Y. 593; NefTs
Ex'rs V. Neff's Devisees, 3 Ohio Dec. 75 ; Manierre v. Welling, 32 R. I. 104, 78
AU. 507, Ann. Cas. 1912C, 1311.
 ;

§ 15) PEOMOTEES AND OPFICEES OP COEPOEATIONS 37

Promoters
Promoters of corporations have sometimes been loosely called
"trustees" for the corporation to be organized or its stockholders.'^
The promoter, like the trustee, is no doubt a fiduciary. He occu-
pies" a position of trust and confidence, where he has unusual op-
portunities to take advantage of others, and where he is prohibited
from acting for his individual interest in any way.^^ But he is not
a technical trustee. He holds title to no definite property for the benefit
of others. The corporation is not yet in existence. He cannot be
a trustee for it. He does not hold any definite property for the
prospective stockholders' benefit. Such property as the promoters
become the owners of, in preparation for the organization of the
corporation, they own absolutely.** Their position seems to be
that of "anticipatory" agents.*°
The promoter may become a trustee for stockholders or a corpo-
ration.Thus,5f he make a secret ^x)fif for himself out of transac-
tions with the corporation; equity will fasten a constructive trust
upon such profits in favor of the stockholders.**! But such a trust
arises out of wrongdoing by the promoters. In their normal re-
lation, promoters are not in any true sense trustees.

OMcers
Directors, trustees, and other officers of corporations are often
spoken of by judges and legal writers as "trustees," or as in a

82 Central Trust Co. v. East Tennessee Land Co. (C. C.) 116 Fed. 743;
Teiser v. United States Board & Paper Co., 107 Fed. 340, 46 C. O. A.
567, 52 L. R. A. 724; Wills v. Nehalem Coal Co., 52 Or. 70, 96 Pac. 528;
Jordan & Dayis v. Annex Corporation, 109 Va. 625, 64 S. B. 1050, 17 Ann. Cas.
267; Mangold v. Adrian Irr. Co., 60 Wash. 286, 111 Pac. 173. See Wilgus,
Corporations and Express Trusts as Business Organizations, 13 Mich. Law
Rev. 205 ; Maitland, Collected Papers, vol. 3, p. 321.
S3 Goodwin v. Wilbur, 104 lU. App. 45; Old Dominion Copper Mining &
Smelting Co. v. Bigelow, 203 Mass. 159, 89 N. E. 193, 40 L. R. A. (N. S.) 314;
Torrey v. Toledo Portland Cement Coi, 158 Mich. 348, 122 N. W. 614 ; Oolton
Imp. Co. V. Richter. 26 Misc. Rep. 26, 55 N. X. Supp. 486 ; Goodman v. White,
174 N. O. 399, 93 S. E. 906.
8* Reynolds v. Title Guaranty Trust Co., 196 Mo. App. 21, 189 S. W. 33
Arnold v. Searing, 78 N. J. Eq. 146, 78 Atl. 762 Alger, Law of Promoters, S 21.
;

85 Arnold v. Searing, 78 N. J. Eq. 146, 78 Atl. 762 ; 1 Thompson on Cor-

porations (2d Ed.) § 103; 2 Coob on Corporation^ (6th Ed.) § 651; 1 Clark
& Marshall on Priv. Corp. § 110b.
86 Exter V. Sawyer, 146 Mo. 302, 47 S. W. 951 ; Groel v. United Electric Co.
of New Jersey, 70 N. J. Eq. 616, 61 Atl. 1061 ; Colton Imp. Co. v. Richter, 26
Misc. Rep. 26, 55 N. X. Supp. 486; Shawnee Commercial & Savings Bank
v. Miller, 24 Ohio Cir. Ct. R. 198; Pietsch v. Milbrath, '123 Wis. 647, 101 N.
W. 388, 102 N. W. 342, 68 L. R. A. 945, 107 Am. St. Rep. 1017.
38 DISTINCTIONS BETWEEN TRUSTS AND OTHEK RELATIONS (Ch. 2

"trust relation," or as "charged with a trust." " But they are not
technical trustees. They lack wholly the element of property own-
ership. The corporation itself is holder of the title to the -proper'
ty with which the officers have to do. The ofHcers have no equita-
ble or legal ownership. °*
Directors, trustees, and other corporate ofifkers are fiduciaries,
as are agents, executors, guardians^ and strict, technical trustees.
As corporate officers they owe a duty of extraordinary good faith to
the stockholders, because of the peculiar intimacy of the relations
and the ease with which the officers could take advantage of the
stockholders. The officers must act solely for the interest of the
stockholders, as the trustee must work solely for the benefit of his
cestui.*' But, aside from this fiduciary element, the two relations
are not similar.
Officers of corporations, like promoters, may become trustees in
a technical sense for the stockholders, if they are guilty of wrong-
doing which results in a secret profit to themselves. Equity will
declare the officers constructive trustees of such unlawful profits.
But the corporate officer who performs his duty is not a technical
trustee.

WILLS
16. A trust which provides for benefits to commence at the death
of the settlor, and in which a power o£ revocation is re-
served to the settlor, differs from an absolute devise or
bequest, in that the rights of the cestui que trust arise up-
on the execution and delivery of the trust deed, whereas
the rights of the legatee or devisee arise only at the death
of the testator.

"Jackson v. Ludeling, 88 U. S. (21 Wall.) 616, 22 L. Ed. 492; Gillett v.

Bowen (C. C.) 23 Fed. 625; Beers v. Bridgeport Bridge Co., 42 Conn. 17;
Colquitt V. Howard, 11 Ga. 556; Cumberland Coal & Iron Co. v. Parish, 42
Md. 598 Hun v. Cary, 82 N. Y. 65, 37 Am. Bep. 546 ; 2 Thompson on Cor-
;

porations (2d Ed.) § 1269.

88 Appeal of Spering, 71 Pa. 11, 20, 10 Am.
Rep, 684; Wallace v. Lincoln
Sav. Bank, 89 Tenn. 630, 649, 15 S. W. 448, 24 Am. St. Rep. 625 ; Boyd v.
Mutual Fire Ass'n of Eau Claire, 116 Wis. 155, 90 N. W. 1086, 94- N.
61 L. R. A. 918, 96 Am. St. Rep. 948 ; 3 Clark & Marshall on Priv! Corp.
W 171,
§
748; 2 Cook on Corporations (6th Ed.) p. 1856, note.,
8 Coons V. Tome (C. C.) 9 Fed, 532; Wright v. Oroville Gold, Silver &
Copper Min. Co., 40 Cal. 20; Slee v. Bloom, 20 Johns. (N. T.) 669; Hedges v
Paquett, 8 Or. 77 ; Philadelphia, W. & B. R. Co. v. Cowell, 28 Pa.
329, 70 Am!
Dec. 128; Hope v. Valley City Salt Co., 25 W. Va. 789.
§ 16) WILLS ,
39

Occasionally it is difficult to decide whether a giyen disposition

of property was testamentary, or created a trust which provided
for benefits to begin at the death of the settlor. If the instrument'
gives the creator of it the power of revocation during his life,'"
which he has in the case of a will, and provides that the interest of
the donee shall commence at the settlor's death,*^ the only impor-
tant distinction between the trust and the will is that the trust deed
takes effect at once, and creates a vested or contingent right in the
cestui, dependent on the terms of the trust instrument, while the
will takes effect only as of the date of the testator's death. The
cestui's rights under the deed presumed arise on the execution and
delivery of that instrument, 'and whether they are vested or contin-
gent depends only on the terms of the instrument; the devisee's or
legatee's rights, because of the ambulatory nature of the instru-
ment which creates them, cannot arise, no matter what the wording
of the will^, until the testator's death. *^ "So far as their legal effect
is concerned, the characteristic distinction between a will and a
trust is that, while the former becomes operative only at the
death of the testator, a trust passes an interest to the trustee and
beneficiary instantly upon the execution and delivery of the writ-
ing by .which it is created." *^
It might, at first thought, appeai; that a distinction might be
made on the ground that the cestui's rights are equitable, while the
devisee's or legatee's rights are legal; but the latter statement is
not universally or necessarily true. The devise or legacy may be of
an equitable interest.®*

90 "A power of revocation in a deed of trust does not render the instrument
testamentary." Wilcox y. Hubbell, 197 Mich. 21, 39, 163 N. W. -497, 503.
See, also, Kelly v. Parker, 181 111. 49, 54 N. E. 615 Kelley v. Snow, 185 Mass.
;

288, 70 N. E. 89 ; Robb v. Washington & Jefferson College, 185 iJ. Y. 485, 78

N. E. 359; Van Cott v. Prentice, 104 N. T. 45, 10 N. E. 257; Windolph v.
Girard Trust Co., 245 Pa. 349, 91 Atl. 634.
91 "The general rule is that, if the intention of the grantor at the time he
delivered the deed was to part with the legal title, the trust will be enforced
in favor of the beneficiaries, even though their enjoyment of the estate is
postponed until the death of their benefactor." Wilson v. Anderson, 186 Pa.
531, 539, 540, 40 AtL 1096, 44 L. R. A. 542. Such a postponement of the enjoy-
ment does not make the gift testamentary. Lewis v. Curnutt, 130 Iowa, 423,
106 N. W. 914; Hallowell Sav. Inst. v. Titcomb, 96 Me. 62, 51 Atl. 249;
Scrivens v. North Easton Sav. Bank, 166 Mass. 255, 44 N. E. 251.
82 Jarman on Wills (6th. Ed.) 27.
93 Lewis v. Curnutt, 130 Iowa, 423, 429, 106 N. W. 914.
9* In the following cases, where the question of construction arose, it was.
held that a trust was created^: Cahlan v. Bank of Lassen County, 11 Cal.
App. 533, 105 Pae. 765 ; Ward v. Cohklin, 232 111. 553, 83 N. E. 1058 Ewing
;

V. Jones, 130 Ind. 247, 29 N. E. 1057, 15 L. R. A. 75 Baxter v. Smith, 64 N.

;

J. Eq. 793, 53 AtL 1125; Lauterbach v. New

York Investment Co., 62 Misc.
 ;

40 DISTINCTIONS BETWEEN TRUSTS AND OTHER RELATIONS (Ch. 2

CONTRACT
17. Differences between trust and contract are:
(a) Historical, namely, that the contract obligation was first en-
forced by the courts of law, while the trust duty was a
creat^ire of chancery;
(b) That contracts require consideration to render them enforce-
able, while trusts do not;
(c) That the object of' the agreement which is called a contract
generally solely the creation of, obligations, while the.
is
object of a trust agreement is the creation of a status, in-
cidental to which are certain obligations
(d) That in contract the parties asstune by virtue of the contract
no duties except those expressly stated, whereas the trust
instrument gives rise to certain law-imposed duties, as well
as those expressly assumed;
(e) That in contract no specific property need be the subject of
the agreement, while in trust definite property is essential.

Distinctions Elaborated
It sometimes happens that an agreement raises the question
whether contract duties or trust obligations have been created.''^
Thus, in an interesting case,** A. delivered nioney to B. for the pur-
pose of having masses said for the soul of A. after her death, and
B. agreed to use the money for that purpose. The court held the
transaction valid as a cojitract, although it wou],d not have been
good as a trust, because of the lack of beneficiaries capable of en-
forcing it.
Treating the agreement as a contract, B.'s obligation was a com-
mon-law obligation; that is, it was one originally enforceable in
England in courts of law. Had B. been a trustee and the trust
been valid, B. would have been subject to duties originally recog-
nized as binding only by Courts of Chancery. This historical dis-
tinction is increasingly of less importance, due to the quite general

Eep. 561, 117 N. Y. Supp. 152 ; Esbb v. Washington & Jefferson College, 185
N. Y. 485, 78 N. E. 359 Kelley v. Snow, 185 Mass. 288, 70 N. E. 89 HamUn
; ;

V. Hamlin, 59 Wash. 182, 109 Pac. 362. In other cases the Intent was con-
strued to be testamentary. Bullen v. State of Wisconsin, 240 U. S. 625, 36
Sup. Ct. 473, 60 L. Ed. 830; NiccoUs v. Niccblls, 168 Cal. 444, 143 Pac. 712;
McEvoy y. Boston Five Cents Sav. Bank, 201 Mass. 50, 87 N. B. 465 ; Russell
V. Webster, 213 Mass. 491, 100 N. E. 637.
»= The distinctions between some special contracts, as agency and bailment,
have been previously considered. See ante, §§8, 12. This section deals only
with the differences between contracts as a class and trusts.
»6 Oilman v. McArdle, 99 N. T. 451, 2 N. E. 464, 52 Am. Rep. 41.'
 § 17) CONTRACT 41

abolition of separate^ courts of equity; but it is said by one learned

author to be the source of all differences now maintained between
trust and contract."'
It should be noted in addition that B.'s obligation to use- the
money for the procurement of masses, in the illustration given, js
,

enforceable as a contract obligation only when B. has received

consideration for his promise so to apply the money, while, on the
other hand, as a trust duty, B.'s obligation so to use the money
would be capable of enforcement regardless of consideration
passing to B-, or passing from the cestuis que trust, if they were
defined persons."*
In England and a few American states the distinction might also
be made that B.'s contractual obligation to apply the money for ^

masses could not be enforced by any third person for whose bene-
fit it was made, but only by the promisee, or his representatives,'"

while a trust duty on B.'s part to apply the money for the benefit
of cestuis, were they definite persons, could be enforced by them,
notwithstanding that no promise was made to th^m. But in
American states generally a contract for the benefit of a third per-
son is enforceable by such third person, and hence this distinction
is not of large importance.^
It may be further noticed that the sole object of the agreement
between A. and B., if it be an agreement creating a contract, is
to give rise to an obligation from B. to A. to apply the money for
the procuring of masses. This is true of a great majority of con-
tracts, whereas, if A. and B. agree upon a trust for this purpose,
their intent is not only to create obligations from B. to A. to apply
the money as 'agreed, but also to create a status lin which A. and
B. are parties, namely, a trust. The trust agreemeht, unlike the
contract, universally creates a stetus, as well as gives rise to ob-
ligations.^ I

Likewise, B.'s position as a contractor dififers from his position

as a trustee, in that in the former place his obligations to A. by
virtue of the agreement which they make are all expressly assumed
by B. ; while, if B. becomes a trustee, his duties are measured, not
only by what he expressly promises, but also by the duties which
the law imposes on him, as, for example, the duty to act solely in
the interest of the cestui que trust.

»TMaitland, Equity, 54. /

w. »8 See post, § 22; TJnderhill, Trusts and Trustees (4th Ed.) 5.
»» Hart, What is a Trust? 15 Law Quart. Rev. 294, 300.
1 Wald's Pollock on Contracts (Williston's Ed.) 237.
2 Anson, Contracts (HufEcut'g Ed.) 4, 10.
*2 DISTINCTIONS BETWEEN TRUSTS AND OTHER RELATIONS (Ch. 2

Contracts may or may not deal with specific property. B., in

the illustration given, had specific money given to him for use in
procuring the masses; but he might have agreed for a considera-
tion to use any mo^ey of his own for that purpose. The trust,
cdntrariwise, as often stated, presupposes definite property as its
subject-matter.
 § 18) EXPRESS AND IMPLIED TRUSTS 43
I

CHAPTER III

CREATION OF EXPRESS TRUSTS

18. EJxpress and Implied Trusts.
19. Language Necessary.
20. Tormality — Statute of Frauds.
21. Formality— Statute of Wills.
22. Consideration.
23. Disposition of Trust. Instrument.
24. Notice of the Trust.
25. Acceptance.
26. Disposition of Trust Property.
27. Savings Bank Trusts.

EXPRESS AND IMPLIED TRUSTS

18. Trusts are classified, with respect to their method of creation,
as e.xpress and implied. Express trusts are created by
the stated intent of the settlor that they shall exist, accom-
panied by the necess,iry disposition of the trust property.
Implied trusts are those adjudged to exist by courts of
equity, either because of a presumed intent that they shall
exist or for the purpose of preventing the unjust enrich-
ment of the holder of a title.

In considering the origin of trusts two classes are usually fixed.

Those trusts which come into being because the parties concerned
have formed the actual intent that they shall arise, have express-
ed that intent in written or spoken words or otherwise, and have
made the requisite property transfers, are called express trusts.
Thus, if A. executes a writing whereby he declares himself trus-

tee of certain lands for B., using the words "trustee" and "cestui
que trust," and describing tbe particular land as the subject of the
trust, there is an express trust.
But there are certain trusts which do not have back of them
any written instrument or oral expression or other acts showing
a trust intent. These latter trusts are called implied, and are divid-
ed into two classes, nam eiyV resulting ancr constructive.^ The for-

-
Messrs. Lewln and Perry, respectively the authors of the best-known Eng-
1

lish and American texts on the subject of trusts, have introduced some
confusion into the classification of trusts by giving to the phrase "implied
trusts" a peculiar meaning. They define as implied those trusts which ex-
ist because of certain language used by the parties which does not directly
create a trust, but is construed \by the courts to have that intent. Under
this definition implied trusts arise from ambiguous or doubtful language
 —

44 CREATION OP EXPRESS TRUSTS (Ch. S

mer occur where the courts presume- from certain acts that the
parties intended a trust to exist, although the parties expressed
no such trust intent and may not actually have had it. The lat-
ter,namelyjconstructive imposed by chancery on the
trusts, are
holders of legal or equitable titles as a means of accomplishing jus-
tice and preventing unjust enrichment J[ Constructive trusts are
not based on the intent of the parties, either actual or presumed.
They are often called involuntary trusts, or trusts ex Inaleficio.
Thus, if A. pay the purchase price of land -w^hich is conveyed to B.
in conSderation of such purchase price, 'tequity will presume that
A. intended B. to act as trustee for A. and a trust will result.
While if A., when occupying a fiduciary relation to B., fraudulent-
ly obtains B.'s property, B. may have A. declared a constructive
trustee of the property. The
further definition of implied trusts is
left to a later section, where The steps
their origin is considered.
leading to the creation of express trusts will first be described.

LANGUAGE NECESSARY
19. The language relied upon for the creation of an express trust
must
(a) Manifest an intent that an express trust arise, and
(b) Describe with certainty and completeness the trust essen-
tials> except the trustee.
No. particular words or phrases need be used to express this in-
tent and embody this description.
\
used by the parties, which is held by the courts to disclose an actual
trust
intent. Lewin, Trusts (12th Ed.) 124, note; 1 Perry on Trusts (6th Ed.)
§ 112. These authorities have led several American courts into the classifi-
cation of trusts into four groups, namely, express, implied,
resulting, and
constructive. Kayser v. Maughan, 8 Colo. 232, 6 Pac. 803; Plum
Tree Lime
Co. V. Keeler, 92 Conn. 1, 101 Atl. 509, Ann. Cas.,1918E,
831; Weer v.
Gand, 88 111. 490; Holsapple v. Schrontz, 65 Ind. App. 390, 117
Stevens v. Fitzpatrlck, 218 Mo. 708, 723, 118 S. W. 51; Burks
N E 547-
v. Burks
7 Baxt. (Tenn.) 353, 355; Olcott v. Gabert, 86 Tex. 121, 127, 23 &.
Gottstein v. Wist, 22 Wash. 581, 590, 61 Pac. 715.
W
985-

But the prevailing view in America is that implied trusts should be

de-
fined as including resulting and constructive trusts
only. Eaton v Barnes
121 Ga. 548, 49 S. E. 593; Rice Dougherty, 148 111. App. 368;" Heil v!
v.
Heil, 184 Mo. 665, 675, 84 S.' W. 45; Lovett v. Taylor, 54 N. J. Eq 311
34 Atl. 896; Gorrell v. Alspaugh, 120 N. C. 362, 366, 27 S. E. 85- McCoy
V. McCoy, 30 Okl, 379, 121 Pac. 176, Ann. Cas.
1913C, 146; 15 Am. & ,Eng
Enc. Law (2d Ed.) 1123; 39 Cyc.i24. Even though it might
be desirable
if one were treating the matter de novo, to use
"implied" in its natural
sense, as, for example, as it is used in the law of contract,
the terminology
herein used is so deeply imbedded in the law that it would seem
unwise to
. attempt a change. ,
 : ;

§ 19) LANGUAGE NECESSARY 45

Precatory expressions are words of request or recommendation.

Whether they create a trust is a matter of construction.
In determining the supposed sfettlor's intent the follow-
ing facts, among others, should be considered
(a) The definiteness of the subject-matter and the beneficiaries
(b) The amount of discretion allowed the trustee;
(c) The relationship of the alleged cestui que trust to the sup-
posed settlor and the obligations of the latter to the for-
mer;
(d) The wording of the gift, whether first made absolutely
and then affected by precatory words in a later and sep-
arate part of the will, or whether the words of gift and
precatory expressions are bound up together in a single!
clause, sentence or paragraph.
The burden is upon the party alleging the existence of an ex-
press trust to prove by unequivocal evidence that the
langiiage used was sufficient for its creation.

Language Used Must Express Intent That Trust Shall Arise

Obviously, unless the language used by the settlor indicates an
intent that a trust come into existence, no express trust will be
created, whatever the words employed.* The very definition of
express trusts indicates that they spring from the will of the par-
ties. Thus, words expressing an intent to make an absolute gift
will not, when the gift is imperfect, create a trust;* and words
showing an intent to convey in trust at some time in the future
do not establish a present trust.* A purpose to give property to a
corporation absolutely for its corporate purposes will not found
an express trust with the corporation as. trustee.*

Seabroot v. Grimes, 107 Md. 410, 68 Atl. 883, 16 li. R. A. (N. S.) 483,
2

126 Am. St. Rep. 400; Colmary v. Fanning, 124 Md. 548, 92 Atl. 1045; Rich-
ardson V. Inglesby, 13 Rich. Bq. (S. C.) 59. In expressing this intent the
settlor's mind must act freely. Thus, if undue influence afCects it, the cre-
ation of the trust will be set aside. Beard v. Beard, 173 5y- 131, 190
S. W. 703, Ann. Cas. 1918C, 832. For practical suggestions concerning the
creation of trusts, see Thulin, Formal Creation of a Trust Inter Vivos, 11
111. Law Rev. 619.
3 Pratt V. Griffin, 184 111. 514, 56 N. E. 819 ; In re Ashman's Estate, 223
Pa. 543, 72 Atl. 899; Johnson v. Williams, 63 How. Prac. (N. Y.) 233. This
is true even though the donor expresses a- hope that the donee will at some
time return the property or Its avails. Murray v. Ray, 251 Fed. 866, 164
<]. C. A. 82.
Reynolds v. Thompson, 161 Ky. 772, 171 S. W. 379.
*
Clarke v. Sisters of Society of the Holy Child Jesus, 82 Neb.
5 85, li7
N. W. 107 In re Durand, 194 N. Y. 477, 87 N. E. 677.
;
46 CREATION OP EXPRESS TRUSTS (Ch.3

No Words Required
Particular
words used convey the intent to establish a trust, they
If the
will have that effect. No formal or technical expressions are re-
qiiired.* For example, it is not necessary that the settlor use
the words "trust" or "trustee,"^ and the designation of one as a
"trustee" does not conclusively creation of a trust.'
show the
The language used may be although the person actu-
sufficient,
ally intended to be a trustee is called an "executor," ' an "attor-
ney," ^0 an "agent," " or a "guardian." If the duties required of
^^

the officer appopted are those of a trustee, the party nominated

will be held to be a trustee, regardless of terminology used:^'
So free from technicality are the rules regarding the creation of
trusts that the trustee of a real property trust will take whatever
estate is necessary for the performance of his duties, regardless of
the presence or absence of the word "heirs" or other technical
words limiting the estate granted.^*

6 Teal V. Pleas. Grove Local Union No. 204, 202 Ala. 23, 75 South. 335;
In re Heywood's Estate, 148 Cal. 184, 82 Pac. 755; Anderson v. Crist, 113
Ind. 65, 15 N. E. 9; Citizens' Loan & Trust Co. v. Herron, 186 Ind. 421,
115 N. E. 941; Eeeder v. Reeder, 184 Iowa, 1, 168 N. W. 122; Blake v.
Dexter, 66 Mass. (12 Cush.) 559; O'Neil v. Greenwood, 106 Mich. 572, 64
N. W. 511; Moulden v. Train, 199 Mo. App. 509, 204 S. W. 65; Putnam
V. Lincoln Safe Deposit Co., 191 N. Y. 166, 83 N. E. 789 ; Martin v.s Moore,
49 Wash. 288, 94 Pac. 1087. In some states recent statutes require a de-
scription of the trust and identification of the cestui que trust. A convey-
ance to one "as trustee" merely is presumed to be absolute. Laws N. D.
1917, c. 239 ;Laws Or. 3,919, c. 436 Laws Wis. 1919, c. 47.
;

7 Carr v. Carr, 15 Cal. App. 480, 115 Pac. 261 ; Hughes v. Fitzgerald, 78
Conn. 4, 60 Atl. 694; In re Soulard's Estate, 141 Mo. 642, 43 S. W. 617;
Morse v. Morse, 85 N. Y. 53.
8 Bank of Visalla v. Dillon wood Lumber Co., 148 Cal. 18, 82 Pac. 374;

In re Hawley, 104 N. Y. 250, 10 N. E. 352; Sansom v. Ayer & Lord Tie

Co., 144 Ky. 555, 139 S, W. 778. A gift to two brothers, "to be placed in
savings bank in trust," with no mention of a trustee, is an absolute^ gift.
Birge v. Nucomb, 93 Conn. 69, 105 Atl. 335.
9 In re Anck's Estate, 11 Phila: (Pa.) 118.
10 Mersereau v. Bennet, 124 App. Div. 413, 108 N. Y.
Supp. 868.
"Anderson v. Fry, 116 App. Div. 740, 102 N. Y. Supp. 112.
12 In re Liehtenstadter, 5 Dem. Sur. (N. Y.) 214.
i^Eyder v. Lyon, 85 Conn. 245, 82 Atl. 573; Rantz v. Dale, 158 111. App.
244; Mee v. Gordon, 187 N. Y. 400, 80 N. E. 353, 116 Am. St. Rep. 613,
10 Ann. Cas. 172.
1* Tyler v. Triesback, 69 Fla. 595, 69 South. 49; West v. Fitz, 109 111.
425; Packard v. Old Colony R. Co., 168 Mass. 92, 46 N. E. 433; Chamber-
lain V. Thompson, 10 Conn. 243, 26 Am. Dec. 390; Ewing v. Shannahan,
113 Mo. 188, 20 S. W. 1065; Fisher v. Fisher, 41 N. J. Eq. 16, 2 Atl. 608;
Welch vj Allen, 21 Wend. (N. Y.) 147; Williams v. First Presbyterian Soc.
in Cincinnati, 1 Ohio St. 478; contra, Evans v. King, 56 N. C. 387; Allen
§ 19) LANGUAGE NECESSAKT 47

Precatory Expressions
The cases in which greatest difficulty arises in discovering wheth-
er a property owner ii^tended a trust to be created are those in
which he uses "precatory expressions." Precatory expressions are
"words of entreaty, request, wish, or recommendation." ^° If, for
example, instead of giving property to A. "in trust for B.," the
owner devise it to A. "with a request that A. care for B. from the
income of such property," the latter expression of desire is called
preca,tory.^'
The basic principle in the construction of precatory expres-
sions is weH stated by a distinguished judge. *"The primary ques-
tion in every case is the intention of the testator, and whether in
the use of precatory words he meant merely to advise or influence
the discretio,n of the devisee, or himself to control or direct the
disposition intended." ^^ ^

,
The words "request," "desire," and the like, do not naturally
import a legal obligation. But the early view in England was that
'

'such words, when used in a will, were to be given an unnatural *

meaning, and were tO be held to be courteous and softened means
of creating duties enforceable by the courts.^* According to that
opinion words of request prima facie created a trust. But since
the beginning of the nineteenth cerjtury the English courts have
chainged their stand upon this question, and now hold that the nat-
ural significance of precatory words is not a trust, but that such
ari' obligation may be shown by other portions of the instrument

V. Baskerville, 123 N". C. 126, 31 S. E. 383. But see Fulbright, v. Toder, 113
N. C. 456, 18 B. 713.
S.
15 Black's Law Diet. (2d Ed.) 928.
18 The trusts sometimes created by sueh words of entreaty or request are
often called "precatory trusts." Kepllnger v. Keplinger, 185 Ind. 81, 113 N.
E. 292 ; Simpson v. Corder, 185 Mo. App. 398, 170 S. W. 357 ; Hunt v. Hunt,
18 Wash. 14, 19, 50 Pac. 578. But it is submitted that it is more satis-
factory to reserve the word "precatory" for the description of the expres-
sion to be construed. If the construction is that a trust is created, there
is no object in distingtiishing it from any other trust by calling it a "preca-
tory", trust. "A great deal has been said in argument and a great many
cases have been cited as to what are awkwardly, and in my opinion in-
correctly, called 'precatory trusts.' As I understand the law of the court,
this iphrase is nothing more than a misleading nickname. When a trust
1^ once established, it is equally a trust, and has all the effect and inci-
dents of a trust, whether declared in clearly imperative terms by a tes-
tator, or deduced upon a consideration of the whole will from language not
amounting necessarily in its prima facie meaning to an imperative trust."
Kigby, L. J., in In re Williams [1897] 2 Ch. 12> 27.
17 Finch, J., in Phillips v. Phillips, 112 N. X. 197, 205, 19 N. B. 411, 8
Am. St. Rep. 787.
18 Malim v, Keighley, 2 Ves. Jr. 333 ; Knight v. Knight, 3 Beav. 148.
 48 CREATION OF EXPRESS TRUSTS (Ch. 3

or by extrinsic circumstances.^* The American cotirts have adopt-

ed this natural construction of precatory expressions.'"'
Precatory Expressions —Guides to Intent
The particular will be of little assistance in guiding
words used
the searcher to a discovery of the intent. Thus the words "de-
sire," ^^ "request,"
"'^
"wish," ^^ "hope,"" "recommend," =^5 «;n
'confidence that," ^^ and "rely,"^' have been held in some instances
to create trusts, and in others to be of no legal effect. The use
of any particular precatory word will not determine the question of
intent. Aid in solving the problem must be sought in consideration
of other portions of the instrument and the facts .surrounding
the supposed settlor at the time of the execution of the instrument.
In the first place, a failure on the part of the settlor definitely
to describe the subjett-matter of the supposed trust or the bene- .

"ficiaries or objects thereof is strong. evidence that he intended no

trust. Unless these elements, namely, subject and object, are defi-
nite, the trust will be unenforceable, even if it could come into be-
ing. A property owner will not be presumed to have disposed
of his estate in an ineffectual and useless way. "Whenever the
subject to be administered as trust property, and the objects for
whose benefit it is to be administered, are to be found in a will, not
expressly creating a trust, the indefinite nature and quantum of
the subjeQt, as well as the indefinite nature of the objects, are

19 "Words of request in their ordinary meaning convey a mere request, and

do not convey a legal obligation of any kind, either at law or in equity.
But in any particular case there may be circumstances which would oblige
the court to say that such words have a meaning beyond their ordinary
meaning and import a Lord Esher, in Hill v. Hill [1897]
legal obligation."
1 Q. B. 483, 486.
20 In re Pennock's Estate, 20 Pa. 268, 59 Am. Dec.
718; Hughes v. Ktz-
gerald, 78 Conn. 4, 60 Atl. 694; McCurdy v. McCallum, 186 Mass. 464, 72
N. E. 75.
21 In re Browne's Estate, 175 Cal. 361, 165 Pac.
960; Lines v. Darden,
5 Fla. 51 ; Manley v. Fiske, 139 App. Div. 665, 124 N. Y. Supp. 149; Hardy
„
V. Hardy, 174 N. C. 505, 93 S. E. 976; In re Dewey's Estate, 45 Utah,
/ 98, 143 Pac. 124, Ann. Gas., 1918A, 475.
2 2 McCurdy v. McCallum, 186 Mass. 464, 72 N. E. 75; In re
Forscht's Es-
tate, 2 Pa. Dist. R. 294.
28 Phillips V. Phillips, 112 N. Y. 197, 19 N. E. 411, 8 Am.
St. Rep. 737;
Sears v. Cunningham, 122 Mass. 538.
24 Van Duyne v. Van Duyne, 15 N. J. Eq.
503 ; Eaton v. Watts, L. R. 4
Eq. 151.
25 Ford V. Fowler, 3 Beav. 146 Gilbert v. Chapin, 19 Conn. 342.
;

2 8 People V. Powers, 83 Hun, 449, 29 N. Y. Supp.

950, 31 N. Y. Supp 1131;
BufEum V. Town, 16 R. I. 643, 19 Atl. 112, 7 L. R.A. 386.
27Blanchard v. Chapman, 22 111. App. 341; WUlet's v. Willets. 35 Hun
<N. Y.) 401. ^
 ;

§ 19)
'

LANGUAGE NECESSAET 49
{

always used by the court as evidence that the mind of the testator
was not to create a trust." "* In many cases the uncertainty of the
subject-matter has influenced the courts' in holding that no trust
was intended by the precatory words,^° while the lack of clearness
regarding the cestuis que trust has had a similar effect in other
cases.'" ;

^econ^jr, the nature of the donee's duties may be determinative.

A trustee is under an imperative obligation to act for the cestuis.
That he may elect to keep the property as his, own or give all or
part of it to the cestuis is inconsistent with the fundamental notion
of a trust, namely, that it is an equitable obligation. Hence, if the
discretion given to the supposed trustee in connection with the
precatory words is so broad as to allow him' to bestow no benefit
on the supposed cestuis, if he likes, the courts will consider it
unlikely that a trust was intended ^^ whereas, if the discretion
;

is, merely as to manner, tirne, or choice of persons from a class,

and the alleged trustee may under no circumstances keep the prop-
erty for himself, the courts will be more apt to presume that 'the
precatory words were intended as words of binding obligation.*^
"Thirdly, if the alleged beneficiary has any natural claim on the
supposed author of the trust and the conditions are such that the
latter would naturally provide for the former, the courts will be
more rfeady to construe precatory words as creating a trust. Thus,

28 Lines v. Darden, 5 Fla. 51, 73. Accord: Floyd v. Smith, 59 Fla. 485,
51 South. 537, 37 L. R. A. (N. S.) 651, 188 Am. St. Rep. 133, 21 Ann. Cas.
318; Handley v. Wrightson, 60 Md. 198; Lucas v. Lockhart, 18 Miss. (10
Smedes & M.) 466, 48 Am. Dec. 766; Noe v. Kern, 93 Mo. 367, 6 fe. W.
239, 3 Am. St. Rep. 544; Harrisons v. Harrison's Adm'x, 2 Grat. (Va.) 1,
44 Am. Dec. 365.
29 Bryan v. MUby, 6 Del. Ch. 208, 24 Atl. 333, 13 L. R. A. 563; Coulson
V. Alpaugh, 163 111, 298, 45 N. E. 216; Hazlewood v. Webster, 7 Ky. Law
Rep. 164; Williams v. Worthington, 49 Md. 572, 33 Am. Rep. 286; Whitesel
V. Whitesel, 23 Grat.. (Va.) 904; but see Cox v. Wills, 49 N. J. Eq. 130,
22 AtL 794.
3 Seymour v. Sanford, 86 Conn. 516, 86 Atl. 7; In re Gardner, 140 N. Y.
122, 35 N. E. 439; In re Roger's Estate, 245 Pa, 206, 91 Atl. 351, L. R. A.
1917A, 168 ; Baker v. Baker, 53 W. Va. 165, 44 S. E. 174.
31 Toms V. Owen (C. C.) 52 Fed. 417; In re Purcell's Estate, 167 Cal.
176, 138 Pac. 704; George v. George, 186 Mass. 75, 71 N. E. 85; Corby v.
Corby, 85 Mo. 371; Eberhardt v. Perolin, 49 N. J. Eq. 570, 25 Atl. 510;
Wilde T. Smith, 2 Dem. Sur. (N. Y.), 93.
3 2 Bull V. Bull, 8 Conn. 47, 20 Am. Dec. 86; Dexter v. Evans, 63 Conn.
58, 27 Atl. 308, 38 Am. St. Rep. 336 ; Erickson v. Willard, 1 N. H. 217
Ide's Ex'rs v. Clark et al., 5 Ohio Cir. Ct. R. 239; In re Pennock's Estate,
20 Pa. 268, 59 Am. Dec. 71^; Walker v. Quigg, 6 Watts (Pa.) 87, 31 Am. Dec.
452 ; Seefried v. Clarke, 113 Va. 365, 74 S. E. 204.
BOGEET TBUSTS 4,
50 CKEATION OP EXPRESS TRUSTS ,
(Ch. 3

in one case,*' where the estate was large and given to the deceas-
ed's widow with a request that she care for the deceased's mother
and sister, for whom no other provision was made, the court held
that .the precatory words could naturally be construed to create a
trust.'*
Fourthly, an absolute gift of property will not be construed to
be a trust because there '!are later precatory expressions. Where
the testator has once made an unrestricted transfer of the prop-
erty, subsequent inconsistent precatory words will not be construed
to show an intent to create a trust. Thus, if the gift is made to
A. "absolutely," '= or "in his own right," '® the courts will be in-
clined to construe the precatory words to have no legal effect. So,
too, if to create a trust from the precatory words would be re-
pugnant to othe^ provisions of the instrument of undisputed va-
,

lidity,'^ or if the words "and it is only a request" follow the prec-

atory expressions," or, of course, if the implication-,of a trust

38 Colton V. Colton, 127 U. S. 300, 8 Sup. Ct. 1164, 32 L. Ed. 138.

84 In the following cases trusts were declared where the supposed cestuls
were parents: v. Schofield's Trustee, 67 S. W. 846, 68 S. V.
Whlttingham
116, 23 Ky. Law
Kep. 2444; Foster v. Willson, 68 N. H. 241, 38 Atl. 1003,
73 Am. St. Rep. 581; Carroll v. Adams (Sup.) 105 N. Y. Supp. 967. In
other cases cnildren were the cestuis. Warner v. Bates, 98 Mass. 274; Pat-
terson V. Humphries, 101 Miss. 831, 58 South. 772 Kidder's Ex'rs v. Kidder,
;

56 Atl. (N. J. Oh.) 154; Appeal of Coate, 2 Pa. 129; Knox v. Knox, 59 Wis.
172, 18 N. W. 155, 48 Am. Kep. 487. And a trust result has been reached
where an adopted child (Murphy v. Carlin, 113 Mo. 112, 20 S. W. 786, 35
Am. St. Rep. 699) and a niece (CoUister v. Fassitt, 163 N. Y. 281, 57 N. E.
490, 79 Am. ist. Rep. 586) were to be benefited. But in the following cases
of close relationship the precatory words were construed not to have cre-
ated trusts: Bliss v. Bliss, 20 Idaho, 467, 119 Pac. 451 (wife); Holmes v.
Dalley, 192 Mass. 451, 78 N. E. 513 (child) ; In re Mitchell's Estate, 160 Cal.
618, 117 Pac. 774 (grandchild); Post v. Moore, 181 N. Y. 1^, 73 N. E. 482,
106 Am. St. Rep. 495, 2 Ann. Gas. 591 (sister); Russell v. United States
Trust Ooj of New York, 136 Fed. 758, 69 C. C. A. 410- (nephews and nieces).
3 McBuffle V. Montgomery (C. C.) 128 Fed. 105; In re Molb's Estate, Myr.
Prob. (Cal.) 212; Haight v. Rt)yce, 274 111. 162, 113 N. E. 71^; Riechauer
V. Born, 151 Iowa, 456, 131 N. W. 705; Pierce v. Pierce, 114 Me. 311, 96
Atl. 143; Williams v. Worthington, 49 Md. 672, 33 Am. Rep. 286; Bacon
V. Ransom, 139 Mass. 117, 29 N. E. 473 ; Noe v. Kern, 93 Mo. 367, 6 S. W.
239, 3 Am. St. Rep. 544; Snyder v. Toler, 179 Mo. App. 376, 166 S. W.
1059 ; Carter v. Strickland, 165 N. 0. 69, 80, S. E. 961, Ann. Gas. 1S15D,
416; Ringe v. Kellner, 99 Pa, 460; Wilmoth v. Wilmoth, 34 W. Va. 426,
12 S. E. 731. '

3 6 Frierson v. General Assembly of Presbyterian Church of U. S., 7 Heisk.

683.
37 Clay V. Wood, 153 N. Y. 134, 47 N. E. 274.
38 Sale V. Thornberry, 86 Ky. 266, 5 S. W. 468.
§ 19) LANGUAGE NECESSAET 51

is expressly excluded by words to the effect that no trust was

intended,'* the precatory words will be given no legal effect.
Fifljily. many' other guiding facts of a miscellaneous chara,cter
may exist. For example, if the precatory expression concerns
property which the devisee already owns, as well as that given to
the devisee by the testator, the courts will consider the words as
of no legal effect.*" The testator will not be deemed to have intend-
ed a trust as to property which he did not own. That the testa-
tor clearly created a trust in another part of the instrument; us-
ing -appropriate woi-ds of trust, has been held to show that prec-
atory words were not intended to create a trust.*^ And so, also,
that the testator was a lawyer, and hence would presumably un-
derstand how to create a trust clearly, tends to prove that a use
of precatory words was not Intended to give rise to a trust.*^ That
the legatee was personally, interested in carrying out the objects
mentioned in' the precatory phrases has been held to point to an
absolute gift, a trust being apparently unnecessary.*' In a gift to
a corporation, a request that the funds be applied to some particular
corporate purpose is generally held not to indicate an attempted
trust, but to be a mere suggestion, which the director^ may or
may not carry out.** That a trust, if created by precatory words,
would be void as violating the rule against accumulations, is an
argument for showing that no trust was intended.*^

—
Precatory Bxpressians Construction of Particular Words or Phrases
The following phrases have been held to show an intent to cre-
ate a trust: "Fpr the education * * * and support of;"*°
"for the support and maintenance of;"*^ "for the support of;"*'
"shall be held, controlled, and invested by my executors fpr;"*'
(

39 Bumes V. Bumes, 13T Fed.

781, 70 O. C. A. 357; Enders' Ex'r v. Tasco,
89 Ky. 17, 11 818; In re Havens, 6 Dem. Sur. (N. Y.) 456.
S. W.
40 Palmer v. Schribb, 2 Eq. Cas. Abr. 291, pi. 9; Parnall v. Parnall, 9
Ch. Div. 96 Hopkins v. Glunt et al., Ill Pa. 287, 2 Atl. 183.
;

41 In re Whitcomb's Estate, 86 Cal. 265, 24 Pac. 1028 ; WUliams v. Com-

mittee of Baptist Cliurcli, 92 Md. 497, 48 Atl. 930, 54 L. E. A. 427.
"Burnes v. Bumes, 137 Fed. 781, 795, 70 C. C. A. 357. *
48 Poor V. Bradbury, 196 Mass. 207, 81 N. B. 882.
44 Pratt V. Trustees of Sheppard & Enoch Pratt Hospital, 88 Md. 610,
42 Atl. 51; Williams v. Committee of Baptist Church, 92 Md. 497, 48 Atl.
930, 54 L. R. A. 427; In re Crane's Will, 15^ N. Y. 557, 54 N. E. 1089.
46 In re Lynch's Will, 102 Misc. Kep. 650, 169 N.Y. Supp. 321.
46 Clifford V. Stewart, 95 .Me. 38, 49 Atl. 52. See, also, Johnson v. John-
son", 215 Mass. 276, 102 N. E. 465.
4 7,Rudd V. Van der Hagan, 86 Ky. 159, 5 S. W. 4^6.
48 O'Riley v. McKiernan, 90 Ky. 116, 13 S. W. 360.
4» Hurst V. Weaver, 75 Kan. 758, 90 Pac. 297.
52 CREATION OP EXPRESS TRUSTS (Ch. 3

"upon condition that he pay;" " "for herself a,nd three children."
"
On the other hand, the following words have been construed as
failing to show an intent to establish a trust: To A. "the use of
my farm;" °Mo A. "for his use;" =^ to my daughters "the income
from" certain property ^* to A. "for the purpose of dividing the
;

same" among needy relatives;"^ to A. to "keep" for the deposi-

tor; "* td A. to be paid for by him by furnishing necessaries to the
grantor at cost prices; "' declaration 'of intention to apply specific
property to payment of a specific debt;"** to a son in full con-
fidence that the son would make a proper adjustment of relations
to other children."'

Language Must Describe Trust Elements Completely and with Cer-

tainty
Uncertainty and ambiguity in the description of the trust ele-
ments tepds to show that no trust was designed ®* but, if the ;

intent to create a trust be assumed, it cannot be effective unless

the trust elements are properly described. Those elements are the
subject-matter, the trust purpbse, the cestuis que trust, and the
trustee."^
Thus, if the property to be administered by the trustee be in-
definite and incapable of identification, no trust can arise.'^ Thfe
residue of the testator's property isa sufficiently definite subject-
matter for a trust.® ^ So, too, if the trust purpose be omitted,®*

BO'Bi re Hasbrouck, 153 App. Div. 394, 138 N. Y. Supp. 620.

»i Stratton v. McKinnle (Tenn. Ch.) 62 S. W. 636.
52 Little y. Colman, 74 N. H. 215, 66'Atl. 483..
B3 Hardy v. May hew, 158 Cal. 95, 110 Pac. 113, 139 Am. St. Eep. 73.
B* Little V. Colman, 74 N. H. 215, 66 Atl. 483.
Es Walter v. Walter, 60 Misc. Eep. 383, 113 N. Y. Supp. 465.
6 Tucker v. Linn (N. J. Ch.) 57 Atl. 1017.
«7 Maxwell V. Wood, 133 Iowa, 721, 111 N. W. 203.
68 Cook V. Black, 54 Iowa, 693, 7 N. W. 121.
58 Lanigan v. Miles,^102 Wash. 82, 172 Pac. 894.
60 Pratt V. 'trustees of Sheppard & Enoch Pratt Hospital, 88 Md. 610,
42 Atl. 51.
eilnglis V. Sailor's Snug Harbor, 28 U. S. (3 Pet.) 99, 7 L. Ed. 617;
Drinkhouse v. German Savings & Loan Soc, 17 Cal. App. 162, 118 Pac.
953 Crowley v. Crowley, 131 Mo. App. 178, 110 S. W..1100.
;

6 2 Mills V. Newberry, 112 111. 123, 1 N. E. 156, 54 Am. Rep. 213; Bark.-
ley V. Lane's Ex'r, 69 Ky. (6 Bush) 587; Roddy
x. Roddy, 3 Neb. 96.
6 a Glover v. Baker, 76 N. H. 393, 83 Atl. 916.
6* Bank v. Rice, 143 CaL 265, 76 Pac 1020, 101 Am. St. Rep. 118; Ingram
V. Fraley, 29 Ga. 553.
§ 19) LANGUAGE NECESSlRT 53

or the description of the beneficiaries be vague," the trust will

be defectively declared.
That a trustee is not named is not important, since the court will
supply that element." It is also not needful that the settlor should
expressly give the trust property to the trustee. If the trust is
fully described, the gift of the property to the trustee will be im-,
plied."
Where the settlor uses repugnant words, at one point showing
an intent to create a trust and at another an opposing intent, wheth-
er any trust was created is a difficulty question of construction.
In many instances of repugnant wordings a trust has been found,"*
while in other cases of the same sort the construction was against
a trust."

Burden of Proof and Character of Evidence Necessary

The burden lies upon the party asserting the existence of a trust
to show
that the language used is sufficient for that purpose.'"
In Texas a rule 'has been established that the evidence of a single
witness, coupled with corroborating circumstances, is adequate to
prove a trust.'*
It is frequently stated by courts that the evidence to estab-
lish the existence of a trust must be "clear," "convincing," "ex-
plicit," and "unequivocal." '^ In practically all instances in which
such requirements regarding the evidence have been laid down, the

8 5 Condlt V. Reynolds, 66 N. J. Law, 242, 49 Atl. 540; Fowler v. Coates,

201 N. T. 257, 94 N. B. 997.

6 8 Trustees of Mclntire Poor School v. ZanesvlUe Canal & Mfg. Co., 9

Ohio, 203, 34 Am. Dec. 436 Appeal of Varner, 80 Pa. 140,

;

8 7 Haywood v. Wachovia Loan & Trust Co., 149 N. C. 208, 62 S. E. 915;

In re Eppig, 63 Misc. Bep. 613, J.18 N. Y. Supp. 683.

68 Harris v. Ferguy, 207 111. 534, 69 N. E. 844; Brpwn's Lessee v. Brown,
12 Md. 87 ; Robinson v. Cogswell, 192 Mass. 79, 78 N. E. 389 ; Pairchild v.
Edson, 77 Hun, 298, 28 N. Y. Snpp. 401; In re Lejee's Estate, 181 Pa. 416,
37 Atl. 554 ; In re Luscombe's Will, 109 Wis. 186, 85 N. W. 341.
6 » Thompson v. Adams, 205 111. 552, 69 N. E. 1; Blakeshere v. Trustees,
94 Md. 773, 51 Atl. 1056; Spooner v. Lovejoy, 108 Mass. 529; Dunshee v.
Goldbacher, 56 Barb. (N. Y.) 579.
7 6 Prevost V. Gratz, 19 U. S. (6 Wheat.) 481, 5 L. Ed. 311; Miller v. Hill,
64 Misc. Rep. 199, 118 N. Y. Supp. 63; Russell v. Fish, 149 Wis. 122, 135
N. W. 531 ; Neyland v. Bendy, 69 Tex. 711, 7 S. W. 497.
71 Smalley v. Paine (Tex. Civ. App.) 130 S. W. 739; HaU v. Latton, IQ Tex.
262.
7 2 Sheehan v. Sullivan, 126 Cal. 189, 58 Pae. 543; Lurie v. Sabath, 208
lU. 401, 70 N. E. 323; Crissman v. Crissman, 23 Mich. 217; Hoffman v.
Union Dime Saving Inst'n, 109 App. Div. 24, 95 N. Y. Supp. 1045 Bough-
;

man V. Boughman, 69 Ohio St. 273, 69 N. E. 430; Appeal of Hollings|iead,

103 Pa. 158; Watts v. McCloud (Tex. Civ. App(,) 205 S. W. 381.
54 '

CREATION OF EXPRESS TRUSTS (Ch. 3

proof offered has been oral but occasionally similar remarks have
;

been made regarding written evidence/^ Occasionally it has been

stated that the evidence must establish a trust beyond a reason-
able doubt/* or be so positive as to leave no doubt.^"
On principle it would seem that no stronger evidence should
be required to prdve the creation of a trust than to prove any
other fact in a civil action. The rule requiring an extraordinarily
high degree of proof has been actually applied rarely, except in
cases where an attempt was made by oral proof to fasten a trust
upon property which appeared to be owned absolutely.

FORMALITY— STATUTE OF FRAUDS

20. In England, prior to 1677, trusts of real and personal property
required no writing for their creation.
The seventh section of the English Statute of Frauds, enact-
ed in 1677, required express trusts of real property to
be "manifested and proved" by a writing signed by the
party enabled to declare the trust.
A great majority of American states have passed similar stat-
utes, though with mcmy minor variations. In a few jur-
isdictions parol trusts in land are allowed.
Implied trusts and trusts of personal property have always, both
in England and America, been provable by oral evidence.
A trustee may be estopped to set up the Statute of Frauds.
The statute makes oral trusts in realty voidable only, not void.
Any writing, however informal, is sufficient to satisfy the statute,
if it contain a complete statement of the trust, and is sign-

ed or subscribed by the proper party.

Common Law Required No Formality
Trusts of both real and personal property could be created at
common law, without writing or other formal evidence.''^ A-' mere
parol declaration or agreement was sufficient to give the trust life
and legal standing.

The Statute of Frauds

The seventh section of the EngHsh Statute of Frauds provided
that "all declarations or creations of trusts or confidences of any

73 Otjen V. Frohbaeli, 148 Wis. 301, 134 N. W. 832.

7* Rogers v. Eogers, 87 Mo. 257.
'0 Harrison v. McMennomy, 2 Edw. Ch. (N. T.) 251.
7 6 Smith V. Smith (Ky.) 121 S. W. 1002; Fleming v. Donahoe, 5 Ohio,
255; Young v. Holland, 117 Va. 433, 84 S. E. 637. The English Statute
of Frauds was St. 29, Chas. II, c. 3. For a discussion of the origin of the
statute, see Hening, 61 Pa. Law Rev. 283.
 ;

§ 20) FORMALITY —STATUTE OF FRAUD^ 55

lands, tenements or hereditaments, shall be manifested and proved

by some writing signed by the party whp is by law enabled Jio
declare such trust, or by his last will in writing, or else they shall
be utterly void and of none effect." This section has been adopted,
with many modifications, by a majority of the American states. ''^

''''Statute of Frauds in Force. —

A section analogous to the seventh sec-
tion of the English statute Is found in the following jurisdictions: Ala-
bama, Code 1907, § 3412; Alaska, Comp. Laws 1913, § 1878; Hubbard v.
Hubbard, 5 Alaska, 478; Arkansas, Kirby & Castle's Dig. 1916, § 3997;
California, Civ. Code, § 852; Colorado, Mills' Ann. St. 1912, § 3059; Florida,
Comp. St. 1914, § 2452 ; Georgia, Park's Ann. Civ. Code 1914, § 3733 ; Ogles-
by V. Wilmerding, Morris & Mitchell, 149 Ga. 45, 99 S. E. 29 ; Idaho, Rev.
Codes 1908, § 6007; Illinois, Jones & A. Ann. St. 1913, § 5875; Iowa,
Code 1897, §2918; Kansas, Gen. St.il915, § 11674; Maine, Rev. St. 1916, c. 78,
§ 17; Maryland, Gordon v. McCuUoh, 66 Md. 245, 7 Atl. 457; Massachusetts,
Rev. Laws 1902, c. 147, § 1; Michigan, Howell's Ann. St. 1913, § 11393;
Minnesota, Gen. St. 1913, § 7002; Mississippi, Hemingway's Ann). Code 1917,
§ 3124 ; Missouri, Rev. St. 1909, § 2868 ;Montana, Rev. Codes 1907, § 4537
Nebraska, Rev. St. 1913, § 2623; NeVada^ Cutting's Comp. Laws, § 2694
New Hampshire, Pub. Si. 1901, c. 137, § 13; New Jersey, 2 Comp. St. 1910,
p. 2611 ; New York, Real Property Law (Consol. Laws, c. 50) § 242 ; Hutch-
ins V. Van Vechten, 140 N. Y. 115, 35 N. E. 446; North Dakota, Civ. Code
1913, § 5364; Oklahoma, Rev. Laws 1910, § 6659; Oregon, Code Civ. Proc.
(L. O. L.) § 804; Pennsylvania, Purdon^s Dig. (13th Ed.), p. 4838; Rhode
Island, Geni Laws 1909, c. 253, § 2; South Carolina, Civ. Code 1912, § 3676;
South Dakota, Rev. Code 1919, § 371; Utah, Comp. Laws 1907, § 2461;
Vermont, Pub. St. 1906, § 2583; Wisconsin, Stat. 1913, § 2302. The equiva-
lent of the English Statute of Frauds is also enforced in the District of
Columbia. McCartney v. Fletcher, 11 App. D. C. 1.
—
No Statute of Frauds. In fifteen American jurisdictions no statute cor-
responding to the seventh section is to be found. This is true in Arizona,
Connecticut, Delaware, Hawaii, Kentucky, Louisiana, New Mexico, North
Carolina, OMoj Tennessee, Texas, Virginia, Washington, West Virginia, and
Wyoming.
But, notwithstanding the absence of such a statute, oral trusts in land
are not allowed in several of these states. Thus, in Washington and Ken-
tucky, apparently the fourth -section of the Statute of Frauds, which for-
bids the transfer, of an interest in lands without a writing, is held to be
broad enough to prevent the creation of trusts without written evidence.
Spaulding v. Collins, 51 Wash. 488, 99 Pac. 306; Arnold v. Hall, 72 Wash.
50, 129 Pac. 914, 44 L. R. A. (N. S.) 349; Brown v. Kausche, 98 Wash. 470,
167 Pac. 1075; Lanigan v. Miles (Wash.) 172 Pac. 894; Rem.'& B. Codes,
vol. 2, § 8745. Sherley v. Sherley, 97 Ky. 512, 522, 31 S. W. 275; Vizard
Inv. Co. V. York, 167 Ky. 634, 181 S. W. 370. But see Stone v. Middleton,
144 Ky. 284, jl37 S. W. 1047 St. Catherine's Cemetery v. Fidelity Trust Co.,
;
;
152 Ky. 797, 154 S. W. 29 Best v. Melcon, 183 Ky. 785, 210 S. W. 662.
'

In Virginia a learned writer expressed the opinion that the fourth section
controls the creation of trusts. 2 Minor's Inst. (4th Ed.) 847. In Garrett
V. Rutherford, 108 Va. 478, 62 S. B. 389, it was held that the question was
an open one whether express trusts in land could be created by parol.
But in more recent cases the court has taken the position that no formality
 (Ch. 3
5)6 CEEATION OF EXPRESS TRUSTS

The general rule in America therefore is that trusts in land must

be proved or created by a writing.

is required. Young v. Holland, 84 S. E. 637; Shield v. E. S. Adkins & Co.,

117 Va. 616, 85 S. E. 492; Clary v. Spain, 119 Va. 58, 89 S. E. 130; Berry
V. Berry's Ex'rs, 119 Va. 9, 89 S. E. 242 ; Eleenor v.^ Hensley, 121
Va. 367,
93 S. B. 582. See Benson, Parol Trusts in Keal Estate, 1 Va. Law Keg.
(N. S.) 81.
In West Virginia trusts in favor of a grantor of real property cannot
be proved orally, although trusts in favor of one other than the grantor
may be manifested by parol. This seems to be a recognition of the fourth
section of the statute as afCecting trusts. Thte decision is also based on the
parol evidence rule. Floyd v. Duffy, 68 W. Va. 339, 69 S. B. 993, 33 L. R.
A. (N. S.) 883; Crawford v. Workman, 64 W. Va. 19, 61 S. E. 322; TroU v.^
Carter, 15 W. Va. 567.
In Connecticut and New Mexico express trusts in land must be proved by
a writing, notwithstanoing the absence of any statutory requirement to that
effect. WUson v. Warner, 84 Conn. 560, 80 Atl. 718; Eagle Mining & Imp.
Co. V. Hamilton, 14 N. M. 271, 91 Pac. 718.
In North Carolina a landowner may not declare himself a trustee by paroj;
but one who intends to become the holder of the legal title may validly
agree by parol to hold it in trust. Avery v. 'Stewart, 136 N. C. 426, 48
S. E. 775, 68 L. R. A. 776; Kelly v. McNeill, 118 N. C. 349, 24 S. E. 738;
Anderson v. Harrington, 163 N. C. 140, 79 S. E. 426; Jones v. Jones, 164
N. C. 320, 80 S. E. 430; Brogden v. Gibson, 165 N. C. 16, 80 S. E. 966 ; Lutz
'
V. Hoyle, 167 N. C. 632, 83 S. E. 749 ; Boone v. Lee, 175 N. C. 383, 95 S. E.
659; Williams v. Honeycutt, 176 N. C. 102, 96 S. E. 730; Wilson v. Jones,
176 N. C. 205, 97 S. E. 18.
In Louisiana trusts were first sanctioned by Act 107 of 1920 which makes
no provision for a requirement of written evidence.
In other states there seem to be no rules of any sort requiring trusts
in land to be manifested by a writing. Pierson v. Pierson, 5 Del. Ch. 11;
Russell V. Bruer, 64 Ohio St. 1, 59 N. E. 740; Richards v. Parsons et al.,
7 Ohio App. 422; Martin v. Lincoln, 4 Lea (Tenn.) 334, 337; Young v. Brown,
136 Tenn. 184, 188 S. W. 1149; Sullivan v. Fant, 51 Tex. Civ. App. 6, 110
S. W. 507; Williams v. Neill (Tex. Civ. App.) 152 S. W. 693; Hambleton
V. Southwest Texas Baptist Hospital (Tex. Civ. App.) 172 S. W. 574 ; Mat-
thews V. Deason (Tex. Civ. App.) 200 S. W. 855; Johnston v. Johnston
(Tex. Civ. App.) 204 S. W. 469; Schultz v. Scott (Tex." Civ. App.) 210 S.
W. 830. On the Texas situation, see note 61 Pa. Law Rev. 687.
—
Nature of the Writing Required. ^In the following states the English
Statute of Frauds is substantially copied, and the trust need only be mani-
fested and proved by a writing: Arkansas, District of Columbia, Florida,
Illinois, Maryland, Missouri, New Jersey, New York, Pennsylvania, and
South Carolina.! In New York, between 1830 and 1860, the trust had to be
"created" by a writing. Hutchins v. Van Vechten, 140 N. Y. 115, 35 N. E.
446. In other states the trust must be "created or declared in writing,"
but no special form of writing is mentioned: Alabama, California, Georgia,
Indiana, Kansas, Maine, Massachusetts, Montana, New Hampshire, North
Dakota, Oklahoma, South Dakota, and Vermont. On the subject of what
facts the writing must state, and taking the position that any writing "iden-
tifying the land and clearly indicating that the person alleged to be a trustee
 § 20) FORMALITY —STATUTE OF FRAUDS 57

When Statute Does Not Apply—Implied Trusts

It is frequently stated by the courts that parol evidence
is not
admissible to establish a trust in real property in the absence of

has no beneflcial Interest therein, or only a specified interest," Is suflBcient,

see 17 Mich. Law Eev. 266. Elsewhere the trust must be "created or de-
clared by a conveyance of other instrument in writing." Alaska, Idaho,
and Oregon.
In yet other states the wording is "created or declared by a deed or con-
Teyance in writing." Colorado, Michigan, Minnesota, Nebraska, Nevada,
Utah, and Wisconsin.
In Iowa, Mississippi, and Rhode Island the trust must be "created and
declared" by an instrument executed, acknowledged, and recorded as a
deed of real property. But in a number of states above mentioned, in which
the statute requires creation or declaration by writing, the courts have
allowed instruments which merely proved or manifested the trust to sat-
isfy the statute. Gaylord v. City of Lafayette, 115 Ind. 423, 17 N. E. 899;
McClellan v. McClellan, 65 Me. 500; Urann'v. Coates, 109 Mass. 581; White
V. Fitzgerald, 19 Wis. 504.
—
Party Who Mitst Sign or Subscribe. In Alabama, Alaska, Colorado, Idaho,
Indiana, Kansas, Maine, Michigan, Minnesota, Mississippi, Nebraska, Ne-
vada, New Hampshire, New York, Oregon, Utah, Vermont, and Wisconsin
the writing must be signed or subscribed "by the party creating or de-
claring the trust."
In Arkansas, Florida, Illinois, Maryland, Missouri, New Jersey, and South
Carolina the words are "the party who is or shall be by law enabled to
declare" the trust, i

In California, Montana, North Dakota, Oklahoma, and South Dakota the

requirement is that the signing or subscribing shall be "by the grantor"
or by the party executing the instrument under which the trustee claims
, the estate. j

In Maine the signature must be "by the party" in Pennsylvania, "by

;

the party holding the legal title"; in Rhode Island the instrument must
be "duly signed"; while in Georgia and Iowa no express provision is made
as to the identity of the signer or subscriber.
In Alabama, Alaska, California, Colorado, Idaho, Indiana, Kansas, Michi-
gan, Minnesota, Montana, Nevada, New York, North Dakota, Oklahoma,
Oregon, South Dakota, Utah, and Wisconsin the signature of an agent or at-
torney authorized in writing will also be sufficient In Maine, Massa-
chusetts, New Hampshire, and Vermont signature by an agent or attorney
is expressly authorized, but no requirement of written authorization is
fixed. /

In Arkansas, Florida, Georgia, Illinois, Iowa, Ma'ryland, Mississippi, Mis-

souri, Nebraska, New Jersey, Pennsylvania, Rhode Island, and South Caro-
lina signature by an agent or attorney is not provided for in the statute. '

—
Signature or Subscription. In Alabama, Arkansas, JFlorlda, Illinois, Kan-
sas, Maine, Maryland, Massachusetts, Mississippi, Missouri, New Hamp-
shire, New Jersey, Pennsylvania, Rhode Island, South Carolina, and Vermont
the requirement is that the writing be "signed."
In Alaska, California, Colorado, Idalto, Michigan, Minnesota, Montana,
Nebraska, Nevada, New York, North Dakota, Oklahoma, Oregon, South Da-
 58 CEEATION OF EXPRESS TRUSTS (Ch. 3

fraud, mistake or accident.''^ The implication is that express trusts ^

in land based solely on oral evidence will be enforced if fraud, ac-

cident, or mistake exist. What is generally meant by these 'ex-

pressions is that if therefraud, accident, or mistake of the proper

is

kirid, a trust of some sort, namely, an implied trust, will be enforced,

even though the express trust fails for want of a writing. It is
not meant that in the ordinary instance fraud, mistake, or acci-
dent cause equity to ignore the Statute of Frauds and allow parol
evidence to create an express trust.
The eighth section of the English Statute of Frauds expressly
exempts from the operation of the seventh section trusts which
"arise or result by implication or construction of law." '° This
exception has been generally copied in America. These are the
implied trusts, the creation of which is considered later.*"
The requirement of writing, therefore, has no application to those
trusts. Fraud, accident, and mistake constitute important grounds
for the creation of one form of these implied trusts, namely, con-
structive trusts. Hence the exception frequently made, as above
stated. ''The Statute of Frauds will not prevent the cre&tion of an
implied trust without a writing, even i^the parties attempted to
create an express trust orally and the statute forbade such a re-
sult.*^ If A. grant lands to B. under an oral express trust, the Stat-
ute of Frauds will prohibit the enforcement of the trust. But equi-
ty may hold B. as trustee of the lands under an implied trust, if
there are present elements on which such a trust can be raised,
as, for example, fraud, accident, or mistake.'"' .

When Statute Does Not Apply —Personal Property

The seventh section of the English Statute of Frauds applies
only to trusts of "lands, tenements and hereditaments," and such
is the scope of similar statutes in America. Trusts of personal
property may everywhere be created and proved without writing.*^

kota, Utah, and Wisconsin the writing must be "subscribed"; that is, signed
at the fend. ,
In Georgia and Iowa the statutes make no express provision either for
signing or Subscribing.
's Jones V. Van Doren,
18 Fed. 619; Amidon v. Snouffier, 139 Iowa, 159,
117 N. W. 44; Baker v. Baker, 75 N. J. Eq. 305, 72 ±.t\.. 1000.
79 St. 29 Chas. II, c. 3.
^ 80 Post, § 30..

81 Goldsmith v. (Soldsmith, 145 N. Y. 313, 39 N.' E. 1067; Eozell v. Van-

syckle, 11 Wash. 79, 39 Pac. 270.
82 Post, for a discussion of the circumstances under which equity
§ 39,
will declare implied trusts. /

88Souza V. First Nat. Bank of Hanford, 36 Cal. App. 384, 172 Pac. 175;
Noble V. Learned, 153 Cal. 245, 94 Pac. 1047 Bay Biscayne Co. v. Baile, 73
;
 § 20) FORMALITY —STATUTE OF FRAUDS 59

It has sometimes been held that, if the subject-matter of the oral

trust was originally real property, but has been converted by the
trustee into personal property, the trust becomes enforceable, eyen
in the absence of writteii evidence, and even though there is no rec-
ognition of the trust after the change in the form of the property.
The trustee is said to have abandoned the shelter of the Statute of
Frauds.** An agreement to hold land in trust, and, if the land be
sold, to be a trustee of the proceeds, has been held to create a valid
trust when the land has been converted into money, although there
was no writing. *°

—
When Statute Does Not Apply Relief hy Equity'
The Statute of Frauds is ordinarily as binding on courts of equi-
ty as on courts of law, but equity has power to relieve against
its operation in certain cases, as in the instance of equitable .estop-
pel. Wherever the trustee has partly, carried out the oral trust in
land and thus recognized its existence, and the cestui que trust
has done acts on the strength of such recognition which place him
in a position from which he cannot withdraw without damage,
equity will hold the trustee estopped /to set up the Statute of
Frauds and will enforce the trust.*® "In such a case, the party is
held, by force of his acts or silent acquiescence, which have misled

Fla. 1120, 75 South. 860; People v. Schaefer, 266 111. 334, 107 N. E. 617;,
Taber v. Zelmer, 47 Ind. App. 165, 93 N. E. 1035 ; Richards v/ Wilson, 185
Ind. 335; 112 N. E. 780; Sturtevant v. Jaques, 99 Mass. (14 Allen) 523;
Bradford v. Eastman, 229 Mass. 499, .118 N. E. 879; Harris Banking Co. v.
Miller, 190 Mo. 640, 89 S. W. 629, 1 L. R. A. (N. S.) 790 ; Moulden v. Train,
199 Mo. App. 509, 204 S. W. 65; Day v. Roth, 18 N. Y. 448; First Nat.
Bank v. Hinkle (Okl.) 162 Pac. 1092; In re Washington's Estate, 220 Pa.
204, 69 Atl. 747; McElveen v. Adams, 108 S. C. 437, 94 S. E. 733; Dupont
V. Jonet, 165 Wis. 554, 162 N. W. 664.
84 Thomas v. Merry, 113 Ind. 83, 15 N. E. 244; Bork v. Martin, 132 N.
Y. 280, 30 "k. E. 584, 28 Am. St, Hep. 570. Contra: Johnson v. McKenzie,
80 Or. 160, 154 Pac. 885, 156 Pac. 791. For a consideration of these and
similar agreements from the point of view of constructive trusts, see post,
'
§ 39. .

86 Craft V. Craft, 74 Fla. 262, 76 South. 772; Mohn v. Mohn, 112 Ind.
285, 13 Nv E. 859; Chace v. Gardner, 228 Mass. 533, 117 N. E. 841; Logan
V. Brown, 20 Okl. 334, 95 Pac. 441, 20 L. R. A. (N. S.) 298. And a similar
holding has been made where the agreement was to account for a part only
of the proceeds of the sale. Hall v. Hall, 8 N. H. 129; Graves v. Graves,
45 N. H. 323. In Bier v. Leisle, 172 Cal. 432, 156 Pac. 870, it was held that
there was a trust, even if the realty was not sold. McGinness v. Barton,
71 Iowa, 644, 33, N. W. 152, and White v. McKenzie, 193 Mich. 189, 159
N, W. 367, are contrary to the weight of authority. In the latter case it
was held that, where A. agreed orally to t)uy land and sell it for the joint
benefit of A. and B., and A. did sell the land, there was no enforceable trust.
8 6 Browne on> Statute of Frauds (5th Ed.) § 447 et seq.
 CREATION OF EXPRESS TRUSTS
(Ch. 3
60 ,

the Other to his harm, to be estopped from setting

up the statute
of frauds."" , , .

of the courts in these cases is that it would be

a
The theory
fraud on the cestui to allow the trustee to rely on the Statute^ of

Frauds after he has encouraged the cestui to change his position

on the faith of the trustee's recognition of the oral trust.
Hence
as a defense
the trustee is held to be estopped to set up the statute
to an action for the enforcement of the trust." Equity has fre-
quently held these doctrines of fraud and estoppel sufficient to en-
able it to relieve against the Statute of Frauds and to enforce a
parol trust in land.*'

Oral Trusts Voidable, Not Void

The express wording of the Enrfish statute and Of many of its
American copies would lead to the natural belief-that oral trusts in
land are wholly unenforceable under all conditions. The wording
'" But, in line
is that they are "utterly void and of none effect."
with the construction of other sections of the same statute, it has
been generally held that "void" in this connection means "voidable""
and that the oral trust may t(e enforced, if the parties are willing
and raise no objection to the lack of written evidence."
Thus, if the trustee desire, he may waive the Statute of Frauds,
and' the trust will be enforced against him, and, if the trust is
completely executed, the validity of acts performed under it will
not be open to question. If a father convey realty to a son on an
oral promise by the son that he will convey the land to his mother
after the father's death, and ^he son makes such conveyance, the
creditors of the son have no standing to attack the validity of the
trust. The son having seen fit to carry it out, the effect is the
same as if the trust had been declared with due formality."" Titles-

87 Glass Hulbert, 102 Mass. 24, 36, 3 Am. Rep. 418.

V.
88 Buckmaster
v. Harrop, 7 Ves. 340; Miller v. Ball, 64 N. T. 286; Meach.
V. Stone & Perry, 1 D. Chipman (Vt.) 182, 191, 6 Am. Dec. 719. Some of
the cases cited under this section are oral contracts to convey interests in
land, rather than oral agreements for express trusts in land ;but the same-
principles apply. Browne on Statute of Frauds (5th Ed.) §| 113, 447 et seq.
89 Church V. Sterling, 16 Conn. 388; Harman v. Fisher, 90 Neb. 688, 134-
-

N. W. 246, 39 L. R. A. (N. ^.) 157; Cauda v. Totten, 157 N. Y. 281. 51 N..E.

989; McLain v. School Directors of White Tp., 51 Pa. 196; Borrow v. Bor-
row, 34 Wash. 684, 76 Pac. 305.
00 St. 29 Chas. II, c. 3, § 7.
»i Myers v. Myers, 167 111. 52, 47 N. B. 309; Forest v. Rogers, J28 Mo..
App. 6, 106 S. W. 1105.
»2Arntson v. First Nat. Bank of Sheldon, 39 N. D. 40a 167 N. W. 760,
L.. R. A. 1918F, 1038. For a similar case, see Delvol v. Citizen's Bank, 92:
Or. 606, 179 Pac. 282, 181 Pac. 985.
 ;

§ 20) FORMALITY —STATUTE OF FRAUDS 61

conveyed by the trustee and other rights accruing, due to such per-
formance of the oral trust, will be recognized by the courts, just as
if the trust had been reduced to writing. If the oral trust is not
avoided, it is as va/lid afe a trust complying with the statute."

—
What Writings Satisfy the Statute General Requisites
The written evidence required under the statute has previously
been considered from the point of view of the statutory statement,"*
but some discussion of the construction of such statutes will be use-
ful.
First, the writing must cdntain a complete statement of the
trust.*" "To take the case out of the Statute of Frauds, the trust
must appear p writing, under the hand of the party to be charged,
with absolute certainty as to its nature and terms, before the court
can undertake to execute it." "° Where there is not sufficient
identification of the trust res, for example, the memorandum is
defective,®^ but that the length of the trust period is not stated in
the memorandum is not important,"' since the trust will last as
long as necessary to accomplish its purpose.
Upon the question when the writing must be created, there can
be no doubt, in states where the statute requires the trust to be
"created or declared" in writing and the statute has been strictly
construed, that the writing must be contemporaneous with the
creation of the trust. In several of these states, however, the stat-
'

ute has been, held to be satisfied by a writing made after the trust
arose. In such case the writing merely proves the trust.°° In
states, on the other hand, where the requirement is only that the

»3 Polk v. Boggs, 122 Oal. 114, 54 Pac. 536 ; Hayden v. Denslow, 27 Conn.
335; King v. Bnshnell, 121 111. 656, 13 N. E. 245; Stringer v. Montgomery,
111 Ind. 489, 12 N. E. 474 ; Johnston v. Jickling, 141 Iowa, 444, 119 N. W.
746; Eatigan v. Ratigan, 181 Iowa, 860, 162 N. W. 580, 165 N. W. 85; Bailey
V. Wood, 211 Mass. 37, 97 N. E. 902, Ann. Cas. 1913A, 950; Lasley v. Delano,
139 Mich. 602, 102 N. W. 1063 ; Eohbins v. Bobbins, 89 N. T. 251 ; Oklahoma
Nat. Bank v. Cobb, 52 Okl. 654, 153 Pac. 134 ; Robertson v. Howerton, 66
Okl. 555, 156 Pac. 329; Shippey v. Bearman, 57 Okl. 603, 157 Pac. 302; Ryan
V. Lofton (Tex. Civ. App.) 190 S. W. 752; Blaha v. Borgman, 142 Wis. 43,
124 N. W. 1047.
»* Ante, p. 56.
95 Marie M. E. Church v. Trinity M. E. Church, 253 111. 21, 97 N. E. 262
Holsapple v. Shrontz, 65 Ind. App. 390, 117 N. E. 547; H. B. Gartwright
& Bro. V. United States Bank & Trust Co., 23 N. M. 82, 167 Pac. 436.
96;K:ent, Ch., in Steere v. Steere, 5 Johns. Ch. (N, Y.) 1, 9 Am. Dec. 256.
»7 Snyder v. Snyder, 280 111. 467, 117 N. E. 465.
»8 Willats V. Bosworth, 33 Cal. App. 710, 166 Pac. 357.
8 9 Gaylord v. City of Lafayette, 115 Ind. 423, 428, 17 N. E. 899; McClellan

V. McClellan, 65 Me. 500; Urann v. Coabs, 109 Mass. 581, 585; White v.
'
Fitzgerald, 19 Wis. 504, 511. .
62 CREATION OF EXPRESS TRUSTS (Ch. 3

trust be manifested or proved by a writing, it is clear that the writ-,

ing may be made at the time of the creation of the trust or at. any
time thereafter, either before the commencement of the action
or after such event.^ Of course, the writing must be executed
while the maker of it is the owner of the property concerned.^ Nat-
urally the owner ,oi the property cannot admit that he holds it in
trust for another before that trust arises. Hence the writing pan-
not ordinarily precede the crfeation of the trust.^ But a- written
offer to hold in trust, later accepted by parol, is a sufiScient writ-
ing-*
"It is not essential that the memorandum relied on should have
been delivered to aiiy one as a declaration of trust." " The intent
with which the writing was made is immaterial.* Indeed, a paper
which expressly repudiates the intention of fastening a trust upon
the property by virtue of the writing, but which shows as a whole
that the relation of trustee and cestui que trust exists, is suffi-
cient.' But the^admission that an oral trust exist^s made in a plead-
ing which sets up the Statute of Frauds, will not be an effective
writing.* It is not requisite that the writing be addressed to^e
cestui que trust, or any particular person.* A signature by initials
is satisfactory.^"
The
following have been held sufficient to satisfy the statute:
a deed of trust; ^^ a memorandum below the signature on a
deed;^^ an answer or other legal pleading; ^^ a letter; *f a re-
ceipt;*" a contract regarding the improvement or control of the

1 Smith V. Howell, 11 N. J. Eq. 349; McArthur v. Gordon, 126 N. Y. 597,

27 N. E. 1033, 12 L. R. A. 667 ; Eeid v. Keid, 12 Rich. Eq. (S. C.) 213.
2 Phillips V. South Park Com'rs, 119 111. 626, 10 N. E. 230.
s See, however, Jackson ex dem. Erwin v. Moore, 6 Cow. (N. Y.) 706, 726.
* Morton v. Tewart, 2 Tounge & O. Oh. 67.
5 Urann v. Coates, 109 Mass. 581, 584. - See also Viele v. Curtis, 116 Me.

328, 101 Atl. 966.

6 Kingsbury v: Burnside, 58 111. 310, 11 Am. Rep. 67 ; McClellan v. Mc-
Clellan, 65 Me. 500.
' Urann v. Coates, 109 Mass. 581.
8 Whiting V. Gould, 2 Wis. 552.

Bates V. Hurd, 65 Me. 180 ; McCandless v. Warner, 26 W. Va. 754.

10 Smith V. Howell, 11 N. J. Eq. 349.
11 Miles V, Miles, 78 Kan. 382, 96 Pac. 481.
12 Ivory V. Burns, 56 Pa. 300.
IS Garnsey v. Gothard, 90 Oal. 603, 27 Pac. 616; McLaurie v. Partlow, 53
111. 340 ;Patten v. Chamberlain, 44 Mich. 5, 5 N. W. 1037.
" Brackenbury v. Hodgkin, 116 Me. 399, 102 Atl. 106 Montague v. Hayes,
;

76 Mass. (10 Gray) 609; Moulden v. Train, 199 Mo. App. 509, 204 S. W.
65; Majin v. Malln, 1 Wend. (N. Y.) 625.
15 Nesbitt V. Stevens, 161 Ind. 519, 69 N. E. 256; Appeal of Roberts, 92
Pa. 407.
§ 20) FORMALITY —STATUTE OF FRAUDS 63

property;^" a recital in a mortgage or lease; ^^ a power of attor-

ney;^* a deposition; ^* a book account .^^ an account render^d.^^ ;

A defective will is not sufficient to create a trust, but it may

operate as an admission that a trust already exists."
The writing may be composed of more than one document.^'
If two' or more papers are relied upon, they must be shown to
be connected with each other. This connection may be shown
by physical attachment or inclosure in the same receptacle,^* or
by reference to and adoption .of one by another,^^ or by clear ref-
erence to the same transaction upon the face of each,^*

What Writings Satisfy the Statute Parol Evidence —

Oral evidence cannot be used to bind" several writings together.
Their connection must appear from their physipal attachment or
from their contents.^* The Avriting or writings relied on to satis-
fy the statute must contain a complete statement of the trust, with-
out the necessity of relying on parol testimony to supply any miss-
ing element. ^° The parol evidence rule naturally forbids the
admission' of oral evidence to vary or contradict the terms of a

Nolan V. Garrison, 151 Mjch. 138, 115 N. W. 58 ; Jones v. Davis, 48 N.

i«
,J. Eq. 493, 21 Atl. 1035.
17 Commercial & Farmers' Bank of Raleigh v. Vass, 130 N. 0. 590, 41
S. E. 791; AUer v. Crouter, 64 N. J. Eq. 381, 54 Atl. 426.
^
18 Hutchlns V. Van Vechten, 140 N. Y. 115, 35 N. E. 446.
19 Baker v. Baker, 3 Cal. Unrep. 597, 31 Pac. 355.
2 Corse v. Leggett, 25 Barb. (N. T.) 389; In re Smith's Estate, 8 Pa.
Co. Ct. R. 539.
21 Denton v. McKenzie, 1 Desaus. (S. C.) 289, 1 Am. Dec. 664,
22 Bryan v. Bigelow, 77 Conn. 604, 60 Atl. 266, 107 Am. St. Rep. 64; Hiss
V. Hiss, 228 111. 414, 81 N. E. 1056 -^ Leslie v. Leslie, 53 N. J. Eq. 275, 31
Atl. 170.
23 Tyler v. Granger, 48 Cal. 259; McCreary- v. Gewinner, 103 Ga. 528,
29 S. E. 960; Npsbitt v. Stevens, 161 Ind. 519, 69 N. E. 256; Stratton v.
Edwards, 174 Mass. 374, 54 N. E. 886; Randall v^ Constans, 33 Minn. 329,
23 N. W. 530 ; Van Cott v. Prentice, 104 N. Y. 46, 10 N. E. 257 ; In re Green-
field's Estate, 14 Pa. 489.
2*Wiggs v. Winn, 127 Ala. 621, 29 Sonth. 96; Hall v. Farmers' & Mer-
chants' Bank, 145 Mo. 418, 46 S. W. 1000.
25 McCleUan v. McClellan, 65 Me. 500; Packard v. Putnam, 57 N. H. 43;
Kimball v. De Graw, 9 N. X. St. Rep. 339.
zeKansdel v. Mopre, 153 Ind. 393, 53 N. E. 767, 53 L. R. A. 753; Tenney
V. Simpson, 37 Kan. 579, 15 Pac. 512; Gates v. Paul, 117 Wis. 170, 94 N.
W. 55.
28 Illinois Steel Co. v. Konkel, 146 Wis. 556, 131 N. W. 842.
Cook V. Barr, 44 N. T. 156; Kimball v. De Graw, 9 N. T. St. Rep.
29

339; Appeal of Dyer, 107 Pa. 446; Martin v. Baird, 175 Pa. 540, 34 Atl.
809; Braun v. First German Evangelical Lutheran Church, 198 Pa. 152, 47
Atl. 963; Jourdan V. Andrews, 258 Pa.,, 347, 102 Atl, 33. But see Kendrick
V. Bay, 173 Mass. 305, 53 N. E. 823, 73 Am. St, Rep. 289.
64 CREATION OF EXPEESS TRUSTS (Ch. 3

trust which is evidenced by a writing." But ambiguities or un-

certainties in a written instrument creating, or proving a trust
may be explained by parol evidence." "When the writing relied
upon Frauds has been lost or destroyed, its
to satisfy the Statute of
contents may be shown by parol proof which is reasonably clear
and certain in its character. * * * And the same rule should
prevail where the party to the suit who is alleged to have signed
the writing, and who has or should have possession thereof, fails to
°*
produce on notice and denies its existence."

FORMALITY— STATUTE OF WILLS

21. If a will is relied upon to create a trust, rather than to evidence
a pre-existing trust, the will must comply with the for-
malities prescribed by the Statute of Wills. Otherwise,
no valid trust will arise.
Since the Statute of Wills^» and the Statute of Frauds'* in '

England some formality has been necessary to the execution of a

valid will. Modern American legislation now very generally
requires wills of real and personal property to be executed with
certain formalities; the common provisions being that such in-
struments be in writing, signed or subscribed by the testator,
ai^d attested by one or more witnesses.'"
It is self-evident that, if an instrument is relied upon as a will to
pass the title to property to a trustee, it riiust be executed with
the formality required by the laws of the state in question. But,
if the instrument is relied on, not to pass the property to another

and fasten a trust upon it, but to constitute an admission of a

pre-existing trust of which the one executing the will is a trustee,
then it is immaterial that the instrument is imperfectly executed
as a will. It may be void as a will, and yet constitute sufficient
evidence to make a valid memorandum of a pre-existing trust."

so Chadwick v. Perkins, 3 Me. (Greenl.) 399; Gale v. SuUoway, 62 N. H.

57; Peer v. Peer, 11 N. J. Eq. 432; Wallace v. Berdell, 97 N. X. 13; Rich-
ards V. Crocker, 66 Hun, 629, 20 N, "Y. Supp. T954, affirmed 143 ISf. Y. 631,
37 N. E. 8271
81 Fox V. Fox, 250 111. 384, 95 N. B. 498; Nesbitt v. Stevens,
161 Ind. 519,
€9 N7 E. 256; Wolf v. Pearce, 45 S. W. 865, 20 Ky. Law Rep. 296; Adams
v.,Canutt, 66 Wash. 422, ,119 Pac. 865.
82 Hiss T. Hiss, 228 111. 414, 423, 81 N. E. 1056.
S3 St. 32 Henry VIII, ch. 1. '

31 St. 29 Ohas. II, ch. 3.

3 5 See, for example, New York Decedent Estate Law (Consol. Laws, c. 13)

I 21, ,

86 Hiss V. Hiss, 228 III. 414, 81 N. E. 1056; Leslie v. LesUe, 53 N. J. Eq.

275, 31 Atl. 170.
 5

§ 22) CONSIDEEATION 65

In othef words, a defective will may prove an express trust, al-

though it cannot create such a relation.

CONSIDERATION
22. If a trust is completely created, lack of consideration will not
render it revocable or invalid.
In order that an unexecuted promise to create a trust may
give rise to a trust, consideration is rtecessary; and vol-
untary agreements to settle property in trust, as well as
voluntary incomplete trusts, are not bases for the declara-
tion by equity of either express or implied trusts. ,

An incomplete gift will not be converted into a trust by equity.

When Trust is Completely Created
thoroughly established that no consideration is necessary
It is
to make a trust enforceable, if all acts essential to be done by the
settlor in order to create the trust have been done.*^ "It is cer-
tainly true that a court of equity will lend no assistance towards
perfecting a voluntary contract or agreement for the fcreation of
a trust, nor regard it as binding so long as it remains executory.
But it is equally true that if such agreement or contract be exe-
cuted by a conveyance of property in trust, so that nothing re-
mains to be done by the grantor or donor to complete the trans-
fer of title, the relation of trustee and cestui que trust is deemed to
be established, and the equitable rights and interests arising out
of the conveyance, though made without consideration, will be
enforced in chancery." "* And another court has thus expressed
itself: "If the deed under which they [the volunteer cestuis]
claim be defective and inoperative at law, they cannot have the aid
of a court of equity to complete and perfect it, any more than
they can have the aid of the court to enforce a promise, or even
a covenant, without consideration, to execute a deed."^'
Once the owner of the property has placed the legal title in
the trustee and created the equitable right in the cestui que trust,
the trust becomes enforceable. If the trust has come into exist-
ence, the question whether the settlor received value for his act
of settlement is immaterial. "The creation of a trust is but the gift

87 Ellison V. Ellison, 6 Vesey, 656; Padfield v. Padfleld,' 72 111. 322; Har-

ris Banking Co. v. Miller, 190 Mo. 640, 89 S. W. 629, 1 L. R. A. (N. S.) 790;
Van Oott V. Prentice, 104 N. X. 45, 10 N. B. 257 ; Dennlson v. Goehring, 7 Pa.
175, 47 Am, Dec. 505.
ssBigelow,/J., in Stone v. Hackett, 12 Gray (Mass.) 227, 230.
89 Ames, C. J., in Stone v. King, 7 R. I. 358, 365, 84 Am. Dec. 557.

BoGERT Trusts —
 ;

66 CREATION OF EXPRESS TRUSTS (Ch. 3

of the equitable interest. An unequivocal declaration as effectually

passes the equitable interest to the cestui que trust as delivery pass-
es the legal title to the donee of a gift inter vivos."*"
It is sometimes said that voluntary "executed" trusts are enforce-
able, but that voluntary "executory" trusts are of no effect legal-
ly.*^ -"A trust may be said to be executed when it has been per-
fectly and explicitly declared in a writing duly signed, in which
the terms and conditions upon which the legal title to the trust
estate has been conveyed, or is held, and the final intention of the
creator of the trust in respect thereto, appear with such certainty'
that nothing remains to be done, except that the trustee, without
any further act or appointment from the settlor carry into effect
the intention of the donor as declared." *^ But there is objec-
tion to the use of the words "executory" and "executed" in this
connection, since the phrase "executory trust" is somewhat ambig-
uous. It is sometimes employed in another sense, namely, to in-
dicate a trust, the details of the execution of which are not defi-
nitely and fully laid down in the original instrument, but which
may, nevertheless, be completely created.*'

Agreements to Create Trusts and Incomplete Trusts

On
the other hand, if the property owner has merely contracted
to create a trust, or has taken only part of the steps necessary
to give the trust existence, or has taken all such steps, but some
of them in a defective manner, and the cestui que trust is a vol-
unteer, equity will not intervene in his behalf.** The trust not
being in existence, the intended cestui can have nothing more on
which to rely than a naked promise, which is of no more effect in
equity than at law. *

Equity's refusal to aid the volunteer prevents her from declar-

ing implied trusts in the case of incomplete gifts.*^ If the prop-
erty owner intended to give A. the legal title, but failed to carry
out his intent by the acts which the law requires, there is no rea-
son why equity' should aid the intended donee and give him an

40 Hallowell Sav. Inst. v. Titcomb, 96 Me. 62, 69, 51 Atl. 249.

41 Masseyv. Huntington, 118 111. 80, 7 N. E. 269.
42 Gaylord v. City of Lafayette, 115 Ind.
423, 429, 17 N. E. 899.
43 Post, § 45.
44 Estate of Webb, 49 Cal. 541; Hamilton v. Hall's Estate, 111 Mich.
291, 69 N. W. 484 Brannock v. Magoon, 141 Mo. App. 316, 125 S. W. 535
;

Harding v. St. Louis Union Trust Co., 276 Mo. 136, 207 S. W. 68; Central
Trust Co. V. Gaftney, 1'57 App. Div. 501, 142 N. T. Supp. 902 Rousseau v.
;

Call, 109 N. C. 173, 85 S. E. 414.

4 6TaIcott V. American Board Com'rs for Foreign Missions, 205 111.
App. 339; Young v. Young, 80 N. Y. 422, 36 Am. Rep. 634.
 ' 67
§ 22) CONSIDERATION

equitable estate. His condition is no worse since the failure to

execute the gift than it was before the intention to make a gift
was formed; the injustice and unjust enrichment necessary to
give rise to a constructive trust do not exist, nor does the intent
necessary to an express trust.
Doubtless if the intended voluntary cestui has sufficiently chang-
ed his position in justifiable reliance on the settlor's agreement
to create a trust, the settlor may be estopped to deny his duty to
settle a trust.**
'
The consideration required to support an agreement to create a
trust is a valuable consideration'; that is, money or its equivalent.
It is, indeed, stated in some cases that meritorious or good con-
—
sideration love and affection or a duty to support^ are recog- —
nized by equity as sufficient cqnsideration.*^ But the weight of
modern authority in England and America denies the validity of
meritorious consideration as a support for an agreement to cre-
ate a trust.*'
It is occasionally hinted by the courts that a seal will induce
equity to carry out an agreement otherwise unenforceable.* ° But
the better view is that chancery will go behind the seal to learn
the true consideration, and that the presence of a seal will not of
itself render a voluntary agreement enforceable.^" "It [equity]
will doubtless not enforce a contract to create a trust, though it
were under hand and seal; and in this respect it carries the doc-
trine of nudum pactum further than even the law does.
* * * » Bi Modern legislation, making the seal merely presump-
tive evidence of consideration or otherwise altering its common-
law effect, will probably lead equity to decrease still further, if
possible, its esteem for the seal.
If one contracting to create a trust has received consideration
for his promise, and then fails to perform, equity will decree a
t,rust. "If there be a valuable consideration between the alleged

46 DUlwyn v. De Gex,
Llewellyn, 4 F. & J. 517.
47 Ellis V. Nimmo, Uoyd & Goold, temp. Sugden, 33S ; Maban v. Mahan,
7 B. Mon. (Ky.) 579; Mclntire v. Hughes, 4 Bibb (Ky.) 186; Landon v. Hut-
ton, 50 N. J. Eq. 500, 25 Atl. 953; Bunn v. Winthrop, 1 Johns. Ch. (N. Y.)
329; Pomeroy, Eq. Jur. (3d Ed.) § 588.
48 Jefferys v. Jefferys, 1 Craig & P. 137; Phillips v. Frye, 14 Allen (Mass.)
36; Whitaker v. Whitaker, 52 N. Y. 368, 11 Am. Rep. 711; Matter of James,
146 ])f. Y. 78, 94, 40 N. B. 876, 48 Am. St. Rep. 774.
48 Caldwell v. 'Williams, Bailey, Eq. (S. C.) 175.
5 Selby V. Case, 87 Md. 459, 39 Atl. 1041; Hayes v. Kershow, 1 Sandf.
Oh. (N. Y.) 258; Mlntum v. Seymour, 4 Johns. Ch. (N. Y.) 498; Pomeroy,
Bq. Jur. (3d Ed.) § 370, note, 383, 1293.
51 Gibson, C. J., in Dennison v. Goehring, 7 Pa. 175, 178, 47 Am. Dec. 505.
68 CEEATION OF EXPRESS TRUSTS (Ch. 3

trustee and cestui que trust, then, under the equitable rule that
what ought to be done will be considered as done, the court may de-
cree a contract to declare a trust as equivalent to an acutal dec-
»='
laration."

DISPOSITION OF TRUST INSTRUMENT

23. Wherethe settlor makes himself trustee, delivery of the dec-
laration of trust to the beneficiary is not requisite to the
completion of the trust.
If the creator of the trust transfer the title to another to hold
in trust, delivery of the trust deed to the trustee' is nec-
essary only so far as the rules of conveyancing require
delivery to pass property. The instrument need not be
manually handed over to the trustee. Placing the ces-
,
tui in possession of the trust instrument in such a trust
is not necessary or natural.
Except as required by statute in a few states, the recording of
the trust document is not necessary to the creation of the
trust.

Delivery
If the property owner has agreed to declare a trust, or to convey
in trust for a consideration, failure to deliver the trust instrument
will be of little importance, since equity can readily give relief to
the intended cestui, whether the trust be considered complete or
incomplete. But, if the trust is voluntary, its enforceability will
depend on its completeness, and it is therefore important to ascer-
tain whether delivery of the trust instrument in cases where there
is a written statement of the trust is necessary to the completeness
of a voluntary trust.
It is well established that it is not essential that the settlor ac-
tually deliver the trust instrument to the cestui or to the trustee in
order to complete the trust. In numerous cases, in which the i-rop-
erty owner has declared himself a trustee by formal written docu-
ment, it has been held unnecessary to give the cestui possession
of that document.^^ If the declarant has shown an intent to effect

62 Janes v. Falk, 50 N. J. Eq. 468, 472, 26 Atl. 138, 35 Am. St. Eep. 783.
In re Way's Trusts, 2 De Gex, J. & S. 365; Linton v. Brown's Adm'rs,
3

(O. C.) 20 Fed. 455; Janes v. Falk, 50 N. J. Eq. 468, 26 Atl. 138, 35 Am.
St. Rep. 783; Moloney v. TUton, 22 Misc. Bep. 682, 51 N. Y. Supp. 19;
Smith's Estate, 144 Pa. 428, 22 Atl. 916, 27 Am. St. Rep. 641; In re Bsh-
bach's Estate, 197 Pa. 153, 46 Atl. 905. Contra: Govin v. De Miranda, 76
Hun, 414, 27 N. Y. Supp, 1049, in which the court states at page 419: "In
no case has it ever been held as yet that a party may, by transferring his
 § 23) DISPOSITION OF TEUST INSTRUMENT 69

a complete tru^t, his failure to place the instrument stating the

trust in the possession or control of the cestui will not be of deter-
mining importance.
When the property owner transfers the res to a third person
'
as trustee, an additional element is involved, namely, the passage
of property froJn settlor to trustee. The necessity of delivery of
the trust instrument will be determined here by the law of con-
veyancing. The declaration of a tryst involves only a theoretical
transfer of the property from the declarant as an individual to the
declarant as a trustee. It is almost universally held, in cases of
transfers to third persons in trust, that the trust deed need not
be actually placed in the manual possession of the trustee.^*
Thus, in Adams v. Adams '"' the settlor signed, sealed, acknowl-
edged, and recorded the trust deed but did not actually deliver it
into the hands of the trustee or notify hir^ of its existence. Mr.
justice Hunt, speaking for the Supreme Court, made the following
statement : "In the case before us the settlor contemplated no fur-
ther act to give completion to the deed. It was not an intention
simply to create a trust. He had done all that was needed. With
his wife he signed and seafed the deed. With her he acknowledged
it before the proper officers, and himself caused it to be recorded in -

the appropriate office. He retained it in his own '^possession, but

where it was equally under her dominion. He declared openly and
repeatedly to her, and to her brothers and ^sisters, that it was a
completed provision for her, and that she was perfectly protected by
it. He intended what he had done to be final and binding upon
him. (Using the name of his friend as trustee, he made the placing
of the deed upon record and keeping the same under the control
of his wife, as well as himself, a delivery to the trustee for the ac-
count of all concerned, or he intended to make himself a ^rustee by
actions final and binding upon himself." And in Huse v. Den ^°
it is said that there need be no "formal and physical handing of

property from one pocket to anbther, make himself a trustee. In every

case where a trust has been established the party creating it has placed
the evidence thereof in thei custody of another and has therebj^ shown that
it was intended to be a completed act."
Si Doe V. Knight, 5 B. & C. 671; Adams v. Adams, 21 Wall. 185, 22 L.
Ed. 504; Huse v. Den, 85 Cal. 390, 24 Pac. 790, 20 Am. St. Rep. 232; Barr
V. Schroeder,' 32 Cal. 609; Tarbox v. Grant, 56 N. J. Eq. 199, 39 Atl. 378;
Souveybye v. Arden, 1 Johns. Ch. (n. T.) 240; Bunn v. Winthrop, 1 Johns.
Gh. (N. X.)\329; Steele v. Lowry, 4 Ohio, 72, 19 Am. Dec. 581. Contra:
Doring v. HUdreth, 170 Mass. 328, 49 N. E. 652, 40 L. R. A. 127, 64 Am.
St. Bep. 301.
BB 21 Wall. 185, J93, 22 L. Ed. 504.
es 85 Cal. 390, 398, 24 Pac. 790, 20 Am. St. Rep. 232.
70 CREATION OF EXPRESS TRUSTS (Ch. 3

it [the trust deed] over" to the trustee. Constructive delivery

will be adequate.
While the failure to deliver the trust instrument is not neces-
sarily fatal to the e:!tistence of the trust, it will constitute important
evidence that a completed trust was not intended. "It is not essen-
tial that the memorandum relied on should have been delivered to
any one as a declaration of trust. It is a question of fact, in all
cases, whether the trust had been perfectly created; and upon that
question the delivery or nondelivery of the instrument is a signifi-
cant fact, of greater or less weight according to the circumstanc-
es." "
has been held that delivery of a trust deed was conclusively
It
shown by an acceptance by the trustee written upon the trust
instrument,"* by signing and acknowledging a trust deed and leav-
ing it to be recorded, °° by signing, acknowledging, and recording
the trust instrument,®" and by a recital of delivery in the deed
coupled with signature, acknowledgment, and recording.®^
A
valid delivery of the trust instrument will not be affected by a
later return of that writing to the settlor."^ A
delivery to a third
person on behalf of the trustee is sufficiefit delijjery to the trustee.^"
Mere custody of the deed by the trustee on behalf of the settlor is
not sufficient to show delivery to the trustee.®*

Recording
It is hardly necessary to state that recording of the trust paper,
in the absence of statute, ig not an essential to completion of the

B^Urann v. Coates, 109 Mass. 581, 584. See, also, Roosevelt/ v. Carow, 6
Barb. (N. Y.) 190, in which case the retention of the trust deed, together
with other circumstances, was held to prove that no completed trust was
intended. And see Welch v. Henshaw, 170 Mass. 409, 49 N. E. 659, 64 Am.
St. Rep. 309, and Ambrosius v. Ambtosius, 239 Fed. 473, 152 C. C. A. 351.
In Geoghegan v. Smith, 133 Md. 535, 105 Atl. 864, the trust was held incom-
plete where the memorandum was not delivered and the supposed settlor
exercised absolute control over the property after the making of the memo-
randum.
68 New South Building & Loan Ass'n v. Gann, 101 Ga. 678, 29 S. E. IS.
69 Lawrence v. Lawrence, 181 111. 248, 54 N. E. 918.
eo Walker v. Crews, 73 Ala. 412; 'Chilvers v. Race, 196 111. 71, 63 N E.
701.
61 Schreyer v. Schreyer, 43 Misc. Rep. 520, 89 N. T. Supp.
508, affirmed,
182 N. X. 555, 75 N. E. 1134.
6 2 stone V. King, 7 R. I. 358, 84 Am. Dec.
557; Talbot v. Talbot, 32 R.
I. 72, 78 Atl. 535, Ann. Cas. 1912C, 1221.
6 3 Woodward v. Camp, 22 Conn. 457; Withers v. Jenkins,
6 S. C "122.
e* Abert v. Lape (Ky.) 15 S. W. 134.

\
§ 24) NOTICE OP THE TRUST 71

trust."" The effect of the recording statutes is the same upon trust
deeds as upon other conveyances.
The recording of a trust instrument is strong evidence that a
complete trust was intended,*" but it has been held not to-be con-
clusive.®''
,

In some states the Statute of Frauds requires the recording

of all instruments creating or proving trusts in real property."'
In these states recording is a necessary step in the creation of
trusts in lan|l enforceable by action.

NOTICE OF THE TRUST

24. Neither notice to the trustee nor to the cestui que trust is es-
sential to the existence of a completed tnist, but the lack
of such notice may have evidentiary value in showing that
the settlor did not intend a completed trust.

Notice to the Cestui Que Trust

Is notice to the beneficiary a prerequisite to a complete trust?
Obviously the cestui cannot bring suit to enforce the trust until
he knows of it, but the trust may nevertheless exist without his .

knowledge. If the settlor's intent is clear tha^ a trust shall arise,

failure to notify the beneficiary of such intent will hot be im-
portant."* "The question in such a case is not so much whether ,

,in the lifetime of the decedent the declaration was actually ex-

8B Sprague V. Woods, 4 Watts & S. (Pa.) 192.

88 Ante, p. 69. . ^ ^

8TLoring v. Hildreth, 170 Mass. 328, 49 N. B. 652, 40 L. R. A. 127, 64

Am. St. Eep. 301. But see Bailey v. Wood, 211 Mass. 37, 97 N. E. 902,
Ann. Cas. 1913A„950.
68 Code Iowa 1897, § 2918; Code Miss. 1906, § 4780; Gen. Laws R: I.
1909, e. 2; Oornelison v. Roberts, 107 Iowa, 220, 77 N. W. 1028;
253, §
Board of Trustees of M. E. Church South v. Odom, 100 Miss. 64, 56 South.
314.
6 8 Fowler v. Gowing (C. C.) 152 Fed. 801; Johnson v. Amberson, 140
Ala. 342, 37 South. 273; O'Brien v. Bank of Douglas, 17 Ariz. 203, 149
Pac. 747; Cahlan v. Bank of Lassen County, 11 Cal. App. 533, 105 Pac.
765; Security Trust <& Safe Deposit Co. v. Farrady, 9 Del. Ch. 306," 82 Atl.
24; Lewis v. Curnutt, 130 Iowa, 423, 106 N. W. 914; Marshall's Adm'r v.
"
Marshall, 156 Ky. 20, 160 S. W. 775, 51 L. R. A. (N. S.) 1208; City of Boston
V. Turner, 201 Mass. 190, 87 N. E. 634; City_of Marquette v. Wilkinson, 119
Mich. 413, 48 N. W. 474, 43 L. R. A. 840 ; Janes v. Falk, 50 N. J. Eq. 468,
26 Atl. 138, 35 Am. St. Rep. 783; Neilson v. Blight, 1 Johns. Cas. (N. Y.)
205; Smith's Estate, 144 Pa. 428, 22 Atl. 916, 27 Am. St. Rep. 641; Wil-
liams V. Haskin's Estate, 66 Vt. 378, 29 Atl. 371; Fleenor v. Hensley, 121
Va. 367, 93 S. B. 582. The courts of Massachusetts have shown a greater
tendency than those of any other state to require notice to the beneficiary.
In Boynton v. Gale, 194 Mass. 320, 323, 80 N. E. 448, the courts said: "What-
72 CREATION OF EXPRESS TRUSTS (Ch. 3

hibited to the inspection of others, as whether, under all the cir-

eumstances of the case, it would appear to have been written and
'*
preserved for the inspection of others."
If it be said that the cestui should be notified in order that he
might exercise the option of accepting or rejecting the trust, the
reply is that acceptance of a beneficial property interest is pre-
sumed. If for any reason the beneficiary does not desire to retain
the bounty of the settlor, he may disclaim after he receives knowl-
edge of the trust.
The failure of the settlor to notify the Qestui of his intent tO'

create a 'trust will be considered, with, all other circumstances,

in determining whether the settlor intended a complete trust, but
such notice is not an absolute essential to the perfected trust.
In an English case '^ that the alleged settlor had written words of
trust in a book, but had not communicated them to the intended
beneficiary, was held to show an intent that there should be no
-completed trust.
Notice to the Trustee
It is likewise well settled that notice to the trustee of the trust
conveyance is unnecessary to the perfection of the trust.'* "Al-
though the trustee may never have heard of the deed, the title
vests in him, subject to a disclaimer on his part." ^*
A
trustee, as will appear later herein,"* cannot be compelled to
accept a trust, but it is unnecessary that he know of it or accept it.
If he declines to act, another trustee will be appointed by equity..
Since the principal object of requiring notice to the trustee would
be to enable him to determine whether he wished to accept or reject
the trust, and since the acceptance or rejection of any particular
individual as trustee has no effect on the life of the trust, the rule
which makes notice unnecessary is easily understandable.
,
As a matter of course the giving or failure to give notice to the
trustee will have some value as evidence of the settlor's state
of mind with respect to the completeness of the trust, but it is.
not conclusive.
r

ever may
be the doctrine elsewhere, It is settled In this state that a mere
declaration of trust by a voluntary settlor, not communicated to the donee
and assented to by him, is not sufficient to perfect a trust, especially when,
the property is retained by him subject tp his own control."
79 Smith's Estate, 144 Pa. 428, 442, 22 Atl. 916, 27 Am. St. Rep.
641.
'iln re Cozzens, 109 Law Times, 306, commented on in 62 Pa. Law Rev.
*
482.
72 De Gex, J> & S. 365; Thatcher v. Wardens, etc.,.
In re Way's Trusts, 2
of St. Andrew's Church of Ann Arbor, 37 Mich. 264; Adams v.' Adams. 21
Wall. 185, 22 L. Ed. 504.
78 Adams V. Adams, 21 Wall. 185, 192, 22 L. Ed. 504.
T4 Post, § 78.
 25) ACCEPTANCE 73

ACCEPTANCE
25. Acc^tanceof the trust by the beneficiary is presumed, and
proof of express acquiescence in the trust by the cestui
is not essential to the completion of the trust.
Likewise acceptance of the trust by the trustee is not a requisite
to the creation of the trust; ^or, if the trustee nominated
does not accept, equity will appoint a substitute. Accept-
ance of the trust by the trustee is presumed.

Acceptance by the Cestui Qiie Trust

No min can be compelled to become the owner of property.
The transferee or donee must assent.'"' The creation of a trust
involves the transfer of rights to the cestui. It follows that ac-
ceptance of the trust by the beneficiary must occur before the trust
will be complete,'* just as the grantee of real prdperty must ac-
quiesce in the deed to him before the grantor's title will pass to
him.
But the law presumes that the transferee of beneficial property
rights accepts them. Commonly the rights of cestui que trust
are purely beneficial and not burdensome. Hence, in the ordi-
nary trust, there is a presumption that the cestui que trust assents
to the trust. No express proof of acceptance of the trust is nec-
essary.'"' But, if the gift of the trust interest imposes' onerous
conditions, the consent of the beneficiary will not be presumed.''*
This presumption of acceptance of the trust by the cestui may be
overcome."

TB 1 Devlin on Real Estate (3d Ed.) § 285.

TBLlbby V. Frost, 98 Me. 288, 56 Atl. 906; Bailey v. Worster, 103 Me.
170, 68 Atl. 698 CunnifE v. McDonnell, 196 Mass. 7, 81 N. E. 879. In Sloan
;

V. Sloan, 282 111. 399, 118 N. B. 709, it was held that acceptance by all the
cestuls que trust was necessary, and that a trust accepted by two of three
only was revocable.
77 O'Brien v. Bank of Douglas, 17 Ariz. 203, 149 Pac. 747; Barr v.
Schroeder, 32 Cal. 609; Branson v. Henry, 140 Ind. 455, 39 N. E. 256; Devol
V. Dy6, 123 Ind. 321, 24 N. E. 246, 7 L. E. A. 439; Lewis v. Curnutt, 130 Iowa,
423, 106 N. W. 914; Libby v. Frost, 98 Me. 288, 56 Atl. 906; Thorp v. Lund,
227 Mass. 474, 116 N. B. 946, Ann; Cas. 1918B, 1204; Suydam v. Dequindre,
Har. (Mich.) 347; H. B. Cartwright & Bro. v. United States Bank & Trust
Co., 23 N. M. 82, 167 Pac. 436; Stone v. King, 7 R. I. 358, 84 Am. Dec.
557; Cloud v. Calhoun, 10 Rich. Bq. (S. 0.) 358; Furman v. Fisher, 4
Cold. (Tenn.) 626, 94 Am. Dec. 210; Fleenor v. Hensley, 121 Va. 367, 93 S:
B. 582. '
,

78 Kemp v. Porter, 7 Ala. 138.

78 Gwynn v. Gwynn, 11 App. D. C. 564; Ly tie's Bx'r v. Pope's Adm'r, 11 B.
Mon. (Ky.) 297; Breedlove v. Stump, 3 Yerg. (Tenn.) 257.
 ,

74 CKEATION OP EXPRESS TRUSTS (Ch. 3

accept the trust occur before the attempt of the

If the refusal to
settlor to create it, no trust will ever arise, and the settlor will re-
main the absolute owner df the property. If the disclaimer of the
trust by the beneficiary take place after the acts of the settlor nec-
essary to the creation of the trust have been performed, the trust
will have had a short life, based on the presumption of the ac-
ceptance by the cestui, but will be destroyed by the later disclaimer,
and the title to the trust property will revest in the settlor.'"

Acceptance by the Trustee v

No man can be compelled to accept the duties of a trusteeship.

Hence, for the purpose of fastening the trust duties upon any given
individual, proof of acceptance by such individual is necessary."
No formal acceptance of the trust is needed. Acts in performance
of the trust show implied acceptance.*" z

But acceptance by the trustee originally named is not essen-

tial to the creation of the trust. Equity will not allow a trust to
fail for want of a trustee.*' Even the neglect to name any trustee
will not be fatal to the perfection of the trust in the ordinary case.
Hence the rule is general that proof of acceptance of the trust by
the trustee is not an essential part of the. evidence necessary to
show that an express trust has been established.** "It is said,
indeed, that the trustee never accepted the trusts of the deed, and
hence that it was incomplete. It is not essential to the validity of a
trust created by the beneficial owner of the- trust property that
there should be an acceptance or a declaration of the trusts by the
trustee in whom the legal interest is vested." *°
As in the case of cestui que trust, the law presumes that the

8P Post, I 108.
81 Civ. Code Cal. §
2222 McFall v. Kirkpatrick, 236 111. 281, 86 N. E. 139;
;

Maccubbin v. Cromwell's Ex'rs, 7 Gill & J. (Md.) 157; Brandon v. Carter,

119 Mo. 572, 24 S. W. 1035, 41 Am. St. Kep. 673. Whether the trustee, in
accepting intended to perform or not, is Immaterial. Pearl v. Pearl, 177
Cal. 303, 177 Pac. 845.
82 Pepper
v. Wailing (Tex. Civ. App.) 195 S. W. 892. Merely standing
mute, whenthere is opportunity to reject, may show acceptance. Heitman
V. Cutting, 37 Cal. App. 236, 174 Pac. 675.
83 Post, § 75.
Braswell v. Downs, 11 Fla. 62; Wells v. German Ins. Co. of Freeport,
81
128 Iowa, 649, 105 N. W. 123; Koche v. George's Ex'r, 93 Ky. 609, 20 S.
W. 1039; Thatcher v. Wardens, etc., of St. Andrew's Church of Ann Arbor,
37 Mich. 264; Minot v. Tilton, 64 N. H. 371, 10 Atl. 682; Stone v. ping,
7 R. I. 358, 84 Am. Dec. 557; Cloud v. Calhoun, 10 Rich. Eq. (S. C.) 358;
Saunders v. Harris, 1 Head (Tenn.) 185.
86 Am^s, C. J., in Stone v. King, 7 R. I. 358, 366, 84 Am. Dec. 557.
I 26) DISPOSITION OF TEUST PROPEETT 75

trustee accepts the conveyance in trust.^* This presumption of

acceptance by the trustee is based on the further presumption that
"any gift by deed, will, is supposed prima facie, un-
or otherwise
less the contrary appears, to be beneficial to the donee." *^ In
this instance the application of this latter presumption seems rather
unsatisfactory, since "the contrary" does expressly appear in every
deed of trust. In such instruments it appears that tlie grantee
cannot hold beneficially, but rather solely for the use of another.
If the trustee decline the trust in advance of the settlement, the
result will be that the settlor (or in case of wills the testator's heirs
or next of kin) will hold the property in trust for the cestui que
trust. If the disclaimer of the trust occur after the trust has been
perfected, the legal title to the property will vest again in the
settlor (or in cases of wills in the testator's heirs or next of kin)
subject to the trusts declared.**

DISPOSITION OF TRUST PROPERTY

26. Transfer of title in the trust res to the trustee is fundamental
to the idea of a trust and an important step in the act of
creating a trust.
The investing of the trustee with possession of the property
is not necessEiry to the completion of the trust, except
in so far as possession is essential to the passage of title.

Transfer of Title
The very definition of a trust involves the idea that the trustee
shall be the holder of a title to property. Hence transferring title
to him is one of the acts which the settlor must perform before
the trust can be complete.'* "To create a trust of this species, it
is essential that the delivery of the property to the alleged trustee

s 6 Kennedy v. Winn, 80 Ala. 165; Harvey v. Gardner, 41 Ohio, 642; Mc-

Lean V. Nelson, 46 N. C. 396 Eyrlck v. Hetrick, 13 Pa^ 488 Goss v. Single-

; ;

ton, 2 Head (Tenn.) 67; Bowden v. Parrish, 86 Va. 67, 9 S. E. 616, 19 Am.
St. Rep. 873.
'
8 7 Harvey v. Gardner, 41 Ohio St. 642, 649. See, also, Goss v. Single-
ton, 2 Head (Tenn.) 67, and Bowden v. Parrish, 86 Va. 67, 9 S. E. 616, 19
Am. St. Rpp. 873.
88 Adams v. Adams, 21 Wall. 185, 22 L. Ed. 504; Bennett v. Bennett, 217
111. 434, 75 N. E. 339, 4 I>. B. A. (N. S.) 470; Goss v. Singleton, 2 Head
(Tenn.) 67. But see King v. Donnelly, 5 Paige (N. Y.) 46.
8» Mahan v. Schroeder, 142 111. App. 538; West v. White's Estate, 56 Mich.
126, 22 N. W. 217; Citizen's Nat. Bank v. McKenna, 168 Mo. App. 254, 153
S. W. 521; Smith's Estate, 144 Pa. 428, 436, 22 Atl. 916, 27 Am. St. Hep.
641i
 76 CREATION OP EXPRESS TRUSTS (Ch. 3

be with the purpose and intent of passing the legal estate to the
trustee and vesting in him the absolute control over the property,
even as against the person creating the trust, subject only to the
declared purpose of the trust; and if such original owner reserves
to himseilf or his heirs the power to control the property, and has
only vested in the alleged trustee a posse.ssipn, without any inten-
tion of vesting the property in him, but simply for the purpose of
constituting him her agent to do certain acts, and at the same time
of reserving the power to dispose of the property at his or her
will, with or without the concurrence of the trustee, this would be
an imperfect trust, and would not vest title in the trustee." *"
Whether the trustee must become the holder of a legal or an
equitable title to the property .before the trust can be complete
depends upon the nature of the title which the settlor intends the
trustee shall have. Ordinarily the settlor transfers to the trustee
the legal title, but occasionally he places in the trustee's hands the
equitable title to the property to hold in trust for the beneficiaries."^
Whatever title the trustee is to have during the administration of
the trust must be given to him before the trust can be said to be
completely created.
If the property owner makes himself the trustee, the transfer of
title is formal or theoretical but, if a third person is to become
; .

trustee, the transfer is actual, and the formalities necessary to con-

. vey the title to real or personal property from one to another must
be complied with.
In order that there may be a complete trust, the interest of the
cestui que trust, whether regarded as an estate or as a right in per-
sonam, must be presently vested in him and\not made contingent.'^
Transfer of Possession
It has already been stated that the trustee must receive the title
to the trust res before the trust can be considered complete." In
some instances no title to property can be passed without delivery
of the thing concerned. The transferee must have possession before
he can have title. An oral gift of personal property is an example.
Where the creation of a trust is attempted by such a gift, the set-
tlor must give the trustee possession of the trust property
before
the ^rust can be completed. The reason lies in the law of gifts,

80 West V. White's Estate, 56 Mich. 126, 128, 22 N. W. 217.

»i Sloans V. Oadogan, 3 Sugden, Vendors & Purchasers (10th' ^ Ed)/ Ap-
i^
pend. 66.
82 Hess Sandner, 198 Mo. App. 636, 198 S.
V.
W. 1125; O'Gorman v. Jol-
ley, 34 S. D. 26, 147 N. W. 78.
» 8 Ante, p. 69.
§ 26) DISPOSITION OP TRUST PEOPERTT 77

rather than in the rules govprning the creation of trusts.'* A

retention by the creator of the power to have access to the trust
property in connection with the trustees, whereas the latter are
allowed to handle the property without ^the joinder of the settlor,
is sufficient delivery to the trustees and possession by them to make
the trust effective.'*
Where possession of the ti^ust property is not necessary to the
passage of title to the trustee, the trust may well be complete with-
out a transfer of possession to the trustee.'" "But the validity of
the trust is not affected by the failure of the trustee to take pos-
session of the property. * * * " '^ Indeed, delivery of the trust
property to the trustee does not conclusively show that a trust
has been created.'*
Obviously it is only in cases of transfers to third persons that the
change of possession can be important. If the property owner
declares himself a trustee, any change of possession will be formal
and theoretical only.
Ordinarily the cestui qtie trust is not expected to obtain pos-
session of the trust res at any time during the life of the trust.
It is well settled that possession of the corpus by him, either in
cases of declarations of trust or transfers in trust, is not indis-
pensable to the creation of the trust relationship."

»*Badgley v. Votrain, 68 111. 25, 18 Am. Rep. 541; Wellington v. Heer-

mans, 110 111. 564; Brannock v. JMagoon, 141 Mo. App. 316, 125 S. W. 535;
HofEman v. Union Dime Sav. Inst., 109 App. Div. 24, 95 N. Y. Supp. 1045;
Brown v. Spohr, 180 N. Y. 201, 73 N. B. 14; Dickerson's Appeal, 115 Pa.
198, 8 Atl. 64, 2 Am. St. Rep. 547.
»B Meldahl v. Wallace, 270 111. 220, 110 N. B. 354.
98 Cahlan v. Bank of Lassen County, 11 Cal. App. 533, 105 Pac. 765;
Otis V. Beckwith, 49 111. 121; Roche v. George's Ex'r, 93 Ky. 609, 20 S.
W. 1039; Sclireyer v. Schreyer, 43 Misc. Rep. 520, 89 N. Y. Supp. 508, af-
firmed, 182 N. Y. 555, 75 N. B. 1134; Young v. Cardwell, 6 Lea (Tenn.)
168.
uT Young Cardwell, 6 Lea (Tenn.) 168, 171.
V,
»8 Lloyd Brooks, 34 Md. 27.
V.
9 9 WilUamson v. Yager, 91 Ky. 282, 15 S. W. 660, 34 Ain. St. Rep. 184;

Mize V. Bates County Nat. Bank, 60 Mo. App. 358; Martin v. Punk, 75
N. Y. 134, 31 Am. Rep. 446; Robb V. Washington & Jefferson College, 185
N. Y. 485,' 78 N. E. 359.
78 CREATION OP EXPRESS TRUSTS (Ch. 3
\

SAVINGS BANK TRUSTS

27. That one has deposited his own money in a bank and directed
that the account be entitled in trust for another does not
alone establish a trust in the bank account. Depositors
are frequently actuated by other motives than trust intent
in making such deposits. The courts require confirmation
of the trust by other acts.
Acts confirmatory of a trust intent are express statements by
the depositor that he intended a trust; allowing the de-
posit to remain until the depositor's death ; notice of the
deposit to the beneficiary; notice to a third person;^ de-
livery of the bank book to the beneficiary or a third per-
son; making a will consistent with a trust intent; and
payment of part of the deposit to the supposed cestui.
Near relationship between depositor and cestui tends to
^
strengthen the notion of a trust.
Facts which rebut the inference that a trust was intended are
the depositor's express statement that he intended no
trust; death of the beneficiary before notice to him of
the trust account; leaving the account untouched after the
beneficiary's death; reservation of the right to with-
draw all or a part of the acsount; dealing with the in-
terest or principal as the depositor's property; oblitera-
tion of the trust words on the bank book by the depositor;
admissions by the supposed cestui inconsistent with a
trust; the making of a will by the depositor which is in-
consistent with a tnist^ that the depositor's financial
condition is such that a trust would be unnatural; that
the taxation laws or rules restricting the size of deposits
favored small deposits as against large ones.

Reasons for Special Rule

If A. deposit his own money in a bank, and by his direction the
deposit is entitled "A., in trust for B.," is a trust created? If any
further acts on the part of A. are necessary to the creatibn of a
trust, what are such acts?
Under the elementary principles concerning the creation of trusts,
previously stated, it 'might be assumed that the mere deposit of
money in a bank under the circumstances mentioned in this ques-
tion would lead to the establishment of a trust. ,The depositor
calls himself a trustee of specific trust property, namely, the claim
against the bank. His declaration is communicated to a third
§ 27) SAVINGS BANK TEUSTS 79

party, namely, the officer of the bank. The beneficiary is definite

and clearly identified.
But the peculiarity with respect to these so-called "savings
bank trusts" is that the courts require that the declarant shall ex-
press his intent to create a trust more clearly and by a larger num-
ber of acts than in the case of an ordinary trust. The deposit of
money in a bank under a trust title is considered equivocal. Men
frequently deposit money under a trust title from other motives
than that of creating a trust. The attitude of the courts toward'
a deposit entitled "in trust" is well stated by Andrews, J., in Beaver
V. Beaver.^ "The form of the account is the essential fact upon
which the plaintiff relies. It may be justly said that a deposit in
a savings bank by one person, of his own money to the credit
of another, is consistent with an intent on the part of the deposi-
tor to give the money to the other. But it does not, we think, of
itself, without more, authorize an affirmative finding that the de-
posit was made with the intent, when the deposit was to a nev
account, unaccompanied by any declaration of intention, and the
.

depositor received at the time a .passbook, the possession and pres-

entation of which, by the rules of the bank, known to the depositor,
is made evidence of the right to draw the deposit. We
cannot
close our eyes to the well-known practice of persons depositing in
savings banks money to the credit of real or fictitious persons, with
no intent of divesting themselves of ownership. It is attributable
—
to various reasons reasons connected with taxation ; rules of the
bank limiting the amount which any individual may keep on de-
posit; the desire to obtain high rates of interest where there is
a discrimination based on the amount of deposits, and the de-
sire, on the part of many persons, to veil or conceal from others
knowledge of their pecuniary condition. "In most cases, where
a deposit of this character is made as a gift, there are contemf-
poraneous facts or subsequent, declarations by which the inten-
tion can be established, independently of the form of the deposit.
We are inclined to think that to infer a gift from the form of the
deposit alone would, in the great majority of cases, and especial-
ly where the deposit was of any considerable amount, impute an
intention which never existed, and defeat the real purpose of the
depositor."
The possibility that the depositor may be influenced by other
motives than the trust motive has caused the courts very gen-
erally to hold that the bare deposit under a trust title does not

1 117 N. r. 421, 430, 431, 22 N. E. 940, 6 L. K. A, 403, 15 Am. St. Hep.

531.
80 CREATION OF EXPRESS TRUSTS (Ch. 3

result in the cfeation of a trust. The depositor must show by other

acts than the mere deposit that his object is the creation of a true
trust.^
The bare deposit must be supported by other facts indicative of
trust intent. The sole problem with respect to savings bank trusts
isthe weighing of the effect to be given these collateral facts. It
isa problem of evidence. Do the collateral facts, when considered
with the deposit, bring out clearly the intent to create a trust ?
Or do they establish that the form of the deposit is deceptive and
was intended merely to accomplish an ulterior purpose, not a trust
purpose?
The evidence bearing upon the intent of the depositor, aside from
the deposit itself, may be divided into three classes, namely: (a)
:^xpress statements of intent; (b) acts of the depositor with re-
spect to the deposit, or the supposed beneficiary, aside from express
statements (c) the circumstances of itit depositor.
;

Express Statements of Intent

The most direct form of evidence as to the depositor's intent,
aside from the deposit itself, is the express statement of the depos-
itor concerning his intent. If the depositor stated, otherwise than
by a direction as to the title of the deposit, at the time of the de-
posit, that he actually intended a trust, such evidence will be ad-
missible, arid ordinarily conclusive, as showing a trust.' So,
too, evidence that the depositor' stated at the time of the deposit
that he intended no trust is receivable as a part of the res gestae
and is of great force.* Direct statements by the depositor that he
intended a trust, made after the deposit, are given much weight ;
*

'"
I

2 Austin Central Sav. Bank of Baltimore, 126 Md. 139, 94 Atl. 520;
V.
Powers Provident Institution for Savings, 124 Mass. 377; Parkman v.
V.
Suffolk Savings Bank for Seamen, 151 Mass. 218, 24 N. E. 43 r Cleveland
V. Hampden Savings Bank, 182 Mass. 110, 65 N. B. 27; Matter of Totten,
179 N. Y. 112, 71 N. B. 748, 70 L. K. A. 711, 1 Ann. Cas. 900; Kambo v.
Pile, 220 Pa. 235, 238, 69 Atl. 96; People's Savings Bank v. Webb, 21 R. I.
2l8, 42 Atl. 874. / '

smooth T. Oakland Bank of Savings, 122 Cal. 19, 54 Pac. 370 ; Batb Sav-
ings Inst. V. Hatkorn, 88 Me. 122,' 33 Atl. 836, 32 L. R. A. 377, 51 Am.
St. Rep. 382 LIttig v. Vestry of Mt. Calvary Protestant Episcopal Church,
;

101 Md. 494, 61 Atl. 635; Martin v. Martin, 46 App. Dlv. 445, 61- N. T.
Supp. 813, appeal dismissed 166 N. Y. 611, 59 N. E. 1126; Robinson v.
Appleby, 69 App. Div. 509, 75 N. T. Supp. 1, affirmed 173 N. Y. 626, 66
N. B. 1115. Contra: Clark v. Clark, 108 Mass. 522.
* Merlgan v. McGonlgle, 205 Pa. 321, 54 Atl. 994 ; Connecticut River Sav-
ings Bank v. Albee'S' Estate, 64 Vt. 571, 25 Atl. 487, 33 Am. St. Rep. 944.
6 Alger V. North End Savings Bank, 146 Mass. 418, 15 N. E. 916, 4 Am.
St. Rep. 331 ; Peck v. Scofield, 186 Mass. 108, 71 N. E. 109; Mabie v. Bailey,
 6

§ 27) SAVINGS BANK TRUSTS 81

but they are not necessarily conclusive in showing the existence

of a trust.' On the other hand, 'statements by the depositor, after
the deposit, to the effect that no trust was intended, if the depositor
be dead, are inadmissible.'' But, if the depositor be alive, he may
testify to his intent in making the deposit, whether such testi-
mony is favorable to a trust * or unfavorable.'
A statement by the supposed beneficiary that she had no prop-
erty, made with knowledge of the deposit,^* or a statement by the
beneficiary that the deposit was made for the purpose of getting
better interest rates and not as a trust ^^ is receivable as strong
evidence that the depositor intended no trust.

Intent Implied from Acts of the Depositor Other Than Express State-
ments
(a) Giving Notice of the Deposit. — If the depositor notifies the
beneficiary that the deposit has been made in trust form, a strong pre-
sumption of a trust arises ;
^^ but this presumption may be over-
come by other facts in the case.^'

95 N. Y. 206. The failure to admit declarations of the depositor favorable

to a trust was held ground for ordering a new trial in Walso v. Latterner,
140 Minn. 455, 168 N. W. 353.
6 Macy V. WilUams, 83 Hun, 243, 31 N. Y. Supp. 620, affirmed 144 N. Y.

701, 39 N. E. 858.
TTierney v. Fitzpatrick, 195 N. Y. 433, 88 N. E. 750; Matter of Bunt,
96 Misc. Rep. 114, 160 N. Y. Supp. 1118; Merigan v. McGonigle, 205 Pa.
321, 54 Atl. 994; Ray v. Simmons, 11 R. I. 266, 23 Am. Rep. 447; Connecti-
cut River Sav. Bank v. Albee's Estate, 64 Vt. 571, 25 Atl. 487, 33 Am.
St. Rep. 944.
8 Sayre v. WeU, 94 Ala. 466, 10 South. 546, 15 L. R. A. 544^
9 Cunningham v. Davenport, 147 N. Y. 43, 41 N. E. 412, 32 L. R..A. 373,

49 Am. St. Rep. 641; Barefield v. Resell, 177 N. Y. 387, 69 N. E. 732, 101
Am. St. Rep. 814; People's Sav. Bank v. "Webb, 21 R. I. 218, 42 Atl. 874.
10 Barefield v. Resell, 177 N. Y. 387, 69 N. E. 732, 101 Am. St. Rep. 814.
11 Matter of Mueller, 15 App. Div. 67, 44 N. Y. Supp. 280.
12 Alger 'V. North End Saving Bank, 146 Mass. 418, 15 N. E. 916, 4 Am.
St. Rep. 331; 'Pe^ v. Scofield, 186 Mass. 108, 71 N. E. 109; Grafing v.
Heilmann, 1 App. Div. 260, 37 N. Y. Supp. 253, affirmed 153 N. Y. 673, 48
N. E. 1104; Farleigh v. Cadman, 159 N. Y. 169, 53 N. E. 808; Meislahn
V. Meislahn, 56 App. Div. 566, 67 N. Y. Supp. 480; Matter of Pierce, 132
App. Div. 465, 116 N. Y. Supp. 816; Matter of Hewitt, 40 Misc. Rep. 322,
81 N. Y, Supp. 1030; Matter of Halligan's Estate, 82 Misc. Rep. 30,' 143
N. Y. SUpp. 676; Matter of Brennan, 92 Misc. Rep. 423, 157 N. Y. Supp. 141;
WiUard v. Willard, 103 Misc. Rep. 544, 170 N. Y. Supp. 886; Ray v. Sim-
mons, 11 R. I. 266, 23 Am. Rep. 447; Petition* of Atkinson, 16 R. I. 413,
16 Atl. 712,, 3 i;,. R. A. 392, 27 Am. St. Rep. .745; Connecticut River Sav.
Bank v. Albee's Estate, 64 Vt. 57i, 25 Atl. 487, 33 Am. St. Rep. 944.
i» Nutt V. Morse, 142 Mass. 1, 6 N. E. 763; Kelley v. Snow, 185 Mass. 288,
70 N. E. 89; Smith v. Speer, 34 N. J. Eq. 336; Matthews v. .Brooklyn
Sav. Bank, 208 N. Y. 508, 102 N. E. 520; Devlin v.,Hinman, 34 App. Div.
BoGEET Trusts—
 82 CREATION or EXPKESS TRUSTS (Ch. 3

Notice of the existence of the deposit given by the depositor

to the beneficiary Ts not absolutely essential to the existence of

a trust.^* In several caSes notice of the e^iistence of a deposit in

trust form given by the depositor to a third person has been ac-
corded weight as tending to show an intent to create a trust.^"
But in other instances, notwithstanding such notice to a third per-
son, no trust was found.^* The Massachusetts courts have been
inclined to give very little weight to the bare deposit in trust form,
or to such deposit accompanied by notice to a third person un-
connected with the beneficiary. The statement of Holmes, J., in
Cleveland v. Hampden Savings Bank ^' is characteristic: "An
owner of property does not lose it by using words of gift or trust
concerning it in solitude or with the knowledge of another not as-
suming to represent an adverse interest. He may amuse himself
as he likes."
^ Naturally notice of the existence of the deposit, obtained 'with-
out the depositor's knowledge or consent, has no efiEect in show-
ing the depositor's intent.^*
—
(b) Transactions Respecting the Bank Book. ^A trust may exifet
without delivery of the bank book by the depositor to another.^" In
fact, it is more natural that the trustee shoiild retain possession of the
evidence of the trust property than that he should deliver it to the
'
beneficiary or to a third person.^"
But the delivery of the bank book by the depositor to th'e bene-
ficiary constitutes strong evidence of intent to make a gift of the

107, 54 N. Y. Supp. 496; Hessen v. McKinley, 155 App. Div. 496, 140 N. Y.
Supp. 724; Weber v. Weber, 58 How. Prac. (N. Y.) 255; Weber v. Weber,
9 Daly (N. Y.) 211.
i*In re Podhajsky's Estate, 137 Iowa, 742, 115 N. W. 590; Milholland
^. Wbalen, 89 Md. 212, 43 Atl. 39, 44 L. R. A. 485; Brabrook v. Boston
Five Cents Sav. 6ank, 104 Mass. 228, 6 Am. Kep. 222 ; Gerrish v. New Bed-
ford Inst, for Sav., 1^8 Mass. 159, 35 Am. Kep. 365.
15 Bath Sav. Inst. v. Hatborn, 88 Me. 122, 33 Atl.
836, 32 L. -R. A. 377,
51 Am. St. Rep. 382; Merlgan v. McGonigle, 205 Pa. 321,^4 Atl. 994; Mabie
V. Bailey, 95 N. Y. 206; In re Biggars, 39 Misc. Rep. 426, 80 N. Y. Supp.
214; In re King's Will, 51 Misc. Rep. 375, 101 N. Y. Supp. 279.
"Minor v. Rogers, 40 Conn. 512, 16 Am. Rep. 69; Cleveland v. Hamp-
den Sav. Bank, 182 Mass. 110, 65 N. E. 27; People's Sav. Bank v. Webb,
21 R. I. 218, 42 Atl. 874.
" 182 Mass. 110, 111, 65 N. B. 27.
18 Matter of United States' Trust Co., 117 App. Div. 178, 102
N. Y Supp
271.
i»Willard v. Willard, 103 Misc. Rep. 544, 170 N. Y. Supp., 886; In re
Gaftney's Estate, 146 Pa. 49, 23 Atl. 163.
20 Milholland v. Whalen, 89 Md. 212, 43 Atl. 43, 44 L. R. A.
205; Weaver
V. Emigrant, etc., Savings Bank, 17 Abb. K. C. (N. Y.) 82; Merlgaa
V. Mc-
Gonigle, 205 Pa. 321, 54 Atl. 994.
§ 27) SAVINGS BANK TRUSTS 83

account by way of a trust.^^ A

direction by the depositor to deliver
the book to the bank for the beneficiary is also strong evidence of
the trust intent."
But the delivery of the book to the beneficiary is not conclusive
of a trust. The delivery^ may be so qualified as to show no intent
to create a trust, but merely an intent to have the beneficiary
hold the book as a bailee of the depositor.^' The bare fact that,
the bank book is found in the possession of the beneficiary's sole
heir and next of kin does not show that a trust exists'.^* .

When the book has been delivered by the depositor to the bene-
ficiary, the presumption of a trust is strong, notwithstanding a
redelivery to the depositor or his nominee; ^° but in a recent case
the New York Court of Appeals has held that under some cir-
cumstances such redelivery shows that no trust exists.^"
In other cases the delivery of the book by the depositor to a third
person ''' or to the depositor's executor,^^ or the leaving of the
book with the bank,^^ has been considered as tending to prove that
a trust was established. But other facts may overcome the pre-
sumption of a trust' raised by the delivery of the book to a third
person.^"
The obliteration of the words of trust from the bank book by
the depositor 'tends to show that\ he intended no trust.^^

21 Decker v. Union Dime Sav. Inst., 15 App. Div. 553, 44 N. T. Supp.

521; Proseus v. Porter, 20 App. Div. 44, 46 N. T. Supp. 656; Jennings v.
Hennessy, 40 App. Div. 633, 58 N. T. Supp. 1142 ; Matter of Davis, 119
App. Div. 35, 103 N. Y. Supp. 946; Matter of Pierce, 132 App. Div. 465,
116 N. Y. Supp. 816; Matter of Rudolph, 92 Misc. Bep. 347, 156 N. Y.
Supp. 825; In re Beaman's Estate (Sur.) 163 N. Y. Supp. 800.
2 2 Board of Domestic Missions of Reformed Cliurch in America v. Me-

chanics' Sav. Bank, 40 App. Div. 120, 54 N. Y. Supp. 28, 57 N. Y. Supp. 582.
2 3Nutt V. Morse, 142 Mass. 1, 6 N. B. 768; Matter of HalUgan's Estate,
82 Misc. Rep. 30, 143 N. Y. Supp. 676; Markey y. Markey (Com. PI.) 13
N. Y. Supp. 925.
24 In re Duffy, 127 App. Div. 74, 111 N. Y. Supp. 77.
2 5 Scrivens v. North Baston Sav. Bank, 166 Mass. 255, 44 N. E. 251;

Macy v. WUliams, 55 Hun, 489, 8 N. Y. Supp. 658, affirmed 125 N. Y. 767, 27

N. B. 409; Stockert v. Dry Dock Sav. Inst., 155 App. Div. 123, 139 N. Y.
Supp. 986; Ray v. Simmons, 11 R. I. 266, 23 Am. Rep. 447.
2 6 Matthews v. Brooklyn Sav. Bank, 208 N. Y. 508, 102 N. E. 520.

27 Peck V. Scofield, 186 Mass. 108, 71 N. E. 109.

2 8 Martin v. Martin, 46 App. Div. 445, 61 N. Y. Supp. 813, appeal dis-

missed 166 N. Y. 611, 59 N. E. 1126; Scallan v. Brooks, 54 App. Div. 248,

66 N. Y. Supp. 591.
29 Robinson v. Appleby, 69 App. Div. 509, 75 N. Y. Supp. 1, affirmed 173
N. Y. 626, 66 N. E. 1115.
so Lattan v. Van Nfess, 107 App. Div. 393, 95 N. Y. Supp. 97, affirmed 184
N. Y. 601, 77 N. E. 1190.
31 In re Bulwinkle, 107 App. Div, 331, 95 N. Y. Supp. 176,
84 CEEATION OP EXPRESS TRUSTS (Ch. 3

(c) Additions to and Withdrawals from the Account. —

No pre-
sumption for or against a trust arises from the mere addition to the
original account during the life of the supposed beneficiary. The addi-
tions become trust property or not, according to the status of the
'
original deposit.*"
But a deposit made after the death of the supposed beneficiary
tends to show tftat the trust is not real, but rather a mere form
for the convenience of the depositor.'*
The use by the depositor of the interest accruing upon the
deposit for his personal benefit has some tendency to show that no
trust was intended, and in some cases, in coniiection with other
facts, it has defeated a trust;** but neither the reservation by the
depositor of the right to use the interest on the account during
his life,*" nor the actual use of such interest by the depositor,'*
is necessarily inconsistent with a trust as -to the principal. The
crediting of the interest to the trust account is an act of no signifi-
cance.*^
The
reservation by the depositor of the right to withdraw any
or of the principal fund for his own use has been viewed differ-
all
ently by the several courts which have considered the question.
It has been regarded as militating against a trust,** while other
courts have treated it as not inconsistent with a trust,*" but as

32 Farleigh v. Cadman, 159 N. Y. 169, 53 N. B. 808; Proseus v. Porter,

20 App. Dlv. 44, 46 N. Y. Supp. 656; Hyde v. Kitchen, 69 Hun, 280, 23 N.
Y. Supp. 573; Eay v. Simmons, 11 E. I. 266, 23 Am. Rep. 447; Connecticut
^iver Sav. Bank v. Albee's Estate, 64 Vt. 571, 25 Atl. 487, 33 Am. St. Eep.
944.
33 In re Bulwinkle, 107 App. Div. 331, 95 N. Y. Supp. 176.
siMacy v. Williams, 83 Hun, 243, 31 N. Y. Supp. 620, affirmed 144 N.
Y. 701, 39 N. E. 858; Garvey v. Clifford, 114 App. Div. 193, 99 N. Y. Supp.
555; Thomas v. Newburgh Sav. Bank, 73 Misc. Rep. 308, 130 N. Y. Supp.
810, affirmed 147 App. Div. 937j 132 N. Y. Supp. 1148.
3 5 Gerrish v. New Bedford Inst, for Sav., 128 Mass. 159, 35 Am. Eep.

365.
36 Gerrish v. New Bedford Inst, for Sav., 128 Mass. 159, 35 Am. Eep.
365 Martin v. Funk, 75 N. Y. 134, 31 Am. Eep. 446; Willis v. Smyth, 91
;

N. Y. 297 ; Graflng v. Heilmann, 1 App. Div. 260, 37 N. Y. Supp. 253, affirmed

153 N. Y. 673, 48 N. E. 1104; Meislahn /v. Meislahn, 56 App. Div. 566, 67
N. Y. Supp. 480; Witzel v. Chapin, 6 Bradt Sur. (N. Y.) 386; Eay v.
Simmons, 11 E. I. 266, 23 Am. Eep. 447. .

37 Hyde v. Kitchen, 69 Hun, 280, 23 N. Y. Supp. 573.

ssNutt V. Morse, 142 Mass. 1, 6 N. E. 763; Smith v. Speer, 34 N. J. Eg.
336.
8»Carr v. Carr, 15 Cal. App. 480, 115 Pac. 261; Drinkhouse v. German
Savings & Loan Soc, 17 Cal. App. 162, 118 Pac. 953; Culver v. Lompoc
Valley Sav. Bank, 22 Cal. App. 379, 134 Pac. 355; Scrivens v. North Baston
Sav. Bank, 166 Mass. 255, 44 N. E. 251; Witzel v. Chapin, 3 Bradf. Sur.
§ 27) SAVINGS BANK TRUSTS 85

indicating merely a power to revoke a trust which was fully cre-

ated.*" So, too, actual withdrawal of part or all of the principal
deposit for the use of the depositor has been held in many in-
stances to show the lack of trust intent,*^ and yet in othe^r cases
the withdrawals from the principal were regarded as consistent
with the trust.*'' /

• Formal notice bank of intent to withdraw has been held

to the
to be equivalent to actual withdrawal.** That the account has
remained untouched as to principal and interest since the prin-
cipal deposit has been held to indicate a trust intent.** With-
drawal of part of the principal by the depositor and application of
it to the use of the beneficiary tends to show a trust.*° That the
account used by the depositor as his sole active account for the
is
transaction of business is strong evidence against a trust.*' An
offer by the depositor to lend the principal to a third party has been
held not antagonistic to a trust.*^ If the trust is complete, with-
drawals from the fund for his own use will render the trustee liable

(N. Y.) 386; In re Bunt, 96 Misc. Rep. 114,. 160 N. X. Supp. 1118; In re
Beaman's Estate (Sur.) 163 N. X. Supp. 800. i

40 Littig V. Vestry of Mt. Calvary Protestant Episcopal Church, 101 Md.

494, 61 Atl., 635.
*i.Jewett V. Shattuck, 124 Mass. 590; Macy v. Williams, 83 Hun, 243,
31 N. Y. Supp. 620, affirmed 144 N. Y. 701, 39 N. E. 858 Matter of Totten,
;

179 N. Y. 112, 71 N. E. 748, 70 L. R. A. 711, 1 Ann. Cas. 900; Lattan v.

Van Ness, 107 App. Div. 393, 95 N. Y. Supp. 97, affirmed 184 N. Y. 601, 77 N.
E. 1190; Matthews v. Brooklyn Sav. Bank, 208 N. Y. 508, 102 N. E. 520;
Devlin v. Hinman, 34 App. Div. 107, 54 N. Y. Supp. 496; Hessen v. Mc-
Kinley, 155 App. Div. 496, 140 N. Y. Supp. 724; Lee v. Kennedy, 25 Misc.
Rep. 140, 54 N. Y. Supp. 155 ; In re Barbey's Estate (Sur.) 114 N. Y. Supp.
725; In re Biggars, 39 Misc. Rep. 426, 80 N. Y. Supp. 214; Weber v. Weber,
i

58 How. Prac. (N. Y.) 255.

*2Milholland v. Whalen, 89 Md. 212, 43 Atl. 43, 44 L. R. A, 205; Scott ^

r. Harbeck, 49 Hun, 292, 1 N. Y. Supp. 788; Mabie v. Bailey, 95 N. Y.

206; Macy v. Williams, 55 Hun, 489, 8 N. Y. Supp. 658, affirmed 125 N. Y.
767, 27 N. E. 409; Farleigh v.'Cadman, 159 N. Y. 169, 53 N. E. 808; Robin- •

son v. Appleby, 69 App. Div. 509, 75 N. Y. Supp. 1, affirmed 173 N. Y.

626, 66 N. E. 1115; Decker v. Union Dime Sav. Inst., 15 App. Div. 553,
44 N. Y. Supp. 521 ; ^ Robertson v. McOarty, 54 App. Div. 103, 66 N. Y.
Supp. 327; Jenkins v. Baker, 77 App. Div. 509, 78 N. Y., Supp. 1074; Marsh
V. Keogh, 82 App. Div. 503, 81 N. Y. Supp. 825; Connecticut River Sav.
Bank v. Albee's Estate, 64 Vt. 571, 25 Atl. 487, 33 Am. St. Rep. 944.
*3 Rush V. South Brooklyn Sav. Inst., 65 Misc. Rep. 66, 119 N. Y. Supp.
726. .

*i Harrison Totten, 53 App. Div. 178, 65 N. Y. Supp. 725.

v.
4B Grafing v. Heilmann, 1 App. Div. 260, 37 N. Y. Supp. 253, affirmed 153
N. Y. 673, 48 N. E. 1104 ; Farleigh v. Cadman, 159 N. Y. 169, 53 N. B. 80S.
*8 Rambo v. Pile, 220 Pa. 235, 69 Atl. 807.'
«T Willis T. Smyth, 91 N. Y. 297.
 86 CEEATION OF EXPRESS TRUSTS (Ch. 3

to the cestui que trust therefor,** but if the trust is incomplete,

the withdrawals by the depositor for his own benefit entail no re-
sponsibility.*" ^

(d) Failure of Depositor to Withdraw Money Before his Death. —

The depositor's failure to act, as well as his actions, are of significance
in ascertaining -whether he intended a trjist. Many courts have held
the failure of the depositor to withdraw the deposit before his death
tqie strong evidence of his desire to create a trust.^° The mere dis-
'
*8Mabie v. Bailey, 95 N. Y. 206; Macy v. WilUams, 55 Hun, 489, 8 N. Y.
Supp. 658, affirmed 125 N. Y. 767, 27 N. E. 409; Farleigh v. Cadman, 159
N. Y. 169, 53 N. E. 808; Robinson v. Appleby, 69 App. Div. 509, 75 N. Y.
Supp. 1, affirmed 173 N. Y. 626, 66 N. E. 1115; Decker v. Union Dime Sav.
Inst., 15 App. Div. 553, 44 N. Y. SugJ. 521; Bobertson v. McCarty, 54 App.
Div. 103, 66 N. Y. Supp. 327; Marsh v. Keogh, 82 App. Div. 503, 81 N. Y.
Supp. 825.
*» Macy V. Williams, 83 Hun, 243, 31 N. Y. Supp. 620, affirmed 144 N. Y.
701, 39 N. B. 858; Cunningham v. Davenport, 147 N. Y. 43, 41 N. E. 412,
32 L. R. A. 373, 49 Am. St. Rep. 641; Matter of Totten, 179 N. Y 112,
71 N. E. 748, 70 L. R. A. 711, 1 Ann. Gas. 900; Lattan v. Van Ness, 107
App. Div. 395, 95 N. Y. Supp. 97, affirmed 184 N. Y. 601, 77 N. B. 1190;
Matthevps v. Brooklyn Sav. Bank, 208 N. Y. 508, 102 N. E. 520; Hessen
V. McKinley, 155 App. Div. 496, 140 N. Y. Supp. 724; In re Biggars, 39
Misc. Rep. 426, 80 N. Y. Supp. 214.
5 Bath Sav. Inst. v. Hathorn, 88 Me. 122, 33 Atl. 836, 32 L. R. A. 377, 51
Am. St. Rep. 382; Littlg v. Vestry of Mt. Calvary Protestant Episcopal
Church, 101 Md. 494, 61 Atl. 635; Fiocchi v. Smith (N. J. Ch.) 97 Atl. 283;
Martin v. Funk, 75 N. Y. 134, 31 Am. Rep. 446; WilUs v. Smyth, 91 N. Y.
297; Fowler v. Bowery Sav. Bank, 113 N. Y. 450, 21 N. E. 172, 4 L. R. A.
145, 10 Am. St. Rep. 479; Graflng v. Heilmann, 1 App. Div. 260, 37 N. Y.
Supp. 253, affirmed 153 N. Y. 673, 48 N. E. 1104; Williams v. Brooklyn
Sav. Bank, 51 App. Div. 332, 64 N. Y. Supp. 1021, appeal dismissed 165 N. Y.
676, 59 N. E. 1132; Martin v. Martin, 46 App. Div. 445, 61 N. Y. Supp. 813,
appeal dismissed 166 N. Y. 611, 59 N. E. 1126; Bqard of Domestic Mis-
sions of Reformed Church in America v. Mechanics' Sav. Bank, 40 App.
Div. 120, 54 N. Y. Supp. 28, 57 N. Y. Supp. 582; Harrison v. Totten, 53
App. Div. 178, 65 N. Y. Supp. 725 ; Scallan^ v. Brooks, 54 App. Div. 248,
66 i>r. Y. Supp. 591 ; Meislahn v. Meislahn, 56 App. Div. 566, 67 N. Y. Supp.
480; Marsh v. Keogh, 82 App. Div. 503, 81 N. Y. Supp. 825; O'Brien v.
Williamsburgh Sav. Bank, 101 App. Div. 108, 91 N. Y. Supp. 908; Beakes
Dairy Co. v. Bems, 128 App. Div. 137, 112 N. Y. Supp. 529; Warburton
Ave. Baptist Church v. Clark, 158 App. Div. 230, 142 N. Y. Supp. 1089;
In re Bigga^, 39 Misc. Rep. 426, 80 N. Y. Supp. 214; Matter of Hewitt, 40
Misc. Rep. 322, 81 N. Y. Supp. 1030; In re Ping's Will, 51 Misc. Rep.
375, 101 N. Y. Supp. 279; Wait v. Society for Political Study of New York
City, 68 Misc. Rep. 245, 123 N. Y. Supp. 637; Matter of Halligan's Estate,
82 Misc. Rep. 30, 143 N. Y. Supp. 676; In re Hammer, 102 Misc. Rep. 193,
169 N. Y. Supp. 684; Weaver v. Emigrant, etc., Savings Bank, 17 Abb.
N. C. (N. Y.) 82; In re Barbey's Estate (Sur.) 114 N. Y. Supp. 725; Witzel
v. Chapin, 3 Bradf. Sur. (N. Y.) 386; In re GafCney's Estate, 146 Pa. 49,
23 Atl. 163; Merigan v. McGonigle, 205 Pa. 321, 54 Atl. 994; Petition of
 ;

§ 27)
'

SAVINGS BANK TRUSTS 87

appearance of the depositor is not equivalent to his death for this

purpose.''^ But remove the deposit before death is not con-
failure to
clusive evidence of the trust intent. Other facts may overpower'' it,
and cause an adjudication that no trust exists."^ In a few cases it
has been held that, where the only facts proved were the deposit in
trust forni and the failure to remove before the death of the deposi-
tor, there was not sufficient evidence to show the creation of a trust.''

(e) Attitude of Depositor to the Account Before aM

After Death
of Beneficiary. —
It is quite generally recognized that failure to indicate
the trust intent by notice, delivery of the book, or in some other way,
before the death of the supposed beneficiary, is very strong proof
that no trust was intended.'* Allowing the account to stand as a
trust account after the death of the supposed cestui que trust,"' or
adding to the account after his death,'* does not, if no act decisive-
ly indicative of trust intent has been done before the cestui que

Atkinson, 16 R. I. 413, 16 Atl. 712, 3 L. R. A. 392, 27 Am. St. Rep. 745;

Connecticut River Sav. Bank v. Albee's Estate, 64 Vt. 571, 25 Atl. 487, 33
Am. St. Rep. 944. See section 144 of the New York Banking Law (Consol.
Laws, c. 2), second paragraph: "When any deposit shall be made by any
person in trust for another, and no^other or further notice of the existence
and terms of a legal and valid trust shall have been given in writing to
the bank, in the event of the death of the trustee, the same, or any part
thereof, together with the dividends or interest thereon, may be paid to
the person for whom the deposit was made." A similar statute was adopt-
ed in North Dakota by Laws 1919, c. 111.
51 Hemmerich v. Union Dime Sav. Inst., 205 N. Y. 366, 98 N. E. 499, ,Ann.
,Cas. 1913E, 514. . v
5 2 Macy V. Williams, 83 Hun, 243, 31 N. Y. Supp. 620, affirmed 144 N. Y.

701, 39 N. E. 858 ; Matter of MueUer, 15 App. Div. 67, 44 N. Y. Supp. 280

Rush V. South Brooklyn Sav. Inst, 65 Misc. Rep. 66, 119 N. Y. Supp. 726;
Rambo v. Pile, 220 Pa. 235, 69 Atl. 807.
53 Stone V. Bishop, 4 ClifC. 593, Fed. Cas. No. 13482 ; Brabrook v. Boston
Five Cents Sav. Bank, 104 Mass. 228, 6 Am. Rep. 222; Clark v. Clark, 108
Mass. 522; Bartlett v. Remington, 59 N. H. 364.
64 Cunningham v. Davenport, 147 N. Y. 43, 41 N. B. 412, 32 L. R. A. 373,
49 Am. St. Rep. 641; Haux v. Dry Dock Sav. Inst., 2 App. Div. 165, 37
N. Y. Supp. 917, affirmed 154 N. Y. 736, 49 N. E. 1097; In re Bulwinkle,
107 App. Div. 381, 95 N. Y. Supp. 176; Garvey v. ClifCord, 114 App. Div.
193, 99 N. Y. Supp. 555; Matter of United States Trust Co. of New York,
117 App. Uiv. 178, 102 N. ,Y. Supp. 271; In re Dufty, 127 App. Div. 74,
ill N. Y. Supp. 77; In re Smith's Estate, 40 Misc. Rep. 331, 81 N. Y. Supp.
1035; In re Thompson's Estate,' 85 Misc. Rep. 291, 147 N. Y. Supp. 402;
Rambo v. Pile, 220 Pa. 235, 69 Atl. 807. The case of Bishop v. Seamen's
Bank for Saving, 33 App. Div. 181, 53 N. Y. Supp. 488, is out of accord
with the other cases.
5 5 Garvey v. Clifford, 114 App. Div. 193, 99 N. Y. Supp. 555; Rambo v.
Pile, 220 Pa. 235, 69 Atl. 807.
65 In re Bulwinkle, 107 App. Div. 331, 95 N. Y. Supp. 176.
 ;

88 CBEATION OP EXPRESS TRUSTS (Ch. 3

trust's death,show a complete trust. Nor does a withdrawal of the

fund after the beneficiary's death render the depositor liable to the
representative of the beneficiary ; no acts irrevocably showing the
trust intent having occurred prior to the death of the berieficiary."
But if the depositor has decisively shown his trust intent before
i the beneficiary's death, as by an express statement in a formal ap-
plication to the bank,"' or by the delivery of the book to the bene-
ficiary,5° then the death of the €;estui que trust has no effect on
the completed trust. The i^etention of the maiden name of a woman
beneficiary in the trust account after her marriage is not incon-
sistent with the trust intent.**

(f) The Making of a Will Inconsistent or Consistent with d Trust. —

That the depositor left a will inconsistent with a trust is strong evi--
dence that he intended no trust in making the deposit; '^ but if the
trust was completed by acts of the depositor before his death, an in-
consistent will cannot destroy the trust." ^ That a will is consistent
with a trust is of some force in favor of the trust.*'
That the depositor had expressed a desire to provide for the
cestui que trust and made no provision for him in his will is evi-
dence favorable to a trust as to the bank account,** but a gift in
the will to the person named as a beneficiary in the bank account
is not,under similar circumstances, fatal to the finding of a trust
^
through the savings bank account.*" '

Intent Implied froik Circumstances of the Depositor

(a) His Relationship to the Beneficiary. —
That the beneficiary oc-
cupies a close relationship to the depositor has often been considered
as having some evidentiary value in favor of the trust intent.** But

BT Cunningham v. Davenport, 147 N. Y. 43, 41 N. E. 412, 32 L. E. A.

373, 49 Am. St. Rep. 641; In re Smith's Estate, 40 Misc. Rep. 331, 81 N. T.
Supp. 1035.
6 8 Robinson v. Appleby, 69 App. Div. 509, 75 N. Y. Supp. 1, affirmed 173

N. Y. 626, 66 N. E. 1115.
B9 Matter of Davis, 119 App. Div. 35, 103 N. Y. Supp. 946.
60 Willis V. Smyth, 91 N. Y. 297.
ei Thomas v. Newburgh Sav. Bank, 73 Misc. Rep. 308, 130 N. Y. Supp.
810, affirmed 147 App. Div. 937, 132 N. Y. Supp. 1148.
62 Stockert v. Dry Dock Sav. Inst., 155 App. Div. 123, 139 N. Y. Supp. 986;
Weaver v. Emigrant, etc.. Savings Bank, 17 Abb. N. C. (N. Y.) 82.
6 3 In re King's Will, 51 Misc. Rep. 375, 101 N. Y. Supp. 279.
•* In re Biggars, 39 Misc. Rep. 426, 80 N. Y. Supp. 214.
<= Marsh v. Keogh, 82 App. Div. 503, 81 N. Y. Supp. 825.
66 Garrigus v. Burnett, 9 Ind. 528 (granddaughter) ; Mabie v. Bailey, 95
N. Y. 206 (stepdaughter) ; Earleigh v. Oadman, 159 N. Y. 169, 53 N. E. SOS
(adopted daughter) Williams v. Brooklyn Sav. Bank, 51 App. Div. 332, 64
;

N. Y. Supp. 1021, appeal dismissed, 165 N. Y. 676, 59 N. E. 1132 (brother)

 ;

§ 27) SAVINGS BANK TRUSTS 89

other facts in the case may weigh so strongly against a trust that the
effect of the kinship will be overcome and a finding of no trust re-
sult." That the party claiming to be a beneficiary was not related at
all to the depositor, but merely occupied the business relationship of
lessor to him, is some proof that no trust was intended by the depos-
itor."

(b) Depositor's Financial Condition. —^The financial condition of the

depositor may be such that he would be very unlikely to desire to
make a gift of the moneys deposited. Thus, that the depositor is an
aged man, having no money except that deposited in the account in
question,** or that the depositpr was not in business, but lived from
the interest of his money and had a large part of his money entitled
"in trust," ^^ is strong evidence that no trust was intended.

(c) The Depositor's Other Bank Accowits. —

That the depositor has
twenty-seven accounts entitled "in trust," that he has $80,000 on de-
posit in banks, that all but $26,000 of it is in accounts entitled "in
trust," and that the depositor made some deposits in trust and de-
livered the books tp the beneficiaries, tends to show that no trust was
intended by an account entitled "in trust for B.," when the bank book
was not delivered to B."^ That the depositor had other bank accounts
labeled "in trust" for certain letters of the alphabet, and others mere-
ly "in trust," without mention of the name of ai;y beneficiary, tends to
>

Bishop V. Seaman's Bank, 33 App. Div. 181, 53 N. Y. Supp. 488 (husband) ;

Harrison v. Totten, 53 App. Div. 178, 65 N. Y. Supp. 725 (grandniece and near-
est relative); Meislahn v. Melslahn, 56 App. Div. 566, 67 N. Y. 'Supp. 480
^child) Jenkins v. Baker, 77 App: Div. 509, 78 N. Y. Supp. 1074 (husband)
;

Marsh v. Keogh, 82 App. Div. 503, 81 N. Y. Supp. 825 (adopted child) Matter ;

of Davis, 119 App. Div. 35, 103 N. Y. Supp. 946 (husband) Stodkert v. Dry
;

Dock Sav. Inst, 155 App. Div. 123, 139 N. Y. Supp. 986 (niece) Miller v.
;

Seaman's Bank for Savings, 33 Misc. Rep. 708, 68 N. Y. Supp. 983 (brother) ;
In re Biggars, 39 Misc. Rep. 426, 80 N. Y. Supp. 214 (child) Merigan v.
;

McGonigle, 205 Pa. 321, 54 Atl. 994 (in loco daughter) Ray v. Simmons, 11
;

B. I. 266, 23 Am. Rep. 447 (in loco daughter) ;Petition of Atkinson, 16 R. I.

413, 16 Ati. 712, 3 L. R.'A. 392, 27 Am. St. Rep. 745 (son).
87 People's Sav. Bank v. Webb, 21 R. I. 218, ,42 Atl. 874 (son) Cunning-;

ham V. Davenport, 147 N. Y. 43, 41 N. E. 412, 32 L. B. A. 373, 49 Am. St Rep.

641 (brother) ; Haux v. Dry Dock Sav. Inst., 2 App. Div. 165, 37 N. Y. Supp.
917, affirmed 154 N. Y. 736, 49 N. E. 1097 (child) Devlin v. Hinman, 34 App.
;

Div. 107, 54 N. Y. Supp. 496 (child) ; In re Smith's Estate, 40 Misc. Rep. 331,
81 N. Y. Supp. 1035; Weber v. Weber, 58 How. Prac. (N. Y.) 255 (daughter).
68 Rambo V. Pile, 220 Pa. 235, 69 Atl. 807.
6 9 Weber v. Weber, 58 How. Prac. (N. Y.) 255.
f Macy v. Williams, 83 Hun, 243, 31 N. Y. Supp. 620, affirmed 144 N. Y.
) 701, 39 N. B. 858. ^
Ti :Macy V. Williams, 83 Hun, 243, 31 N. Y. Supp, 620, affirmed 144 N. X.
701, 39 N. E. 858.
90 CREATION OF EXPRESS TRUSTS (Ch. 3;

show that an account in trust for a stepdaughter was^ intended to cre-

ate legal rights in the stepdaughter regarding the money so depos-
ited." That the depositor had no other bank account thdn the one
in question, and did an active business through it, militated against
a trust in one case.'*

(d) Rules Limiting the Amount of Savings Bank Deposits. — It is

customary for legislatures to place a limit upon the amount which

may be deposited under a single name in a savings bank.'* Thus, in
New York, neither natural persons, societies, nor corporations
may deposit more than $5,000 in a savings bank.''
That there is such a limit, .and that the depositor in question
'

had reached it in a deposit in his own name, shows a motive other

than a trust motive for entitling another deposit "in trust." Such
motive is the avoidance of the deposit limit rule. Such evidence is
therefore relevant on the question of trust intent and may, with
other facts, show the absence of a trust intent."' But in some
cases .this evidence has not been considered as conclusive against
a trust, although it has been given » weight." "Inasmuch as the
interest limit of this bank was $3,000, it is argued from these facts
that these accounts were opened to gain interest. But the argu-
ment at best is speculation upon a possible motive. There were
other savings banks open to him. We
have seen that on the same
day the depositor made a deposit in another savings bank, and
this tends to refute the inference of his ignorance of the existence
of other banks, or of his exclusion of them. Moreover, if he sought
a scheme to gain interest, he could have deposited $3,000, instead of
$2,700, in this particular account under discussion, out of the $7,-
482 received by him on that day. The argument based upon a
scheme for interest does not carry special force in any case; for
it is available in every case where the depositor's own funds in the

same bank have^reached the limit. It has not received much con-

72 Mabie v. Bailey, 95 N. T. 206.

" Rambo v. Pile, 220 Pa. 235, 69 Atl. 807.
'* St. 26 & 27 Vict. ch. 87, S 39 St. 56 & 57 Vict.
; c. 69, §i 1, 2, 3.
76 New York Banking I^aw (Consol. Laws, c. 2) § 247, as amended by Laws
1920, c. 167.
'*-Brabrook v. Boston Five Cents Sav. Bank, 104 Mass. 228, 6 Am. Eep.
222 (no trust) ; Parkman v. Suffolk Sav. Bank for Seamen, 151 Mass. 218,
24 N. E. 43 (no trust) ; Thomas v. Newburgh Sav. Bank, 73 Misc. Rep. 308,
130 N. T. Supp. 810, affirmed 147 App. Div. 937, 132 N. Y. Supp. 1148 (no
trust).
77Merigan v. McGonigle, 205 Pa. 321, 54 Atl. 994; Williams v. Brooklyn
Sav. Bank, 51 App. Div. 332, 64 N. Y. Supp. 1021, appeal dismissed 163
N. Y. 676, 59 N. B. 1132; Meislahn v. Meislahn, 56 App. Div. 566, 67 N.
Y. Supp. 480.
 § 27) SAVINGS BANK TRUSTS ' 91

sideration where the depositor has named a beneficiary of the

trust." "
(e) Rules Giving Greater Interest Rates on Small Deposits. That —
the savings bank in question gave a higher rate of interest on deposits
below a certain amount, and tliat the depositor had already reached this
limit in an account under his own name, is of some evidentiary value,
as tending to show a motive for the deppsit in trust form other than
the trust motive; ^° but, notwithstanding such evidence, the exist-
ence of a trust intent may otherwise be show-n.*"

(f) Rules of Taxation Favoring Small Deposits. — If the laws of the

state in question tax savings ba^k deposits only when larger than a
specific sum, and the depositor's individual account has already reached
that amount, those facts may be shown as some proof that the deposi-
tor did not intend a trust by placing the account in a trust form, but
merely intended to avoid taxation. But, notwithstanding such a mo-
. tive, other circumstances may show a trust. '^ ,

78 Williams v. Brooklyn Sav. Bank, 51 App. Div, 332, 336„337, 64 N. Y.

Supp. 1021, appeal dismissed 165 N. Y. 676, 59 N. B. 1132.
7 9 Weber v. Weber, 58 How. Prac. (N. Y.) 255; Weber v. Weber, 9 Daly
(N. Y.) 211.
80 Mabie
v. Bailey, 95 N. Y. 206.
81Connecticut Kiver Sav. Bank v. Albee's Estate, 64 Vt. 571, 25 Atl. 487, 33
Am. St. Rep. 944.
 :

92 CEEATION OF RESULTING TRUSTS (Ch. 4

CHAPTER IV
CREATION OF RESULTING TRUSTS
28. Introduction to Implied Trusts.
29. Underlying Principle of Restilting Trusts,
30. Statute of Fraudsv
31. Voluntary Conveyances.
32. Imperfect or Illegal Declarations of Trust.
33. Payment of Consideration for Conveyance to Another.
34. Use of Trust Funds for Purchase of Property.

INTRODUCTION
28. Implied trusts are trusts declared to exist by courts of equity,
either for the purpose of carrying out the- presumed in-
tent of the psuties or to rectify fraud and prevent imjust
enrichment. They are of two classes, namely
(a) Resulting trusts, which are declared by equity to exist be-
cause of a presumed, intent that they shall exist; and
(b) Constructive trusts, which are created by equity as a con-
venient means of rectifying fraud and preventing unjust
enrichment.

In previous sections* the creation of express trusts has been

considered. The origin of implied trusts will now be studied.
Reference has previously been made to the unsatisfactory and
conflicting classifications of trusts made by various judges and
authors.^ "Implied trusts" have been defined by some to mean
trusts in which the settlor consciously intended a trust, but ex-
pressed his intent in doubtful or ambiguous language, as, for
example, by the use of such precatory words as "I request." In
such cases the court has sometimes been said to imply or construe
the trust from the words of the parties.^ But the more common
definition of implied trusts is that they are trusts which owe
their existence to thg courts, and not to expressed intent of the
parties (either clear or ambiguous) thatjthey are law-created
;

trusts, and not trusts created by act of the parties.jj This more
common definition has also divided implied trusts into two classes,
namely, resulting and constructive trusts; the former implied
by the courts, because the parties involved are presumed to have

1 Ante, 8 18 et seq. ' See note, ante, p. 43.

"Lewin, Trusts (12th Ed.) p. 124, note; 1 Perry, Trusts (6th Ed.) § 112.
 ;
;

§ 28) INTKODUCTION '

93

intended them, and the latter created by the courts for the purpose
of preventing the unjust enrichment of the holder of a title, usual-
ly the legal title.*
The classification of trusts has been discussed by several able
writers." Undoubtedly a desirable division would be that of Pro-
fessor Costigan, into "intent-enforcing" and "fraud-rectifying"
trusts. Within the former class would fall: (1) Cases where the
parties have clearly expressed an intent to have a trust exist (2) ;

cases in which the parties have expressed an ambiguous intent,

which the court, construing' their acts, holds to be a trust intent
and (3) cases in which the parties have expressed no intent by
words, but have done acts from which the court presumes that a
trust was intended. In this latter case the court declares that
,

as a result of these acts a trust exists. To the second class, that

of "fraud-rectifying," would be assigned those cases now usually
classed as constructive or involuntary trusts, in which the par-
ties have expressed no intent to have a trust, nor does the court
presume that any such intent existed, but the court uses the trust
as the most convenient method of working out justice and pre-
venting one party from unjustly enriching himself.
The statement that resulting trusts are creatpd by operation of
law may be criticized. It may be urged that they are created by
the acts of the parties ; that their basis is the intent of the parties
that the law does not bring them into being, but- adjudges that
they have existed ever since the parties did the acts in question;
and that resulting trusts are like the contracts which are prop-
erly called "implied." Such contracts are inferred by the courts
from the acts of the parties, as where one takes a newspaper from a
news-stand without making any statement. Ordinarily the courts
would infer that as a matter pi fact there was a contract for the pur-
chase of the newspaper.

* See authorities cited, ante, p. 44, note.

"Some courts have been disposed to divide these trusts into categories, with
distinctive names, as 'resulting trusts' and 'constructive trusts,' but have
so confused the lines which divide them from each' other as to have material-
ly impaired their usefulness for the purpose of legal exposition. Generally
speaking, however, a resulting trust is one which the law implies to meet the
requirement of justice that a legal status be given to what is the clear in-
tention of the parties ; while constructive trusts rest upon the sound public
policy wiich requires that the laws themselves should not become the instru-
ments of designing persons to be used for the purpose of fraud and oppres-
sion." Ferguson y. Eobinson, 258 Mo. 113, 129, 167 S.,W. 447, 452.
^ See Mai tland, Equity, pp. 75-76; "The Classification of Trusts as Ex-
press, Resulting and Constructive," G. P. Costigan, Jr., 27 Harv. Law Rev.
437 "Resulting Trusts and the Statute of Frauds," H. F. Stone, 6 Col. Law
;

Eev. 326.
94 CEEATION OF RESULTING TRUSTS (Ch. 4

On the other hand, it may be said that constructive triists are

analogous to quasi contracts, which are imposed by law upon par-
ties for the purpose of preventing unjust enrichment. If A. has'
paid $500 to B. under a contract which is unenforceable because
of the Statute of Frauds, and B. sets up the statute as a bar
against performance, A. may recover of B. the $500 thus paid, not
because of any true contract for its return, but because the law
imposes on B. a quasi contract obligation to return the $500. In
the same way constructive trusts are imposed on parties who
were never intended to be trustees, but who now hold property
which does not equitably belong to them.
Although the common classification of trusts is illogical, it
seems inadvisable to depart from it in an elementary text-book.
Resulting and constructive trusts will be treated together, and
under the common heading of implied trusts, although they do not
logically belong together. To do otherwise would produce con-
fusion rather 'than clarity.

UNDERLYING PRINCIPLE OF RESULTING TRUSTS

29. Resulting trusts are based on the presumption that one parting
with property expects a return. They exist in certain
cases where the holder of the legal titie to property has
given no value therefor.

I Resulting trusts are based on the fundamental notion that one is

presumed not to give away his property .2 "All resulting uses or
trusts will be found to be some variation of this principle, viz. that
one is presumed not to be a donor of property conveyed or caused
to be conveyed by him." ° If A. owns property and conveys it
gratuitously to B., there is a presumption that A. did not intend
a gift to B. If A. pays X. for property which he has X. con-
vey to B., there is a presumption that A. expected to receive
some value for his money, and that B. was not to be the abso-
lute owner of the property. The idea that one who gives value
expects to get value in return is at the root of resulting trusts.
The one furnishing the value may furnish it directly or indi-
rectly, but in either case equity presumes that he intended that
some interest sho'uld accrue to him in return for such value.
Wherever equity finds a holder of the legal title to real or personal

8 H. F. stone, "Resulting Trusts and the Statute of Frauds,"

6 Col. .Law
Eev. 326, 329. For a case in which resulting trusts are confused with' con-
structive trusts, and fraud is said to be a necessary element of resulting
trusts, see Havner Land Co. v. MacGregor, 169 Iowa, 5-, 149 N. W. 617.
 ;

§ 30) STATUTE OP FRAXJDS 95

property, who has furnished no consideration for the transfer

of that legal title to himself, equity presumes that the person who
furnished the consideration for such transfer intended that the
holder of the legal title should be a trustee for the payer of the
consideration. The further definition of resulting trusts can best
be accomplished by a consideration of the various cases in which
they have been held to arise.

STATUTE OF FRAUDS
30. The Statute of Frauds has no application to resulting trusts.
They may be created and proved by oral evidence, wheth-
er they relate to real or persohal property.

The eighth section of the English Statute of Frauds ^ excepts

from the operation of the seventh section trusts arising or re-
sulting "by the implication or construction of law," and the Amer-
ican state statutes have universally followed the English model
in this respect.' It is everywhere held that a resulting trust may
be proved by parol- evidence.* Resulting trusts need not be cre-
ated or proved by a written instrument.

T St 29 Charles II, c. 3 (1677).

8 See note, ante, p. 55. But the statutes of Pennsylvania require an ac-
knowledged and recorded declaration of a resulting trust or an action of
ejectment begun by the cestui que trust in order to make the resulting' trust
valid against creditors of or bona fide purchasers from the legal title holder,
without notice. 4 Purdon's Dig. (13th Ed.) p. 4850; Rochester Trust Co. v.
White, 243 Pa. 469, 90 Atl. 127 Rosa v. Hummel, 252 Pa. 578, 97 Atl. 942.
;

» Caple V. M<:Collum, 27 Ala. 461 Bayles v. Baxter, 22 Cal. 575 Poulet v.

; ;

Johnson, 25 Ga. 403 Brennaman v. ScheU, 212 111. 356, 72 N. E. 412 Mc-
; ;

Collister v. Willey, 52 Ind. 382 Culp v. Price, 107 Iowa, 133, 77 N. W. 848
;

Lehrling v. Lehrling, 84 Kan. 766, 115 Pac. 556 Nickels v. Clay, 14 Ky. Law
;

Rep. 925 Davis v. Downer, 210 Mass. 573, 97 N. B. 90 Butler v. Carpenter,

; ;

163 Mo. 597, 63 S. W. 823; Baker v. Baker, 75 N. J. Eq. 305, 72 Atl. 1000;
Ross V. Hegeman, 2 Edw. Ch. (N. Y.) 373; Coffin v. Mcintosh, 9 Utah, 315,
34 Pac. 247.
The courts frequently state that the evidehce to establish a resulting trust
must be clear, strong, unequivocal and convincing. Hunter v. Feild, 114
Ark. 128, 169 S. W. 813; Steward v. Hackler, 117 Ark. 655, 173 S. W. 425;
McGill V. Chappelle, 71 Fla. 479, 71 South. 836. "Since such a trust works
in a sense uphUl against the statute of frauds, the rule has ever been to
require strong, unequivocal, and convincing proof before finding and decree-
ing the existence of such a trust." Bunnell v. Zinn (Mo.) 184 S. W. 1154,
1156. It is not understood why the proof of a resulting trust should require
stronger evidence than any other fact in a civil action.
96 CREATION OF EESULTING TRUSTS (Ch. 4

VOLUNTARY CONVEYANtES
31. It was common-law
a doctrine of early English equity that a
conveyance, in which no consi<^eration was named and
no use expressed, was presumed to create a resulting
trust' in favor of the grantor. Trusts of this variety
are now obsolete, because of changes in conveyancing.

In the early history of the English common law practically all

land was held to uses. It was almost universal to mention in
conveyances the use to which the property conveyed was to be
held. Wherever A. conveyed land to B. by a common-law con-
veyance (feoffment with livery of seizin, fine, or recovery), and
no consideration was mentioned and no use named, chancery
presumed that the universal custom of holding to uses would
be followed, and that a use was intended for the benefit of A., the
person naturally entitled to the profits of the property.^" It was
presumed that A. did not intend to give away his property, and,
if any use were to exist, it would seem natural that it should exist

in favor of A. This use was called a resulting use.

Later, when the Statute of Uses was enacted, and uses were
recognized as trusts, chancery continued to enforce A.'s rights in
the form of a resultii^g trust. '

Changes in conveyancing have rendered this form of resulting

trust now obsolete. The old common-law forms of conveyancing
are superseded by conveyances operating under the Statute of
Uses, in which there is no room for a presumption of a trust in
favor of the grantor. The conveyances by lease and release
and bargain and sale practically always mention a consideration
or name the person to whose use the land is to be held. The
conveyance by bargain and sale relied for its operation on the rais-
ing of a use in the grantee. Hence such a conveyance without
mention of a use was impossible. Modern conveyances in the
form of grants always state that consideration passed, or name
the use, or do both, and hence leave no room for presumptions as to
the identity of the person who is entitled to the use of the prop-
'

erty.
The resulting trust of this nature is, therefore, very generally
held to be nonexistent.^^ Naturally, if any consideration^* or

i» Digby, History of Real Property (5th Ed.) 329, 355; Bacon, Uses, 217.
11 LemanWhitley, 4 Euss. Ch. 423; Talnter v. Broderick Land & In-
v.
vestment Co., 177 Cal. 664, 171 Pac. 679; McClenahan v. Stevenson, 118 Iowa,
12 ^
See note 12 on following page. ~
§ 31) VOLUNTARY CONVEYANCES 97

any use" is named, no trust can result to the grantor. stat- A

ute declaring that all conveyances shall pass a fee, unless a con-
trary intent clearly appears in the conveyance, prevents the occur-
rence of resulting trusts of this class.^*
"The old common-law conveyances operated to pass the title
without the machinery of a declaration of uses, and where no use
was declared, and in the absence of an actual consideration paid,
the courts raised a resulting trust in favor of the grantor. But
modern conveyances, of which the one in hand is a sample, operate
under the Statute of Uses, and contain an express declaration
of uses, and it is contrary to first principles to permit this dec-
laration to be contradicted by parol, except in cases of fraud, ac-
cident, or mistake." "
Under the early common law, when resulting trusts of this class
arose, the presumption of a trust in favor of the grantor could al-
wkys be overcome by parol evidence that a gift was intended.
,

The duty of a man to support his wife and children raised a pre-
sumption that a voluntary conveyance to wife or child was by
way of gift, and not with the intent that wife or child should hold
as a resulting trustee.^"

106,91 N. W. 925; Philbrook v. Delano, 29 Me. 410; Groff v. Rohrer, 35

Md. 327; TItcomb v. Morrill, 10 Allen (Mass.) 15; Bartlett v. Bartlett, 14
Gray (Mass.) 277; Taylor v. Thompson, 88 Mo. 86; Hogan v. Jaques, 19
N. J.'Eq. 123, 97 Am. Dec. 644; Lovett v. Taylor, 54 N. J. Eq. 311, 34 Atl.
896; Coffey v. Sullivan, 63 N. J. Eq. 296, 49 Atl. 520. But see Bayles v.
Grossman, 5 Ohio Dec. 354 Boyd v. Winte (Okl.) 164 Pac. 781. But k volun-
;

tary conveyance, coupled with other facts, may raise a resulting trust. Gray
V. Beard, 66 Or. 59, 133 Pac. 791. It has been recently held tha^a voluntary
,

conveyance by one trustee for a charity to another trustee, without mention

of a trust purpose, created a resulting trustj Deutsche Presbyterische Kirche
V. Trustees of Presbytery of Elizabeth, 89 N. J. Eq. 242, 104 Atl. 642. •

12 Verzier v. Convard, 75 Conn. 1, 52 Atl. 255; Gould v. Lynde, 114 Mass.

366; Jackson v. Cleveland, 15 Mich. 94, 90 Am. Dec. 266; Parrington v.
Barr, 36 N. H. 86.
13 Bragg V. Geddes, 93 111. 39; Donlin v. Bradley, 119 111. 412, 10 N. B. 11;
Salisbury v. Clarke, 61 Vt. 453, 17 Atl. 135.
1* CampbeU v. Noble, 1^5 Ala. 233, 41 South. 745.
1" Lovett V. Taylor, 54 N. J. Eq. 311, 318, 34 Atl. 896.
1* Christ's Hospital v. Budgin, 2 Vern. 683; Jennings v. Sellick, 1 Vem.
467.
B0G£BT TBUSTS —7
98 CREATION OF RESULTING TRUSTS (Ch. 4

IMPERFECT OR ILLEGAL- DECLARATIONS OF TRUST

32. Whenever property is voluntarily conveyed in trust by deed
. or will, and the statements of the trust are imperfect or
illegal, or for any other reason the trust fails, a trust
results in favor of the transferor of the property or his
representatives.

Whenever real or personal property has been conveyed inter

vivos or by will, without consideration, to another under a pri-
vate trust, and the beneficiaries of the trust are not named, or are
named as jto a part of the property only, or the beneficiaries named
are incapable of taking, or the purpose of the trust is illegal, or
impossible, or the trust is void for indefiniteness, or the purpose of
the trust is accomplished, or for any other reason the trust
fails in whole or in part, a trwst results as to the property thus
undisposed of in favor of the grantor, or in favor of his successors,
if he be dead. The trustee named in the instrument is declared a
trustee, not under the original instrument as to the undisposed
property, but a trustee of a resulting trust. If the property be
personal, and the settlor be dead, the cestuis under the resulting
trust will be the next of kin of the settlor; if the property be
real, the heirs of the settlor will benefit by the resulting trust.^'
Thus, where the benpficiary has died, so that the further per-
formance of the trust is impossible, it is held that a trust Results
to the donor or his successors ;^° and where the trust is too in-
definite to be carried out the trustee named wjU hold under a
resulting trust for the next of kin.^° "If by lapse of time ox for
other reasons the trustees could no longer apply the object of

17 Hopkins v. Grimshaw, 165 V. S. 342, 17 Sup. Ct. 401, 41 L. Ed. 739;

Cagwin v. Buerkle, 55 Ark. 5, 17 S. W. 266; John M. C. Marble Co. -v. Mer-
chant's Bk., 15 Cal. App. 347, 115 Pac. 59
; Taylor v. Crosson (Del. Ch.) 98 Atl.
375; Drew v. Wakefield, 54 Me. 291; Blake v. Dexter, 66 Mass. (12Cush.) 559;,
Amory v. Trustees of Amherst College, 229 Mass. 374, 118 N. E. 933; Har-
gadine v. Henderson, 97 Mo. 375, 11 S. W. 218; ^prague v. Trustees of
Protestant Episcopal Church of Diocese of Michigan, 186 Mich. 554, 152 N.
,W. 996; Bowker v. Wells, 2 How. Prac. (N. S.) 150 ;_ Casey v. Casey, 161
App. Div. 427, 146 N. Y. Supp. 348; Dover v. Khea, 108 N. C. 88, 13 S. E.
164 ;Broadup v. Woodman, 27 Ohio St. 553 In re Bacon's Estate, 202 Pa.
;

535, 52 Atl. 135; Ford v. Dangerfield, 8 Rich. Eq. (S. C.) 95.
18 Chater v. Carter, 238 U. S. 572, 35 Sup. Ct. 859, 59 L. Ed.
1462
; Giersch
T. Grady, 85 Conn. 685, 84 Atl. 103.
"Haskell v. Staples, 116 Me. 103, 100 Atl. 148, L. R. A. 1917D, 819;
Davison v. Wyman, 214 Mass. 192, 100 N. E. 1105; Blunt v. Taylor, 230
Mass. 303, 119 N. E. 954 Bond v. Dukate, 118 Miss. 516, 79 South. 86.
;
 ;

§ 32) mPEEPECT OR ILLEGAL DECLARATIONS OF TRUST 99

the trust to any purpose within the, intention of the donor, their
title a3 trustees would not be defeated; but they would hold
the trust property, not for their owrT benefit, but for the grantor'^
heirs as a resulting trust."^" ,

It is often said that the result of the partial or imperfect or

illegal declaration of trust, or of the failure or accomplishment of
the trust is, in the case of wills, that the property concerned pass-
es as if the deceased had died intestate so far as it is concerned
that is, that real property passes directly to the testator's heirs and
personal property directly to an administrator for the next of kin.^^
It is submitted, however, that a more complete statement of the re-
sult is that the will is given effect to pasfe the legal title to the trustee
named therein, but that the trustee holds such legal title in trust
for the heirs or next of kin. To speak of intestacy in such a case
is to declare the will void. The will' takes efifect, the trustee
gets the legal title, but must hold it for the benefit of the heirs or
next of kin, and the same decree which declares the resulting
trust will doubtless decree a conveyance by the resulting trustee
to the cestui que trust of such resulting trust, since ^he resulting
trust is always passiveJS
In cases of public or charitable trusts, a declaration void for in-
definiteness will have the effect of raising a resulting trust for the
heirs or next of kin, as in the case of a private trust.^^ But, when
the defect in the charitable trust is merely that the testator's
scheme for administering the trust breaks down, equity will apply
the cy pres doctrine, and administer the trust for a purpose as near
like that of the settlor as possible.^' This cy pres doctrine often
prevents the application of this theory of resulting trusts to de-
fective charitable trusts.^*
Where a testator gives property to a trustee under an imperfect
or illegal trust, and inserts a residuary clause in his will, the trus-
tee will hold as a resulting trustee for the residuary legatees or
devisees. The general statement is that the persons named in

2 Lyford V. City of Laconia, 75 N. H. 220, 223, 72 Atl. 1085, 22 L. R. A.

(N. S.) 1062, 139 Am. St. Rep. 680. See, also. Vizard Inv. Co. v. York,' 167
Ky. 634, 181 S. W. 370.
21 In re Fair's Estate, 136 Cal. 79, 68 Pae. 306; Bristol v. Bristol, 53 Conn.

242, 5 Atl. 687 ;Wilce v. Van Arden, 248 111. 358, 94 N. E. 42, 140 Am. St.
Rep. 212, 21 Ann. Cas. 153; In re Eaton's Estate, 160 Mich. 230, 125 N. W.
85; Vail v. Vail, 4 Paige (N. Y.) 317; Mille? v. London, 60 N. C. 628.
22 Minot V. Attorney General, 189 Mas^. 176, 75 N. E. 149 ; Wilcox v. At-
torney General, 207 Mass. 198, 93 N. E. 599, Ann. Cas. 1912A, 833.
23 Adams v. Page, 76 N. H. 96, 79 Atl. 837.
2* For a further discussioii of the effect, of imperfect charitable trusts, see
post '
§ 63.
 100 CREATION OF EESULTING TRUSTS (Ch. 4

the residuary clause take the property named in the defective

trust.^"
It will be observed that the principle underlying this class of
resulting trusts is thp same as that which formed the basis of
such trusts arising out of voluntary conveyances. Here, as there,
a presumption against gift arises. The grantor or testator is
presumed not to have intended that the voluntary trustee under
the imperfect or illegal trust should hold for the trustee's benefit.
The trustee has given no value for the property he holds under
the defective trust. The presumption is that the settlor intended
that, if the trust proved \iefective, the property subject to it should
go back to the settlor, if living, or to his successors, if he be dead.
'

Such presumption causes equity to fasten a trust on the prop-

erty in the hands pf the trustee named in the defective instrument.
This action gives ^effect to the settlor's deed or will, and at the
same time confers the beneficial ownership of the property on
him who is equitably entitled to it,

PAYMENT OF CONSIDERATION ^fOR CONVEYANCE TO

ANOTHER
33. One who pays the consideration for a transfer of real or per-
sonal property, but has the title taken in the name of
another, is presumed to be the beneficiary of a resulting
trust as to such property.
The consideration paid must be the money or other property
of the alleged cestui at the time of the convey^ce, if
a trust is to exist.
The consideration must be paid or agreed to be paid at or be-
/ fore the time when the property is conveyed.
The whole of the consideration must be paid, or, according to
the weight of authority, an aliquot -part of the consider-
ation under an agreement for an interest in an aliquot part
of the property.
If the payor of the consideration is the husband or parent of
the grantpe, there is a presumption that the transfer of
the property was by way of gift or advancement
In seven states resulting trusts of this kind are abolished by
'

statute,
>
Phelps V. Bobbins, 40 Conn. 250: Trunkey v. Van Sant, 176 N. T. 535,
25

68 N. E. 946; Woolmer's Estate, 3 Whart. (Pa.) 477; Craig v. Beatty. 11

S. C. 375.
§ 33) PAYMENT FOR CONVEYANCE TO ANOTHER

(a) General Principle - „.

The third and most important class of resulting trusts is that
arising where A. pays the consideration for conveyance of property,
real or personal, and has the property conveyed to B. "On account
of the improbability of a gift to a stranger, the law implies that the-
one who holds the title, witjiout having paid any value for it, is
a trustee for the one who in fact paid the purchase price." ^^ This
principle is one universally recognized,^ ^ except in certain states,
wh^ere statutes have been passed controlling the situation. The
statutes declaring or modifying the general rule above stated will
be discussed later.^'
This form of trust arises only when the purchase in the name of
a stranger is made with the payor's consent. Z'li such consent be
—
lacking that is, if the grantee uses the money of another to buy
the property, without such other's knowledge or consent a trust —
is declared by equity, which, although sometimes called a resulting
trust, is more properly a constructive trust, one created to avoid the
unjust enrichment of the legal title holder, and not one to carry out
a presumed intent.^*J If the title is taken in the name of a stranger
by mistake, equity will declare a trust in favor of the payor of

28 Howe V. Howe, 199 Mass.

598, 602, 85 N. E. 945, 127 Am. St. Rep. 516.
2^ Dyer 2 Cox, 93 In re Spencer (D. C.) 128 Fed. 654 Spradling
v^ Dj^er, ; ;

V. Spradling, 101 Ark. 451, 142 S. W. 848 Leroy v. Norton, 49 Colo. 490, 113
;

Pac. 529 ;Lander v. Persky, 85 Conn. 429, 83 Atl. 209 Plttock v. Pittock, 15
;

Idaho, 426, 98 Pae. 719 Masters v. Mayes, 246 111. 506, 92 N. E. 945 Eat-
; ;

liff V. Elwell, 141 Iowa, 312, 119 N. W. 740, 20 L. B. A. (N. S.) 223 Buck v. ;

Pike, 11 Me. 9; Euler v. Schro^der, 112 Md. 155, 76 Atl. 164; Mahorner
V. Harrison, 21 Miss. (13 Smedes. & M.) 53; Brown v. Alexander, 118
Miss. 848, 79 South. 842; Plumb v. -Cooper, 121 Mo. 668, 26 S. W. 678;
Oowles V. Cowles, 89 Neb. 32,7, 131 N. W. 738 Mershon v. Duer, 40
; '

N. J. Bq. 333; Summers v. Moore, 113 N. C. 394, 18 S. E. 712; Creed v.

President, etc., of Lancaster Bank, 1 Ohio St. 1; De Eoboam v. Schmidtlin,
50 Or. 388, 92 Pac. 1082 Asata v. Asam, 239 Pa. 295, 86 Atl. 871
; Butler v.
;

Rutledge, 2 Cold. (Tenn.) 4; Burns v. Ross, 71 Tex. 516, 9 S. W. 468; La-

risey v. Larisey, 93 S.-,C. 450, 77 S. B. 129; Fiskv. Patton, 7 Utah, 399, 27
Pae. 1; Flanary v. Kane. 102 Va. 547, 46 S. E. 312. That the, grantee
was ignorant of the conveyance does not affect the resulting trust. Mereness
V. Delemos, 91 Conn. 651, 101 Atl. 8; Froemke v. Marks, 259 111. 146, 102 N.
B. 192. But if the placing of title in another than the payor of the con-
sideration was with the object of preventing the collection of a judgment,
and so the defrauding of creditors, there will be no resulting trust. Higgin-
botham v. Boggs, 234 Fed. 253, 148 C. C. A. 155.
28 See post, p. 111.
29 Keller v. Keller,-45 Md. 269 Shrader v. Shrader, 119 Miss. 526, 81
;

South. 227 Gogherty v. Bennett, 37 N. J. Eq. 87 Lloyd v. Woods, 176 Pa. 63,
; ;

34~Atl. 926.
 ;

102 CREATION OP RESULTING ^TEUSTS (Ch. 4

ihe purchase price,'" The general rule above stated applies to cases
of personal property as well as real property.'^
That the stranger who has acquired title as a result of con-
sideration paid' by another is a resulting trustee for that other
is a presumption merely. The stranger may prove that a gift of
the property to him was intended. H^ may rebut 'the pre-
sumption of a trust ;'^ and the evidence which rebuts the pre-
sumption may be parol evidence.'^ While a resulting trust is
not based on an express agreement, yet, if the payor of the con-
sideration and "the grantee make an agreement equivalent in ef-
fect to what the law would imply, under the facts of the case, a re^-
sulting trust will be decreed, and the express agreement will be
ignored.** -

(b) Source of Consideration

It is essential that the money or other consideration furnished
for the conveyance shall, at the time of the conveyance, have been
the property of the person who claims to be a cestui que trust.''
Hence, that A. has lent money to B., and that B. has purchased

8" Fairhurst v. Lewis, 23 Ark. 435; Hay ward v. Cain, 110 Mass. 273; Tur-
ner V. Home Ins. Co., 195 Mo. App. 138, 189 S. W. 626 Oberthier v. Stroud, 33
;

Tex. 522.
81 Baker v. Terrell, 8 Minn. 195 (Gil. 165) ; McClung v. Colwell, 107 Tenn.
59?, 64 S. W. 890, 89 Am. St. Rep. 961.
s^Tryon v. Huntoon, 67 Cal. .325, 7 Pac. 741; Livermore v. Aldrich, 59
Mass. (5 Cush.) 431; Irvine v. Marshall, 7 Minn. 286 (Gil. 216) ; Baldwin v.
Campfield, 8 N. J. Eq. 891 ; Warren v. Steer, 112 Pa. 634, 5 Atl. 4. The pre-
sumption has been overcome where the payor of the consideration was in-
debted at least morally to the grantee for maintenance in old age (Morford
V. Stephens [Mo.] 178 S. W. 441), and where there was long-continued ac-
quiescence by the payor of the consideration in the use of the property
by the grantee (Akin v. Akin, 276 111. 447, 114 N. E. 908), and where an
employer paid the consideration for a house in which her secretary lived,
the object being to reward services (Reizenberger v. Shelton, 86 N. J. Eq.
92, 97 Atl. 293).
8 3 Bayles v. Baxter, 22 Cal. 575; Blasdel v. Locke, 52 N. H. 238; Peer v.
Peer, 11 N. J. Eq. 432 ; Strimpfler v. Roberts, 18 Pa. 283, 57 Am. Dec. 608
Smith V. Strahan, 16 Tex. 314, 67 Am. Dec. 622.
3* Breitenbucher v. Oppenheim, 160 Cal. 98, 116 Pac. 55 ; Barrows v. Ro-
han, 41 Conn. 278. A resulting trust is not changed to an express trust by
'
a writing acknowledging its existence. Lasker-Morris Bank & Trust Co. v.
Cans, 132 Ark. 402, 200 S.W. 1029.
S5 Crawford v. Manson, 82 6a. 118, 8 S. E. 54; Mercer
v. Coomler, 32 Ind.
App. 533, 69 N. E. 202, 102 Am. St. Kep. 252; Dehaven v. Sterrit, 3 J. J.
Marsh. (Ky.) 27; Anderson v. Gile, 107 Me. 325, 78 Atl. 370; Shaw v. Shaw,
86 Mo. 594 ; Eisenberg y. Goldsmith, 42 Mont. 563, 113 Pac. 1127. The source
of the money is not important so long as it belonged to the one claiming to be
a cestui que trust. Harrison v. Harrison, 265 111. 432, 107 N. B. 128.
 ;

§ 33) PAYMENT FOR CONVEYANCE TO ANOTHER 103

property with such money and taken title in his own name, is
not ground for the declaration of a resulting trust in A.'s favor.
The money furnished for the property had become B.'s by virtue
of the loan, and it cannot be said that A. furnished the considera-
tion for the conveyance to B.^°
On the other hand, if the payor of the consideration has received
it as a Joan from the grantee of the property, a trust will arise in
favor of the payor. If A. borrows $500 from B-, and later A. pays
this money, to C, who, in return therefor and ^t A.'s request, 'con>
veys land to B., a presumption of a resulting trust arises. The
i

money furnished was A.'s montey. It had ceased to be the prop-

erty of B., because of the loan from B. to A.'''
It is obvious that the payor of the consideration, who claims the
resulting trust in his favor, need not himself have delivered the
consideration. It is sufficient if his money was paid by another
for him, with his consent.^*

(c) Time of Payment

The
trust results, if at all, at the time of the transfer of the title
to the real or personal property involved. It is the taking of the
legal title, considered with the payment of the consideration by
another at that time or previously, which gives rise to the pre-
sumption of a trust. Hence the time of the payment of considera-
tion is important. Payment must be made before or at the time of

»« Chapman v. Abrahams, 61 Ala. 108 ; Pain v. Farson, 179 111. 185, 53 N.

E. 579; Keminger v. Joblonski, 271 111. 71, 110 N. E. 903; Meredith v. ,Citi-
zens' Nat. Bank, 92 Ind. 343 ; Kennerson v. Nash, 208 Mass. 393, 94 N. E. 475
Phillips V. Phillips, 81 N. J. Eq. 459, 86 Atl. 949 ; In re Gorham, 173 N. C.
272, 91 S. E. 950; Jordan v. Jordan (Tex. Civ. App.) 154 S. W. 359; Aaron
Frank Clothing Co. v. Deegan (Tex. Civ. App.) 204 S. W. 471. A trust will
not be declared on a showing that A. owed B. and that A. thereafter bought
realty for an amount equal to the debt. The funds of the alleged cestui que
trust must be clearly traced to the property. Orear v. Farmers' State Bank &
Trust Co., 286 111.' 454, 122 N. E. 63. A fortiori if money is given to A. by B.
and property is purchased by B. with the money, no resulting trust arises in
A.'s favor. Metropolitan Trust & Savings Bank v. Perry, 259 111. 183, 102 N.
E. 218; Stephens v. St. Louis Union Trust Co., 260 111. 364, 103 N. E. 190.
3 7 Bates V. Kelly, 80 Ala. 142; Caruthers v. "Williams, 21 Fla. 485; Reeve

V. Strawn, 14 111. 94; ,Weekly v. Ellis, 30 Kan. 507, 2 Pac. 96; Burleigh v.
White, 64 Me. 23 Dryden v. Hanway, 31 Md. 254, 100 Am. Dec. 61
; ; Howe
v. Howe, 199 Mass. 598, 85 N. E. 945, 127 Am. St. Kep. 516 ; Page v. Page, 8
N. H. 187 ; Rogan v. Walker, 1 Wis. 527.
38 Breitenbucher v. Oppenheim, 160 Cal. 98, 116 Pad 55; Barroilhet v.
Anspacher, 68 Cal. 116, 8 Pac. 804. Thus, where a wife's interest in land is
credited to her husband on payment of the price, the wife is a payor of part
of the consideration and a resulting trust occurs. Hinshaw v. Russell, 280
lU. 235, 117 N. E. 406.
 104 CEEATION OF EESULTING TRUSTS (Ch. 4

the conveyance.*' Payments made to an owner of real Srpersonal

property after the time of purchase do not Create any resulting
trust in favor of the payor. The trust arises at the time of the con-
veyance, if ever.*" Payments made to assist the owner of property
in improving it do not give the payor any rights as a resulting
trustee.*^
In a few cases it has been held that a payment of part of the con-
sideration at the time of the conveyance and the giving of a note
to the grantor for the balance, or the mere payment of the balance
later, gave rise to a presumption of a resulting trust as to the whole
property.*^ A
resulting trust as to the amount actually paid or se-
cured to be paid would seem correct on principle, but it is difficult
to see why later payments alone should be given any retroactive ef-
fect. If A. pays for the property by giving his note, rather than
by delivering cash, it would seem that a trust in A.'s favor should
arise. In an early New York case the court expressed itself on
this point as follows: "In this case there can be no doubt that,
whilst the grant was made to one person, the consideration there-
fore was paid by another. The defendant objects that but a part
of the purchase money was paid when the deed was executed, and
that, if there could have been a resulting trust in favor of the plain-
tiff, it would have been only pro tanto. But a note was given for
the residue at the time, in her behalf, by her then friends, and it is

39 Long King, 117 Ala. 423, 23 South. 534; Pickler v. Pickler, 180 111.
V.
168, 54 N. E. 311; Hays v. HoUis, 8 Gill (Md.) 357; Brooks v. Shelton, 54
Miss. 353 ; Lynch v. Herrlg, 32 Mont. 267, 80 Pac. 240 ;Lee v. R. H. Elliott &
Co., 113 Va. 618, 75 S. E. 146 ; Whiting v. Gould, 2 Wis. 552. Payment before
the conveyance is satisfactory. Guin v. Guin, 196 Ala. 221, 72 South. 74.
*»Butterfiel^ V. Butterfleld, 79 Ark. 164„ 95 S.- W. 146, 9 Ann. Gas. 248;
Motherwell v. Taylor, 2 Idaho (Hash.) 254, 10 Pac. 304; Alexander v. Tarns,
13 111. 221 ; Westerfleld v. Kimmer;- 82 Ind. 365 ; Warner v. Morse, 149 Mass.
400, 21 N. E. 960 Ostheimer v. Single, 73 N. J. Eq. 539j 68 Atl. 231 ; Lescaleet
;

V. Rickner, 16 Ohio Cir. Ot. R. 461; Sisemore v. Pelton, 17 Or. 546, 21 Pac.
667; Appeal of Cross, 97 Pa. 471 ; Musselman v. Myers, 240 Pa. 5, 87 Atl.
425; Guest v. Guest (Tex. Civ. App.) 208 S. W. 547; Pinnock v. Clough, 16
Vt. 500, 42 Am. Dec. 521 Beecher v. Wilson, 84 Va. 813, 6 S. E. 209, 10 Am.
;

St. Rep. 883 Bowen v. Hughes, 5 Wash. 442, 32 Pac. 98 Smith v. Turley,
; ;

32 W. Va. 14, 9 S. E. 46. In Shelton v. Harrison, 182 Mo. App. 404, 167 S.'W.
634, payments made after the conveyance seem to have been given effect as
creating a resulting trust as to a portion of the property.
*! Bodwell V. Nutter, 63 N. H. 446, 3 Atl. 421 Krauth v. Thiele, 45 N. J.
;

^Eq. 407, 18 Atl. 351; Rogers v. Murray, 3 Paige (N. Y.) 390. Nor does a
' payment to discharge a mortgage give rise to a resulting trust for the payor.
Thomson v. Thomson (Mo.) 211 S. W. 52.
*2 Skahen v. Irving, 206 111. 597, 69 N. E. 510; Lynch v. Herrig, 32 Mont.
267, 80 Pac. 240; Hickson v. Culbert, 19 S. D. 207, 102 N. W. 774; Pearce v.
Dyess, 45 Tex. Civ. App. 406, 101 S. W. 549.
§ 33) PAYMENT FOE CONVEYANCE TO ANOTHER 105

apparent that it was the understanding at the' time when the con-
veyance was made. It is not necessary that the consideratiofi should
be paid in specie, but anything representing it, coming from or in
behalf of the cestui que trust, will be equally available to protect
the beneficial interest. The cases which declare the unavailability
of subsequent payments have reference to such as are made pursu-
ant to arrangements concocted after the conveyance had been made
and consummated." *' It is sufficient if the obligation to pay is in-
curred by the alleged cestui at the time of the conveyance, whether
the obligation is evidenced by a writing or not.** The "considera-
tion mu'st be paid or assumed to be paid by the cestui que trust at
the time of the conveyance."*"*

(d) Amount of Payment

If the claimant has paid all the consideration for the conveyance
at or before the time when such conveyance was made, there is no
difficulty in declaring a presumption in favor of a resulting trust.
But, if a part only of the money used to pay for the property was
furnished by the alleged cestui, a question of some difficulty arises.
Some of the leading American courts have laid down the rul6 that
a part payment, in order to create a resulting trust, must have been
an "aliquot part" of the purchase price and paid for a corresponding
interest in the property. The word "aliquot," as used in this con-
nection, means "a 'particular fraction of the whole,' as distinguish-
ed from a general contribution to the purchase money." *^ "There
is no doubt of the correctness of the doctrine that where the pur-

chase money is paid by one person, and the conveyance taken by

another, there is a resulting trust created by implication of law in

*3 liOunsbury v. Purdy, 16 Barb. (N. Y.) 376, 380. See, also, "Subsequent
Payments under Resulting Trusts," C. E. Grinnell, 1 Harv. L. B. 185, and the
following cases cited therein: Runnels v. Jackson, 1 How. (Miss.) 358;
White V. Sheldon, 4 Nev. 280; Gibson v. Foote, 40 Miss. 788; Dudley v.
Bachelder, 53 Me. 403 ; Ci;amer v. Hoose, 93 111. 503 Barrows v. Bohan, 41
;

Conn. 278 Morey v. Herrick, 18 Pa. 123 ; Willis v. Willis, 2 Atk. 71.
;

44 Wrightsman v. Rogers, 239 Mo. 417, 144 S. W. 479, citing Weiss v. Heit-
kamp, 127 Mo. loc. cit. 31, 29 S. W. 709, and Clowser v. Noland, 133 Mo. 221,
34 S. W. 64. See, also, Yetman v. Hedgeman, 82 N. J. Eq. 221, 88 Atl. 206.
*= Williams v. Wager, 64 Vt. 326, 333, 24 Atl. 765. See Hornbeck v. Barker
(Tex. Civ. App.) 192 S. W. 276, where the grantee gave his own notes for
part of the price at the time of the conveyance, and payment of such notes
later by another was allowed to create a resulting trust in, favor of the payor
of the notes. This seems an erroneous result.
*6 Skehill V. Abbott, 184 Mass. 145, 147, 68 ]S(. E. 37. In Hinshaw v. Russell,
280 m. 235, 117 -N. E. 406, "aliquot" is said to mean "a definite and distinct
interest, as opposed to an indefinite and unascertainable one," and not a part
contained in the whole a certain number of times without Remainder.
106 CEEATION OP EEStJLTING TRUSTS (Ch. 4

favor of the former. And where a part of the purchase money is

paid by" one, and th€ whole title is taken by the other, a resulting
trust pro tanto may in like manner, under some circumstances, be
created. But in the latter case we believe it to be well settled that^
the part of the purchase money paid by him in whose favor the re-
sulting trust is sought to be enforced must be shown to have been
paid for some specific part or distinct interest in the estate, for
'some aliquot part,' as it is sometimes expressed ; that is, for a spe-
cific share, as a tenancy in common or joint tenancy of one-half, one-
quarter, or other particular fraction of the whole, or for a particular
interest, as a life estate, or tenancy for years, or remainder, in the
whole, and that a general contribution of a sum of money toward
the entire purchase is not sufficient." " In New York resulting
trusts are abolished, except in cases where the title is taken in the
name of another without the consent of the payor. Speaking of this
statute, the Court of Appeals has said "The exception in the fifty-
:

third section applies in favor of a person who pays the consideration.

That means the whole consideration, and hot, as in this case, a
part of it. * * * It may be that, in cases where an aliquot part
or some other definite part of the consideration has been advanced,
the parties intending that some specific interest shall vest in the
person paying it, or in proportion to the sum paid, there might be
a resulting trust to that extent." *^
On the other hand, gome courts have repudiated the notion that
payment of an aliquot part or agreement for an aliquot share is
necessary. "In order to establish a resulting trust arising from the
payment of the purchase money by another, it is not necessary that
the beneficiary should have furnished the whole of the purchase
money, nor an exact aliquot part thereof. If the amount paid is
certain, a trust will result with respect to an undivided share of the
land proportioned to his share of the whole price." *' "In this state '

a resulting trust does not depend upon the fact that the one who
seeks to establish it had paid the entire consideration, nor that
what he may have contributed was for an aliquot part of the es-
tate." ">

*T Hoar, J., in McGowan v. McGowan, 14

Gray (Mass.) 119, 121, 74 Am.
Dec. 668, citing Crop v. Norton, 2 Atk. 74; Sayre v. Townsend, 15 Wend. (N.
Y.) 647; White v. Carpenter, 2 Paige (N. Y.) 217; Perry v. McHenry, 13
111. 227 ; Baker v. Vining, 30 Me. 121, 50 Am. Dec. 617. See, also, Feingold v.
Roeschlein, 276 111. 79, 114 N. E. 506 ; Pollock v. Pollock, 223 Mass 382 111
N. E. 963.
*' O'Brien, J., in Schierloh v. Schierloh, 148 N. X.
103, 107, 42 N. E. 409.
*» Nfeathery v. Neathery, 114 Va. 650, 656, 77 S. E. 465.
"0 Gerety v. O'Sheehan, 9 Cal. App. 447, 449, 99 Pac. 545.
§33) PAYMENT FOR CONVBTANGB TO ANOTHER 107

It is obvious that, if the amount of money contributed by the al-

leged cestui is uncertain, no trust can result in his favor. The
fiortion of the property claimed as the subject-matter of the trust
must be a fixed share/^
When the amount paid by the claimant is certain, the cases may
be divided into two classes, namely: (1) Those in which there
was no express agreement between payor and the grantee of the
property for any interest in the property; and (2) those in which
there was an express agreement between payor and grantee that
the payor should have an interest in the property corresponding to
the payment.
The cases where no express agreement is shown will first be con-
sidered. It has been held that the. mere payment of an even frac-
tion of the purchase price, as one-half or one-third, with no under-
standing as to an interest in the property to be obtained by the
payor, does not give the payor a right to have a resulting trust de-
clared in his favor. The payment seems to be presumed to be a
loan.°^ And so, also, it has been held that the payment of an un-,
even fraction of the purchase price, as, for example, $1,251.16 out of
a total of $9,500, with no agreement regarding an interest in the
property to be obtained by the payor, does not give rise to a re-
sulting trust in favor of the payor.^^ But in other cases such pay-
ment of an uneven fraction of the purchase price, without express
agreement, has been held to create a resulting trust."** Whether the
payment was a loan to the grantee or a part payment of the price
should be, it would seem, a question of fact, to be determined by
the peculiar facts of each case. The nresumption is undoubtedly
stronger in favor of an intended trust where alfthe consideration
is paid than where only a part is paid. But there seems to be no
reason why a resulting trust arising out of part payment should be
impossible. If the payor did not intend a loan or a gift, such re-
sulting trust should be found.
The second class of cases, namely, those where an express agree-
81 Harton v. Amason, 195 Ala. 594, 71 South. 180; Olcott v. Tope, 213 111.
124, 72 N. E. 751 ; Baker v. Vining, 30 Me. 121, 50 Am. Dec. 617 Cutler v.
;

Tuttle, 19 N. J. Eq. 549.

52 German v. Heath, 139 Iowa, 52, 116 N. W. 1051; Wheeler v. Kirtland,
23 N. J. Eq. 13.
B3 Olcott V. Bynum, 17 Wall. 44, 21 L. Ed. 570; McGowan v. McGowan, 14
Gray (Mass.) 119, 74 Am. Dec. 668; Storm v. McGrover, 189 N. Y. 568, 82
N. E. 160; Sayre v. Townsend, 15 Wend. (N. Y.) 647; O'Donnell v. White,
18 R. I. 659, 29 Atl. 769.
6 4 Lowell V. Lowell, 185 Iowa, 508, 170 N. W. 811; Chadwick v. Felt, 35
Pa. 305 Neathery v. Neathery, 114 Va. 650, 77 S. E. 465. See, also, dictum
;

at Chancellor Kent, potsford v. Burr, 2 Johns. Ch. (N. X.) 405.

 ;

108 CREATION OF RESULTING TETJSTS (Ch. 4

ment is made between the payor of part of the consideration and

the grantee, will next be considered. It may first be supposed that
payor and grantee agreed that the title to the property to be pur-
chased should be taken in the names of both payor and grantee;
that is, that the deed should run to them as tenants in common or
as joint tenants. In such case, if one party takes the title in his
own name, without the knowledge or consent of the other, a trust
has been held in some cases to result in favor of the one paying
part of the consideration, whose name was not mentioned in the
deed-^** In one case of this class it was said that, while no trust ^

resulted in favor of the defrauded payor of part of the considera-

tion, he had an equitable lien on the land for the amount of his
payment.^" It is submitted that in this class of cases there is actu-
al fraud, and, that the misappropriation of funds should result in a
constructive trust being declared.
It may be supposed, in the second place, that the agreement was
that title should be taken in the name of A., and that A. should
pay one-half and B. one-half, and that B. should have an interest
in the property, either legal or equitable. It has been held that a
contract that B. have a legal interest in the property under such
circumstances amounted to an agreement to convey land to B.,
and, being oral, was void, an(l that it gave rise to no constructive
trust, since the only fraud involved was the refusal to perform a
contract withm the Statute of Frauds.^' It would seem that the
only trust which could properly be established by equity here
would be a constructive trust, because of the violation of an oral
contract for an interest in lands whei-e payment has been made. ^

Such a trust is maintained in some stateS, while in others it is not.^'

In other cases, however, it has been held that a resulting trust will
be implied in the situation just described.^" On the other hand, if
the interest which B. contracts for is that of a cestui que trust un-
der an express trust, it has been held by some courts that a valid
resulting trust in his favor arises where A. refuses to carry out his

ssAhrens v. Simon, 101 Neb. 739, 164 N. W. 1051; Skehill v. Abbott, 184
Mass. 145, 68 N. E. 37 Puckett v. Benjamin, 21 Or. 870, 28 Pac. 65 O'Donnell
; ;

V. McCool, 89 Wash. 537, 154 Pac. 1090.

sio-Leary v. Corvin, 181 N. Y. 222, 73 'N. E. 984, 106 Am. St. Rep. 542, 2
Ann. Oas. 664.
5' Allen V. Oaylor, 120 Ala. 251, 24 South. 512, 74 Am. St. Rep. 31.
"8 See post, § 39.
» 9. Da vis V. Dickerson, 137 Ark. 14, 207 S. W.
436; Wrightsman v. Rogers,
239 Mo. 417, 144 S. W. 479 Bear v. Koenigstein, 16 Neb. 65, 20 N. W. 104
;

Levy V. Ryland, 32 Nev. 460, 109 Pac. 905 Dow v. Jewell, 18 N. H. 340, 45
;

Am. Dec. 371.

 ;

§ 33) PAYMENT FOR CONVEYANCE TO ANOTHER 109

agreement," while elsewhere it has been maintained that no re-

sulting trust exists.'^ In this latter situation there has been an
attempt to create an express trust. If the Statute of Frauds has
been satisfied, it would seem that such attempt should be effectual.
If the statute has not been satisfied, it would seem that the only-
trust properly implied would be a constructive trust arising out of
fraud, in those states where violation of a promise void under the
Statute of Frauds is regarded as fraud. It is difficult to see how
a resulting trust can logically be held to exist in any case where
the parties have made an express agreement. J The fundamental
conception of a resulting trust is that it is presumed to arise where
certain acts have been done and their intended effect is not explain-
ed by express agreement.^
In the situation where A. pays part of the consideration, and
agrees with B. that B. shall pay the balance, and that title \o the
property shall be taken in the name of A., it has been held that no
trust results in favor of A. when'B. uses A.'s money and his own to
buy the land and takes title in B.'s name, without A.*s consent."^
On one theory and another American courts have, in cases where
part payment of the consideration has been made by one and title
taken in the name of another, found resulting trusts in favor of
such part payor to the extent of the payment.^^

(e) Effect of Relationship of Payor and Grantee

If the payor of the consideration is related to the person to whom
title isconveyed in such a way that there is a duty on the part of
the payor to support the grantee, the presumption of a resulting
trust does not' prevail, but the presumption of advancement or gift
is established. Thus, if A., the husband of B., pay the considera-

s" Breitenbucher t. Oppenheim, 160 Cal. 98, 116 Pac. 55 ; Gerety v. O'Shee-
han, 9 Cal. App. 447, 99 Pac. 545 ; Pavlovich v. Pavloyich, 22 Cal. App. 500,
135 Pac. 303; Barrows v. Bohan, 41 Conn. 278.
81 Dudley v. Dudley, 176 Mass. 34, 56 N. E. 1011.
«2 Schierloh v. Schlerloh, 148 N. X. 103, 42 N. E. 409.
63 Moultrie v. Wright, 154 Cal. 520, 98 Pac. 257; Price v. Hicks. 14 Fla.
565 ; Crawford v. Manson, 82 Ga. 118, 8 S. E. 54 Smith v. Smith, 85 111. 189
;

Derry v. Derry, 98 Ind. 319; Sullivan t. McLenans, 2 Iowa, 437, 65 Am.

Dec. 780; Pierce v. Pierce, 46 Ky. (7 B. Mon.) 433; Buck v. Swazey,
35 Me. 41, 56 Am. Dee. 681; Johnson v. Johnson, 96- Md. 144, 53 Atl. 792;
Barton v. Magruder, 69 Miss. 462, 13 South. 839; Baumgartner v. Guessfeld,
38" Mo. 36; Hall v. Xoung, 37 N. H. 134; Warren v. Tynan, 54 N. J. Eq. 402,
34 Atl. 1065; Bryant v. Allen, 54 App. Div. 500, 67 N. Y. Supp. 89; Morey v.
Herrick, 18 Pa. 123 ; McGee v. Wells, 52 S. O. 472, 30 S. E. 602 Shoemaker
;

V. Smith, 30 Teim. (11 Humph.) 81; Neill v. Keese, 13 Tex. 187; Eogers v.
DonneUan, 11 ukh, 108, 39 Pac. 494; Pinney v. Fellows, 15 Vt 525; Pum-
phry v. Brown, 5 W. Va. 107.
110 CREATION OF RESULTING TRUSTS (Ch. 4

tion for a conveyance of property to B., there is a presujtnp-

tion that A. intended to give this property, to B., because of
the duty which A. has to support B.°* But this presumption of gift
may be overcome by no advancement wasMntended,
oral proof that
and that a trust in favor of the husband was the object of the hus-
band.«=
So, too, if the payor of the consideration is the parent of the gran-
tee of the property, or a person in loco parentis, equity presumes
that the payor intended to make a gift or advancement, and not to
raise a trust.°® However, this presumption of gift is rebuttable by
evidence that the parent intended a trust and did not have in mind
a gift."
Since the wife does not owe her husband a duty of support, there
is no ground for presuming an advancement or gift from her to the

6 4 Ciffo V. CHffo, 44 App. D. 6. 217; Goelz v. Goelz, 157 111. 33, 41 N. E.

756 ; Sunderland v. Sunderland, 19 Iowa, 325 ; Spring v. Hight, 22 Me. 408,
39 Am. Dec. 587; Hayes v. Horton, 46 Or. 597, 81 Pae. 386; Edgerly v.
Bdgerly, 112 Mass. 175; Ilgenfritz v. Ilgenfritz, 116 Mo. 429, 22 S. W. 786;
Gray v. Gray, 13 Neb. 453, 14 N. W. 390; Dickinson v. Davis, 43 N. H. 647,
80 Am. Dec. 202; McGee v. McGee, 81 N. J. Eq. 190, 86 Atl. 406; Scott v.
Calladine, 79 Hun, 79, 29 N. Y. Supp. 630 Egerton v. Jones, 107 N. O. 284, 12
;

S. E. 434 ; Coe v. Coe, 75 Or. 145, 145 Pac. 674 ; Spradling v. Spradling, 101
Ark. 451, 142 S. W. 848 Kennedy v. Kennedy (Tex. Civ. App.) 210 S. W. 581.
;

Improvements put on the wife's land with the husband's money do not inure
to his benefit by way of resulting trust. Nelson v. Nelson, 176 N. C. 191, 96
S. E. 986 ; Anderson v. Anderson, 177 N. C. 401, 99 S. E. 106.
"5 Poole V. Oliver, 89 Ark. 85, 115 S. W. 952; Hubbard v. McMahon, 117
Ark. 563, 176 S. W. 122; Kern v. Beatty, 267 111. 127, 107 N. E. 794; Towles
V. Towles, 176 Ky. 225, 195 S. W. 437 ;Price v. Kane, 112 Mo. 412, 20 S. W.
609; Woodward v. Woodward, 89 Neb. 142, 131 N. W. 188; Shotwell v.
Stickle, 83 N. J. Eq. 188, 90 Atl. 246 ;Flanner v. Butler, 131 N. C. 155, 42
S. E. 557, 92 Am. St. Rep. 773; Toney v. Toney, 84 Or. 310, 165 Pac. 221;
Wallace v. Bowen, 28 Vt. 638. If the wife expressly agrees to hold under
conditions identical with those of a resulting trust, the presumption of a
gift is rebutted. Wilson v. Warner, 89 Conn. 243, 93 Atl. 533. Contra:,
Jackson v. Jackson, 146 Ga. 675, 92 S. E. 65.
'88 Foster v. Treadway, 98 Ark. 452, 136 S. W. 934; Doll v. Gifford, 13
Colo. App. 67, 56 Pac. 676; Euans v., Curtis, 190 111. 197, 60 N. E. 56; Mc-
Ginnis v. McGinnis, 159 Iowa, 394, 139 N. W. 466; Clark v. Creswell, 112
Md. 339, 76 Atl. 579, 21 Ann. Cas. 338; Page v. Page, 8 N. H. 187; Astreen
V. Flanagan, 3 Edw. Ch. (N. Y.) 279; Wheeler v. Kidder, 105 Pa. 370: Mil-
ler V. Blose's Ex'r, 30 Grat. (Va.) 744. But see Madsen v. Madsen, 35 Cal.
App. 487, 170 Pac. 435, contra, the decision being afEected by statute.
«7In re Peabody, 118 Fed. 266, 5^ C. C. A. 360; Hartley v. Hartley, 279
111. ,593, 117 N. E. 69
; Rankin v. Harper, 23 Mo. 579 Long v. Long (Mo.)
;

192 S. W. 948 ; Peer v. Peer, 11 N. J. Eq. 432 ; Jackson ex dem. Benson v.

Matsdorf, 11 Johns. (N. Y.) 91, 6 Am. Dec. 355; Elrod v. Cochran,' 59 S. 0.
467, 38 S. E. 122; Shepherd v. White, 10 Tex. 72; Law v. Law, T6 Va. 527;
Clary v. Spain, 119 Va. 58, 89 S. E. 130.
§ 33) PAYMENT FOB CONVEYANCE TO ANOTHER HI
husband. If the wife pay the consideration for a conveyance to the
husband, the ordinary presumption of a resulting trust arises ** ;

and, likewise, a child's payment of the consideration for a deed tak-

en in the name of the parent is presumed to result in a trust in fa-
vor of the child.^^
Where the payor of the consideration was the common-law
wife,'" fiance,'^ or brother or sister," of the grantee, a trust has
been held to result, there being no presumption of a gift.

(f) Statutes
In California, Georgia, Montana, North Dakota, Oklahom.a, and
South Dakota there are statutes declaring the rule of equity with
respect to resulting trusts which is set forth above.'^
In Indiana, Kansas, Kentucky, Michigan, Minnesota, New York,
and Wisconsin the statutes do away with resulting trusts of this

68 Shaw Bernal, 163 Cal. 262, 124 Pac. 1012; Loften v. Witboard, 92 111.
V.
461; Resor Resor, 9 Ind. 347; Southern feank of Fulton v. Nichols, 235
v.
Mo. 401, 138 S. W. 881 ; Mayer v. Kane, 69 N. J. Eg. 733, 61 Atl. 374; Barnes
V. Spencer, 79 Or. 205, 1^53 Pae. 47 ; McCormick v. Cooke, 199 Pa. 631, 49 Atl.
238; Chalk v. Daggett (Tex. Civ. App.) 204 S. W. 1057. Prior to the Mar-
ried "Women's Acts the wife's money became her husband's property, and
hence the purchase of projwrty by him with the money formerly held by
her as separate property created no resulting trust for her. Brooks v.
i

Brooks, 275 111. 23, 113 N. E. 919. But a gift has been presumed where the
wife paid the consideration and had the title taken in the names of both hus-
band and wife. Doyle v. Doyle, 268 111. 96, 108 N. E. 796; Haguewood v.
Britain, 273 Mo. 89, 199 S. W. 950. This seems correct, because the indication
by the payor of the consideration that she was to have a certain interest in
the property bought, namely, that of a tenant by the entirety, warrants the
presumption that she did not expect to receive any greater interest. But in
Deese v. Deese, 176 N. O. 527, 97 S. E. 475, the court held that payment of the
consideration by the wife and a conveyance to the husband and ^ife created
a resulting trust in her favor as to one-half.
«9 Champlin v. Champlin, 136 111. 309, 26 N. E. 526, 29 Am. St. Rep. 323;
Harlan v. Eilke, 100 Ky. 642, 38 S. W. 1094 ; Detwiler v. Detwiler, 30 Neb.
338, 46 N. W. 624 ;Crowley v. Crowley, 72 N. H. 241, 56 Atl. 190 ; O'Neill v.
O'Neill, 227 Pa. 334, 76 Atl. 26.
7 McDonald v. Carr, 150 111. 204, 37 N. E. 225.
Ti Lufkin V. Jakeman, 188 Mass. 528, 74 N. E. 933.
T2 Kuncl v: Kuncl, 99 Neb. 390, 156 N. W. 772; Harris v. Mclntyre, 118 III.

275, 8 N. E. 182. But see Printup v. Patton, 91 Ga. 422, 18 S. E. 311, contra.
It will not be presumed that a son is making a gift of property to his mother.
Martin v. Thomas, 74 Or. 206, 144 Pac. 684 nor an uncle to his nephew, Doll
;

V. Doll, 99 Neb. 82, 155 N. W. 226.

'3 Civ. Code Cal. § 853; Park's Ann. Civ. Code Ga. § 3739; Rev. Codesi
Mont. 1907, § 4538; Comp. Laws N. D. 1913, % 5365; Clark v. Frazier (Okl.)
177 Pac. 589 ; Rev. Code S. D. 1919, S 372. The California statute reads as fol-
lows: "When a transfer of real property is made to one person, and the
consideraiaon therefor is paid by or for another, a trust is presumed to result
in favor of the person by or for whom such payment is made."
 112 CREATION OP RESULTING TRUSTS (Ch. i

was taken in the name of another than the

variety, unless the title
payor without the payor's consent.''*
It should be observed that these statutes do not apply to person-
al property." Partnership realty being deemed personalty, if a
partner use partnership money to buy land and take the title in his
o-vyn name, a trust will result to the other members'of the firm,
even in those states which have abolished resulting trusts of this
type in real property."
In at least one state these statutes have been given a jiarrow con-
struction, which has resulted in very much limiting their intended
eflfect. Thus, in New York it has been held that if A. pay the pur-
chase price of land; and have B., the seller, cdnvey the land to C.
upon an oral understanding that the conveyance is to be for the
benefit of D., the statute does not apply, and a trust results in D.'s
favor.'" And so, too, if the payor of the consideration and the
grantee sustain any confidential relations towards each other, the
courts are quick to seize upon that fact as a basis for a construc-
tive trust, even though the statute prohibits a resulting trust.''"
The construction of these various statutes cannot be traced here,
but some of the more important decisions are cited.''

'" Burns' Ann. St. Ind. 1914, §§ 4017-4019 ; Gen. St. Kan. 1915, §§ 11679,
11680; Ky. St. 1915, §§ 2353, 2354; How. Ann. St. Mich. 1912, §§ 10675, 10676;
Gen. St. Minn. 1913; §§ 6706-6708; Real Property Law (Consol. Laws N. Y.
c. 50) § 94 ; St. Wis. 1913, SS 2077-2079. The New York statute is typical
and roads as follows : "A grant of real property for' a valuable consideration,
to one person, the consideration being paid by another, is presumed fraudu-
lent as against the creditors, at that time, of the person paying the considera-
tion, and, unless a fraudulent intent is disproved, a trust results in favor of
such creditors, to an extent necessary to satisfy their just demands; but
the title vests in the grantee, and no use or trust results from the payment
to the person paying the consideration, or in his favor, unless the grantee
either, 1. Takes the same as an absolute conveyance, in his own name, with-
out the consent or knowledge of the person paying the consideration ;. or 2. In
violation of some trust, purchases the property so conveyed with money or
property belonging to another."
*5 Baker v. Terrell, 8 Minn. 195 (Gil. 165) ; Bobbins v. Bobbins, 89 N\
T. 251; Bork v. Martin, 132 N. Y. 280, 30 N. E. 584, 28 Am. St. Eep. 570;
Tobin V. Tobin, 139 Wis. 494, 121 N. W. 144.
'8 Fairchild v. Fairchild, 64 N. T. 471.
" Siemon v. Schurck, 29 N. Y. 598.
Ts Jeremiah v. Pitcher, 26 App. Div. 402, 49 N. Y. Supp. 788, affirmed 163
N. Y. 574, 57 N. E. 1113.
TB CaUfomia: Broder v. Conklin, 77 Cal. 330, 19 Pac. 513; Hellman v.
>

'
Messmer, 75 Oal. 166, 16 Pac. 766 Porter v. Douglass, 7 Cal. App. 429, 94
;

Pac. 591 ; Parks v. Parks, 179 Cal. 472, 177 Pac. 455. Georgia: Brooks v.
Fowler, 82 Ga. 329, 9 S. E. 1089 ; Manning v. Manning, 135 Ga. 597, 69 S. B.
1126 Hall v. Edwards, 140 Ga. 765, 79 S. E. 852. Indiana: Wynn v. Sharer,
;

23 Ind. 573; Malady v. McEnary, 30 Ind. 273; Mitchell v. Colglazier, 106

 8 ;

§ 34) USE OF TKUST FUNDS FOE PUKCHASE OF PEOPEBTT 113

USE OF TRUST FUNDS FOR PURCHASE OF PROPERTY

34. If a trustee or other person occupying a fiduciary relation use
the funds of his beneficiary or principal, with the consent
of the beneficiary or principal, for the purchase of property
in the name of the trustee or other fiduciary, a trust is pre-
sumed to result in favor of the beneficiary or principal.
-. \ 'I
It is very generally held that, where a agent, guardian,
trustefe,
administrator, executor, partner, or other person in a fiduciary re-
lation, uses the funds of the person trusting him for the purchase
of property, and takes title in his own name, a trust results in fa-
vor joi the cestui q|ue trust, principal, or other person whose funds
are thus employed.'"
This trust has been held to result, regardless of whether the own-
—
er of the money ^the principal, cestui que trust, legatee, or other
—
person in like position consented to |;he purchase of the property

Ind. 464, 7 N. E. 199 ; Noe v. Roll, 134 Ind. 115, 33 N. E. 905 Koehler v.
;

Koehler (Ind. App.) 121 N. B. 450; Mkkeever v. Yeoman (Ind. App.) 121 N.
E. 672. Kansas: Franltlln v. CoUey, 10 Kan. 260; Chantland v. Midland
Nat. Bank, 66 Kan. 549, 72 Pac. 230; Hanrion v. Hanrion, 73 Kan. 25, 84
Pac. 381, 117 Am. St. Bep. 453 ; Garten v. Trobrldge, 80 Kan. 720, 104 Pac.
1067; Anderson v. Hultberg, 247 Fed. 273, 159 C. C. A. 367. Kentucky:
Watt V. Watt, 39 S. W. 48, 19 Ky. Law Rep. 25 ; Clay v. Clay's Guardian,
72 S. W. 810, 24 Ky. Law Rep. 2016; Martin v. Martin, 68 Ky. (5 Bush.)
47; Wright v. Yates, 140 Ky. 283, 130 S. W. 1111; Neel's Ex'r v.
Noland's Heirs, 166 Ky. 455, 179 S. W. 430; Dalzell v. Dalzell, 170 Ky.
297, 185 S. W. 1107. Mictvigan: Fisher v. Fobes, 22 Mich. 454; McCreary
V. McCreary, 90 Mich. 478, 51 N. W. 545; Winans v. Winans' Estate, 99
Mich. 74, 57 N. W. 1088; Waldron v. Merrill, 154 Mich. 203, 117 N. W. 631;
Signs V. Bush's Estate, 199 Mich. 192, 165 N. W. 820. Mimiesota: Durfee v.
Pavitt, 14 Minn. 424 (Gil. 319) ; Johnson v. Johnson, 16 Minn. 512 (Gil. 462) ;
Petzold V. Petzold, 53 Minn. 39, 54 N. W. 933; Haayen v.Hoaas, 60 Minn.
313, 62 N. W. 110. Montama: Lynch v. Herrig, 32 Mont. 267, 80 Pac. 240.
l^ew yoric: McCartney v. Bostwick, 32 N. Y. 53; Foote v. Bryant, 47 ^. Y.
544; Everett v. Everett,.4S N. Y. 218; Reitz v. Reitz, 80 N.Y. 538; Haack v.
Weicken, 118 N. Y. 67, 23 N. E. 133; Church of St. Stanislaus v. Algenieine
^ / Verein, 31 App. Div. 133, 52 N". Y. Supp. 922, affirmed 164 N. Y. 606, Q8 N. B.
1086 ; O'Brien v. Gill, 166 App. Div. 92, 151 N. Y. Supp. 682 Hegstad v. Wy-
;

siecki, 178 App. Dlv. 733, 165 N. Y. Supp. 898. North Dakota: Currle v. Look,
14 N. D. 482, 106 N. W. 131. South Dakota: Hickson v. Oulbert, 19 S. D.
2107, 102 N.'w. 774; Bucknell v. Johnson, 39 S. D. 212, 163 N. W. 683.
> , Wisconsin: Knight v. Leary, 54 Wis. 459, 11 N. W. 600; Campbell- v. Camp-
bell, 70 Wis. 311, 35 N. W. 743 ; Meier v. Bell, 119 Wis. 482, 97 N. W. 186
Perkinson v. Clarke, 135 Wis. 584, 116 N. W. 229 ; Priedrich v. Huth, 155
Wis. 196, 144 N. W. 202.
80 Irvine v. Marshall, 61 U. S. (20 How.) 558, 15 L. Ed. 994; Thompson
V. Hartline, 105 Ala. 263, 16 South. 711; O'Connor v. Irvine, 74 Cal. 435, 16
BOGERT TEUSTS—
114 CREATION OF RESULTING TRUSTS (Ch. 4

in the name of his representative or not." In some cases there >

was consent/^ while in others there was not.*'

In a few cases the trust has been called a constructive trust where
the fiduciary invested the money in his own name without the bene-
ficiary's consent,, and a resulting trust where the beneficiary consented
that the fiduciary take title in his own name.^* This would seem to
be the proper distinction. H
the fiduciary uses the beneficiary's
money to buy property in the fiduciary's name wrongfully, there is

fraud, and an involuntary or constructive trust should be fastened

on the property for the use of the beneficiary. But if the beneficiary
consents that the fiduciary employ the beneficiary's money in the
purchase of property, to stand in the name of the fiduciary as a
private individual, there is no fraud, and a trust can be constructed"
only on the theory that the beneficiary must be presumed to have
intended that the fiduciary should hold the property in trust for the
beneficiary, and not absolutely. >^

If the beneficiary or principal consents to the use of funds be-

longing to him legally or equitably in the purchase of property, to
stand in the name- of the trustee or agent as an individual,, the pire-^
sumption that a man does not intend to give away his property
again applies. It will be presumed that the one furnishing the con-
sideration for the purchase and consenting that title be taken in
another's name intended that such other should hold for the pay-
or's benefit.

Pae. 236 Waterman v. Buckingham, 79 Conn. 286, 64 Atl. 212 ; Van Buskirk
;

V. Van Buskirk, 148 111. 9, S5 N. E. 383 ; Katzlng v. Wiegand, 286 111. 646,
122 N. B. 97; Brannon v. May, 42 Ind. 92; Allen v. Malone, 2 Iowa, 591;
Market v. Smith, 33 Kan. 66, 5 Pac. 394 Stone v. Burge, 74 S. W. 250, 24,
;

Ky. Law Rep. 2424 Brown v. Dwelley, 45 Me. 52 Alterauge v. Christiansen,

; ;

48 Mich. 60, 11 N. W. 806; Bitzer v. Bobo, 39 Minn. 18, 38 N; W. 609; Cooper

V. Cooper, 61 Miss. 676; Phillips v. Overfleld, 100 Mo. 466, 13 S. W. 705;
Johnson v. Dougherty, 18 N. J. Eq. 406 Storm v. McGrover,. 70 App. Div.
;

33, 74 N. Y. Supp. 1032 ; Gashe v. Young, 51 Ohio St. 376, 38 N. E. 20 ; Wal-

lace V. Duffield, 2 Serg. & R. (Pa.) 521, 7 Am. Dec^ 660; Watson v. Thomp-
son, 12 R. I. 466; Green t. Green, 56 S. C. 193, 34 S. E. 249, 46 L. R. A. 525;
Hows V. Butterworth (Tenn. Ch. App.) 62 S. W. 1114; Long's Adm'rs v.
Steiger, 8 Tex. 460 Francis v. Cline, 96 Va. 201, 31 S. E. 10 Case v. Seger,
; ;

4 Wash. 492, 30 Pac. 646; Hill v. True, 104 Wis. 294, 80 N. W. 462.
81 Bostleman v. Bostleman, 24 N. J. Eq. 103.
82 Work V. Work, 14 Pa. 316 ; Gnmaer v. Barber, 182 Pa.
31, 37 AU. 848.
88 Houseman-Spitzley Corporation v. American State Bank, 205 Mich. 268,
171 N. W. 543; Dougan v. Bemis, 95 Minn. 220, 103 N. W. 882, 5 Ann. Cas.
253 ;Shrader v. Shrader, 119 Miss. 526, 81 South. 227 Buffalo, N. Y. & B.
;

R. Co. V. Lampson, 47 Barb. (N. Y.) 533; Kaphan, v. Toney (Tenn. Ch. App.)
58 S. W. 909.
8*Whaley v. Whaley, 71 Ala. 159; Barger v. Barker, 30 Or. 268, 274, 47
Pac. 702 Hanson v. Hanson, 78 Neb. 584, 592, 111 N. W. 368.
;
§ 34) USE OP TRUST FUNDS FOR PURCHASE OP PROPERTY -, 115

There is much confusion on this subject, the courts failing to dis-

tinguish accurately between constructive and resulting trusts. It
may make a practical difference which is declared, since the statute
of limitations runs against a constructive trustee from the begin-
ning of the trust, while in many jurisdictions it operates against a
resulting trustee only from the date of the repudiation of the trust
by him.*^
85 Hanson v. Hanson, 78 Neb. 584, 111 N. W. 368.
116 CREATION OF CONSTKUCTIVE TRUSTS (Ch. 5

CHAPTER V
CREATION OF CONSTRUCTIVE TRUSTS
35i Definition.
36. Statute of Frauds.
37. Constructive Trusts Not Based on Fraud.
38. Actual Fraud.
39. Violation of Voidable Promise as Fraud.
40. Violation of Parol Promise Made to Secure Gift by Will or Intestacy.
41. —
Fraud Conclusively Presumed ^Benefit Obtained by Fiduciary While
Acting for Principal.
42. —
Rebuttable Presumption of Fraud Direct Transfer from Principal to
Fiduciary.
43. Miscellaneous Implied Trusts.

DEFINITION
35. Constructive trusts are created by courts of equity whenever
the legal title to property is found in one who is not an
express trustee, but who is not equitably entitled to re-
tain such legal title. They are based on fraud, actual or
constructive, or other wrongful conduct, and are some-
times called "involuntary trusts," or "trusts ex maleficio."
They exist merely for the piurpose of enabling equity to
work out a remedy.

Constructive trusts do not arise because of the intent of par-

ties thatthey shall arise, but often directly contrary to such in-
tent. They are not "intent-enforcing" trusts, but in a general way
may be called "fraud-rectifying" trusts.^
These trusts are created by courts of equity, not merely declared to
exist as a result of acts of the parties. Whenever equity finds
that one has obtained or now retaihs the legal title to property,
real or personal, by any kind of wrongdoing, actual or constructive,
so that a retention of such title will result in his. unjust enrichment,
equity may declare such legal title holder to' be the trustee of a
trust constructed by it for the purpose of working out justice.
The trust is merely a convenient means of remedying wrong. It is
not a permanent trust, in which the trustee is to have any duties of

1 These terms are used in an article by Professor G. P. Costlgan, Jr., on

"The Classification of Trusts as. Express, Resulting and Constructive," in 27

Harv. Law Rev. 437.
 ;

§ 35) -
DEFINITION 117

administration, but. a passive, temporary trust, in which the trus-

tee'^ sole duty is to transfer the legal title to the cestui que trust.''
Naturally, if the reason why the holder of the legal title cannot
equitably retain the beneficial use of the property is that such
person is an express trustee, there is no occasion fbr declaring hirn
a constructive trustee. The situations in which equity works out
a remedy by a constructive trust are without number. An at-
'tempt will be made in the subsequent sections of this chapter to
consider some of the more important instances in which construc-
tive trusts have been created or seriously considered. -

Constructive trusts are sometimes called "trusts ex'maleficio^"

or "involuntary trusts."

2 For cases discussing the definition and underlying theory of constructive

trusts, see Maltbie v. Olds, 88 Conn'. 633, 92 Atl. 403 ;Miller v. Miller, 266
lU. 522, 107 N. B. 821 Kern v. Beatty, 267 111. 127, 107 N. E. 794 Farrell
; ;

V. Wallace, 161 Iowa, 528, 143 N. W. 488; Clester v. Clester, 90 Kan. 638,
135 Pac. 996, L. K. A^. 1915B, 648 May v. May, 161 Ky. 114, 170 S. W. 537
;

Ferguson v. Robinson, 258 Mo. 113, 167 S. W. 447; Hayden v. Dannenberg,

42 Okl. 776, 143 Pac. 859, Ann. Oas. 1916D, 1191. In MaltMe v. Olds, supra,
the court makes the following statement :"Fraud, actual or constructive, is
the foundation on which the law raises a constructive trust. * * * " In
May V. May, supra, the following definition is given "But where a trust is
:

raised by equity in behalf of one who has been impofeed upon by another, it
is enforced to work out justice and in spite of the intention of one of the par-
ties. A trust of this character must necessarily involve some element of
fraud, actual or constructive, perpetrated by or arising out of the conduct of
the party charged with the trust. Such a trust, though frequently called a
resulting trust, is more strictly a constructive trust." In Ferguson v. Robin-
son, supra, the court said X "While constructive trusts rest upon the sound
:

public policy which requires the laws themselves should not become the in-
struments of designing persons to be used for the purpose of fraud and op-|
pression. Dishonesty and deceit are not necessarily ingredients of the former
[resulting trusts], while fraud, either actual or constructive, is the very
foundation of the latter, which are accordingly called, by those who delight
in garnering expressions from' the ripened fields of the classical languages,
'trusts ex maleficio.' "^ And see also the following statement from Hayden
V. Dannenberg, supra : "All instances of constructive trusts may be referred
to what equity denominates fraud, either actual or constructive, including acts
or omissions in violation of fiduciary obligations. If one should obtain the
legal title to property, not only by fraud or iby violation of confidence, or of
fiduciary relations, but in any other unconscientious manner, so that he can-
not equitably retain the property which really belongs to another, equity car-
ries out this theory of a double ownership, equitable and legal, by impressing
a constructiv-e trust upon the property in favor of the one who is in good con-
science entitled to it, and who is considered in equity as the beneficial owner."
In California constructive trusts are defined by statute "One who gains a
:

thing by fraud, accident, mistake, undue influence, the violation of a trust,

or other wrongful act, is, unless he has some other and better right thereto,
an involuntary trustee of the thing gained, for the benefit of the person who
would otherwise have had it." Civ. Code, Cal. § 2224.
 ;
;

118 CREATION OF OONSTEUCTIVE TRUSTS (Ch. 5

STATUTE OF FRAUDS
36. The Statute of Frauds has no application to constructive trusts.
They are created by equity, regardless of whether the
evidence on which they are based is oral or written, wheth-
er the property involved is real or personal.

By the express provisions of the eighth section of the English

Statute of Frauds ^ trusts arising "by the implication or construc-
tion of law" are not subject to the Statute of Frauds. The Amer-
ican state statutes have universally adopted this exception,* and
the decisions that no written evidence is necessary as a basis for
constructive trusts are numerous."*

CONSTRUCTIVE TRUSTS NOT BASED ON FRAUD

37. In the following cases, where there is no fraud, actual or con-
structive, but in which the legal title holder is not entitled
to the beneficial ownership of the property, equity may
create a constructive trust:
(a) Where the legal title has been obtained by mistake.
(b) Where the transaction by which the legal title was obtained
has been set aside or rescinded.
(c) Where the legal title was obtained by wrongdoing othei: than
strict fraud, as, for example, by undue influence, conver-
sion, forgery, theft, meddling with trust funds, or breach
of trust.

(a) If by mistake the l^gal title is conveyed to another than the

intended grantee, or the wrong property is conveyed to the in-

= St. 29 Chas. II, ch. * See note, ante, p. 55.

3 (1677).
6 Whitney v. Hay, 181 XJ.21 Sup. Ct. 537, 45 L. Ed. 758; McNeil v.
S. 77,
Gates, 41 Ark. 264 De Mallagh v. De Mallagh, 77 Cal. 1^6^ 19 Pac. 256
;

Bohm V. Eohm, 9 Colo. 100, 10 Pac. 790;. Larmon v. Knight, 140 111. 232, 29
N. B. 1116, 33 Am. St. Rep. 229; Buck v. Voreis, 89 Ind. 116; Becker v. Neu-
rath, 149 Ky. 421, 149 S. W. 857 Gilpatrick v. Glidden, 81 Me. 137, 16 Atl.
;

464, 2 L. R. A. 662, 10 Am. St. Rep. 245 Cameron v. Lewis, 56 Miss. 76

;

Pratt V. Clark, 57 Mo. 189 ; Brannin v. Brannin, 18 N. J. Eq. 212 ; Wood v.

Rabe, 96 N. Y. 414, 48 Am. Rep. 640 ; Avery v. Stewart, 136 N. O. 426, 48 S.
E. 775, 68 L. R. A. 776; Hanson v. Svarverud, 18 N, D. 550, 120 N. W. 550;
Ewing V. Ewing, 33 Okl. 414, 126 Pac. 811 ; KroU v. Coach, 45 Or. 459, 78 Pac.
397, 80 Pac. 900; Schrager v. Cool, 221 Pa. 622, 70 Atl. 889 ; Morris v. Reigel,
19 S. D. 26, 101 N. W. 1086 Orr v. Perky Inv. Co., 65 Wash. 281, 118 Pac. 19
;

Floyd v..Dufey, 68 W. Va. 339, 69 S. B. 993, 33 L. R. A. (N. S.) 883; Fair-

child V. Easdall, 9 Wis. 379.
 ' ;

§ 37) CONSTEUCTIVE TRUSTS NOT BASED ON PRAtTD 119

tended grantee, the actual grantee may be deckred by equity tp

hold the legal title under a donstructive trust for the grantor.'
"But there is another principle, recognized in equity, that when one
person, through fraud or mistake, obtains the legal title and appar-
ent ownership of property, which in justice and good conscience
belongs to another, such property is impressed with a use in favor
of the equitable owner."
No trust was intended here, but the declaration of one by equity
will prevent the person accidentally holding the legal title from
unjustly enriching himself at the expense of him in equity en-
titled to the property.
(b) When a transaction by which the legal title to property is
transferred, is set aside, declared void, rescinded, or annulled, the
holder of the legal title by virtue of such transaction may be de-
clared by equity to be a constructive trustee for the person who
transferred the property.'
Thus, when a receiver of a corporation sells some of its property,
and later the order appointing such receiver is vacated the pur-
chasers of the property hold it as constructive trustees for the cor-
poration.*
It is inequitable that the transferee under the void transaction
should retain the property. Equity uses the constructive trust
to place the legal title again in the real owner.
(c) If one acquire property through any kind of iriequitable
conduct, equity may create a constructive trust as to the property
.

for the purpose of working out the ends of justice.

Thus, property obtained through the exercise of undue influence
or duress may be declared by equity to be subject to a construc-
tive trust ; ^'' a convertor of property may be held in equity as a
constructive trustee of the converted property or of its proceeds ;^^
and, where one meddles with trust property and wrongfully as-

6 Wilson V. .Castro, 31 Cal. 421 ; Andrews v. Andrews, 12 Ind. 348 ; Harris v.

Stone, 8 Iowa, 322; Smith v. Walser, 49 Mo. 250; Lamb v. Schiefner, 129
App. Div. 684, 114 N. T. Supp. 34; Anderson v. Nesblt, 2 Rawle (Pa.) 114.
7 Cole V. Fickett, 95 Me. 265, 270, 49 Atl. 1066.

8 Clapp V. Vateher, 9 Cal. App. 462, 99 Pac. 549; Bircher v. Walther, 163 Mo.
461, 63 S. W. 691 ; Butte Hardware Co. v. Cobban, 13 Mont. 351, 34 Pac. 24
Medical CoUege Laboratory v. New York University, 1Y8 N. Y. 153, 70 N. E.
467 ; Ross v. Davis, 122 N. C. 265, 39 S. E. 338 ; Long v. Fuller, 21 Wis. 121.
9 Lutey V. Clark, 31 Mont. 45, 77 Pac. 305, 84 Pac. 73.
1" MuUin v. Mullin, 119 App. Div. 521, 104 N. Y. Supp. 323.
11 Thompson v. Thompson, 107 Ala. 163, 18 South. 247; Ellett v. Tyler, 41

111. 449; Ramsden v. O'Keefe, 9 Minn. (Gil. 63) 74; Phillips v. Hines, 32
Miss. 163 ; Tecumseh Nat. Bank v. Russell, 50 Neb. 277, 69 N. W. 763 ; New-
ton V. Taylor, 32 Ohio St. 399.
 ,

120 CBEATION OF CONSTRUCTIVE TRUSTS (Ch. 5

sumes control of it, equity may charge him as a constructive trus-

ty of such property.^^
So, too, if a trustee, in violation of his trust, convey away the
trust property, the proceeds of the trust property in the hands of
the trustee','^' and the trust property itself, if in the hands of a
taker who has had knowledge of the breach of trust, or has not
paid value,^* will be held subject to a constructive trust in favor
of the cestui que trust of the violated trust.
Property acquired through crime may be the basis of a construc-
tive trust. Thus the proceeds of stolen property in the hands of a
thief are often held to be bound by a constructive trust ;^'' property
acquired by forgery has been held -to be the subject-matter of a
constructive trust ^* and the logical theory on which to dispose
; ,

of the cases of property acquired by an heir of devisee through

the murder of his ancestor or testator is that of a constructive
trust."

12 Penn v. Fogler, 55 N. E. 192 ; Tarbox v. Tarbox, 111 Me.

182 111. 76,
374, 89 Atl. 194 ; v. Koenig, .93 Neb. 68, 139 N. W. 889 ;
Nebraska Power Co.
Bailey v. Bailey, 67 Vt. 494, 32 Atl. 470, 48 Am. St. Eep. 826; Brown v..
Lambert's Adm'r, 33 Gratt. (Va.) 256; Morris v. Joseph, 1 W. Va. 256, 91
Am. Dec. 386. .

18 Small V. Hockinsmith, 158 Ala. 234, 48 South. 541; Eice v. Rice, 108 111.
199 ; Rebesher v. Rebesher (N. X. Sup.) 126 N. Y. Supp. 572 ; Harmon v. Har-
mon, 96 S. 0. 393, 71 S. E. 815 Oaks v. West (Tex. Civ. App.) 64 S. W. 1033.
;

The same rule applies where the proceeds of the trust property consist of
realty standing in the name of the trustee's wife as a dummy. Clingman v.
Hill, 104 Kan. 145, 178 Pac. 243.
1* Murphy v. Farmers' & Merchants' Bank of Los Angeles, 131 Cal. 115, 63
Pac. 368, 731 ; Taylor v. Fox's Ex'rs, 162 Ky. 804, 173 S. W. 154 Elliott v. ;

Landis Mach. Co., 236 Mo. 546, 139 S. W. 356.

15 Pioneer Mining Co. v. Tyberg, 215 Fed. 501, 131 C. C. A. 549, L. R. A.
1915B, 442 National Mahaiwe Bank v. Barry, 125 MasS. 20 ; Lamb v. Roo-
;

ney, 72 Neb. 322, 100 N. W. 410, 117 Am. St. Rep. 795 Llghtfoot v. Davis, 19&
;

N. T. 261, 91 N. E, 582, 29 L. R. A. (N. S.) 119, 139 Am. St. Rep. 817, 19 Ann.
Cas. 747.
18 Blair v. Hennessy (Tex. Civ. App,) 138 S. W. 1076.
IT Hall V. Knight, 135 L. T. J. 550. Some courts have taken the view that
the will or the Statute of Descents does not operatein favor of the murderer;
that is, that he acquires no title, legal or equitable. Riggs v. Palmer, 115 N.
Y. 506, 22 N. E. 188, 5 L. R. A. 340, 12 Am. St. Rep. 819. Others have held
that, in the absence of express statutory provision, the murderer will obtain
both legal and equitable title. Holloway v. McCormick, 41 Okl. 1, 136 Pac.
1111, 50 L. R. A. (N. S.) 536; Wall v. Pfanschmidt, 265 111. 180,'l06 N. E. 785,
L. R. A. 19150, 328, Ann. Cas. 1916A, 674 (discussed in 9 111. Law Rev. 502,
505). The better view would seem to be to allow the will or the statute to-
operate, but to fasten a gonstructive trust on the property in favor of the in-
nocent heirs or next of kii) immediately upon the testator's or ancestor's
death. In Van Alstyne v. TufCy, 103 Misc. Rep. 455, 169 N. Y. Supp. 173, where
a tenant by the' entirety murdered his cotenant, the doctrine of nullification of
 38) ACTUAL PEAUD 121

ACTUAL FRAUD
38. Where the legal title to property has been obtained through
actual fraud equity may declare the fraudulent holder
a constructive trustee of the property in favor of the one
defrauded.

'
Fraud is a well-known ground of equitable jurisdiction. "It
is a well-settled tule of equity that a misrepresentation constitutes
fraud, reliev^ble in equity only when (a) it is untrue (b) the party ;

making it knew, or should have known, it to be untrue, and it was

made by him to induce the other party to act or omit to act; (c)
it induced the other party to act or omit to act and (d) it is
;

a material fact." ^* i"That courts of equity have concurrent juris-

diction with the law courts to grant relief from the consequences of
fraud and misrepresentation is a, proposition too firmly established
in the jurisprudence of this state to be now questioned." ^*3J
If adequate relief cannot be accomplished by setting aside the
fraudulent transaction, equity "will suffer the title to rest in the
fraudulent grantee as a trustee ex maleficio." "" The cases in which
equity has held a fraudulent grantee or transferee as a construc-
^
tive trustee are very numerous.^
Examples of the fraud which gives rise to a constructive trust
are the cases where an agent violates the contract of agency, and

the law by which the surviving tenant takes the whole property was applied^
although the survivor immediately after the murder committed suicide, and
hence appareitly did not commit the murder to gain the property. For a dis-
cussion of this case, see 27 Tale Law J. 964, and 16 Mich. Law Rev. 561.
18 Taylor v. MuUins, 151 Ky. 597, 599, 152 S. W. 774.
19 Culver V. Avery, 161 Mich. 322, 126 N. W. 439, 442.
zoWestphal v. Williams (Ind. App.) 107 N. E. 91, 94.
21 Cmmingham v. Pettigrew, 169 Fed. 335, 94 C. C. A. 457 Smith v. Smith,
;

153 AU. 504, 45 South. 168 Hays v. Gloster, 88 Cal. 560, 26 Pac. 367 Frick
; ;

Co. V. Taylor, 94 Ga. 683, 21 S. E. 713 ; Smith v. Wright, 49 111. 403 Norris ;

V. KendaU, 48 Ind. App. 304, 93 N. E. 1087; Hall v. Doran, 13 Iowa, 368:

Clester v. Clester, 90 Kan. 638, 135 Pac. 996, L. R. A. 1915E, 648 Vanderpool ;

V. Vanderpool, 163 Ky. 742, 174 S. W. 727 Batty v. Greene, 206 Mass. 561, 92
;

N. E. 715, 138 Am. St. Rep. 407; Hanold v. Bacon, 36 Mich. 1; Nesbit^ v.
Onaway-Alpena Til. Co., 202 Mich. 567, 168 N. W. 519 Winona & St^ P. R.
;

Co. V. St. Paul & S. C. R. Co., 26 Minn. 179, 2 N. W. 489 ; M6ore v. Crump.
84 Miss. 612, 37 South. 109 Aspinall v. Jones, 17 Mo. 209
; South End Min-
;

ing Co. V. Tinney, 22 Nev. 19, 35 Pac. 89 Valentine v. Richardt, 126 N. Y. 272,.
;

27 N. E. 255 Edwards v. Culberson, 111 N. C. 342, 16 S. E. -233, 18 L. R. A.

;

204 Currie v. Look, 14,N. D. 482, 106 N. W. 131 Parrish v. Parrish, 33 Or.
; ;

486, 54 Pac. 352; Tetlow v. Bust, 227 Pa. 292, 76 Atl. 22; Davis v. Settle, 43-'
W. Va. 17, 26 S. B. 557; Blakeslee v. sWrring, 34 Wis. 538.
 — ;

122 CREATION OP CONSTRUCTIVE TRUSTS (Ch. 5

in that wayacquires his principal's property ^^ where a con-

;

veyance is made in fraud of creditors;^' and cases of fraud

by a buyer at a judicial sale in obtaining the property, at an un-
usually low figure by means of false representations, "or in ob-
taining title for himself when supposed to buy for the debtor.^*
Mere inadequacy of consideration for the transfer of property
is not siifficient ground for declaring a trust ;^^ but coupled with
other facts, it may be sufficient to show fraud on which a trust
may be tiased.^'
Naturally, the retention of property by fraud, as well as the ob- .

taining of it, gives rise to a constructive trust.^^ Where property has

been conveyed to an innoceht grantee, due to the fraud of a third per-
son,> such innocent grantee will hold the property under a constructive

trust.^^

VIOLATION OF VOIDABLE PROMISE AS FRAUD

39. Ordinarily equity will not raise a constructive trust merely
because of the violation of an oral promise, voidable un-
der the Statute of Frauds
(a) To convey or devise real property;
(b) To buy land in the name of the promisee, or in the joint
names of the promisee and the promisor;
(c) To hold real property in triist for the prortiisee or for an-
other.

2 2Sanford v. Hamner, 115 Ala. 406, 22 South. 117; Collins v. Rainey, 42

Ark. 531; Wells, Fargo & Co. v. Robinson, 13 Cal. 134; Boswell v. Cunning-
ham, 32 Fla. 277, 13 South. 354, 21 L. R. A. 54 Barton v. Moss, 32 III. 50
;

Hitchcock V. Cosper, 164 Ind. 633, 73 N. E. 264; Bellinger v. Collins, 117 Iowa,
173, 90 N. W. 609 Gilbert v. Hewetson, 79 Minn. 326, 82 N. W. 655, 79 Am.
;

St. Rep. 486; Grumley v. Webb, 44 Mo. 444, 100 Am. Dec. 304; Hoehne v.
Breitkreitz, 5 Neb. 110 ; Seacoast R. Co. v. Wood, 65 N. J. Eq. 530, 56 Atl. 337
Jackson v. Sternbergh, 1 Johns. Oas. (N. Y.) 153. ,

23 Eiler v. CruU, 112 Ind. 318, 14 N. E. 79; Kingman Plow Co. v. Knowlton.
143 Iowa, 25, 119 N. W. 754 ; Hillyer v. Le Roy, 84 App. Div. 129, 82 N. T.
Supp. 80.
2*McRarey v. Huff, 32 Ga. 681; Estill v. Estill, 3 Bibb (Ky.) 177; Huxley
V. Rice, 40 Mich. 73 ; Dickel v. Smith, 38 W. Va. 635, 18 S. E. 721.
25 Burch V. Nicholson, 157 Iowa, 502, 137 N. W. 1066 Chandler v. Roe,
;

46 Okl. 349, 148 Pac. 1026 (semble).

28Parkhurst v. Hosford (C. O.) 21 Fed. 827; Bither v. Packard, 115 Me.
^
306, 98 Atl. 929. ,

2^ Anglo-American Savings & Loan Ass'n v. Campbell, 13 App. D.

C. 581;
Bell V. McJones, 151 N. C. 85, 65 S. E. 646.
28 Saar v. Weeks, 105 Wash. 628, 178 Pac. 819; Ruhe v. Ruhe, 113
Md. 595,
77 Atl. 797.
 ;

§ 39) VIOLATION OF VOIDABLE PROMISE AS FRAUD 123

If the promisor has, however, been guilty of fraud other than
the breach of his promise^ and in some cases
where the
existence of a confidential relation between promisor and
promisee gives ground for presumed fraud, equity will
construct a trust in favor of the promisee.
A constructive trust is frequently created by equity when—
(a) Agrantee, having made a promise to sell the land and
ac-
count for all or a part of the proceeds, sells the property,
but fails to accoxmt for the proceeds;
(b) There has been a breach of a parol promise to buy
real prop-
erty at a judicial sale and hold it for the benefit
of, or
convey it to, one having an interest in the property to be
offered at such judicial sale.

(a) Contract to Convey or Devise Land

It is elementary that the fourth section of the English
Statute of
Frauds, which is adopted generally in America, provides that oral
contracts for the conveyance of an interest in land are voidable.
The question has frequently arisen as to whether the refusal to
perform such a contract is fraud on which equity will construct
a trust.
It is generally held that the violation of a promise to convey
or
reconvey, or buy and convey, or devise real property is not fraud
of the nature justifying the creation of a constructive trust.^°

29 Scribner v.
Meade, 10 Ariz. 143, 85 Pac. 477; Bland v. Talley, 50 Ark. 71,
6 S. W. 234 Hunter
; v. FeUd, 114 Ark; 128, 169 S. W. 813 Taylor v. Kelley, 103
;

Cal. 178, 37 Pac. 216 Lyons v. Bass, 108 6a. 573, 34 g. E. 721 Houston v.
; ;

Farley, 146 Ga. 822, 92 S. E. 635 Miller v. Miller, 266 lU. 522, 107 N. E. 821
;

Moore v. McClaIn (Ind. App.) 119 N. E. 258; Revel v. Albert (Iowa) 162 n!
yjf. 595; Goff v. Goff, 98 Kan. 201, 158 Pac. 26, rehearing denied, 98 Kan. 700,
158 Pae. 662; Fields v. Hoskins, 182 Ky. 446, 206 S. W. 763; Mclntyre v!
Mclntyre, 205 Mich. 496, 171 N. W. 393 ; Ostheimer v. Single, 73 N. J. Eq. 539,
68 Atl. 231 ; Watson v. Erb, 33 Ohio St. 35 ; Chadwiqk v. Arnold, 34 Utah, 48^
95 Pac. 527; In re Mason's Estate, 95 Wash. 564, 164 Pac. 205; Parke's v!
Burkhart, 101 Wash. 659, 172 Pae. 908. On this and other topics considered
in this section, see Costigan, "Trusts Based on Oral Promises to Hold in Trust,
to Convey, or to Devise, Made by Voluntary Grantees," 12 Mich. Law Rev 423
515.
The fourth section of the Statute of Frauds covers oral contracts to
devise real property. Dicken v. McKinley, 163 111. 318, 45 N. E. 134, 54 Am.
St. Rep. 471; Gould v. Mansfield, 103 ,Mass. 408, 4- Am. Rep. 573; Hen-
nlng V. Miller, 66 Hun (N. Y.) 588, 21 N. Y. Supp. 831, 5 Am. & Eng. Ann.
Gas. 495, note. If the promise to devise was made with fraudulent intent,
naturally a constructive trust arises from the breach. Manning v. Pippen, 86
Ala. 357, 5 South. 572, 11 Am. St. Rep. 46. In some cases the confidential
relation existing between the promisee and the one who makes the promise to
devise has given rise to a constructive trust. Bradley Co, v. Bradley, 37 Cal.
 ' .

124 CREATION OF CONSTRUCTIVE TRUSTS (Ch. 5

"In the case before us, as has been said, the only breach of the
verbal contract consists in refusing to convey land bought with
his own money. In such case, no resulting or constructive trust
arises by operation of law, and. there are no such acts of fraud as
take the case out of the fifth section of the Statute of Frauds. The
agreement was to buy land in his own name, and convey it to
plaintiff. Before consummating the purchase, he repudiated his
agency, and refused to act as a trustee for plaintiff, by refusing
to receive his money or to act for him. Wherein does this differ
from a verbal agreement to convey land already purchased? " *"
Speaking of the violation of a contract to convey, another court
has said "Accordingly, the only fraud involved in the case is such
:

moral fraud as necessarily attends every instance where one de-

clines to carry out a contract iiot legally binding upon him because
within the operation of the statute." ''•
However^ if the person to whom the promise to convey is made
surrenders some actual, present interest in the real property to be
conveyed, as a result of such promise, then equity will declare
a constructive trust in favor of such promisee on the violation of
the promise.^^ /Thus, where one who has a contract for the pur-
chase of real property surrenders his, rights and allows another
to buy the property, on the strength of a promise by such other that
he will convey to the contract vendee later, a constructive trust
will be declared in favor of the promisee.^^ '"The ground upon

. App. 263, 173 Pac. IDll; Kern v. Beatty, 267 111. 127, 107 N. E. 794; Huffine
V. Lincoln, 52 Mont. 585, 160 Pac. 820; Schneringer v. Schnerlnger, 81 Neb.
661, 116 N. W. 491. And occasionally it has been held that the breach of the
contract to devise, irrespective of fraud in the promise or confidential rela-
tions, gives rise to a constructive trust. Chapman's Ex'r v. Chapman, 152
Ky. 344, 153 S. W. 434.
A promise, made for a valuable consideration, that the promisee should
receive the share of the promisor's estate which she would then have taken
as a presumptive heir, gives rise to" a constructive trust in favor of the
promisee when the promisor leaves a will by which the promisee receives
nothing. Even thoiigh the promisor owned realty at the time of the promise,
he might have fulfilled his promise by a gift of personal property, or by
allowing the laws of intestacy to operate. Stahl v. Stevenson, 102 Kan.
447, 171 Pac. 1164.
8» Watson
V. Erb, 33 Ohio St. 35, 51.
81
Lyons v. Bass, 108 Ga. 573, 577, 34 S. E. 721.
8 2Delkin v. McDuffie, 134 Ga. 517, 68 S. E. 93; Brooks v. Ellis, 3 Greene
(Iowa) 527; Bryant v. Hendricks, 5 Iowa, 256; Rose v. Treadway, 4 Nev.
455, 97 Am. Dec. 546; Plumer v. Reed, 38 Pa. 46. See Allen v. Gooding,
173 N. C. 93, 91 S. E. 694, where the promisee had negotiated a sale of
land, and on the basis of the defendant's promise to convey, had the deed
taken in the name of the defendant.
8» Plumer v. Reed, 38 Pa. 46.
 ;

§ 39) VIOLATION OF VOIDABLE PROMISE AS PBAUD 125

which such trusts have been recognized and enforced is that the
cestui que trust, relying upon some promise of the fraudulent trus-
tee, has surrendered a right, or omitted some act foi- his own pro-
tection, by virtue whereof the fi^audulent trustee has been enabled
to acquire to himself the legal titl^, the enforcement of which le-
gal title would amount to a fraud upon the cestui que trust."''*

(b) Contract to Buy Lai^d in Name of Promisee or in Joint Names

Where A. contracts with B. that he. A., will buy real property
with the funds of B. aiid in the name of B., and, in violation of such
promise, A. buys the reaj property in his own name and with his
own funds, equity does not find fraud upon which to base a con-
structive trust.^" "Where a man employs another person by parol,
as an agent, to> buy an estate for him, and the latter buys it ac-
cordingly in his own name, and no part of the purchase money
is paid by the principal, then, if the agent denies the trust, and there
is no written agreement or document establishing it, he cannot, by
a suit in equity, compel the agent to convey the, estate to him
for (a? has been truly said) that would be decidedly in the teeth of
the Statute of Frauds." "
Nor will a constructive trust be created if the promise is to take
title in the names of promisor and promisee jointly, and the prom-
isor takes title in his own name solely and pays for the property
with his own funds. The contract is regarded as one for an in-
terest in lands and within the Statute of Frauds. Its breach is not

8*Bardon Hartley, 112 Wis. Tft, 80, 87 N. W. 809.

v.
85 Lehman v.Lewis, 62 Ala. 129, 133; Hackney v. Butts, 41 Ark. 393;
Hodgson V. Fowler, 7 Colo. App. 378, 43 Pae. 462; Burden v. Sheridan, 36
Iowa, 125, 14 Am. Rep. 505; "Fischli v. Dumaresly, 3 A. K. Marsh. (Ky.) 23;
Miazza t. Terger, 53 Miss. 135; Allen v. Eichard, 83 Mo. 55; Wallace v.
Brown, 10 N. J. Bq. 308; Nestal v. Schmid, 29 N. J. Eq. 458; Wheeler v.
Hall, 54 App. Div. 49, 66 N. Y. Supp. 257 ; Croup v. De Moss, 78 Wash. 128,
138 Pac. 671; FarreU v. Mentzer, 102 Wash. 629, 174 Pac. 482. Contra:
Chastain v. Smith, 30 Ga. 96 Rose v. Hayden, 35 Kan. 106, 10 Pac. 554, 57
;

Am. Rep. 145; Johnson v. Hayward, 74 Neb. 157, 103 N. W. 1058, 5 L. R.

A. (N. S.) 112, 12 Ann. Cas. 800; Rees v. Egan (Okl.) 166 Pae. 1038; Powell
V. Adler (Okl.) 172 Pac. 55. Apparently in Holtzclaw v. Wells, 166 Ky. 353,
179 S. W. 193, if the evidence of the parol agreement had been satisfactory,
the court would have decreed a constructive trust.
In Bauman v. Wuest, 32 Gal. App. 217, 162 Pac. 434, it was held that a
contract of this sort was within the California Statute of Frauds, and a pur-
chase by the agent with his own funds and for himself was not a proper
basis for an implied trust. For a note on the subject, see 5L. R. A. (N. S.)
112. Occasionally the confidential relationship existing between the promisee
and the agent to purchase has been made the ground of a constructive trust
Boswell V. Cunningham, 32 Fla. 277, 13 South. 354, 21 L. R. A. 54.
88 2 Story's Equity, S 1201, as quoted -in Lehman v. £ewis, 62 Ala. 129, 133.
 ;

126 ^ CREATION OF CONSTRUCTIVE TRUSTS (Ch. 5

fraudulent although it may be morally wrong.*^ "When, there-

fore, one makes an oral contract with another that the latter shall
buy land on joint account, and he in violation of the contract takes
the deed to himself, no trust results in favor of the former as to
one-half of the land, unlefes it is shown that he famished the money

=«
—
for the one-half in other words, that it vvas bought with his mon-
'

ey." '

On principle it a contract to buy land for an-

would seem that
other was a mere contract to act as an agent, and did not involve
the transfer of any interest in land as far as the parties to the con-
tract are concerned. The promisor^ agrees to procure another, a
third party, to convey an interest in lands to the promisee. It is
a contract concerning lands but not for an interest in lands.

(c) Contract to Hold Real Property in Trust ,

It isheld by the majority of American courts that the violation

of an oral promise to hold re^l property in trust for the promisee
or for another is not such fraud as will cause equity to create a
constructive trust. If A. own real property, and orally promise to
hold it in trust for B., and later decline to carry out the trust,
equity will not malce A. a. constructive trustee of the property and ;

the same result is reached, if A. convey real property to B. upon

B.'s oral promise to hold the land in trust for A., which promise is
later violated. If the only fraud proved is the breach of the oral
contract, and if promisor and promisee do not occupy a confidential
relationship, from which fraud can be presumed, equity will not
declare the promisor a trustee.^

s'' Emerson v. Galloupe, 158 Mass./ 146, 32 N. E. 1118; Levy v. Brush, 45

N. T. 589; Rische v. Diesselhorse (Tex. Oiv. App.) 26 S. W. 762; Gushing v.
Heuston, 53 Wash. 379, 102 Pac. 29.
"8 Bailey v. Hemanway, 147 Mass. 326, 328, 17 N. E. 645.
3» Patton V. Beecher, 62 Ala. 579 Brlndley v. Brindley, 197 Ala. 221, 72
;

So. 497 Wright v. Young, 20 Ariz. 46, 176 Pac. 583 Ussery v. TJssery, 113
; ;

Ark. 36, 166 S. W. 946 Burt v. Wilson, 28 Cal. 632, 87 Am. Dec. 142
; Von ;

Trotha v. Bamberger, 15 Colo. 1, 24 Pac. 883 Verzier v. Oonvard, 75 Conn.

;

1, 52 Atl. 255; Lawson v. Lawson, 117 111. 98, 7 N. E. 84; Davis v. Stam-
baugh, 163 III. 557, 45 N. E. 170 Kyder v. Ryder, 244 111. 297, 91 N. E. 451
;

Roche v. Roche, 286 111. 336, 121 N. B. 621; Westphal v. Heckman, 185 Ind.
88, 113 N. E. 299 Drear v. Farmers' State Bank & Trust Co., 286 111. 454,
;

122 N. E. 63 Dunn v. Zvfilling, 94 Iowa, 233, 62 N.' W. 746 Andrew v. Andrew,

; ;

114 Iowa, 524, 87 N. W. 494; Titcomb v. Morrill, 10 Allen (Mass.) 15; Ryan
v. Williams, 92 Minn. 506, 100 N. W. 380; Weiss v. Htitkamp, 127 Mo.
,23, 29 S. W. 709; Ferguson v. Robinson, 258 Mo. 118, 167 S. W. 447; Dailey
T. Kinsler, 31 Neb. 340, 47 N. W. 1045; Lovett v. Taylor, 54 N. J. Eq. 311,
34 Atl. 896 Sturtevant v. Sturtevant, 20 N. T. 39, 75 Am. Dec. 371 Wheeler
; ; .

V. Reynolds, 66 N. Y. 227; Braun v. First German Evangelical Lutheran

 § 39) VIOLATION OF VOIDABLE PROMISE AS FRAUD 127

In England and a few American states it is held that a con-

structive trust will be declared on account of a breach of an oral
agreement to hold land in trust.*" The reason given for the pre-
vailing view is that, to declare a constructive trust because of a
breach of an agreement voidable on account of the Statute of
Frauds, would be practically to destroy the Statute of Frauds
concerning trusts. It will be of slight importance to the beneficiary
whethei: his trust is called implied or express, so long as it is en-
•
forced. This view has been forcibly stated by Brickell, C. J., in a
leaditig case.*^ "The plain meaning of the statute is that^a trust
in land, not arising by implication or constructioij of law, cannot
be created by parol^=-that a writing signed by the party creating or
declaring the trust is indispensable to its existence. Fraud, im-
position, mistake, in the original transaction, may^ constitute the
purchaser, or donee, a trustee ex maleficio. It is fraud then, and
not subsequent fraud, if any exist, which justifies a cburt of equity in
—
intervening for the relief of the party injured by it as it is the
payment of the purchase money, at the time the title is acquired,
which creates a resulting trust, and not a subsequent payment,
whatever may he the circumstances attending it. * * * When
the original transaction is free from the taint of fraud or imposi-
tion, when the written contract expresses all the parties intended it
should, when the parol agreement which is sought to be enforced,
is intentionally excluded from it, it is difficult to conceive of any
ground upon which the imputation of fraud can rest, because of
its subsequent violation or repudiation, that would not form a

Church, 198 Pa. 152, 47 Atl. 963; McCloskey v. McCloskey, 205 Pa. 491,
55 Atl. 180 ; Farrell v. Mentzer, 102 Wash. 629, 174 Pac. 482 Krouskop v.
-r-

Krouskop, 95 Wis. 296, 70 N. W. 475. See 39 L. K. A. (N. S.) 906, for a

good discussion of the subject. See, also, Harlan F. Stone, "Resulting Trusts
>

and the Statute of Frauds," 6 Col. Law Kev. 326 ; J. B. Ames, "Constructive
Trusts Based upon the Breach of an Express Oral Trust of Land," Lectures
on Legal History, p. 425, 20 Harv. Law Rev. 549.
*"Davies v. Otty, 35 Beav. 208; Rochefoucauld v. Bonstead [;1897] 1 Ch.
196 ; Tinkler v. Swaynie, 71 Ind. 562 Myers v. Jackson, 135 Ind. 136, 34 N.
;

B. 810 (but see General Convention of New Church in United States v. Smith,
52 Ind. App. 136, 100 N. B. 384) ; Feesner v. Cooper, 59 Okl. 133, 134 Pac. 379.
In some California cases, where the relationship of promisor and promisee
was close, a constructive trust has been created, upon a breach of the oral
contract. Kimball v. Tripp, 13^ Cal. 631, 69 Pac. 428; Cooney v. Glynn, 157
Cal. 583, 108 Pac. 506.
Breach of the oral agreement was held enough in Willats v. Bosworth,
33 Cal. App. 710, 166 Pac. 357. See, also, Avery v. Stewart, 136 N. C. 426, 48 S.
E. 775, 68 L. B. A. 776, and Troll v. Carter, 15 W. Va. 567. In Nort^ Carolina
and West Virginia as well as some other states, the Statute of Frauds re-
specting the creation of real property trusts has a very limited application
or is not in force. See ante, pp. 55, 56.
*i Patton V. Beecher, 62 Ala. 579, 592, 593.
 128 CEEATION OP CONSTRUCTIVE TRUSTS (Ch. 3

basis for a similar irnputation, whenever any promise or contract

is broken. It is annihilation of the statute to withdraw a case from
its operation because of such violation or repudiation of an agree-
ment or trust it declares shall not be made or proved by pai-ol.
There can be no fraud if the trust does not exist, and proof of its
existence by parol is that which the statute forbids. In any and
every case, in which the court is called to enforce a trust, there
must be a repudiation of it, or an inability from accident to perform
it. If the repudiation is a fraud, which justifies interference in op-
position to the words and spirit of the statute, the sphere of opera-
tion of the statute is practically limited to breaches from accident,
and no reason can be assigned for the limitation."
In answer to this argument, however, it may be said that parol
agreements to' hold in trust are of two classes, namely, those in
which a refusal to enforce the promise will result in the unjust en-
richment of the promisor, and those in which the failure to enforce
the promise will not cause; unjust enrichment of the promisor. If
A. agrees, voluntarily, to hold in trust for B. real property which
at the time of the promise belongs to A., and A. later declines to
carry out his agreement, the refusal of the courts to enforce A.'s
promise will not result in A.'s being unjustly enriched at the ex-
pense of B. But if A. voluntarily transfers real property to B., in
consideration of an oral promise by B. to hold such property in
trust for A., and B. later repudiates his promise and seeks to hold
the real property for his own benefit, "the failure of the courts to
enforce the express oral trust will result in the unjust enrichment
of B. at the expense of A.
It is submitted that, in cases where unjust enrichment would
result, equity might well create a constructive trust. This would
not be enforcing the original oral express trust, but would be cre-
ating an implied trust for the sole purpose of preventing unjust
enrichment. The original oral express trust might call for the'
collection of the rents and the delivery of them to the cestui que
trust for a period of ten years. The constructive trust' would' be
a mere passive trust, on the basis of which equity would decree
a conveyance of the property to the beneficiary.
The holding suggested in cases of unjust enrichment would be
in accord with the stand taken by the courts with respect to other
agreements, voidable because not complying with the Statute of
Frauds. Money paid and the reasonable value of services rendered,
under a contract avoided because of the Statute of F^rauds"; may
be recovered in quasi contract.^^
*2 Cook V. Doggett, 2 Allen (Mass.) 439; Herrick
v. NeweU, 49 Minn. 198,
51 N. W. 819 Erben v. Lorilla,rd, 19 N. X. 299 Ellis v. Gary, 74 Wis. 176, 42
; ;

N. W. 252, 4 L. R. A. 55, 17 Am. St. Bep. 125.

 9

§ 39) VIOLATION OF VOIDABLE PROMISE AS PEAUD 129

(d) Actual Fraud at tfie Time of the Promise

If the promisor, who has agreed to hold the real property in trust
for the promisee, has a fraudulent intent at the time he makes the
promise, then equity will declare the promisor a constructive trus-
tee, notwithstanding that the promise was oral and the Statute of
Frauds requires trusts in land to be manifested or proved by a
writing.*'
Active solicitation of the conveyance by the grantee under the
oral trust will be important evidence of an intent to defraud the
grantor and break the oral contract.
It has been held that, if the parties have agreed that the oral
trust agreement shall be reduced to writing, a fraudulent intent at
the time of the agreement need not be shown, in order to fasten
a constructive trust upon the property.**

(e) Con^denfial Relations Between Promisor and Promisee as a Basis

for Presumed Fraud
A further exception to the strict rule regarding oral promises
to hold in trust is found in the case of confidential relations exist-
ing between promisor and promisee. Many courts have been
eager to avoid the hardship which the Statute of Frauds imposed
upon promisees under oral agreements. These courts have there-
fore seized tlpon every evidence of fraud as a basis for a con-
structive trust. The breach of the voidable promise could not, ac-
cording to .their established theory, constitute fraud. But if the
promisor and promisee sustained relations of confidence, due to
kinship or business association, equity might easily presume that
advantage had been taken of this confidential relation, and that
fraud existed. This presumption has often been relied upon.*^

*s Von Trotha v. Bamberger, 15 Colo. 1, 24 Pac. 883 Brown v. Doane, 86 ;

Ga. 32, 12 S. E. 179, 11 L. R. lA. 381 Xantry v. Lantry, 51 111. 458, 2 Am.
;

Kep. 310 Gregory v. Bowlsby, 126 Iowa, 588, 102 N. W. 517 Pollard v. Me-
; ;

Kenney, 69 Neb. 742, 96 N. W. 679, 101 N. W. 9 Grote t. Grote, 121 App. Div.
;

841, 106 N. T. Supp. 986 Parrish v. Parrish, 33 Or. 486, 54 Pac. 352 Meek
; ;

V. Meek, 79 Or. 579, 156 Pac. 250.

'.

** Wolford V. Herrington, 74 Pa. 311, 15 Am. Rep. 548. Where there was
such agreement to execute a written statement of the trust, and the deed
was delivered to the grantee for examination only, and he had it recorded, a
constructive trust was decreed in Hardman v. Ryan, 106 Wash. 433, 180 Pac.
142i
*»'Bradley Co. v. Bradley, 165 Cal. 237, 131 Pac. 750; Hillyer v. Hynes, 33
Cal. App. 506, 165 Pac. 718 Milloglav v. Zacharias, 33 Cal. App. 561, ;165 Pac.
;

977 Appeal of Fisk, 81 Conn. 433, 71 Atl. 559 Btahl v. Stahl, 214 111. 131,
; ;

73 N. E. 319, 68 L. B. A. 617, 105 Am. St. Rep. 101, 2 Ann. Gas. 774 Newls ;

V. Topfer, 121 Iowa, 433, 96 N. W. 905 Erdman v. Kenney, 159- Ky. 509, 167
;

S. W. 685; Apgar v. Connell, 79 Misc. Rep. 531, 140 N. X. Supp. 705; Jere-
BOGEET TBTJOTS—
130 CREATION OP CONSTEUCTIVB TEUSTS (Ch. 5

For example, where a son received real property fi;'om his mdther
under an oral promise to hold the same for the benefit of the
mother and the 'promisor's brothers and sisters, a repudiation of
the promise was held to give rise to a constructive trust.*° The
fact of near relationship and the natural confidence placed by
mother in son enabled the court to presume fraud. Although no
actual fraud in the making of the promise was shown, and although
the breach of the oral contract to hold in trust was not legal fraud,
the court found a basis for a constructive trust in the presumed
fraud arising from the confidential relationship.
This theory seems somewhat of a subterfuge, since there must
always be a relatidn of trust and confidence between promisor and
promisee in these cases; otherwise, the land would scarcely be
conveyed to the promisor upon his oral promise. The promisee
must always trust the promisor. The fact that he conveys the land
to the promisor, or has the lapd conveyed to the promisor shows
this fact. Why should this presumption of undue influence and fraud
arise in one case of trust and confidence and not in another?

(f) Oral Promise by Grantee to Sell Land and Account for Proceeds
Frequently the grantee of real property agrees orally to sell the
land and account to the grantor for all or a part of the proceeds.*'
The question arises, when the grantee breaks his contract and de-
clines to deliver to the grantor all or any part of the proceeds,
whether the grantee is to be considered a trustee of such proceeds
in favor of the grantor. It has been held by many courts that,
after the sale of the property, the grantee holding the proceeds
would be adjudged a trustee for the grantor. This is true both
in cases where a part only of the proceeds were to be delivered,*'
and in cases where the entire proceeds were to be paid to the
.

grantor. **

miah v. Pitcher, 163 N. T. 574, 57 N. B. 1113, affirming 26 App. Div. 402, 49 N.

Y. Supp. 788 ; Goldsmith v. Goldsmith, 145 N. X. 313, 39 N. E. 1067 Hanson
;

V. Svarverud, 18 N. D. 550, 120 N. W. 550 ; Hatch'er v. Hatcher, 264 Pa. 105,

107 Atl. 660.
*6 Goldsmith v. Goldsmith, 145 N. Y. 313, 39 N. E. 1067.
*' On this suhject, see matter under Statute of Frauds, ante, § 20.
*8 Collar V. Collar, 75 Mich. 414, 42 N. W. 847, 4 L. E. A. 491; Mulrooney
v.- Irish- American Sav. & Bldg. Ass'n, 249 Mo. 629, 155 S. W. 804 ; Spencer v.
Richmond, 46 App. Div. 481, 61 N. Y. Supp. 397 Bechtel v. Ammon, 199 Pa.
;

81, 48 Atl. 873; Contra: Benson v. Dempster, 183 111. 297, 55 N. B. 651;
McGinness v. Barton, 71 Iowa, ,644, 33 N. W. 152 Cameron v. Nelson, 57
;

Neb. 381, 77 N. W. 771.

*» Collins V. Tillou's Adm'r, 26 Conn. 368, 6^ Am. Dec. 398; Craft v. Craft,
74 Fla. 262, 76 South. 772; Thomas v. Merry, 113 Ind. 83, 15 N. E. 244;
Bork V. Martin, 132 N. Y. 280, 30 N. E. 584, 28 Am. St. Kep. 570; Logan v.
§ 39) VIOLATION or VOIDABLE PEOMISE AS PEATJD 131

The courts are not clear in their statements as to whether this is

the case of an express trust in personal property or of an implied
trust in realty arising out of fraud. The former view would seem
preferable. The New York Court of Appeals has explained its
position as follows "^ :

"Though the statutes might have justified the defendant's refusal

)to dispose of the land as he had orally agreed, yet, having dis-
posed of it, he has voluntarily emerged from the field of their pro-
tection, and exposed himself to the law which deals with him as a
trustee of personal property realized for plaintiff's benefit, by virtue
of an agency for the plaintiff which he has so far performed pur-
suant tp the plaintiff's instructions and his own agreement, as
to obtain the moneys his agency was constituted to produce. Equi-
ty approves his performance, so far as he has, performed, and as the
^statutes referred to no longer apply, there is no law which he can
invoke to shield him from the full performance of his duty."
In cases where the agreement is entirely executory that is, —
where the promisor has neither sold the real property nor a,ccountecl
—
for its proceeds the breach of contract by the grantee will not
cause equity to create him a constructive trustee. The promise
is voidable under the Statute of Frauds, and a breach of it is not
fraud.^^ I

Breach of an oral agreement to deliver to the promisee a share

in the profits from the sale of real property, has been held to be
ground for the declaration of d constructive trust.^^"

(g) Oral Agreement to Buy Land at Judicial Sale and Hold for
Promisee
In numerous cases the owner of an interest in land, as, for ex-
ample, an equity of redemption or a fee simple subject to the lieij
of a judgment, has made an agreement with 4 stranger to the title
that such stranger should bid in the land on the judicial sale of it,
hold it for the promisee, aijd dispose of it for the promisee, or re-

Brown, 20 OM. 334, 95 Pac. 441, 20 L. R. A. (N. S.) 298. Contra

: Marvel
V. Marvel, 70 Neb. 498, 97 N. W. 640, 113 Am. St. Rep. 792.
Where the grantee agreed to hold the proceeds of the realty in trust for the
grantor ij the realty was sold, and it was sold, it was held in Chace v.
Gardner, 228 Mass. 533, 117 N. E. 841, that there was a valid express trust
in the proceeds.
60 Bork V. Martin, 132 N. Y. 280, 284, 285, 30 N. E. 584, 28 Am. St. Rep. 570.
51 Adams v. Adams, 79 111. 517; Pearson v. Pearson, 125 Ind. 341, 25 N. E.
342 Byers v. McEniry, 117 Iowa, 499, 91 N. W. 797 Kinsey v. Bennett, 37
;
;

S. C. 319, 15 S. E. 965. Contra Bier v. Leisle, 172 Cal. 432, 156 Pac. 870.
:

6 2 Green, V. Brooks, 81 Cal. 328, 22 Pac. 849. But see contra, Ruggles v.
Merritt, 166 Mich. 457, 132 N. "W. 112; White v. McKenzie, 193 Mich. 189,
159 N. W. 367.
 ;

132 CREATION OP CONSTRUCTIVE TRUSTS (Ch. 5

convey it to him' upon certain conditions. It has been quite gfener-

ally held_ that a breach of the promise so to buy and hold is fraud
sufficient to give rise to a constructive trust in favor of the owner
of the interest in the property, who has rehed on the promise and
therefore taken no steps himself to protect his interest at the time of
the judicial sale.^'
But other courts have declined to establish a constructive
trust on like or similar facts.''* The case of Ryan v. Dox"" is
illustrative of the prevailing view upon this subject. There a mort-
gagor agreed with the defendant that the d^efendant should buy
the mortgaged real estate at the foreclosure sale that title should^ ;

be taken in the name of the defendant that defendant should pay'

;

the amount of the bid with his own funds that defendant should
;

hold the real property as security for the repayment of his advanc-
es; and that defendant should convey the property to the mort-
gagor, the plaintiff, upon repayment of his advances. The defend-
ant bid at the sale a;nd obtained the property for a reduced price,
because it was understood he was nidding for the mortgagor. The
mortgagor remained away from the sale and took no steps to pro-
tect his interest, relying on the defendant. Upon the repudiation

Handy, 20 Ark. 381, 73 Am. Dee. 497; Strasner v. Carroll, 125

OS Brittin v.

Ark. 34, 187 W. 1057, Ann. Cas. 1918E, 306; Price v. Reeves, 38 Cal. 457;
S.
Thomas v. Goodbread (Fla.) 82 South. 835; Kives v. Lawrence, 41 Ga. 283;
Arnold V. Cord, 16 Ind. 177 Eadie v. HamUton, 94 Kan. 214, 146 Pac. 323
;

Griffin v. Schlenk, 139 Ky. 523, 102 S. W. 837; Miller's Heirs v. Antle, 2 Bush
(Ky.) 407, 92 Am. Dec. 495; Doom v. Brown, 171 Ky. 46(9, 188 S. W. 475
(trust called resulting) Northcraft v. Martin, 28 Mo. 469; O'Day v. Annex
;

Eealty Co. (Mo.) 191 S. W. 41; Robinson v. Cruzen (Mo. App.) 202 S. W.
449; Dickson v. Stewart, 71 Neb. 424, 98 N. "W. 1085, 115 Am. St. Rep. 596:
Day V. Devitt, 79 N. J. Eq. 342, 81 Atl. 368; Eckerson v. McCulloh, 39 N.
J. Eq. 115; Van Home v. Fonda, 5 Johns. Ch. 388; Allen <v. Arkenburgh,
% App. Div. 452, 37 N. Y. Supp.' 1032 Ryan v. Dox, 34 N. Y. 307, 90 Am. Dee.
;

096; Goldman v. Cohen, 167 App. Div. 666, 153 N Y. Supp. 41; Rush v.
McPherson, 176 N. C. 562, 97 S. E. 613 Bee^e v. VPentz, 55 Pa. 369, 93 Am.
;

Dec. 762; Wolford v. Herrington, 86 Pa. 39; Jenckes v. Cook, 9 R. I. 520;

Denton v. McKenzie, 1 Desaus. 289, 1 Am. Dec. 664 Haywood v. Ensley, 8
;

Humph. (Tenn.) 460; Chandler v. Riley (Tex. Civ. App.) 210 S. W. 716;
Harras v. Harras, 60 Wash. 258, 110 Pac. 1085. In analogy to this principle
it was held in Prescotfv. Jenness, 77 N. H. 84, 88 Atl. 218, that a construc-
tive trust would be declared where a inortgagor had been promised the right
to redeem, although his technical right had expired, and the defendant bought
the property from the mortgagee under an oral agreement to allow the
. mortgagor to redeem within two years.
o«.La Cotts V. La Cotts, 109 Ark. 335, 15^ S. W. 1111; Walter v. Klock, 55
111. 362; Kellum v. Smith, 33 Pa. 158; Barnet v. Dougherty, 32 Pa. 371;
Eox V. Peoples, 201 Pa. 9, 50 Atl. 226 -Lancaster Trust Co. v^ Long, 220 Pa,
;

499, 69 Atl. 993 Stafford v. Stafford, 29 Tex. Civ. App. 73, 71 S. W. 984,
;

"34 N. Y. 307, 90 Am. Dec. 696.

§ 40) VIOLATION OF PROMISE TO SECURE GIFT BY WILIj 133

of his promiseby the defendant, itwas held that the defendant

wc^ld be declared a constructive trustee for the mortgagor, the
plafntiflf.
It is difficult to see why
there should be any difference between
judicial sales and private According to the weight of author-
sales.
ity, breach Of an oral agreement to hold in trust ought to be regarded

as no fraud upon which to found a constructive trust."" On au-

thority it would seem that some fraud at the time of the promise
would be necessary to the existence of a constructive trust in the
case of judicial sales, as well as in the case of private transfers.
On principle the purchasers at judicial sales, who violate their
promises to hold for the promisees, are attempting unjustly to en-
rich themselves, and should be made constructive trustees for the
promisees, even though the express trust involved cannot be en-
forced.

VIOLATION OF PAROL PROMISE MADE TO SECUiJE

GIFT BY WILL OR INTESTACY
40. TheStatute of Wills, with some exceptions, prevents an oral
testamentary disposition of property. An oral promise
to transfer property after the death of its owner and a
written direction as to the disposition of property after the
owner's death, not executed with testamentary formality,
cannot, therefore, be enforced as testamentary provisions.
The Statute of Ftauds requires trusts of rieal property to be
created or proved by writing. Parol promises by a done,e
of real property to hold it in trust for an ancestor or tes-
tator cannot be enforced as express trusts.
If the promisor, who has secured property by the laws of in-
testacy or by will, had a fraudulent intent at the time
he made the promise upon the basis of which he secmred
the property, and declines to hold for the agreed purpose,
he will be charged with a constructive trust.
If the recipient of property by will or intestacy learns of the
donor's desire that he use the property for another only
after the donor's death, no constructive trust will attach
as a result of a refusal to carry out the donor's wishes.
If the recipient propiises to hold the property for others, but
the names of such others are not communicated until after
the donor's death, 'the tecipient will hold vmder an im-
plied trust for the heirs, next of kin, or residuary devisees

»« See ante, pp. 126-128.

 134 CEEATION OP CONSTRUCTIVE TRUSTS (Ch. 5

or legatees of the donor, and not for the intended bene-

ficiaries.
^
If a gift is made by will in reliance on the promise of the donee to
hold for another, a breach of such promise will cause
equity to hold the donee as a constructive trustee for the
intended beneficiary.
/ If an ancestor allows property to pass to his next of kin or heir
in reliance on the promise of such next of kin or heir that
he will apply the property to the benefit of another, a re-
pudiation of such promise by the next of kin or heir will
give rise, to a constructive trust for the intended bene-
ficiary.
A promise by one joint donee of property, by will or intestacy,
will not ordinarily bind the other donees but it may have
;

that effect if made on behalf of all.

(a) The Statute of Wills and

the Statute of Frauds
well known that wills of real and personal property are,
It is
with some exceptions, required to be in writing. The Statute of
Wills °^ first made possible wills of real property. Modern Amer-
ican statutes require testamentary dispositions of property, with
some important exceptions, to be written. °*
It is rudimentary law, also, that in a large majority of jurisdic-
tions express trusts in land must be evidenced by or created in
writing."® ^

On
account of these statutory provisions affecting the disposition
of property by will and the creation of trusts in land, it is obviously
impossible that equity should declare that property left by a de-
ceased person, either in a case of testacy or intestacy, should be
burdened by any express oral obligation or affected by any ex-
press oral trust. Thus, if A. leaves a will^by which real property
is devised to B. absolutely, and A. tells B. orally that he desires him

to hold the land in trust for C, and B. agrees so to hold it, the
obligation of B. to hold the property for C. cannot be enforced
directly without violating the^ Statute of Wills and the Statute of
Frauds. To enforce such oral obligation would be to allow the
making of an oral will or the creating of an oral trust in land.""
It is an important question what attitude equity should assume
toward B., in the illustration just given, if B. refuse to hold for

" St. 32 Henry VIII, c. 1.

See, fpr esample.
58 Decedent Estate Law N. Y. (Consol. Laws, c. 13) §§
30-22.
="See ante, pp. 54-58.
8»Ileynolds v. Reynolds, 224 N. Y. 429, 121 N. E. 61.
§ 40) VIOLATION OF PROMISE TO SECURE GIFT BY WILL 135

C. after the will has taken effect and B. has become the legal
owner of the property. Is B., in repudiating his promise, guilty of
any fraud which will be recognized by equity, as the basis of a con-
structive trust? Or is the breach of an obligation attempted to
be imposed in violation of the Statute of Frauds and the Statute
of Wills not legal fraud, though wrong morally ?
Tjae situation is the same on principle if the promise of the re-
cipient of the property induces, not a gift by will, but intestacy, as
a result of which the property comes to the promisor. Thus if
A., the owner by the promise of B., his
of real property, is induced
sole heir, not to make
a will, but to allow the real property to de-
scend to B., upon B's oral promise to hold the land for X., the
same question is presented. Is the refusal of B., the heir who has
obtained the property, to j^erform the promise on the strength of
which he obtained it, such fraud as to give rise to a constructive
trust?"

(b) ActiMl Fraud at the Time of the Promise

It has already been shown that one who obtains property by
actual fraud may be held as a constructive trustee of it.** It is
therefore obvious that, if the person obtaining property by will-
or the laws of inheritance on account of a promise made to the
testator or intestate to hold it for another had the actual intent
at the time he made the promise not to perform it, he has been
guilty of actual fraud, and equity will hold him as a constructive
trustee of the' property so obtained.^^ "It is conceded that in cases
of actual intentional fraud equity will raise a trust, notwithstand-
ing the Statute of Frauds; or the Statute of Wills." "
In a few cases the courts seem to have held that actual fraud at
the time of the promise was an essential.®' A fraudulent iijtent la-
ter conceived seems riot to have been considered sufHcient.* This
theory is, however, the view of a small minority of the courts which

81 For an able discussion of the questions covered by this section, see G.

P. Costigan, Jr., "Constructive Trusts, Based on Promises Made to Secure
Bequests, Devises, or Intestate Succession," 28 Harv. Law Rev. '237, 366.
82 See ante, % 38.
8 3 Hoge V. Hoge, 1 Watts (Pa.) 163, 26 Am. Dec. 52.
8 4 Winder v. Scholey, 83 Ohio St. 204, 216, 93 N. E. 1098, 33 L. R. A. (N.

S.) Ann. Cas. 1379.

995, 21
>8B Moranv. Moran, 104 Iowa, 216, 73 N. W. 617, 39 L. R. A. 204, 65 Am.
St. Rep. 443 Evans v. Moore, 247 111. 60, 93 N. E. 118, 39 Am. St. Rep. 302
;

(discussed by Profi Costigan in 6 111. Law Rev. 67;" see, however. People v.
Schaefer, 266 111. 334, 107 N. E. 617, discussed by Prof. Costigan in 10 111.
Law Rev. 139) Sprinkle v. Hayworth, 26 Gratt. (Va.) 384; Tennant v.
;

Tennant, 43 W. Va. 547, 27 S. E. 334.

136 CREATION OF CONSTRUCTIVE TRUSTS (Ch. 5

have considered the question. The prevailing view is that a mere

violation of the oral promise is ground for a constructive trust,
and that therefore actual fraud at the time of the promise is a
priori reason for a constructive trust.

(c) Directions of Testator or Ancestor Not Communicated During

His Life
Under this heading two situations may be imagined:
First, the testator or ancestor may not communicate to the dev-
isee or heir that he intends the devisee or heir to hold otherwise
than for his own
benefit. For example, A., a testator, may die
leaving a will by which real property is given to B. absolutely, but
by a separate instrument, not executed as a will, and not discov-
ered until after A.'s death, it may appear that A. intended B. to
hold the property for C, or pay money to C. In this case B. has
made no promise in return for the gift. The directions to hold
for C. are of no fotce, since they attempt to make a testamentary
disposition of property without the formalities required. In this
case it is generally held that B. may hold for his own benefit, and
that there is no constructive for C. or for A.'s heirs
trust either
or residuary devisees.®" The Statute of Wills makes the informal
testamentary document inadmissible as evidence. Hence it can-
not, be proven, against the devisee's objection, that the testator
intended the devisee to hold for another. That proof being lacking,
there is no fraud or injustice on which to found a constructive trust.
Secondly, it may be supposed that the devisee or heir promises to
hold for a purpose later to be copimunicated to him by the testa-
tor or ancestor, but that sucli purpose is not communicated during the
life of the testator or ancestor. Thus, A. may devise real property
to B. in trust, without naming the beneficiaries in the will, and B.
may promise to hold the property in trust for persons later to be
named. If no persons are named as beneficiaries during A.'s life,
and the names of siich beneficiaries appear only by a writing, not
executed with testamentary formality, discovered after A.'s death,
B. will be held as a trustee for A.'s heirs or residuary devisees.''
It would obviously be an unjust enrichment to allow B. to hold for
his own benefit. He cannot be compelled to hold for the purposes
mentioned in the informal writing, for that would violate the Stat-
ute of Wills. 'Therefore the only just thing is to compel him to
hold for the representatives of A., his heirs or residuary devisees.
\

8^ Juniper v. Batchelor (1868) Wkly. Notes 197; Bryan v. Bigelow, 77

Conn. 604, 60 Atl. 266, 107 Am. St. Rep. 64 Nash v. Bremner, 84 N. J. Eq.
;

131, 92 Atl. 938 Schultz's Appeal, 80 Pa. 396.

; i

»^ In re Boyes, L. R. 26 Ch. D. 531. See cases cited under ante, § 32.

§ 40) VIOLATION OP PROMISE TO SECUKB GIFT BY WILL 137,

(d) Directions of Testator or Ancestor Communicated During His

Life
If the testator or ancestor tells the devisee or heir during the
former's life that he desires the devisee or heir to hold for a third
person, and the devisee or heir promises so to hold the property,
and the gift is made to the heir or devisee in reliance on such prom-
ise,and the recipient of the property later repudiates the promise
and attempts to hold for himself, equity will declare such recipient
a constructive trustee of the property for the benefit of the bene-
ficiary named in the promise.
"Trusts, in cases of this character, are impressed on the ground
of fraud, actual or constructive, and the basis or ground upon which
fraud -is imputed is that of holding the estate of testator against
conscience. It is not based necessarily on any imputation,of fraud,
or intention to defraud, at the time of making the promise, but of
afterwards holding, or attempting to hold, the estate, as if the
proipise, on which the estate was received in its original condition,
had not been made. The fraud consists in holding, oi; attempting
to hold, the estate free from the effect or obligation of a proitaise,
subject ,to which it was intended to be devised and received, and
which it is obligatory in conscience to carry out. Where the es-
tate or interest therein is thus received by the person who made
the promise, the attempt to hold the estate without performing the
promise is an actual fraud, for the reason that the recipient, having
actually made the promise, knows personally of the obligation,
and is guilty of actual fraud in h6lding, or attempting to hold, the
estate without performing the promise, so ^ar as his interest in
the estate extends. As to such promisor, it is clearly not a ques-
tion of modifying or cutting down plain and ambiguous (sic)
devises in a will by parol evidence or unattested papers, in violation
of the statute of frauds or of wills, for the devise to the promisor,
is not modified, but he is dealt with as a holder by fraud of prop-
erty under the will, and a trust ex maleficio is raised from these
facts." ««
"It may be stated at the outset that fraud is the foundation of an
action of this nature, and that the object of such an action is to
arrest the consummation of a fraud. But for the element of fraud,
equity would be without excuse for interposihg against the stat-
ute of wills ^nd the statute of frauds, which- require certain solemn
Written formalities for wills and certain writings (where lands are
involved) for trusts. * * * Therefore, since a willfully broken
promise, made in aid of the promisee's definite intention, which

88 PoweU V. Xearance, 73 N. J. Eq. 117, 67 Atl. 892, 896.

138 CREATION OP CONSTRUCTIVE TRUSTS (Ch. 5

thwarts( such intention and prevents other action, is a fraud, equi-

ty affords relief to the beneficiaries of the promise. There must not
only be an expressed intention, but there must be a promise ihade
to carry out such intention; otherwise there would be fio breach
""
of promise, and consequently no fraud by the promisor."
The breach of the promise of the heir, next of kin, devisee, or
legatee is regarded by equity as fraud. In order to prevent the
unjust enrichment of the promisor and to obviate fraud, equity
constructs a trust and compels the recipient of the property to
hold it for the intended beneficiary.'"
Of course it is essential that the testator ^or ancestor should
have relied on the promise of the donee in transferring, or allow-
ing the laws of intestacy to transfer, the property to the donee.
If a testator, for example, would have transferred the property to
the donee, regardless of the promise, and the making of the j^omise
had no influence in causing him to make the gift, then the failure to
perform the promise will not give rise to a constructive trust.''^
The proniise to hold for another need not be expressly made. It

69 Mead Robertson, J31 Mo. App. 185, 191, 110 S. W. 1095.

v.
TO Shields v. McAuley (C. C.) 37 Fed. .302; Ourdy v. Berton, 79 Cal. 420,
21 Pac. 858, 5 L. R. A. 189, 12 Am. St. Rep. 157 De Laurencel v. De Boom,
;

48 Cal. 581; People v. Schaefer, 266 111. 334, 107 N. E. 617 (discussed by Prof.
Costigan in 10 111. Law Rev. 139) Rice Stix Dry Goods Co. v. W. S. Al-
;

brecht & Co., 273 111. 447, 113 N. E. 66; Ransdel v. Moore, 153 Ind. 393,
53 N. E. 767, 53 L. R. A. 753 Orth v. Orth, 145 Ind. 184, 42 N. E. 277, 44 N.
;

B. 17, 32 L. R. A. 298, 57 Am. St. Rep. 185 Meador v. Manlove, 97 kan. 706,
;

156 Pac. 731 Taylor v. Fox's Ex'rs, 162 Ky. 804, 173 S. W. 154
; Baylies v. Pay-
;

son, 5 Allen (Mass.) 473; Hooker y. Axford, 83 Mich. 453; Barrett v. Thielen,
140 Minn. 266, 167 N. W. 1030 ; Benbrook v. Yancy, 96 Miss. 536, 51 South.
461 Crinkley v. Rogers, 100 Neb. 647, 160 N. W. 974
; SmuUin v. Wharton,
;

73 Neb. 667, 103 N. W. 288, 106 N. W. 577, 112 N. W. 622, 113 N. W. 267;
Williams v. Vreeland, 29 N. J. Bq. 417 Casey v. Casey, 161 App. Div. 427,
;

146 N. T, Supp. 348; Jimmerson v. Ferguson, 57 Mi^c. Rep. 504, 109 N. T.

Supp. 845; Miller v. Hill, 64 Misc. Rep. 199, 118 N. Y. Supp. 63; Arntson
V. First Nat. Bank, 39 N. D. 408, 167 N. W. 760, L. R. A. 1918P, 1038;
Winder v. Scholey, 83 Ohio St. 204, 93 N. E. 1098, 33 L. R. A. (N. S.) 995, 21
Ann. Cas. 1379 Church v. Ruland, 64 Pa. 432 Jones v. McKee, 3 Pa. 496, 45
; ;

Am. Dec. 661; Appeal of Socher, 104 Pa. 609; Towles v. Burton, Rich. Eq.
Cas. (S. C.) 146, 24 Am. Dec. 409; McLellan v. McLean, 39 Tenn. (2 Head.)
684 ;Bennett v. Harper, 36 W. Va. 546, 15 S. E. 143. Contra Chapman v. :

Whitsett, 236 Fed. 873, 150 C. C. A. 135 Brown v. Kausche, 98 Wash. 470,
;

167 Pac. 1075.

Ti Whitehouse v. Bolster, 95 Me. 458, 50 Atl. 240; Mead
v. Robertson, 131
Mo. App. 185, 110 S. W. 1095 Tyler v. Stitt, 132 Wis. 656, 112 N. W. 1091,
;

12 L. R. A. (N. S.) 1087, 122 Am. St. Rep. 1012. Andj of course, a mere
statement by the legatee to the claimant that he would share the legacy,
not referring to any promise to the testator, has no effect to create a con-
structive trust. Hollis V. Hollis, 254 Pa. 90, 98 Atl. 789.
§ 40) VIOLATION OF PROMISK TO SECURE GIFT BT WILL 139

may appear by silent acquiescence.''^ "While a promise is essential,

it need not be expressly made, for active co-operation or silent ac-
quiescence may have the same effect as an express promise. If the
legatee knows what the testator expects of him, and, having an
opportunity to speak, says nothing, it may be equivalent to a prom-
ise, provided the testator acts upon it. Whenever it appears that
the testator was prevented from action by the action or silence of
the legatee,who knew the facts in time to act or speak, he will not
be permitted to apply the legacy to his own use when that would
defeat the expectations of the testator." ''
Where the purpose communicated to the donfee during the life-
time of the donor is an illegal purpose, and therefore one which
cannot be enforced by the courts, the donee will not be held under
a constructive trust for the ^intended beneficiaries of the illegal
trust, but will be held under a resulting trust for the next of kin
or heirs of the donor. Thus, where the purpose of the donor was a
charitable purpose, and the gift was made in a state where char-
itable gifts were invalid, the donee under a promise to hold for
charitable uses will be compelled by equity to hold for the benefit
of the next of kin or heirs of the donor, depending upon whether
the property was real or personal.''*
Trusts under this heading may be divided into three classes:
First, there are those cases in which a testator has been induced
to make a devise or legacy upon a promise by devisee or legatee
to hold the property for another.'^ Secondly, the testator may be
induced by the promise to abstain from revoking a gift by will.'''

'2 Eussell V. Jackson, 10 Hare (Eng.) 198; Barron v. Stuart, 136 Ark. 481,
207 S. W. 22 Mead v. Robertson, 131 Mo. App. 185, 110 S. W. 1095 In re
; ;

O'Hara's Will, 95 N. Y. 403, 47 Am. Rep. 53 Edson t. Bartow, 154 N. Y. 199,

;

48 N. E. 541; Stirk's Estate, 232 Pa. 98, 81 Atl. 187.

73 Trustees of Amlierst College v. Ritch, 151 N. Y. 282, 324, 45 N. E. 876,
37 L. R. A. 305.
f* In re O'Hara's Will, 95 N. Y. 403, 47 Am. Rep. 53. See, also, cases cited
under ante, § 32.
75 In re Fleetwood, L. R. 15 Oh. Div. 594; Buckingham v. Olark, 61 Conn.
204, 23 Atl. 1085; Chapman's Ex'r v. Chapman, 152 Ky. 344, 153 S. W. 434;
GUpatrick v. Glidden, 81 Me. 137, 16 Atl. 464, 2 L. R. A. 662, 10 Am. St. Rep.
245; Owings' Case, 1 Bland (Md.) 370, 17 Am. Dec. 311; Ham v. Twombly,
181 Mass! 170, 63 N. E. 336 ; Hooker v. Asford, 33 Mich. 453 Benbrook v.
;

Yancy, 96 Miss. 536, 51 South. 461; SmuUin v. Wharton, 73 Neb. 667, 103
N. W. 288, 106 N. W. 577, 112 N. W. 622, 113 N. W. 267 ;Williams v. Vree-
land, 29 N. Bq. 417 Edson v. Bartow, 154 N. Y. 199, 48 N. E. 541 Winder
J. ; ;

V. Scholey, 83 Ohio St. 204, 93 N. E. 1098, 33 L. R. A. (N. S.) 995, 21 Ann.

Cas. 1379; Jones v. McKee, 3 Pa. 496, 45 Am. Dec. 661: Rutledge's Adm'r
V. Smith's Ex'rs, 1 McCord Eq. (S. C.) 119; McLellan v. McLean, 2 Head
(Term.) 684; Bennett v. Harper, 36 W. Va. 546, 15 S. E. 143.
'SNorris v. Trazer, L. R. 15 Eq. Cases 318; De Laurencel v. De Boom,
140 CREATION OP CONSTRUCTIVE TRUSTS (Ch. 5

"

And in the third place the promise may have been made for the
purpose of securing intestacy; the promisor agreeing that, if the
owner would allow the property to pa^s to him by, the laws of in-
heritance, he would apply the property to the benefit of another.'''
By the great weight of authority in each of these three instances
the breach of the promise of the person receiving the property will
cause equity to create a constructive trust in favor of the intend-
ed beneficiary of the property.
Where one receiving no property under a will promises the tes-
tator that he will transfer certain property to one of the testator's
children, if the testator does not remernber such child in his will,,
a failure to perform the promise does not cause the creation of a
constructive trust in favor of the person intended to be benefited
by this promise.'*

(e) Direction of Testator or Ancestor Communicated to One or

of Several Donees, but Not to All
More
A difficult question arises where the property passes by will or
inheritance to several persons, and one or more, but not all, of these
donees have agreed to hold the property for others. Shall the
proinise of part of the donees bind all, or only the actual promisors ?
The English courts have held that one tenant in common will not
be bound by a promise made by a cotenant, while a joint tenant
will be bound by a promise made by another for the purpose of in-
ducing the gift, but not by a promise which merely prevented the
revocation of the gift.''
In America, in some cases where the cotenant made a promise
for himself, which did not purport to bind all the donees, it has
been held that only the actual promisor was bound.*" But in other

48 Cal. 581 ;Dowd v. Tucker, 41 Conn. 197 ; Gaither v. Gaither, 3 Md. Ch.
158 Ragsdale v. Ragsdale, 68 Miss. 92, 8 South. 315, 11 L. K. A. 316, 24
; Am
St. Rep. 256 Belknap v. Tillotson, 82 N. J. Eq. 271, 88 Atl. 841 ; Heinisch v.
;

Pennington, 73 N. J. Bq. 456, 68 Atl. 283 ; Rutherfurd v. Carpenter, 134 App.

Div. 881, 119 N. T. Supp. 790; Richardson v. Adams, 10 Yerg. (Tenn.) 273;
Brook V. Chappell, 34 Wis. 405.
7T McDowell V. McDowell, 141 Iowa, 286, 119 N. W.
702, 31 L. R. A. (N. S.)
176, 133 Am. St. Rep. 170; Gemmel v. Fletcher, 76 Kan. 577, 92 Pac. 713,
93 Pac. 339; Browne v. Browne, 1 Har. & J. (Md.) 430; Grant v. Brad-
street, 87 Me. 583, 33 Atl. 16^ ; Tyler v. Stitt, 132 "Wis. 656, 112 N. W. 1091,.
12 L. R. A. (N. S.) 1087, 122 Am. St. Rep. 1012. In the case of Cassels v.
Finn, 122 Ga. 33, 49 S. E. 749, 68 L. R. A. 80, 106 Am. St. Rep. 91, 2 Ann.
Cas. 554, it was held that in this situation no constructive trust would bfr
enforced against the promisor.
7 8 Robinson v. Denson, 3 Head (Tenn.) 395.

" See In r,e Stead [1900] 1 Ch. 237, and authorities there collected.
8" Powell V. Yearance, 73 N. J. Eq. 117, 67 AU. 892 ; Heinisch v. Penning-
 —

§ 41) FEAUD PRESUMED —FibUOIARIES' SECEBT PEOPITS Wl

cases, where the cotenant purported to make a promise for all,
so that the entire title could be said to be tainted with fraud, it has
been held that all the cotenants must hold under a constructive
trust.»i

FRAUD CONCLUSIVELY PRESUMED—BENEFIT OB-

TAINED BY FIDUCIARY WHILE ACTING FOR
PRINCIPAL
I

41. If one acting in a fiduciary capacity, as, for example, as trus-

tee, executor, administrator, gimrdian, attorney, agent,
director, or promoter, obtain any secret profit for himself,
the transaction is conclusively presumed to be fraudulent,
and his principal may^ at his option, regardless of the
good faith of the fiduciary, have the fiduciary declared
by equity to be a constructive trustee of the benefit so
obtained.

Where one is acting in a representative and fiduciary capacity,

equity demands that he seek only the profrt and advantage of his
principal. The fiduciary is not allowed to have conflicting inter-
ests. He must not be seeking his own financial advancement, as
well as that of his principal. The word "fiduciary" is here used
in a broad, general sense, to include' strict trustees, executoi^s, ad-
ministrators, guardians, committees of lunatics and feeble-minded
persons, partners, co-tenants, agents, attorneys, directors, ^nd
promoters of corporations, and many others in similar relations.
The word "principal" is here used to dcisignate the persons who
are represented in'thp relationships above suggested, namely, the
cestuis que trust, legatees, next of kin, wards, and others.
It is a broad principle of equity, having a highly varied applica-
tion, that the fiduciary will hold any private profit which he ob-
tains, while acting in his representative capacity, under a con-
structive trust for the principal, if the principal so elect. The
principal may allow the fiduciary to retain the profit he has made
may ratify the transaction. But, if the principal desires, he may
by a bill in equity have the fiduciary declared a constructive trus-
tee of the profit which the fiduciary has obtained.
This rule applies, regardless of the actual good faith of the fidu-

ton, 73 N. J. Eq. 456, 68 Atl. 233 ; Fairchild v. Edson, 154 N. T. 199, 48 N.

E. 541', 61 Am. St. Rep. 609.
81 Hooker v. Axford, 33 Mich. 453; Amherst College, Trustees of, v. Ritch,
151 N. Y. 282, 45 N. E. 876, 37 L. R. A. 305; Winder v. Scholey, 83 Ohio
St. 204, 93 N. E;,,1098, 33 L. R. A. (N. S.) 995, 21 Ann. Cas. 1379.
142 CREATION OP CONSTRUCTIVE TRUSTS (Ch. 5

ciary. He may have intended no fraud. He may have paid value

for what he has received and done no actual harm to the prin-
cipal. Equity will nevertheless declare the fiduciary a construc-
tive trustee of the property he has obtained. The transaction
is conclusively presumed to be fraudulent. To discourage such
dangerous dealings equity declares them all, regardless of the pe-
culiar circumstances of individual cases, fraudulent at the election
of the principal. /

Thus, if the fiduciary buy the trust property at a sale thereof, he

may, at the option of the principal be helfi a constructive trustee
of it for the principal, regardless of the price paid or the loss or

gain to the principal. ^^ It is immaterial whether the fiduciary

buys the trust property directly or indirectly. The constructive
trust will be created, at the option of the principal. ^^ Of course,
if the principal consents to the purchase of the property by the fidu-

ciary, either in advance ** or after the sale,*° by way of ratifica-

tion, the sale will be valid, and no trust will arise from it. And
if the principal sees fit to set aside the sale and have the fiduciary

8 2 Attorney and Client: Stockton v. Ford, 52 V. S. (11 How.) 232, 13 L.

;

Ed. 676 Holmes v. Holmes, 106 Ga. 858, 38 S. E. 216 Harper v. Perry, 28
' ;

Iowa, 57; Eolikatis v. Lovett, 213, Mass. 545, 100 N. E. 748; Johnson v.
Outlaw, 56 Miss. 541; Aultman, Miller & Co. v. Loring, 76 Mo. App. 66;
Levara v. McNeny, 73 Neb. 414, 102 N. W. 1042; Case v. Carroll, 35 N. Y.
385; Miles v. Ervin, 1 McCord Eq. (S. C.) 524, 16 Am. Dec. 610; "Wheeler
V. Willard, 44 Vt. 640 Newcomb v. Brooks, 16 W. Va. 32 O'Dell v. Eogers,
; ;

44 Wis. 136.
Ag&nt: Peabody v. Burri, 255 111. 592, 99 N. H. 690; "Witte v. Storm, 236 ,

Mo. 470, 139 S.'W. 384; Luscombe v. Grigsby, 11 S. D. 408, 78 N. W. 357;

Frost V. Perfield, 44 Wash. 185, 87 Pac. 117.
Administrator: Powell v. Powell, 80 Ala. 11; Williford v. Williford, 102
Ark. 65, 143 S. W. 132 Carrier v. Heather, 62 Mich. 441, 29 N. W. 38.
;

Trustee: Eisert v. Bowen, 191 N. T. 544, 85 N. E. 1109, affirming 117 App.

Div. 488, 102 N. Y. Supp. 707 Barrett v. Bamber, 81 Pa. 247.
;

Executor: Merrick v. Waters, 171 N. Y. 655, 63 N. E. 1119, affirming 51

App. Dlv. 83, 64 N. Y. Supp. 542.
Votenants: Carpenter v. Carpenter, 58 Hun, 608, 12 N. T. Supp. 189.
Guardian: Sparhawk v. Allen, 21 N. H. 9.
Assignee for creditors: Ex parte Lacey, 6 Ves. 625 Broder v. Conkliu,
;

121 Cal. 282, 53 Pac. 699.

J^lembers of church society: Fort v. First Baptist Church of Paris (Tex.
Civ. App.^ 55 S; W. 402.
But see the following cases, apparently out of line with the weight of au-
thority : Hess V. Voss, 52 111. 472 Grayson v. Weddle, 63 Mo. 523.
;

83 Lovell V. Felkins, 181 Ala. 165, 61 South. 262 ; Turner v. Turner, 34

Okl. 284, 125 Pac. 730; Irwin v. Monongahela River Consol. Coal & Coke
Co., 238 Pa. 558, 86 Atl. 491.
s*Page V. Stubbs, 39 Iowa, 537.
8= Ward V. Brown, 87 Mo. 468; Olson v. Lamb, 56 Neb. 104, 76 N. W. 433,
71 Am. St. Kep. 670.
 ;

§ 41) PRAXJD PRESUMED —PIDUCIAEIES' SECRET PROFITS 143

declared a constructive trustee of the property bought, he must, of

course, reimburse the fiduciary for money advanced from his own
I
pocket as payment for the property bought.'."
"The rule which disables one occupying a confidential or fidufciary
relation, in respect to property the subject of a sale, from purchas-
ing for his own benefit, and regarding him as a trustee if he do
purchase, is absolute, and looks to no other facts than the relation
and the purchaser. 'No fraud in fact need be shown by the cestui
que trust, and no excuse will be heard from the trustee. The fact
'^
established, and the result inevitably follows.' "
If officers of a corporation buy property on which the corporation
had an option, they may be hejd by the corporation as constructive
trustees of the property.** So, too, the rule is well established
that, if a fiduciary buys an outstanding cl,aim against the trust
.
property, the principal may hold him as a constructive trustee
of such title or claim.*" And if the fiduciary use the trust property
in his own business, and thereby make a profit, he may be held
as a constructive trustee of such profit by the principal."" If the
fiduciary make a profit on the sale of the trust property to a third
person,"^ or purchase for himself property which he should have
bought for the principal,"^ equity will declare the fiduciary, at the
option of the principal, a constructive trustee of the property
which he holds as a result of the reprehensible transaction.
Avery common application of this principrle with respect to
constructive trusts is found in the cases where a promoter or agent
has made a secret profit upon a sale of property to a corporation
or other principal. In some instances the promoted or other agent

88 Gaston v. King, 63 Miss. 326; Maynard's Case, 1 "Walk. (Pa.) 472.

King V. Remington, 36 Minn. 15, 25, 29 N. W. 352.
s''

88 Lagarde v. Anniston Lime & Stone Co., 126 Ala. 496, 28 South. 199
Trenton Banking Co. v. McKelway, 8 N. J. Eq. 84.
s^Downard v. Hadley, 116 Ind. 131, 18 N. E. 457; Henry v. Eaiman, 25
Pa. 354, 64 Am. Dec. 703.
soKyleV. Barnett, 17 Ala. 306; Bond v. Lockwood, 33 111. 212; Chanslor
V. Chanslor's Trustees, 11 Bush (Ky.) 663; Clarkson v. De Peyster, Hopk. Ch.
(N. T.) 424.
91 Griggs V. Griggs, 66 Barb. 287.
92 Turner v. Sawyer, 150 U. S. 578, 14 Sup. Ct. 192, 37 L. Ed. 1189; Koyer
V. Willmon, 150 Cal. 785, 90 Pac. 135; McPherrin v. Fair, 57 Colo.'SSS;, 141
Pac. 472; Ainsworth v. Harding, 22 Idaho, 645, 128 Pac. 92; Vallette v.
Tedens, 122 lU. 607, 14 N. B. 52, 3 Am. St. Rep. 502; Byington v. Moore, 62
Iowa, 470, 17 N. W. 644 Nester v. Gross, 66 Minij. 371, 69 N. W. 39 Winn
; ;

V. Dillon, 27 Miss. 494; Seacoast R. Co. v. Wood, 65 N. J. Eq. 530, 56 Atl.

337; Maltz v. Westchester County Brewing Co. (N. Y. Sup.) 140 N. Y.
Supp. 521; Sawyer v. Issenhuth, 31 S. D. 502, 141 N. W. 378; Kenyan v.
Trevino (Tex. Civ. App.) 137 S. W. 458.
144 CREATION OP CONSTRUCTIVE TRUSTS (Ch. 5

himself sells to the principal, in other cases he obtains a considera-

tion from a thjrd party for arranging a sale to the principal. The
promoter or other agent is universally held as a constructive trus-
tee of the secret profit thus obtained the principal, of course, be-
;

ing the beneficiary .of such trust.®* Thus the directors of a cor-
poration, who act for their own benefit in the purchase of- corpora-
tion property, may, at the election of the corporation or its stock-
holders, be held as constructive trustees of the profits which they
have obtained ; °* and a partner or quasi partner, who conceals
from his associ^t^es at the time of the purchase of a play by the
partnership that he is entitled to one-fourth of the royalties from
the play, is a constructive trustee pf the royalties which he re-
ceives after the sale "* and a city officer, who, while advising a
;

committee regarding building sites, buys land himself and sells it

to the city through a third person, is a trustee for the city of the
profits made —
that is, the difference between the price paid by
him for the 'land and the price paid by the city.°°
These' cases are all variations of the same principle, namely, that
one who is acting in a representative capacity must act for his
principal alone, and must not seek his own private gain. Whatever
such a fiduciary obtains secretly, while acting for his principal,
he must hold for the benefit of the principal.

REBUTTABLE PRESUMPTION OF FRAUD—DIRECT

TRANSFER FROM PRINCIPAL T© FIDUCIARY
42. Wherever two persons are in a confidential relation, because
of kinship, business connection, guardianship, or for
any other reason, a transfer of property from the one be-
stowing confidence to the one trusted is viewed with sus-
picion by equity and a prima facie presumption of fraud
is raised therefrom. Unless this presumption of fraud is
rebutted by the grantee, equity will declare him a con-
structive trustee for the grantor.

ssDaTfis V. Las Ovas Co., 227 IJ. S. 80, 33 Sup. Ct. 197, 57 L. Ed. 426;
Johnston v. Little, 141 Ala. 382, 37 South. 592 Bone v. Hayes, 154 Cal. 759,
;

99 Pac. 172; Old Dominion Copper Mining & Smelting Co. v. Bigelow, 203
Mass. 159, 89 N. E. 193, 40 L. R. A. (N. S.) 314; Exter v. Sawyer, 146 Mo.
302, 47 S. W. 951 ; Arnold v. Searing, 78 N. J. Eq. 146, 78 Atl. 762 ; Colton
Ibp; Co. V. Hichter, 26 Misc. Kep. 26, 55 N. Y. Supp. 486 Shawnee Commer-
;

cial & Savings Bank Co. v. Miller, 24 Ohio Cir. Ct.R. 198.
»* Billings V. Shaw, 209 N. Y. 265, 103 N. E. 142.
»s Selwyn & Co. v. Waller, 212 N. T. 507, 106 N. E.
321, L. R. A. 1915B, 160.
»^ City of Minneapolis v. Canterbury, 122 Minn. 301, 142
N. W. 812, 48
L. R. A. (N. S.) 842, Ann. Gas. 1914D, 804.
§ 42) REBUTTABLE PEESUMPTION OF FRAUD 145

Dealings between persons on an unequal footing are viewed with

suspicion by courts of equity. The opportunities for fraud are
so great that equity places a burden on the stronger party to
prove the fairness and good faith of the transaction. Where a per-
son placed in a position of trust obtains a direct conveyance of
property from the person trusting him, equity looks with suspicion ^

on the transaction. The, conveyance may be fair, made upon full

information, and for a sufficient consideration. But, since the
position of influence of the fiduciary makes fraud and undue in-
fluence easy, equity will presume fraud and place the burden on the
graijitee of showing the fairness of his conduct. If he can show that
the grantor has acted upon full information as to his rights, has
not beep misled or deceived, and has received a consideration rea-
sonably adequate, he (the grantee and fiduciary) will be allowed by
equity to retain the property. But, if he cannot show these facts,
he will be decreed by equity to hold the property under a con-
structive trust for the grantor and one trusting him.
Attorney and Client
A typical illustration of the cases here under discussion is that
of a transfer from client to attorney during the existence of the
relationship. It is said by the courts that this transaction will be
closely -scrutinized,"' that the greatest good faith will be required
on. the part of the attorney,"* and that the burden is on the attor-
ney t6 prove the fairness of the transaction between himself and
his client."' But an attorney is not incapacitated from becoming a
grantee of his client. The grant froni client to attorney is pnly
presumptively fraudulent, and the presumption may be overcome
by evidence of good faith. Proof by the attorney that he paid value,
that the client acted with full knowledge of his rights and free from
the influence of his attorney, will rebut the presumption of fraud and
establish the sale as a valid transaction.^ Of course, the presump-

»7 Dawson Copeland, 173 Ala. 267, 55 South. 600; Lewis v. Helm, 40

v.
Colo. 17, 90 Pac. 97 ; Mills v. Mills, 26 Conn. 213 ; Gruby v. Smith, 13 111.
App. 43 ; State v. Johnson, 149 Iowa, 462,' 128 N. W. 837 ; Yeamans v.
James, 27 Kan. 195; Palms' Adm'rs t. Howard, 129 Ky. 668, 112 S. W.^lllO;
Gray v. Emmons, 7 Mich. 533 Eysaman v. Nelson, 79 Misc. Kep. 304, 140
;

N. T. Supp. 183.
»8in re Danford, 157 Cal. 425, 108 Pae. 322; McCormick v. Malin, 5
Blackf. (Ind.) 509; Eyan v. Ashton, 42 Iowa, 365; Payne v. Avery, 21 Mich.
524; Hames v. Stroud, 51 Tcs. Civ. App. 562, 112 S.'W. 775; Young v.
MuTphy, 120 Wis. 49, 97 JST. W. 496.
»9 Day V. Wright, 233 111. 218, 84 N. B. 226; Donaldson v. Eaton & Bstes,
136 Iowa, 650, 114 N. W. 19, 14 L. R. A. (N. S.) 1168, 125 Am. St. Kep. 275;
Manheim v. Woods, 213 Mass. 537, 100 N. E. 747; Phipps v. Willis, 53 Or.
190, 96 Pac. 866, 18 Ann. Cas. 119:
1 Myers v. Luzerne County (C. C.) 124 Fed. 436; Cooley v. Miller, 156 Oal.

510, 105 Pac. 981; Appeal of St. Leger, 34 Conn. 434, 91 Am. Dec. 735;
BoGEET Trusts —10
14:6 CREATION OF CONSTRUCTIVE TRUSTS (Ch. 5

tion of fraud arises only during the continuance Of the relation of

attorney and client.^ Ratification by the client may prevent an
attack on the sale on the ground of presumptive fraud.*
"Wherever a fiduciary relation exists, legal or actual, whereby
trust and confidence are reposed on the One side, and influence and
control are exercised on the other, courts of equity, independent of
the ingredients of positive fraud, through public policy as a pro-
tection against oveirweening confidence, will interpose to prevent
a man from stripping himself of his property. * * * The re-
lation requires the parties to abstain from all selfish projects.
The general principle is, if a confidence is reposed and that con-
f

fidence is abused, courts of equity will grant relief. In such cases

it is not necessary to prove the actual exercise of overweening influ-

ence, misrepresentation, importunity, or fraud aliunde the act com-

plained of. * * * The general rule is that he who bargains in
a matter of advantage with a person placing confidence in him is
bound to show that a reasonable use has been made of that confi-
dence, a rule applying equally to all persons standing in confidential
relations to each other." *
Trustee and Cestui
The rule of presumptive frau^ which applies to direct transfers
from client to attorney also controls transfers from cestui que trust
to trustee. "Defined principles of public policy are clearly opposed
to the unrestricted right of a trustee to acquire the property of a
cestui que trust. A sale by a trustee to himself of the trust property
is uniformly held to be voidable at the option of the cestui que
trust, even though the trustee may have given an adequate price
and gained no advantage. * * * But, where ^rust property
has been acquired by a trustee through the medium of direct deal-
ing with the cestui que trust, it is manifest that the right of the
cestui que trust to avoid the contract should not be without lim-
itation. While some courts have held such dealing to be con-
trary to public policy, and voidable at the instance of the cestui

Stubinger v. Frey, 116 Ga. 396, 42 S. E. 713; Morrison v. Smith, 130 lU.
304, 23 N. E. 241 ; Mitcliell v. Colby, 95 Iowa, 202, 63 N. W. 769 ; Yeamans
V. James, 27 Kan. 195; Merryman v. Euler, 59 Md. 588, 43 Am. Rep. 564;
Crocheron v. Savage, 75 N. J. Eq. 589, 73 Atl. 33, 23 L. R. A. (N. S.) 679; Nes-
bit V. Lockman, 34 N. Y. 167; Helms v. Goodwill, 64 N. Y. 642; Tippett v.
Brooks, 95 Tex. 335, 67 S. W. 495, 512; Vanasse v. Reid, 111 Wis. 303, 87 N.
W. 192. But see West v. Raymond, 21 Ind. 305 Yerkes V. Crum, 2 N. D. 72,
;

49 N. W. 422; Lane v. Black, 21 W. Va. 617; Keenan v. Scott, 64 W. Va. 137,

61 S. B. 806.
2 Zeigler v. Hughes, 55 111. 288.
» Wills V. Wood, 28 Kan. 400 ^ Lewis v. Broun, 36 W. Va.
; 1, 14 S. E. 444.
* Thiede v. Startzman, 113 Md. 278, 77 Atl. 666, 670, quoting Highberger v.
Stiffler, 21 Md. 352, 83 Am. Dec. 593.
§ 42) EEBUTTABLB PRESUMPTION OF FRAUD 147

que trust, the better and prevailing view appears to be that such
dealings are presumed to be invalid, but will be supported if the
trustee can establish that the cestui que trust acted voluntarily
and with entire freedom from any influence arising by reason of the
trust relationship, and with intelligence and full knowledge of all
the circumstances." " The trustee who has received thel property
of cestui que trust by means of a direct grant from the cestui is
held to be a constructive trustee of the property, unless he can es-
tablish the fairness of the transaction.*
And so, too, a direct transfer from distributee to admiilistrator,
or legatee to executor, raises a prima facie presumption of fraud,
and the grantee will be held a constructive-trustee for the grantor,
unless the grantee can establish that the transfer was fair and' above
board.''
Guardian and Ward
A
transfer from ward to guardian will be closely scrutinized by
equity,' and will not be sustained if the guardian obtains any ad-
vantage from the transfer.® By the weight of authority it is held
that the transfer from ward to guardian is not void nor voidable
under all circumstances by the ward, but is voidable by the ward
unless the guardian proves that the transaction was a bona fide
conveyance for value, freely made by the ward. The transaction is
presumed to be fraudulent, and the burden is on the guardian to
show its fairness.^" The ward ma^ affirm the sale from himself' to

B Swift V. Bq. 102, 103, 75 Atl. 974.

Craighead, 75 N. J.
« Malone y^ Kelley, 54 Ala. 532Metropolis Trust & Savings Bank v. Mon-
;

nier, 169 Cal. 592, 147 Pac. 265; Bryan v. Duncan, 11 Ga. 67; Brown v.
'
Cowell, 116 Mass. 461 ; Field v. Middlesex Banking Co., 77 Miss. 180, 26
South. 365; Ludington v. Patton, 111 Wis. 208, 86 N. W. 571.
Section 2235 of the Civil Code of California provides as follows: "All
transactions between a trustee and his beneficiary during the existence
of the trust, or while the influence acquired by the trustee remains, by
which he obtains any advantage from his beneficiary, are presumed to be
entered into by the latter without sufficient consideration, and under undue
influence."
7 Williams v. Powell, 66 Ala. 20, 41 Am. Kep. 742 ; Golson v. Dunlap, 73
Cal. 157, 14 Pac. 576; Richards v. Pitts, 124 Mo. 602, 28 S. W.^8; State ex
rel. Jones v. Jones, 53 Mo. App. 207 Lovell v. Briggs, 2 N. H. 218
; Leach ;

V. Leach, 65 Wis. 284, 26 N. W. 754.

s Taylor v. Calvert, 138 Ind. 67, 37 N. p. 531; Hart v. Cannon, 133 N. C.

10» 45 S. E. 351.
9 Fidelity Trust Co.- v. Butler, 91 S. W. 676, 28 Ky. Law Rep. 1268; Wil-

liams V. Palmer, 2 Baxt. (61 Tenn.) 488.

10 Willis V. Bice, 157 Ala. 252, 48 South. 397, 131 Am. St. Rep. 55; Wald-
stein V. Barnett, 112 Ark. 141, 165 S. W. 459; McParland Larkin, 155 111.
v.
84, 39 N. E. 609 Meek y. Perry, 36 Miss. 190
; ; Brandau Greer, 95 Miss.
v.
100, 48 South. 519, 21 Ann. Cas. 1118 ; Goodrick v. Harrison, 130 Mo. 263, 32
148 CREATION OP CONSTEUCTIVE TRUSTS (Ch. 5

the guardian, although it was originally voidable.^^ But in some

cases it has been held that a guardian cannot buy from his ward,
and that a conveyance from ward to guardian is unenforceable.^*
The question as to what constitutes a relation of trust and con-
fidence sufficient to gi-i^e rise to a presumption of fraud has arisen
in a variety of ways. A
transfer from cotenant to cotenant,^^ from
son-in-law to father-in-law,^* from stepdaughter to stepfather,^'
from minor niece to aunt,^° from uncle to nephew,^' and from pa-
rishioner to priest^* has been held to give rise to a presumption of
fraud upon which a constructive trust could be founded. On the
other hand, in some^cases transfers from uncle to nephew,^" grand-
father to grandson,^" cousin to cousin,''^ and brother to sister^'
have been held not to give rise to any presumption of fraud on the
ground of confidential relationship. A transfer from principal to
agent has been held to be presumptively fraudulent.^'
The doctrine applied in these cases is well stated in a New Yotk
case:^* "Whenever, however, the relations between the contract-
ing parties appear to be of such a character as to render it certain
that they do not deal on terms of equality, but that either on the
one side from superior knowledge of the matter derived from a fi-
duciary relation, or from overmastering influence, or on the other
from weakness,, dependence, or trust justifiably reposed^ unfair ad-
vantage in a transaction is rendered probable, there the burden is
shifted, the transaction is presumed void, and it is incumbent upon
the stronger party to show affirmatively that no deception was
practiced, no undue influence was used, and that all was fair, open,
voluntary, and v^ell understood." ,

S. W. 661; Mann y. McDonald, 10 Humph. (Tenn.) 275; Baylor v. Fulker-

son's Ex'rs, 96 Va. 265, 31 S. E. 63.
11 Appeal of Schur (Pa.) 2 Atl. 336.
i^Hindman v. O'Connor, 54 Ark. 627, 16 S. W. 1052, 13 L. R. A. 490;
Dohms T. Mann, 76 Iowa, 723, 39 N. W. 823 ; Williams v. Davison's Estate,
133 Mich. 344, 94 N. W. 1048.
isKoefoed v. Thompson, 73 Neb. 128, 102 N. W. 268.
1* Bowler v. Curler, 21 Nev. 158, 26 Pac. 226, 37 Am. St. Rep. 501.
16 Newis V. Topfer, 121 Iowa, 433, 96 N. W. 905.
16 Butler V. Hyland, 89 Gal. 575, 26 Pac. 1108.
17 Ward V. Conklin, 232 111. 553, 83 N. E. 1058.
18 Henderson v. Murray, 108 Minn. 76, 121 N. W. 214, 133 Am. St. Rep.
412.
1" Doheny v. Lacy, 168 N. Y. 213, 61 N. E. 255.
20 Cowee v. Cornell, 75 N. Y. 91, 31 Am. Rep. 428.
21
Schneider v. Schneider, 125 Iowa, 1, 98 N. W. 159.
Reeves v. Howard, 118 Iowa, 121, 91 N. W. 896.
22

2 s Kimball v. Tripp, 136 Cal. 631, 69 Pac. 428; Vorse v. Verse (Iowa)
171 N. W. 186; Hunter v. Hunter, 50 Mo. 445.
21 Cowee V. Cornell, 75 N. Y. 91, 99, 100, 31 Am. Rep. 428.
§ 42} REBUTTABLE PRESUMPTION OP FRAUD 149

Doubtless the exact relationship of the parties is not so impor-

tant as their relative ages, their mental and physical conditio\i, and
their respective abilities^ and characters.
In the case of transfers from wife to husband, there is a presump-
tion of fraud, which, unless rebutted, will give rise to a construc-
tive trust in favor of the wife.'"* "A court of equity will interpose
its jurisdiction to sfet aside instruments between persons occupying
relations in which one party may naturally exercise an influence
over the conduct of 'another. Ahusband occupies such a relation
to the wife, and the equitable principles referred to would apply to
them in respect to gratuitous transfers by the wife to the husband,
however it might be in ordinary business transactions, which the
wife may legally engage in. When this relation exists the person
obtaining the benefit must show, by the clearest evidtence, that the
gift was freely and deliberately made. The burden is upon the per-
son taking the gift to show that the transaction was fair and
proper."""
"It is equally unnecessary to show by authority that the most
dominant influence of all relations is that of the husband over his
wife. From thte proud and untutored savage to the cultured and
refined Anglo-American, the wife ^ affectionately anxious to please
her husband. This is first in her heart, whether she be in the me-
nial service of a rude hut, or in daily toil for support of her family,
or in charge of an elfegant mansion. When he commands, she
obeys; when he persuades, she yields; when he gently hints a,
wish, she grants. * * * Surely, if anywhere, the rule that he
who bargains in a matter of advantage with a person, placing a.
confidence in him, is bound to show that a reasonable use has been
made of that conffdence, and that the arrangement is fair and con-
scientious, should be applied in a case where the wife conveyed her
property to her husband.""^
But the wife is not presumed to occupy a position of influence
with her husband. A transfer from the husband to wife is not pre-
sumed, because of the mere relationsjiip, \o have been obtained by
fraud."^

25 Wood V. Wood, 116 Ark. 142, 172 S. W. 860; Jackson v. Jackson, 94

Cal. 446, 29 Pae. 957 ; Heinrich v. Heinrich, 2 Cal. App. 479, 84 Pac. 326.
But see Olester v. Clester, 90 Kan. 638, 135 Pac. 996, L. E. A. 1915E, 648.
The decision in Laird v. Vila, 93 Minn. 45, lOO N. W. 656, 106 Am. St. Kep.
420, was affected by statute.
26 Boyd V. De La Montagnie, 73 N. Y. 498, 502, 29 Am. Rep. 197.
27 Darlington's Appeal, 86 Pa. 512, 519, 520, 27 Am. Rep. 726. This state-
ment of the husband's dominating position seems an exaggeration as ap-
plied to present-day family, business, and political conditions.
2 8McDougall V. McDougall, 135 Cal. 316, 67 Pae. 778; Ford v. Ford. 193
Pa. 530, 44 Atl. 561. ,
 ; :

150 CEBATION OP CONSTRUCTIVE TRUSTS

'
(Ch. 5

It has been held in a number of cases that no presumption of

fraud arises from the transfer of property from parent to child,^"
or from child to parent,'" where there is no basis for fraud except
the bare relationship. But, on the other hand, where other circum-
stances beside the mere relationship, are found the courts have held
that a constructive trust would be created upon a conveyance from
parent to child'^-or from child to parent.'^ Frequently in these
cases the conveyance was of real property, and there was a voidable
oral promise by the grantee to hold the property in trust for the
grantor. The confidential relation was seized upon as a ground for
avoiding the Statute of Frauds.

MISCELLANEOUS IMPLIED TRUSTS

43. Implied trusts are used by equity as a means of working out
justice in a number of miscellaneous instances, as, for ex-
ample :

(a) In favor of a contract vendee of land who

has paid the price,
where the vendor
legal title remains in the
(b) In favor of the assignee of notes for the purchase motiey,
where the assignor of the notes (the vendor of the land)
still holds the legal title.

implied trusts which equity cre-

It is difficult to classify all the
ates. Some can hardly be said to be based on presumed intent, and
therefore resulting, or based on fraud, actual or implied, and there-
fore constructive. The implied trust is used by equity with great
freedom as a means of working out justice in cases where a trust
is a convenient medium. Thus, where a contract for the sale of real
property has been made and the price has been paid, but the legal
title still remains in the vendor, equity regards the vendor as a trus-
tee of the land for the vendee.^" And also, where a contract is made

2»Tenbrook v. Brown, 17 lid. 410; Carpenter v. Soule, 88 N. Y. 251, 42

Am. Eep. 248.
3» Bonham v. Doyle, 39 Ind. App. 438, 77 N. E. 859, 79 N. E. 458; Gregory
V. Bowlsby, 115 Iowa, 327, 88 N. W. 822 Apgar v. Connell, 160 App. Div.
;

743, 145 N. T. Supp. 1079. .

'81 Goldsmith
V. Goldsmith, 145 N. X. 313, 39 N. E. 1067.
«2 Markley v. Camden, Safe Deposit & Trust Co., 74 N. J. Bq. 279, 69
Atl. 1100 ;Wood y. Rabe, 96 N. X. 414, 48 Am. Eep. 640.
8'Bogers v. Psnobscot Min. Co., 154 Fed. 606, 83 C. C. A. 380; Wimbish
V. Montgomery Mut. Building & Loan Ass'n, 69 Ala. 575 Scadden Flat Gold-
;

Min. Co. V. Scadden, 121 Cal. 33, 53 Pac. 440 Conner v. Lewis, 16 Me. 268
;

Bowie V. Berry, 3 Md. Oh. 359; Ryder v. Loomis, 161 Mass. 161, 36 N. E.
836; Lovejoy v. Potter, 60 Mich. 95, 26 N. W. 844; Taylor v. Lowenstein,
 ;

§ 43) MISCEUJANEOUS IMPLIED TRUSTS 151

for the sale of real property, the buyer gives a note for the price,
and the seller assigns this "note, the seller is regarded as holding
the legal title to' the real property in "trust for the assignee of the
purchase money note.^*

50 li^iss. 278; Fonda v. Sage, 46 Barb. 109; Cole v. Tyson, 43 N. O. 170;

Russell V. Stlnson, 3 Hayw. (Tenn.) 1; Bartz v. Paff, 95 Wis. 95, 69 N. W.
297, 37 L. R. A. 848.
»* Conner v. Banks, 18 Ala. 42, 52 Am. Dec. 209
; Kelly v. Payne, 18 Ala. 371
Guy V. Butler, 6 Bush (Ky.) 508; Hicks, 4 Smedes & M. (Miss.)
Tanner v.
294; Lindsey v. Bates. 42 Miss. 397, 4^0 (semble).
 •

152 THE TRUST PURPOSE —PRIVATE TRUSTS (Ch. 6

CHAPTER VI
THE TRUST PURPOSE—PRIVATE TRUSTS
44. Trusts Classified as to Purpose.
45. Passive Trusts.
46. —
Active Trusts Validity of Purpose. •
'

47. —
Active Trusts Statutory Restrictions.
48. Rule Against Remoteness.
49. Rule Against Suspension of Power of Alienation. . ,

50. Rule Against Acccumulations. ^ \

51. Spendthrift Trusts.

62. Fraudulent Purpose.
r

TRUSTS CLASSIFIED AS .TO PURPOSE

44. Trusts are classified as to. purpose as —
(a) Private or public ; and
(b) Active or passive. /

A private trust is a trust for the benefit of a known, defined

individual or individuals.
A charitable or public trust is a trust in which unascertained,
indefinite persons, to b^ selected by the trustee from
the whole world or from a certain class, are the bene-
ficiaries.
An active trust is a trust in which the trustee has affirmative
duties of management and administration to perform.
A passive trust is one in which the trustee is a mere receptacle
of the legal title and has no affirmative duties towcird
the cestui que trust.

With respect to the purposes for AA^hich trusts may be created

there are two large classes. A
trust may be private in its purpose;
that is, have as its objects or beneficiaries certain known iden-
tified persons. A
trust created by a father for the benefit of his son
is of this variety. Or a trust may have as its purpose the as-
sistance or benefit of the public or a large class thereof. This sec-
ond sort of trust is called a public or charitable trust. If A.
bequeathed money to X., as trustee, to invest and apply the income
in aid of worthy retired clergymen, the trust is public or charitable.
The cestuis are indefinite and unascertained persons, to be selected
by the trustees from the entire class of clergymen.
"The requisites of a v.alid private trust and one for a charitable
use are materially different. In the former, there must not only
 —

§ 45) PASSIVE TRUSTS 153

be a certain trustee who holds the legal title, but a certain specified
cestui que trust, clearly identified or made capable of identification
by the terms of the instrument creating the trust, while it is an
'

essential feature of the latter that the beneficiaries are uncertain

a class of persons describ'ed in some general language, often fluc-
tuating, changing in their individual members, and partaking of a
quasi public character. Indeed, it is said a public charity begins
where uncertainty in the recipient begins."^
The purposes for which private trusts are and may be created
will first be considered. In a separate chapter the purposes prop-
erly called charitable and the characteristics of such trusts will
be set forth.
All trusts are al^o distinguished with respect to the active or
passive nature of their purpose. "Where the trustee is not mere-
ly the recipient of the title for the use of the beneficiary, where he
has a duty to perform in relation to the property which calls for
the exercise of judgment or discretion, it is an active trust, and
is not affected by the Statute of Uses.""

J A passive trust is purely formal.t "The prime requisite of a ,

passive trust is that the trustee is made in form a mere holder of

the legal title, the right to the possession and the profits being
in another. If there are any active duties for the testatof [sic] to per-
form with respect to administering the property, and the primary ,

use be expressly or impliedly, by reason of such active duty, vest-

ed in the trustee, the trust is necessarily active and not affected
by the statute which would otherwise execute the use and thus
vest the legal title in the equitable owner."*
Since passive trusts are comparatively unimportant and have
no permanent existence, they will be considered first. Later active
trusts, which constitute by far the larger and more important part
•of private trusts, will be discussed.

PASSIVE TRUSTS
45. The English Statute of Uses attempted to abolish uses, which
were practically equivalent to passive trusts, by providing
that, wherever jises were created, the statute would ex-
ecute the use and transfer from the feoffee to uses to the
cestui que use the legal estate.

1 Pennoyer v. Wadhams, 20 Or. 274, 278, 25 Pac. ,720, 11 L. R. A. 210.

2 Webb V. Hayden, 166 Mo. 39, 48, 65 S. W. 760.
3 Holmes v. Walter, 118 Wis. 409, 416, 417, 95 N. W. 380, 62 L. R. A. 986.
And see Randolph v. Read, 129 Ark. 485,' 196 S. W. 133,
154 THE TRUST PURPOSE —PRIVATE TRUSTS (Ch. 6

In many American states the Statute of Uses is considered a

part of the common law. In others statutes abolishing
passive trusts and transferi-ing the legal title to the cestui
que trust have been adopted. On one ground or another
it is universally held that the creation of a passive trust
results in the conveyance of the legal title directly to
the beneficiary. The trustee takes nothing.

Passive trusts are also sometimes called simple,* dry," naked,*

formal,^ or executed* trusts.
A passive trust has already been defined as one in which the
trustee is the bare receptacle of the legal title and has no affirma-
tive duties to perform. Thus, where a testatrix bequeathed $500
to A., to be kept in trust for A. by her daughter, the bequest
amounts to a passive trust, and A. will be entitled to the payment
of the legacy free from any trust." And where land is patented to
one in trust, without setting out the nature of the trust,^° or where
the purpose of the original trust is accomplished,^^ or the only duty
of the trustee is to convey to the beneficiary,^^ or where the trust is
an implied trust, that is, either constructive pr resulting,^^ the
trust will be treated as a passive trust by equity.
The reasons for the enactment and the effect of the Statute of
Uses have been previously explained.^* It provided, in substance,

^
» Atkins Atkins, 70 Vt. 565, 41 Atl. 503.
V.
5 Copimonwealth v. Louisville Public Library, 151 Ky., 420, 152 S. W. 262.
6 Wilkinson v. May, 69 Ala. 33.
7 Dyett V. Central Trust Co., 64 Hun, 635, 19 N. Y. Supp. 19.

8 Woodward v. Stubbs, 102 Ga. 187, 29 S. E. 119; Park's Ann. Civ. Code

<3a. 1914, § 3736 ;Kronson v. Lipschitz, 68 N. J. Eq. 367, 60 Atl. 819 Ean-
;

zau V. Davis, 85 Or. 26, 165 Pac. 1180 Kay v. Scates, 37 Pa. 31, 78 Am. Dec.
;

399 ; Porter v. Doby, 2 Rioh. Eq. (S. C.7 49. Unfortunately "executed trust"
is also used by some courts to mean a trust completely created. Lynn v.
Lynn, 135 111. 18, 25 N. E. 634 Gaylord v. City of Lafayette, 115 Ind. 423,
;

17 N. B. 899 ; Miles v. Miles, 78 Kan. 382, 96 Pac. 481 ;Watson v. Payne,

143 Mo. App. 721, 128 S. W. 238 Morris v. Linton, 74 Neb. 411, 104 N. W.
;

927 Skeen v. Marriott, 22 Utah, 73, 61 Pac. 296. The confusion of terminol-
;

ogy is Increased by an occasional use of the phrase as meaning a trust fully

outlined and planned by the settlor as distinguished from one where the de-
tails of administration are left to the trustee. Saunders v. Edwards, 55
N. C. (2 Jones, Eq.) 134.
B Guild V. Allen, 28 R. I. 430, 67 Atl. 855.
10 Brown v. Harris, 7 Tex. Civ. App. 664, 27 S. W.45.
11 Rector v. Dalby, 98 Mo. App. 189, 71 S. W. 1078.
12 Adams v. Guerard, 2S Ga. 651, 76 Am. Dec. 624.
Contra: Sprague v.
Sprague, 13 R. I. 701.
13 Shelton v. Harrison, 182 Mo. App. 404, 167 S. W. 634. '

1* See section 4, ante.

 ;

§ 45) PASSIVE TRUSTS 155

that whenever any person should be seised of real property to the

use of another by reason of any conveyance or will, the person to
whom the use was given should thereafter have the legal title
and the feoffee to uses should take no interest.^" The use of that
day was practically equivalent to the modern passive trust. The
feoffee to uses was a mere holder di the legal title. The Statute
of Uses abolished uses and rejidered impossible thereafter passive
trusts.
The
Statute of Uses is regarded as a part of the common law
•of a majority of the American states. "The Statute Of Uses being
in force in England when our ancestors came here, they brought it
with them as an existing modification of the common lawj and
it has always been considered a part of our law." ^'
In several states statutes directly abolishing passive trusts, and
declaring that att-empts to create them shall result in passing the
legal title directly to the beneficiary, have been adopted.^^
On one ground or another, either because of the operation of
the Statute of Uses, or because of a local statute having an effect
similar to that of the Statute of Uses, or because of a rule of
equity, an attempt to create a passive trust is generally held to
result in the passage of the legal estate to the cestui que trust.^'

15 St. 27 Henry VIII, c. 10 (1535). See Digby's History of the Law of Real
Property (5tli Ed.) p. 347.
16 Marshall v. Fisk, 6 Mass. 24, 31, 4 Am. Dec. 76. And see Alford v. Ben-
nett, 279 111. 375, 117 N. E. 89; Newcomb v. Masters, 287 111. 26, 122 N.
E. 85. In some states, although the Statute of Uses has never been in
force, the result accomplished bj' that statute is achieved b^ direct action of
a court of equity, decreeing that the legal title is in the beneficiary of the
passive trust. Farmers' & Merchants' Ins. Co. v. Jensen, 56 Neb. 284, 76
. N. W. 577, 44 L. R. A. 861; Hill v. Hill, 90 Neb. 43, 132 N. W. 738, 38
L. R. A. (N. S.) 198 ; Helf enstine's Lessee v. Garrard, 7 Ohio, 276, pt. 1
,

Gorham v. Daniels, 23 Vt. 600. .

17 Code Ala. 1907, § 3408; How. Ann. St. Mich. 1912, § 10671;' Gen. St.
Minn. 1913, § 6703; 2 Comp. St. N. J. 1910, p. 1536, § 7; New York Real
Property Law (Consol. Laws, c. 50) § 93. The New York statute is typical
a.nd reads as follows: "Every disposition of real property, whether by deed
or devise, shall be made directly to the person in whom the right to the
possession and profits is intended to be vested, and not to another to the
use of, or in trust for, such person; and if made to any person to the use
of, or in trust for another, no estate or interest, legal or equitable, vests in
the trustee. But neither this section nor the preceding sections of this ar-
ticle shall extend to the trusts arising, or resulting by implication of law,
nor prevent or affect the creation of such express trusts as are authorized
and defined in this chapter." See Kidd v. Cruse, 200 Ala. 293, 76 South.
69 Berry v. Wooddy, 16 Ala. App. 348, 77 South. 942 Cutler v. Winberry
; ;

<Sup.) 160 N. Y. Supp. 712.

18 Speed V. SL Louis M. B. T. R. Co., 86 Fed. 235, 30 C. C. A. 1 ; Hunting-
ion V. Spear, 131 Ala, 414, 30 South. 787; Ringrose v. Gleadall, 17 Cal. App.
156 THE TRUST PUEPOSE —PRIVATE TRUSTS (Ch. 6

The Statute of Uses by its express wording is confined to real

property, and it has been construed to have no application to
personal property.^* But the rule of the statute has often been
applied to personal property, on the theory that the reason of
the rule was equally applicable.^"
The Statute of Uses has no application to resulting and con-
structive trusts. ^^ In a few states it is held not to apply to uses
created by devise.^^ It has no application to trusts to preserve
contingent remainders. =*' The authorities are in conflict as to
whether operates in the case of a passive Irust for the benefit, of
it

a married woman, created

for the purpose of 'preserving her sep-
arate estate.''* Charitable trusts, being active, are not subject to

664, 121 Pac. 407 ; Teller v. Hill, 18 Colo. App. 509, 72 Pac. 811 ; Slater v.
Rudderforth, 25 App. D. C. 497 Smith v. McWliorter, 123 Ga. 28'(, 51 S. E.
;

474, 107 Am. S-t. Rep. 85 ; Smith v. Smith, 254 111. 488, 98 N. E. 950 ; Allen
V. Craft, 109 Ind. 476, 9 N. E. 919, 58 Am. Rep. 425 Commonwealth v. Louis-
;

ville Public Library, 151 Ky. 420, 152 S. W. 262; Hamlin v. Mansfield, 88
Me. 131, 33 Atl. 788 ; Brown' v. Reeder, 108 Md. 653, 71 Atl. 417 ; Simonds v.
Simonds, 199 Mass 552, 85 N. E. 860, 19 L. R. A. (N. S.) 686; Everts v.
Everts, 80 Mich. 222, 45 N. W. 88; Thompson v. Conant, 52 Minn. 208, 53 N.
W. 1145; Van Vacter v. Mc Willie, 31 Miss. 563; Jones v. Jones, 223 Mo.
424, 123 S. W. 29, 25 L. R. A. (N. S.) 424; Fellows v. Ripley, 69 N. H. 410,
45 Atl. 138 Melick v. Pidcock, 44 N. J. Eq. 525, 15 Atl. 3, 6 Am. St. Rep.
;

901; Jacoby v. Jacoby, 188 N. Y. 124, 80 N. E. 676; Hallyburton v. Slagle;

130 N. C. 482, 41 S. E. 877; Troy & North CarWina Gold Min. Co. v. Snow
Lumber Co., 170 3Sf. O. 273, 87 S. E. 40 Springs v. Hopkins, 171 N. C. 486,
;

88 S. E. 774 Lee v. Gates, 171 N. C. 717, 88 S. E. 889, Ann. Cas. 1917A, 514;
;

Smith V. Security Loan & Trust Co., 8 N. D. 451, 79 N. W. 981;' Fogarty v.

Hunter, 83 Or. 183, 162 Pac. 964 ; In re West's Estate, 214 Pa. -35, 63 Atl. 407;
Darling v. Witherbee, 36 R. I. 459, 90 Atl. 751 ; Breeden v. Moore, 82 S. C.
534, 64 S. E. 604; Brown v. Hall, 32 S. D. 225, 142 N. W. 854; Turley v.
Massengill, 7 Lea (Tenn.) 353; Henderson v. Adams, 15 Utah, 30, 48 Pac. 398;
Sims V. Sims, 94 Va. 580, 27 S. E. 436, 64 Am. St. Rep. 772 Blake v. O'Neal,
;

63 W. Va. 483, 61 S. E. 410, 16 L. R. A. (N. S.) 1147; Holmes v, Walter, 118

Wis. 409, 95 N. W. 380, 62 L. R. A. 986.
10 Smith V. Smi1;h, 254 111. 488, 98 N. E. 950 In re Hagerstown Trust Co.,
;

119 Md. 224, 86 Atl. 982; Slevin v. Brown, 32 Mo. 176; Harney v. Platts,
6 Rich. (S. C.) 310.
20 Bowman v. Long, 26 Ga. 142 ; Prince de Beam v. Winans, 111 Md. 434,
74 Atl. 626 In re De Rycke's Will, 99 App. Dlv. 596, 91 N.- Y. Supp. 159.
;

2iTrask v. Greta, 9 Mich. 358; Strimpfler v. Roberts, 18 Pa. 283, 57 Am.

Dec. 606.
22 Bass V. Scott, 2 Leigh (Va.) 356; Blake v. O'Neal,
63 W. Va. 483, 61
S. E. 410, 16 L. R. A. (N. S.) 1147.
23 Vanderheyden v. Crandall, 2 Denio (N. Y.) Kay v. Scates, 37 Pa. 31,
9 ;

78 Am. Dec. 399.

2* That the statute applies to trusts for married women, see Marvel v.
Wilmington, Trust Co., 10 Del. Ch. 163, 87 Atl. 1014 Wilder v. Ireland, 53
;

N. C. (8 Jones Law) 85; Milton v. Pace, 85 S. C. 373, 67 S. B. 458. That

% 46) ACTIVE TRUSTS —VALIDITY OF PURPOSE ' 157

the Statute of Uses ;^° but a grant to trustees for a charitable

corporation, if passive, will be executed by the statute.^'

ACTIVE TRUSTS—VALIDITY OF PURPOSE

46. Except in states which have statutory systems, private trusts
in real and personal property may be created for any pur-
pose which does not violate law or public policy.
If the purpose of a trust is wholly illegal, the trust will not be
enforced by equity. If the trust is partially for a valid
purpose and partially for an illegal purpose, that portion
of the trust having a valid purpose will be enforced, if it is
independent of the invalid portion, so that the two can be
separated without frustrating entirely the testator's in-
tention.
The validity of the purpose of a trust of real property is deter-
mined by the situs of the real property which is the sub-
ject of the trust. Personal property trusts are controlled
as to validity of purpose when created by will by the
law of the domicile of the testator; when created by in-
strument inter vivos, by the law of the place where the
instrument is executed.

Active trusts have previously been described as trusts in which

the trustee has affirmative duties of administration to perform. Ex-
amples of such trusts are trusts to collect rents and pay them
over to the beneficiary for life,^' trusts to sell property and pay
the debts of the settlor with the proceeds thereof,^* and trusts
for the conduct of business, in which the trustees occupy a posi-
tion analogous to that of directors and the cestuis que trust cor-
respond to stockholders.''*

the statute has no application to such trusts, see Glasgow v. Missouri Car
& Foundry Co., 229 Mo. 585, 129 S. W. 900 ; Temple v. iTerguson, 110 Tenn.
84^, 72 S. W. 455, 100 Am. St. Eep. 791.
25 Huger V. Protestant Episcopal Church, 137 Ga. 205, 73 S. E. 385; In
re Stewart's Estate, 26 "Wash. 32, 66 Pac. 148, 67 Pac. 723.
28 Schenectady Dutch Church v. Veeder, 4 Wend. (N. Y.) 494 ; Voorhees v.
Presbyterian Church of Village of Amsterdam, 8 Barb. (N. Y.) 135; Van
Deuzen v. Trustees of Presbyterian Congregation, 4 Abb. Dec. (N. Y.) 465.
27 McFall V. Kirkpatrick; 236 111. 281, 86 N. E. 139.
28 McHardy v. McHardy's Ex'r, 7 Fla. 301.
29 For an illustration of this use of the trust as a substitute for a' corpora-
tion, see Cunningham v. Bright, 228 Mass. 385, 117 N. E.' 909. For a statu-
tory authorization of such trust, see Laws Okl. 1919, c. 16, which reads in
part as follows: "Express trusts may be created in real 'or personal property
158 THE TRUST PURPOSE —PRI VATE TRUSTS (Ch. 6

An
active, private trust may be created^ except in a few jurisdic-
tionswhich have established statutory systems of trusts, for any
purpose which does not contravene some statute of the state'"
or its public policy.'^ It is obvious that a trust designed to en-
courage treason, or to aid in the commission of murder, would not
be enforced by the courts. Nor -would a trust in restraint of
marriage. In the Southern states, prior to emancipation, trusts
for the freeing of slaves were invalid.^'' But, aside from such re-
strictions regarding crime _and public policy which surround all
transactions, the purposes for which trusts of real and personal
property may be created in England and the majority of American
states are limited only by the imagination of the creators of such
trusts.
The validity of the purpose of a trust is not affected- by the
reservation of a power of revocation in the settlor; °' nor by the
reservation of an interest in the property in favor of the settlor '* ;

nor by a provision that the cestui's right* to enjoy the trust prop-
erty is postponed to a future date.''* Naturally the purpose for
which the trust is founded must be certain. An indefinite trust
instrument can no more be enforced than an indefinite contract.'*
But the trust instrument need not provide for every possible con-
tingency.' '.

or both with power in the trustee, or a majt)rity of the trustees, If there be

more than one, to receive title to, hold, buy, sell, exchange, transfer and
convey real and personal property for the use of such trust; to take, re-
ceive, invest or disburse the receipts, earnings, rents, profits or returns from
the trust estate ; to carry on and conduct any lawful business designated in
the instrument of trust, and generally to do any lawful act in relation to
such trust property which any individual owning the same absolutely might
do." For a comparison of express trusts and corporations as business or-
ganizations, see Wilgus, 13 Mich. Law Rev. 71, 205.
so A trust designed to carry out a void act of a Legislature has an invalid
purpose. Disston v. Board of Trustees of Internal Improvement Fund, 75
Fla. 653, 79 South. 295.
31 A trust having the object of suppressing a criminal prosecution is void.
Bettinger v. Bridenbecker, 63 Barb. (N. Y.) 395.
8 2 Lemmond v. Peoples, 41 N. C. (6 Ired. Eq.) 137.
ss Talbot V. Talbot, 32 R. I. 72, 78 AtL 535, Ann. Gas. 1912C, 1221
3 4 In re Soulard's Estate, 141 Mo. 642, 43 S. W. 617.

30 Noble V. Learned, 153 Cal. 245, 94 Pac. 1047; Nichols v. Emery, 109
Cal. 323, 41 Pac. 1089, 50 Am. St. Rep. 43 Lewis v. Curnutt, 130 Iowa, 423,
;

106 N. W. 914.
36 Angus V. Noble, 73 Conn. 56, 46 Atl. 278 ;Sheedy v. Roach, 124 Mass.
472, 26 Am. Rep. 680; SmuUin v. Wharton, 73 Neb. 667, 103 N. W. 288, 106
N. W. 577, il2 N. W. 622, 113 N. W. 267 ; Gueutal v. Gueutal, 113 App. Div,
310, 98 N. Y. Supp. 1002 ; Weaver v. Spurr, 56 W. Va. 95, 48 S, E. 852.
»r In re Hoffman's Will, 201 N. X. 247, 94 N, E. 990.
 . ;

§ 46) ACTIVE TRUSTS —VALIDITY OF PURPOSE 15&

If the trust instrument have but one purpose and that purpose be
invalid, because, for example, of a violation of the rule against
perpetuities, it is obvious that the entire trust must fall to the
ground. But in many
instances trusts have several purposes.
The same may provide for payments to A. during
trust instrument
his life, payments to his children after his death, and finally a
payment of the' principal to X. at a given time. If one of these
several purposes is valid and the remainder invalid, will the entire
trust fail? The answer depends upon whether the purposes are
separable or are inextricably connected. If the valid purpose is
independent of the invalid, if the two can be separated, and the
valid enforced without (^oing violence to the settlor's intent, then
the valid purpose may be enforced, and the invalid stricken out.'*
But if, on the other hand, the valid purpose and the invalid pur-
pose are so connected that to enforce one without enforcing the
other would doubtless have been contra'ry to the settlor's intent^
and would cause an injustice, then the entire trust must be de-
clared void because of its partial invalidity.'*
Conflict of Laws
Real property almost entirely controlled by the laws of the
is
jurisdiction in which
it lies. The validity of the purpose of trusts
of real property is, in accordance with this principle, determined
by the law of the situs.*" If the trust be one of personal property,
however, and be created by will, the law of the domicile of the tes-
tator controls ordinarily. Personal property is presumed to follow
the person of the owner.*^ If the instrument is one taking effect

38 Younger v. Moore, 155 Cal. 767, 103 Pac. 221; Andrews v. Kice, 53
Conn. 566, 5 Atl. 828; Sinnott v. Moore, 113 Ga. 908, 39 S. E. 415; Viney
V. Abbott, 109 Mass. 300 Amory v. Trustees of Amherst College, 229 Mass.
;

374, 118 N. E. 933; Robb v. Washington and Jefferson College, 185 N. X.

485, 78 N. E. 359 Culross v. Gibbons, 130 N. Y. 447, 29 N. E. 839
; In re ;

Denis' Estate, 201 Pa. 616/51 Atl. 335; Appeal of IngersoU, 86 Pa. 240.
«8 Carpenter v. Cook, 132 Cal. 621, 64 Pac. 997, 84 Am. St. Rep. 118; Hof-
sas V. Cummings, 141 Cal. 525, 75 Pac. 110 ^Rong v. Haller, 109 Minn. 191
;

123 N. "W. 471, 26 L. R. A. (N. S.) 825; Kelly v. Nichols, 17 R. I. 306, 21

Atl. 906.
*o Campbell-Kawannanakoa v. Campbell, 152 Cal. 201, 92 Pac. 184 ; Appeal
of Fisk, 81 Conn. 433, 71 Atl. 559; Kerr v. White, 52 Ga. 362 Hobson v.;

Hale, 95 N. Y. 588 ; Penfield v. Tower, 1 N. D. 216, 46 N. W. 413.

*i Farmers' & Mechanics' Sav. Bank v. Brewer, 27 Conn. 600; Cross v.
United States Trust Co. of New York, 131 N. Y. 330, 30 N. E. 125, 15 L.
.
R. A. 606, 27 Am. St. Rep. 597 Dammert v. Osborn, 140 N. Y. 30, 35 N. E.
;

407 Towjisend v. Allen, 59 Hun, 622, 13 N. Y. Supp. 73, affirmed 126 N. Y.

;

646, 27 N. E. 853 Merritt v. Corlies, 71 Hun, 612, 24 N. Y. Supp. 561 ; Jones

;

V. Jones, 8 Misc. Rep. 660, 30 N. Y. Supp. 177 Sullivan v. Babcock, 63 How.

;

Prac. (N. Y.) 120; Wood v. Wood, 5 Paige (N. Y.) 596, 28 Am. Dec. 451;
English V. Mclntyre, 29 App. Div. 439, 51 N, Y. Supp. 697; Lanius v.
Fletcher, 100 Tex. 550, 101 S. W. 1076.'
 IGO THE TRUST PUEPOSE —PEPVATE TRUSTS (Ch. 6

inter vivos, ordinarily the law of" the state of execution will decide
the question of validity" of purpose.*^ ^

In a number of New York decisions respecting the validity of

the purpose of personal property trusts, it has been held that the
law of the. jurisdiction of administration was the determinative
feature. Thus, where a testator, domiciled in arid a resident of
New Yorki made a will by which he left personal piroperty to trus-
'tees to be administered in the state of Pennsylvania, it has been
held that the laws of Pennsylvania control as to the validity of the
purpose of the trust.*' If thq trust is to be administered in New
Yo.rk, and was created in a foreign jurisdiction, the New York
courts treat the law of the domicile of the settlor as controlling;
but if the trust is to be administered in a foreign jurisdiction, the
New York courts seem to treat the law of the place of administ;ra-
tion as controlling.** Thus, the only trusts of personal property,
the validity of the purposfe of which is tested by the laws of New
York, are those which are created in New York and to be adminis-
tered there.

ACTIVE TRUSTS— Statutory restrictions

47. In California^ Michigan, Minnesota, Montana, New York,
North Dakota, Oklahoma, South Dakota, and Wisconsin
the purposes for which real property trusts may be cre-
ated are limited by statute.
While an attempt to create a trust for a purpose not named in
the statute does not result in the creation of a trust, the
instnunent will be enforced as a power in trust, if other-
wise lawful.

In nine states, namely, California, Micliigan, Minnesota, Mon-

tana, New York, North Dakota, Oklahoma, South Dakota, and
Wisconsin, the legislatures have established statutory systems
of> trusts in real property and have expressly limited the purposes
for which such trusts may be created.*^ The theory of the foun-

,
*2 Mercer v. (0. C.) 132 Fed. 501; Codman v. Krell, 152 Mass.
Buchanan
214, 25 N. B. 90; W^se
Dandridge, 35 Miss. 672, 72 Am. Dec. 149.
v.
*3 Chamberlain v. Chamberlain, 43 N. Y. 424. See, also, In re Orum, 98 -'

Misc. Rep. 160, 164 N. Y. Supp. 149.

**Kerr v. Dougherty, 79 N. Y. 327; Hope v. Brewer, 136 N. Y. 126, 32
N. B. 558, 18 L. R. A. 458; Mount v. Tuttle, 183 N. Y. 358, 76 N. E. 873, 2 U.
^. A. (N. S.) 428; Robb v. Washington and JefEerson College, 185 N. Y.
485, 78 N. B. 359; Hasbrouck v. Knoblauch, 130 App. Div. 378, 114 N. Y.
Supp. 949 ; Peabody v. Kent, 153 App.' Div. 286, 138 N. Y. Supp. 32.
«5 UaHfornUi.—Oiv. Code, S 847: "What Uses and Trusts may Exist.—Uses
 ;

§ 47) ACTIVE TRUSTS— STATUTORY RESTRICTIONS 161

ders of this system, for the statutory purposes named in the sev-
eral states are very similar, was that all trusts, except those involv-
ing active administration and Requiring the holding of the legal
title, should be abolished, because they render uncertain -the rec-
ord title to land and result in fraud and confusion. If the legal
\ title is really necessary or highly convenient, said these reformers,

and trusts in relation to real property are those only which are specified in*
this title." Civ. Code, § 857 "For "What Purposes Express^ Trusts may
:

—
be Created. Express trusts may be created for any of the following pur-
j

poses: 1. To sell and convey real property and to hold or reinvest or

apply or dispose of the proceeds in accordance with the instrument creat-
ing the trust. 2. To mortgage or lease real property for the benefit of
annuitants, or deyisees or legatees, or other beneficiaries, or for the pur-
pose of satisfying any charge thereon. 3. To receive the rents and profits
'

of real property, and pay them to, or apply them to the use of any person,
whether ascertained at the time of the creation of the trust or not, for
himself or for his family during the life of such person, or for any short-
er term, subject to the rules of title two or division two of part one of this
code. 4. TJo receive the rents and profits of real property and to accu-
mulate the same for the purposes and within the limits prescribed by the
same title r or 5. To convey, partition, divide, distribute or allot real prop-
erty, in accordance with the instrument creating the trust, subject to the
limitations of the same title."
Section 857 has received construction in a large number of cases. For
cases construing subdivision 1, see the following: MorfCew v. San Francisco
& S. R. R. Co., 107 Cal. 587, 40 Pac. 810; In re Delaney's pstate, 49 Cal. 76;
Keogh V. Noble, 136 Cal. 153, 68 Pac. 579 ; Ward v. Waterman, 85 Cal. 48S,
24 Pac. 930; Nichols v: Emery, 109 Cal. 323, 41 Pac. 1089, 50 Am.- St. Rep.
43; Koch v. Briggs, 14 Cal. 256, 73 Am. Dec. 651; Thompson v. McKay, 41
Cal. 221 ; Wittfield v. Forster, 124 Cal. 418, 57 Pac. 219 ; Auguisola v. Ariiaz,
51 Cal. 435 ; Benhalack v. Richards,- 116 Cal. 405, 48 Pac. 622 ; Simpson v.
Simpson, 80 Cal. 237, 22 Pac. 167 ; In re Fair's Estate, 132 Cal. 523, 60 Pac.
442, 64 Pac. lOOQ, 84 Am. St. Rep. 70 ; In re Sanford's Estate, 136 Cal. 97, 68
Pac. 494 ; McCurdy v. Otto, 140 Cal. 48, 73 Pac. 748 In re Pichoir's Estate,
;

139 Cal. 682, 73 Pac. 606 Carpenter v. Cook, 132 Cal. 621, 64 Pac. 997, 84 Am.
;

^t. Rep. 118; In re Hinckley's Estate, 58 Cal. 457; Sacramento B^nk v.

Alcorn, 121 Cal. 379, 53 Pac. 813 ; Hyatt v. Argenti, 3 Cal. 151 ; Handley v.
Pfister, 39 Cal. 283, 2 Am. Rep. 449. For cases 'construing subdivision 2, see
the following Gunter v. Janes, 9 Cal. 643 Bateman v. Burr, 57 Cal. 480
: ;

Tyler v. Granger, 48 pal. 259; Johnson v. Miner, 144 Cal. 785, 78 Pac. 240.
In construction of subdivision 3, see the following cases : Carpenter v. Cook,
132 Cal. 621, 64 Pac. 99T, 84 Am. St. Eep. 118; In re Dolan's Estate, 79 Cal.
65, 21 Pac. 545; Cutter v. Hardy, 48 Cal. 568; In re Sanford's Estate, 136
Cal. 97, 68 Pac. 494 ; Toland v. Toland, 123 Cal. 140, 55 Pac. 681 ; Simpson v.
Simpson, 80 Cal. 237, 22 Pac. 167; Helntz v. Hoover, 138 Cal. 372, 71 Pac.
447 ; Nichols v. Emery, 109 Cal. 323, 41 Pac. 1089,~ 50 Am. St. Rep. 43. In
construction of subdivision 4, see the following cases: Blackburn v. Webb,
133 Cal. 420, 65 Pac. 952 ; In re Steele's Estate, 124 Cal. 533, 57 Pac. 564.
—
Michigan. How. Ann. St. 1912, § 10679: "Express trusts may be created
for any or either of the following purposes : 1. To sell lands for the benefit
of creditors ; 2. To sell, mortgage or lease lands, for the benefit of legatees,
BOGEET Tbusts — ^11
 :

i62 THE TRUST PUEPOSE^-PEIVATE TRUSTS (Ch. 6

we will allow a trust ; but in cases where a trust is an unnecessary

formality, and the work desired to bedone could be done equally
well by means of a power, we will abolish the trust.
The trusts allowed fall into four main classes, namely, those
to sell property for the benefit of creditors; those to sell, mort-
gage, or lease for the benefit of annuitants or other legatees, or to
pay off a charge; those to collect income and apply it to the use

or for the purpose of satisfying any charge thereon; 3. To receive the rents
and profits of lands, and apply them to the use of any person, during the
life of such person, or for any shorter term, subject to the rules prescribed
in the last preceding chapter; 4. To receive the rents and profits of lands,
and to accumulate the same for the benefit of any married woman, or for
either of the purposes and within the limits prescribed in the preceding chap-
ter ;5. I'or the beneficial interest of any person or persons, when such trust
is fully expressed and clearly defined upon the face of the instrument creat-
ing it, subject to the limitations prescribed in this title."
For construction of subdivision 1, see Chicago Lumbering Co. v. Powell,
120 Mich. 51, 78 N. W. 1022; Geer v. Traders' Bank of Canada, 132 Mich.
215, 93 N. W. 437 Sta!te Bank of Bay City v. Chapelle, 40 Mich. 447 ; Iron
;

Cliffs Co. V. Beecher, 50 Mich. 486, 15 N. W. 558; Thatcher v. St. Andrew's

Church of Ann Arbor, 37 Mich. 271 Crane v. Reeder, 22 Mich. 339. Subdi-
;

vision 2 Haddou v. Hemingway, 39 Mich. 615 Everts v. Everts, 80 Mich.

: ;

222, 45 N. W. 88; Cummings v. Corey, 58 Mich. 494, 25 N. W. 481. Subdivi-

sion 4 Burdeno v. Amperse, 14 Mich. 96, 90 Am. Dec. 225. Subdivision 5
:

Methodist Episcopal Church of Newark' v. Clark, 41 Mich. 741, 3 N. W. 207 f

Wheelock v. American Tract Soc., 109 Mich. 141, 66 N. W. 955,' 63 -Am. St.
Rep. 578 White v. Rice, 112 Mich. 403, 70 N. W. 1024 ; Gilchrist v. CorUss,
;

155 Mich. 126, 118 N. W. 938, 130 Am. St. Rep. 568.

— —
Minnesota. Gen. St. 1913, § 6710: "Purposes of Express Trusts— Duration.
^Express trusts may be created for any of the following purposes l.v To
:

sell lands :^r the benefit of creditors. 2. To sell, mortgage, or lease lands
for the benefit of legatees, or for the purpose of satisfying any charge thereon.
3. To receive the rents and profits of lands, and apply them to the use of
any person, during the life of such person, or for any shorter term, subject
to the rules prescribed in chapter 59. 4. To receive the rents and profits of
lands, and to accumulate the same, for either of the purposes, and within
the limits prescribed in chapter 59. 5. To receive and' take charge of any
money, stocks, bonds, or valuable chattels of any kind and to invest and loan
the same for the benefit of the beneficiaries of such express trust ; and the
district courts of the state shall, upon petition, and hearing have power
to appoint a trustee for the purpose herein set forth, requiring such trustee
to give such bond for the faithful execution of such express tru^t as to the
court may seem right and proper and express trusts created under the pro-
;

visions of this paragraph shall be administered under the direction of the

court. 6. For the beneficial interests of any person or persons, whether such
trust embraces real or personal property or both, when the trust is fully ex-
pressed and clearly defined on the face of the instrument creating it Pro- :

vided, that the trust shall not continue for a period longer than the life or
lives of specified persons in being at the time of its creation, and for twenty-
two years after the death of the survivor of them, and that the free aliena
 ;

§ 47) ACTIVE TBUSTS —STATUTORY EESTEICTIONS 163

of beneficiaries; and those to collect income and accumulate it

for persons entitled to receive accumulations. To accomplish
these purposes the trust form is deemed necessary or very cori-
venient. To accomplish other purposes sorfietimes reached by
trusts, it is felt that powers in trust will be equally efficacious and
convenient and more conducive to an orderly system of land-
holding.

tion of the legal estate by the trustee is not suspended for a period exceeding
the limit prescribed in chapter 59. * * • "
—
Montana. (Rev. Codes, § 4540: "For What Purposes Express Trusts may
—
be Created. Express trusts may be created for any of the following pur-
poses: 1. To sell real property, and apply or dispose of the proceeds in ac-
cordance with the instrument creating the trust. 2. To mortgage or lease real
property for the benefit of annuitants or other legatees, or for the purpose of
satisfying any charge thereon. 3. To receive the rents and profits of real
property and pay them to or apply them to the use of any person, whether
ascertained at the time of the creation of the trust, or not, for himself or for
his fatnily, during the life of such person, or for any shorter term, subject
to the rules of title II, of this part ; or, 4. To receive the rents and profits of
real property, and to accumulate the same for the purposes and within the
limits prescribed by the same title."
—
New York. Real Property Law (Consol. Laws, c. 50) § 96: "Purposes for
—
Which Express Trusts may be Created. ^An express trust may be created
for one or 'more of the following purposes: 1. To sell real property for the
benefit of creditors ; 2. To sell, mortgage or lease real property for the benefit
of annuitants or other legatees, or for the purpose of satisfying any charge
thereon ; 3. To receive the rents and profits of real property, and apply them
to the use of any person, during the life of that person, or for any shorter
term, subject to the provisions of law relating thereto; 4. To receive the
rents and profits of real property, and to accumulate the same lor the pur-
poses, and within the limits, prescribed by law."
For constructions of this statute by the New York Court of Appeals, see
Leggett V. Perkins, 2 N. Y. 297 ; Selden v. Vermilya, 3 N. Y. 525 Savage v.
;

Burnham, 17 N. Y. 561 Beekman v. Bonsor, 23 N. Y. 298, 80 Am. Dec. 269

;

New York Dry Dock Co. v. Stillman, 30' N. Y. 174 Kiah v. Grenier, 56 N. Y.
;

220 Moore v. Hegeman, 72 N. Y. 376 Heermans v. Burt, 78 N. Y. 259 Cooke

; ; ;

v. Piatt, 98 N. Y. 35 Weeks v. Cornwell, 104 N. Y. 325, 10 N. B. 431 ; People

;

V. Stockbrokers' Bldg. Co., 49 Hun, 349, 2 N. Y. Supp. 113, affirmed 112 N. Y.

670, 20 N. E. 414 ; Cochrane v. Schell, 140 N. Y. 516, 35 N. E. 971 Cassagne
;

V. Marvin, 143 N. Y. 292, 38 N. B. 285, 25 L. E. A. 670; Salisbury v. Slade, 160

N. Y. 278, 54 N. B. 741 ; Hubbard v. Housley, 43 App. Div. 129, 59 N. Y. Supp.
392, affirmed 160 N. Y. 688, 55 N. E. 1096 ; Thompson v. Hart, 58 App. Div.
439, 69 N. T. Supp. 223, affirmed 169 N. Y. 571^ 61 N. E. 1135 ; Russell v.
Hilton, 80 App. Div. 1T8, 80 N. Y. Supp. 563, affirmed 175 N. Y. 525, 67 N. E.
1089; Murray v. Miller, 85 App. Div. 414, 83 N. Y. Supp. 591, affirmed 178
N. Y. 316, 70 N. E. 870; Robb v. Washington and JefEerson College, 185 N.
Y. 485, 78 N. B. 359.
—
North Dakota. Comp. Laws 1913, § 5367 : "For What Trusts may be Creat-
ed.— Express trusts may be created for any of the following purposes 1. To
:

sell real property and apply- or dispose of the proceeds in accordance with
the instrument cr;eating the tru^t. 2. To mortgage or lease real property for
164 THE TRUST PURPOSE —PRIVATE TRUSTS (Ch. 6

The statutes of these same states ordinarily provide that, if an

attempt is made to create a trust in land for an unauthorized
purpose, the trustee shall take no estate as a trustee; but, if
the trust directs the performance of an act which may lawfully

the benefit of annuitants op other legatees or for the purpose of satisfying

any charge thereon. 3. To receive the rents and profits of real property and
pay them to or apply them to the use of any person, whether ascertained
at the time of the creation of the trust or not, for himself or for his family
during the life of such person or for any shorter term, subject to the rules of
chapter 28 of this code or, 4. To receive the rents and promts of real prop-
;

erty and to accumulate the same for the purposes and within the limits
prescribed by the same chapter."
— —
Oklahoma. Rev. Laws 1910, § 6662: "Express Trusts. Express trusts
may be created for any of the following purposes : First. To sell real property
and apply or dispose of the proceeds in accordance with the instrument creat-
ing the trust. Second. To mortgage or release real property for the benefit
of annuitants or other legatees, or for the purpose of satisfying any charge
thereon. Third. To receive the rents and profits of real property; and pay
them to or apply them to the use of any person, whether ascertained at the
time of the creation of the trust or not, for himself or for his family, during
the life of such person,, or for a shorter terin, subject to the provisions of
Article II of this chapter. Fourth. To receive the rents and profits of real
property, and to accumulate the same for the purposes and within the limits
prescribed by the same article." /
-

See McCoy v. McCoy, SO'Okl. 379, 121 Pac. 176, Ann. Cas. 19130, 146. See,
also. Laws 1919, Okl. c. 16.
—
South Dakota. Rev. Code 1919, § 374: "Express trusts may be created for
any of the following purposes: 1. To sell real property and apply or dispose
of the proceeds in accordance with the instrument creating the trust. 2. To
mortgage or release real property for the benefit of annuitants or other leg-
atees, or for the purpose of satisfying any charge thereon. 3. To receive
the rents and profits of real property, and pay them to or apply them to the
use of any person, whether ascertained at the time of the creation of the
trust or not, for himself or his family, during the life of such person, or for
any shorter term, subject to the rules of chapter 7 of this part; or, 4. To
receive the rents and profits of real property, and to accumulate the same for
the purposes and within the limits prescribed by the same chapter."
—
Wisconsin. St. 1913, § 2081: "Express trusts may be created for any or
either of the following purposes: (1) To sell lands for the benefit of credi-
tors. (2) To sell, mortgage or lease lands for the benefit of legatees or for
the purpose of satisfying any charge thereon. (3) To receive the rents and
profits of land and apply them to the use of any person during the life pf
such person or for toy shorter term, subject to the rules prescribed in the
last preceding chapter. (4) To receive the rents and profits of lands and to
accumulate the same for the benefit of any married woman or for any of
the purposes and within the limits prescribed in the preceding chapter. (5)
For the beneficial interest of any person or persons, when such trust is fuUy
expressed and clearly defined upon the face of the instrument creating it,
subject to the limitations as to time and /;he exceptions thereto relating to
literary and charitable corporations prescribed in this title. • * * "
For construction, see the following cases: Walker v. Colby Wringer Co. (C.
§ 48) RULE AGAINST REMOTENESS 165

be ptrformed a" a power in trust, the instrument shall be given

effect as a power in trust.**
Thus, under this statutory system, if A. devised real property
to B. for the purpose of having B. partition the property between
C. and D., the will would fail to create a valid trust, because a
trust to partition real estate is not provided for in this statutory
scheme.*' But the direction of A. would be enforced as a power in
trust. The real property would descend to A's heirs, as if he had
died intestate, and B. would hold a power in trust over the prop-
erty. The legal title would pass to A.'s heirs, but B. would have
the power to partition the property between C. and D.
These statutes do not apply to personal property. Trusts of
personal property may be created fqr any lawful purpose.**

RULE AGAJNST REMOTENESS '

'^8. The common-law rule against remoteness, which is the rule

against perpetuities in a majority of American states, is
that "no interest is good unless it must vest, if at all, not
later than twenty-one years after some life in being at
the creation of the interest."
This rule restricts the creator of a trust by requiring him to
make all interests under his trust vest not later than
twenty-one years after the end of some life in being at
the time the trust instrument goes into effect.

C.) 14 Fed. 517; Marvin v. Titsworth, 10 Wis. 320; McLenegan v. Teiser,

115 Wis. 304, 91 N. W. 682 ; McWilliams v. Gough, 116 Wis. 576, 93 N. W.
550; Patton v. Patrick, 123 Wis. 218, 101 N. W. 408; Pietsch v. Marshall
& Ilsley Bank, 164 Wis. 368, 160 N. W. 184. ./

*8 How. Ann. St. Mich. 1912, § 10682 ;Gen. St. Minn. 1913, § 6713 ; Real
Property Law N. Y. (Consol. Laws, c. 50) § 99; Comp. Laws N. D. § 5370;
Eev. Laws Okl. 1910, § 6665 Rev. Code S. D. 1919, § 377 ; St. Wis. 1913, §
;

2085.
For construction of these statutes, see Randall v. Constans, 33 Minn. 329,
23 N. W. 530- Hawley v. James, 5 Paige (N. Y.) 318; Selden v. Vermilya, 3
N. Y. 525 ; Downing v. Marshall, 23 N. Y. 366, 80 Am. Dec. 290 ; New York
Dry Dock Co. v. Stillman, 30 N. Y. 174 Townshend v. Frommer, 125 N. Y.
;

446, 26 N. E. 805; Cutler v. Winberry (Sup.) 160 N. Y. Supp. 712; Murphey

V. Cook,- 11 S. D. 47, 75 N. W. 387 ; McLenegan v. Yeiser, 115 Wis. 304, 91 N.
W. 682. But this rule does not seem to prevail in California. In re Falx's
Estate, 132 Cal. 523, 60 Pac. 442, 64 Pac. 1000, 84 Am. St. Rep. 70. '

*TBy an amendment going into effect August 10, 1913 (St. 1913, p. 438),
a trust to partition is valid in California. In re Aldersley's Estate, 174 Cal.
366, 163 Pac. 206.
*8in re Schwartz, 145 App. Div. 285, 130 N. Y. Supp. 74; Hammerstein v.
Equitable' Trust Co. of New York, 156 App. Div. 644, 141 N. Y. Supp. 1065.
 :

166 I
THE TRUST PURPOSE —PRIVATE TRUSTS (Ch. 6

I The mle against remoteness of vesting does not, according to

the better view, restrict the length of time for which a
trust may continue.

Trusts, like property interests, are subject in their creation

all
to two namely, the rule against remoteness, and
restrictive rules,
the rule against suspension of the power of alienatioti. Ordinarily
in any given state only one of these rules will apply, for the states
which have the common-law rule against remoteness do not usu-
ally have the statutory rule against suspension of the power of the
alienation, and vice versa; but occasionally, as, for example, in
New York, both rules are in force. Each of these rules is some-
times referred to as "the rule against perpetuities," and sometimes
this mle is construed to include both a prohibition qi undue re-
moteness of vesting and a prohibition of undue suspension of the
power of alienation. For the purpose of clearness these two
entirely distinct rules will be treated in separate sections and the
term "perpetuities" will be avoided as much as possible.
First, how does the rule against remoteness restrict the purposes
for which trusts may be created? This rule has been stated in the
following words by the most learned American commentator upon
it :"No interest is good unless it must vest, if at all, not later
than twenty-one years after some life in being at the creation of
the interest." *' A child en ventre sa mere is regarded as in being
for the purposes of the rule." ° This rule, it will be seen,--has to do
only with the date at which property interests must v^st. They
must not remain contingent for too long a period, for longer than
during the continuance of lives in being at the time the instrument
takes' effect and twenty-one years. "The rule governs both legal
and equitable interests, and interests in both realty and person-
alty." "
This rule against remoteness is the rule against perpetuities in a
majority of the American states. °^

*»
Gray, Perpetuities (3d Ed.) p. 175.
Long V. Blackall, 7 Term R. 100.
"0
"1 Gray, Perpetuities (3d Ed.) p. 175.
62 Alabama. —
The common-law rule as to real property lias been superseded
by a peculiar local statute, found in Code 1907, § 3417, which reads as follows
"Lands may be conveyed to the wife and children, or children only, severally,
successively, and jointly; and to the heirs of the body of the survivor, if they
come of age, and in default thereof, over but conveyances to other than the
;

wife and 'children, or children only, cannot extend beyond three lives in being
at the date of the conveyance, and ten years thereafter." This rule now
governs dispositions of real property, but the common-law rule as to remote-
ness is still in effect as to personal property. Lyons v. Bradley, 168 Ala. 505,
§ 48) RULE AGAINST REMOTENESS 167

The rule against remoteness may affect trusts in two ways. The
trust instrument may provide for an equitable interest in property,

53 South. 244. For further construction of this statute, see Guesnard v.

Guesnard, 173 Ala. 250, 55 South. 524; Farr v. Perkins, 173 Ala. 50O, 55
South. 928; Ashurst v. Ashurst, 181 Ala. 401, 61 South. 942; Montgomery
V. Wilson, 66 South. 508, ;L89 Ala. 209.
—
Arkansas. The common-law rule against remoteness is in force. Moody v.
Walker, 3 Ark. 147; Clark v. Stanfield, 38 Ark. 347.
—
Colorado. ^The common-law rule is in force. Chilcott v. Hart, 23 Colo. 40,
45 Pac. 391, 35 L. R. A. 41 ; Miller v. Weston, 25 Colo. App. 231, 138 Pac.
424.
—
Connecticut. Since the enactment of chapter 249 of the Public Acts of
1895, which repealed a peculiar local rule, the common-law rule against
remoteness has been in force. Bates v. Spooner, 75 Conn. 501, 54 Atl. 305;
Loomer v. Loomer, 76 Conn. 522, 57 Atl. 167 Wolfe v. Hatheway, 81 Conn.
;

181, 70 Atl. 645 Bartlett v. Sears, 81 Conn. 34, 70 Atl. 83

; Allen v. Almy,
;

87 Conn. 617, 89 Atl. 205, Ann. Cas. 1917B, 112.

—
District of Colwmbia. In addition to the statutory statement of a rule
against undue suspension of the power of alienation there seems to be recog-
nition of the common-law rule against remoteness.' Wills v. Maddox, 45
App. D. C. 128 ; Hopkins v. Grimshaw, 165 U. S. 342, 17 Sup. Ct. 401, 41 L.
Ed. 739.
—
Florida. The common-law rule seems to be in force. Cawthon v. Stearns
Culver Lumber Co., 60 Fla. 313, 53 South. 738.
—
Georgia. Park's Ann. Civ. Code 1914, § 3678, lays down the practical
equivalent of the common-law rule against remoteness. It limits the period
to lives in being, 21 years, and the period of gestation. Phinizy v. Wallace,
'

136 Ga. 520, 71 S. E. 896.

—
Illinois. The common-law rule is tnforce. Hale v. Hale, 125 111. 399, 17
N.,E. 470; Keyes v. Northern Trust Co., 227 111. 354, 81 N. B. 384; Armstrong
V. Barber, 239 111. 389, 88 N. E. 246 French v. Calkins, 252 111. 243, 96 N.
;

E. 877; Dime Savings & Trust Co. v. \Vatson, 254 111. 419, 98 N. E. 777;
Barrett v. Barrett, 255 111. 332, 99 N. E. 625 Kolb v. Landes, 277 111. 440, 115
;

N. E. 539.
—
Kansas. ^The common-law rule is in force. Keeler v. Lauer, 73 Kan. 388,
85 Pac, 541 Henderson v. Bell, 103 Kan. 422, 173 Pac. 1124.
;
'

Kentucky.—Ky. St. 1915, § 2360, reads as follows: "The absolute power of

alienation shall not be suspended, by any limitation or condition whatever,
for a period longer than during the continuance of a life or lives in being at
the creation of the estate, and /twenty-one years and ten months thereafter."
This appears to be a rule against suspension of the power of alienation and to
have nothing to do with remoteness, but it seems to have been construed to
be a rule against remoteness of vesting. Brown v. Columbia Finance &
Trust Co., 123 Ky. 775, 97 S. W. 421, 30 Ky. Law Rep. 110; United States
Fidelity & Guaranty Co. v. Douglas' Trustee, 184 Ky. 374, 120 S. W. 328, 20
Ann. Cas. 993 Miller v. Miller, 151 Ky. 563, 152 S. W. 542 Tyler v. Fidelity
; ;

& Columbia Trust Co., 158 Ky. 280, 164 S. W. 939 Pond Creek Coal Co. v.
;

Runyan, 161 Ky. 64, 170 S. W. 501; Curd's Trustee v. Curd, 163 Ky. 472,
173 S. W. 1148. In Tyler v. S^delity & Columbia Trust Co., supra, the court
says (158 Ky. at page 286, 164 S. W. 941) "The test, therefore, for de-
:

termining the existence of a perpetuity, is not whether the event or contin-

gency n§.med upon which the estate devised may vest in the ultimate takers
 ;

168 THE TRUST PURPOSE —PRIVATE TRUSTS (Ch. 6

to come into existence as a vested interest at a period too remote

and prohibited by the rule. For example, a provision that trusts
should arise when a gravel pit was worked out violated the rule
against remoteness, because the time.within which the trust inter-
ests must vest was not necessarily limited by any number of lives

does happen or may happen, but whether it Is possible that it might not
happen within that time. If it is possible that the event or contingency upon
which the estate will finally vest may not happen within the limit prescribed
by the rule against perpetuities, the instrument is void, or at least so much
thereof is void as relates to this remote event or contingency. In other
words, a possible perpetuity is a perpetuity denounced by the statute." Pond
Creek Coal Co. v. Runyan, supra, is, however, repudiated in Kentland Coal
& Coke Co. v. Keen, 168 Ky. 836, 183 S. W. 247, L. R. A. 1916D, 924.
Maine.^-The common-law rule applies. Slade v. Patten, 68 Me. 380 Towle
;

V. Doe," 97 Me. 427, 54 Atl. 1072.

Maryland—Tbe common-law rule is In force. Lee v. O'Donnell, 95 Md.
538, 52 Atl. 979 Robinson v. Bonaparte, 102 Md. 63, 61 Atl. 212 ; Hollander
;

V. Central Metal & Supply Co., 109 Md. 131, 71 Atl. 442, 23
, U R. A. (N. S.)
1135 ; Starr v. Starr Methodist Protestant Church, 112 Md. 171, 76 Atl. 595
Gambrill v. Gambrill, 122 Md. 563, 89 Atl. 1094.
—
Massachwsetts. The common-law rule governs. Fosdick v. Fosdick, 88
Mass. (6 Allen) 41; Otis v. McLellan, 95 Mass. (13 Allen) 339; Loring v.
Blake, 98 Mass. 253 ; Lovering v. Worthington, 106 Mass. 86.
Mississippi.—A. peculiar local statute exists: "Estates in fee tail are
prohibited ; and every estate which, but for this statute, would be an estate
in fee tail, shall be an estate in fee simple ;but any person may make a con-
veyance or a devise of lands to a succession of donees then living, not ex-
ceeding two, and to the heirs of the body of the remainderman, and, in de-
fault thereof, to the right heirs of the donor, in fee simple." Hemingway's
Ann. Code 1917, § 2269. This rijle as to vesting seems to supersede the
common-law rule as far as limitations of real property are concerned. Gully
V. Neville, 55 South. 289; Gwin v. Hutton, 100 Miss. 320, 56 South. 446;
Henry v. Henderson, 101 Miss. 751, 58 South. 354 ; Redmond v. Redmond, 104
Miss, 512, 61 South. 552. But the common-law rule is in force as to personal
property, Thomas v. Thomas, 97 Miss. 697, 53 Soutb. 630.
—
i

Missouri. ^The common-law rule applies. Lockridge v. Mace, 109 Mo. 162,
18 S. W. 1145 ;Bradford v. Blossom, 207 Mo. 177, 105 S. W. 289 ; Stewart
v. Coshow, 238 Mo. 662, 142 S. W. 283. See Hudson, The Rule against Per-
petuities in Missouri, 15 Mo. Law Bui., No. 11, p. 3.
—
-New SumpsMre. The rule is against remoteness. Wood v. Griffin, 46 N.
H. 230; Wentworth v. Wentworth, 77 N. H. 40O, 92 Atl. 733.
—
New Jersey. The rule is the common-law rule against remoteness. Siedler
V. Syms, 56 N. J. Eq. 275, 38 Atl. 424; In re Corle, 61 N. J. Eq. 409, 48 Atl.
1027; Van Riper v. Hilton, 78 N. J. Eq. 371, 78 Atl. 1055; In re Smisson,
79 N. J.' Eq. 233, 82 Atl. 614.
—
NeWi Yiork. Recent decisions (In re Wilcox, 194 N. Y. 288, 87 N. E. 497,
and Walker v. Marcellus & O. L. Ry. Co., 226 N. Y. 347,' 123 N. E. 736) have
made it apparent that there exists in New York a rule against remoteness of
vesting, as well as against undue suspension of the power of alienatioh.
§48) EXJLE AGAINST REMOTENESS 169

or by the twenty-one year period."* And so, too, a trust to begin

when were paid off out of rents was held to provide for
iriortgages
the vesting of an interest at a too remote time, since the time of
vesting was not fixed by lives in being and Iwenty-one years."*.
The first restriction, then, is that the interests of trustee and bene-

Thus, this state seems to have two rules against perpetuities. See 5 Cornell
Law Quarterly, 189.
—
North Carolina. The rule is against remoteness. Baker v. Pender, 50
N. C. (5 Jones Law) 351; O'Neal v. Borders, 170 N. C. 483, 87 S. B. 340.
—
Ohio. A peculiar lo6al statute provides what persons may be grantees
and devisees of lands lying within the state: "No estate in fee simple, fee
tail, or any lesser estate, in lands or tenements, lying within this state,
shall be given or granted by deed or will, to any person or persons but such
as are in being, or to the immediate issue or descendants of such as are in
being at the time of making such deed or will." Page & A. Ann. Gen. Code,
§ 8622 ; Phillips v. Herron, 55 Ohio St. 478, 45 N. E. 720. The rule against
remoteness seems also to be in force. Stevenson v. Evans, 10 Ohio St. 307,
315 ; Dayton v. Phillips, 28 Wkly. Law Bui. (Ohio) 327.
—
Oregon. The rule is that of the commion law. In re Johii's Will, 30 Or.
494, 47 Pac. 341, 50 Pae. 226, 36 L. B. A. 242.
Permsylvania.— The common-law rule of remoteness is in force. Brlggs v.
Davis, *81 Pa. 470; In re Johnston's Estate, 185 Pa. 179, 39 Atl. 879, 64
Am. St. Rep. 621 Stephens v. Dayton, 220 Pa. 522, 70 Atl. 127 ; Barton v.
;

Thaw, 246 Pa. 348, 92 Atl. 312, Ann. Cas. 1916D, 570.
—
Rhode Island. The common-law rule applies. Williams v. Herrick, 19 R.
I. 197, 32 Atl. 913 Storrs v. Burgess, 29 R. I. 269, 67 Atl. 731 ; In re Tyler,
;

30 R. I. 590, 76 Atl. 661.

—
South Carolina. ^The rule is one of remoteness. Breeden v. Moore, 82 S. C.
534, 64 S. B. 604.
—
Termeasee. The rule is the common-law rule against remoteness. Davis v.
Williams, 85 Tenn. 646, 4 S. W. 8 ; Armstrong v. Douglass, 89 Tenn. 219, 14
S. W. 604, 10 L. R. A. 85.
!rea;o«.—The rule is one against remoteness. Dulln v. Moore, 96 Tex. 135,'
70 S. W. 742; Anderson v. Menefee (Civ. App.) 174 S. W. 904.
—
VHrgifiia. ^The common-law rule is in force. Otterback y.^Bohrer, 87 Va.
548, 12 S. E. i013.
—
West Virginia. ^The rule is against remoteness. Whelan v. Reilly, 3 W. Va.
597; Starcher Bros. v. Duty, 61 W. Va. 373, 56 S. E. 524, 9 L. R. A. (N. S.)
913, 123 Am. St. Rep. 990; Thaw> v. GafCney, 83 S. E. 983, 75 W. Va. 229, 3
A. L. R. 495.
"3 In re Wood [1894] 3 Ch. 381. See, also, Taylor v. Crosson (Del. Ch.)
98 Atl. 375 ; Overby v. Scarborough, 145 Ga. 875, 90 S. E. 67 ; Ortman v.
Dugan, 130 Md. 121, 100 Atl. 82; Ewalt v. Davenhill, 257 Pa. 385, 101 :3.tl.
756 ; Rhode Island Hospital Trust Co. v. Peck, 40 R. I. 519, 101 Atl. 430. A
provision for the payment of one-h&lf the income of the trust fund to the
settlor or his eldest male heir on demand at any time is void, as creating an
interest too remote. Amory v. Trustees of Amherst College, 229 Mass. 874,
118 N. B. 933. But discretionary power in the trustee as to the time of
payment of the cestui que trust's interest does not cause a violation. Strout
v. Strout, 117 Me. 357, 104 Atl. 577.
«* In re Bewick, [^911] 1 Ch. 116.
170 / THE TRUST PURPOSE —PRIVATE TRUSTS (Ch^6

ficiary must vest within the fixed period in states having the rule^
against remoteness. The triist must begin and the property rights
'

of trustee and cestui must vest within a time limited by lives in be-
ing and twenty-one years.
The second question to be asked is whether the rule against re-
moteness affects the duration of trusts. May a trust last for a pe-
riod not measured by lives in being and twenty-one years ? May a
tr\ist last for a gross period, as, for example, for fifty years?
In. the first place, it should be noticed that all contingent inter-
ests following after trust estates are subject to the rule against re-
moteness, and may drag the trust down with them, if they vio-
late the rule. For example, if a trust is created to last for seventy-
five years, and contingent remainders are provided to follow the
trust term, it is obvious that these contingent interests violate the
rule against remoteness. They need i;ot vest within lives in being
and twenty-one years. They are to vest only at the end of a period
of years, not in any way connected with lives. Hence, of coiirse,
the remainders to take efifect and vest at the ,end of the trust are
void for remoteness. It may well be that the falling of these re-
mainders will so destroy the scheme of the testator that it will be
necessary, in order to prevent an unjust disposition of the property,
to declare the trust for the term of seventy-five years void also,
This was done in a Pennsylvania case. The trust was valid in it-
self, but it was destroyed, due to its inseparable connection with an
unlawful contingent remainder.^^
On the other hand, although there is a remainder following the
trust which is too remote, and therefore void, yet the trust may be
se^rable and may stand alone. In many cases the only effect of
the violation of, the rule against remoteness by a contingent remain-
der is that the i^emainder is void. The trust preceding the remain-
'
der is enforced.^"
In the second place, there remains for discussion the direct ef-
fect of the rule against reniotenfiss on the duration of trusts. Here
it would seem that the law ought to be certain and easy of ascer-
tainment; that, since the rule has nothing to do with vested in-
terests, but only to do with the time within which' interests must
vest, vested trust estates might continue for any length of time
without coming in conflict with the rule. That the trust is to last
for seventy-five years ought to be unimportant under the rule

SBIn re Johnston's Estate, 185 Pa. 179, 39 ^.tl. 879, 64 Am. St. Rep. 621.
"8Beers v. Narramore, 61. Conn. 13, 22 Atl. 1061; Loomer v. Loomer, 76
Conn. 522, 57 Atl. 167 Wolfe v. Hatheway, 81 Conn. iSl, 70 Atl. 645 Dime
; ;

Savings & Trust Co. v. Watson, 254 111. 419, 98 N. B. 777; Camden Safe
Deposit & Trust Co. v. Guerin, 87 N. J. Eqi 72, 99 Atl. 105.
§ 49) RULE AGAINST SUSPENSION OP POWER OF ALIENATION ITl

against remoteness, if the trust begins soon enough. The irule is

against too remote vesting of contingent estates, not against too
remote lasting of vested estates. This view has been taken by the
better reasoned decisions.'*' "There is no rule which limits the
continuance of a trust to any period of time. A
trust is no more in-
valid for the reason that it may continue thirty years than is a life
estate or estate in fee simple. The essential thing is that the bene-
ficial interest under the trust vest in the cestui que trust within the
time limited by law for the vesting of legal estates."^* But in a
number of decisions the courts seem to have been confused as to
the true meaning of the rule against remoteness and to have' held
that a trust which lasted for longer than lives in being and twenty-
one years was void.^°
It would seem that the only reasonable interpretation of the rule
against remoteness as applied to trusts is that it affects only the
time when they may begin, and not the period of their duration or
the time of their ending. If a trust begins within lives in being
and twenty-one years, il^ should, as far as the rule against remote-
ness is concerned, be allowed to continue for^any period^of time.
Throughout its continuance the interests of trustee and cestui que
trust will be vested. No question of remote vesting would seem to
be involved.

RULE AGAINST SUSPENSION OF POWER OF ALIEN-

ATION
49. In many
states the rule against perpetuities is that the power of
alienation of property shall not be suspended longer than
a given period.
In these states trusts are invalid when they iresult in suspending
the power of alienating the trust property for a period
longer than that of the rule against perpetuities.

sTLoomer v. Loomer, 76 Conn. 522, 57 Atl. 167; Armstrong v. Barber, 239

111. 389, 88 N. E. 246^ (discussed by A. M. Kales in 4 111. Law Rev. 281) ;

O'Hare v. Johnston, 273 111. 458, 113 N. E. 127 ; Deacon v. St. Louis Union
Trust Co., 271 Mo. 669, 197 S. W. 261 In re Johnston's Estate, 185 Pa. 179,
;

39 Atl. 879, 64 Am. St. Rep. 621. ,

5 8 Looiper V. Loomer, 76 Conn. 522, 527, 57 Atl. 167. ,

o* Slade V. Patten, 68 Me. 380 (but see Pulitzer v. Livingston, 89 Me.' 359,
36 Atl. 635) ;Barnum v. Barnum, 26 Md. 119, 90 Am. Dec. 88 Reed v. Mc-
;

Ilvain, 113 Md. 140, 77 Atl. 329 ; American Colonization Soc. v. Soulsby, 129
Md. 605, 99 Atl. 944 Siedler v. Syms, 56 N; J. Eq. 275, 38 Atl. 424 Otterback
; ;

V. Bohrer, 87 Va. 548, 12 S. E. 1013 ;Fitch'ie v. Brown, 211 U. S. 321, 29 Sup.

Ct. 106, 53 L. Ed. 202. See Gray, Perpetuities (3d Ed.' §§ 232-245h.
1T2 THE TEUST PURPOSE —PRIVATE TRUSTS (Ch. 6

Trusts may result in suspenc^ing the power of alienation, either

because the instruments creating them expressly require
the trustee to retain the trust property, or because they
prohibit the beneiiciary from selling his interest, or because
a statute forbids alienation of the beneficiary's interest.

The rule against undue restraint upon the alienation of property-

is called the rule against perpetuities in many states. In substance
it provides that every provision in will or deed which suspends the
absolute power of alienation of real or personal property beyond a
given period shall be void. The period during which suspension
may occur is two lives in being in some states, and any number of
lives in being in others.
This rule, it will be seen, is aimed at preventing property from
being inalienable for too long a period. It aims to keep property
in the market. It is entirely different from the rule against remote-
ness, which is aimed at preventing the fastening of contingent and
uncertain interests upon real property for 1;oo long a period.
The rule against undue suspension of the power of alienation has
been adopted in thirteen states and the district of Columbia.""

«o Arizona. —
^The power of alienation cannot be suspended lor more tlian
two and twenty-one years. Civ. Code 1913, §§ 4679, 46'80.
lives
—
California. ^The power of alienation may not be suspended beyond the
existence of lives In being. Civ. Codes, §S 715, 716. See Sacramento Bank v.
Montgomery, 146 Cal. 745, 81 Pac. 138; In re Fay's Estate, 5 Cal. App. 188,
89 Pac. 1065; In re Heberle's Estate, 155 Cal. 723, 102 Pac. 935; In re
Gregory's Estate, 12 Cal. App. 309, 107 Pac. 566. See Hohfeld, The Need' of
Remedial Legislation in the California Law of Trusts and Perpetuities, 1
Cal. Law Rev. 305.
—
District of Columbia. ^The power of alienation shall not be suspended for
more than lives in being and twenty-one years. Torbert's Code 1919, § 1023.
But the rule against remoteness is recognized. See page 167, ante.
——
Idaho. Suspension beyond lives in being is prohibited. Rev. Codes, § 3067.
Indiana. ^Suspension of the power of alienation of both real and personal
property for longer than lives in being is 'forbidden. Bums' Ann. St. 1914,
§§ 3998, 9723. See Matlock v. LDck, 38 Ind. App. 281, 73 N. E. 171 ; Pooler v.
Hyne, 213 Fed. 154, 129 C. O. A. 506 Hayes v. Martz, 173 Ind. 279, 89 N. E.
;

303; Reeder v. Antrim, 64 Ind. App. 83, 110 N. B. 568. See 1 Ind. Law J.
220; 2 Ind. Law J. 18; 3 Ind. Law J. 7, 67, 100.
—
Iowa. Suspension longer than lives in being and twenty-one years is for-
bidden. See Code 1897, § 2901. In some cases the rule appears to be consider-
ed as one dealing with vesting, while in others emphasis is laid on the power of
alienation. Todhunter v. Des Moines, I. & M. R'. Co., 58 Iowa, 205, 12 N. W.
267 Meek v Briggs, 87 Iowa, 610, 54 N. W. 456, 43 Am. St. Rep. 410"; In re
;

Hubbell Trust, 135 Iowa, 637, 113 N. W. 512, 13 L. R. A. (N. S.) 496, 14 Ann.
Gas. 640 Phillips v. Harrow, 93 Iowa, 92, 61 N. W. 434
; In re Ogle's Estate,
;

146 Iowa, 33, 124 N. W. 758.

—
MuMgan. The statute limits suspension of thp power of alienation to two
 ;

§ 49') RULE AGAINST SUSPENSION OP POWER OP ALIENATION 173

The effect of this rule against undue suspension of the power of

alienation upon the purposes for which trusts can be created is ob-
vious. No trust which contemplates a suspension of the p6wer of
alienation for a time longer than that allowed by the statute will be
valid. For example, in New York the statute prohibits the sus^
pension of the power of' alienation for longer than two lives.
Hence a trust which provided that the trustee should retain the
property intact, and should have no power to sell it during the lives
of A., B., and C, would suspend the power of alienation of the trust
property for three lives, and 'be void.
What trusts suspend the power of alienation? In what cases
lives in being. How. Ann. St. 1912, §i 10636, 10637. See, also, Trustees, etc., of
M. E. Church of Newark v. Clark, 41 Mich. 730, 3 N. W. 2(J7 Fitz Gerald v. City
;"

of Big Rapids, 123 Mich. 281, 82 N. W. 56; Casgrain v. Hammond, 134 Mich.
419, 96 N. W. 510, 104 Am'. St. Rep. 610; Mclnerny v. Haase, 163 Mich. 364, 128
N. W. 215. Personal property is not cov.ered by the statute against restraints
on alienation. Penny v. Croul, 76 Mich. 471, 43 N. W. 649, 5 L. R. A. 858.
The rule against remoteness is recognized in Palms ^. Palms, 68 Mich. 355,
36 N. W. 419, and Niles v. Mason, 126 Mich. 482, 85 N. W. 1100.
—
Minnesota. The power of alienation must not be suspended longer than
during two lives in being. Gen. St. 1913, § 6665: See Rong v.. Haller, 109
Minn. 191, 123 N. W. 471, 806, 26 L. R. A. (N. S.) 825; Buck v. Walker, 115
Minn. 239, 132 N. W. 205, Ann. Cas. 1912D, 882. See Fraser, Future Interests
in Property in Minnesota, 3 Minn. Law Rev. 320.
—
Montana. Suspension of the power of alienation for longer than the period
of lives in being is prohibited. Rev. Codes, § 4463.
—
New York. The rule is against thp suspension of the power of alienation
for a longer period than two lives in being. Real Property Law (Consol.
Laws, c. 50) § 42; Personal Property Law (Consol. Laws, c. 41) § 11. These
statutes have given rise to an enormous amount of litigation. For illustrative
cases, see Hawley v. James, 5 Paige, 318 ; Coster v. Lorillard, 14 Wend. 265
Woodgate v. Fleet, 64 N. Y. 566 Schermerhorn v. Cotting, 131 N. T. 48, 29
;

N. E. 980; Allen v. Stevens, 161 N. "X. 122, 55 N. E. 568; In re Colegrove's

Estate, 221 N. Y. 455, 117 N. B. 813; Carrier v. Carrier, 226 N. T. 114, 123
N. E. 135. See Dwight on Powers of Sale as Affecting Restraints on Aliena-
tion, 7 Col. Law Rev. 589.
—
"North Dakota. Comp. Laws 1913, § 5287, prohibits the suspension Of the
power of alienation for a period longer than lives in being. See Penfield v.
Tower, 1 N. D. 216, 46 N. W. 413 ; Hagen v. 3acrison, 19 N. D. 160, 123 N.
W. 518, 26 L. R. A. (N. S.) 724.
—
Oklahoma. Lives in being is the legal period for suspension of the power
of alienation. Rev. Laws 1910, § 6605.
—
South Dakota. The legal period of suspension of the' power of alienation
is during lives in being. Rev. Code. 1919, § 294.
—
Wisconsin. The rule is against the suspension of the power of alienation
for longer than during two lives in being and twenty-one years. St. 1913,
S 203ft For construction, see Holmes v. Walter, 118 Wis. 409, 95 N. W. 380,
62 L.' R. A. 986 ; In re Adelman's Will, 138 Wis. 120, 119 N. W. 929'; Eggleston
V-. Swartz, 145 Wis. 106, 129 N. W. 48. The statute appliesto real property
only. Danforth v. City of Oshkosh, 119 Wis. 262, 97 N. W. 258.
174 ,
THE TRUST PURPOSE —PRIVATE TRUSTS (Ch. 6

does the existence of a trust take the trust property out, of the mar-
ket, and make it impossible for any person or persons to convey to
another an absolute and complete title to the trust property?
A trust may suspend the power of alienatiort because of its own
express provisions. It may by its express terms require that the
,

alienation of the trust property shall be suspended during a given

period. Thus, the settlor may provide the trustee shall retain title
to certain real property, collect the rents therefrom, and deliver
them to A., and divide the property between the children of A., at
A.'s death. Such'^a trust prevents the 'property from being sold for
a given period, namely, from the date of th^ creation of the trust
until A.'s death. It suspends the power of alienation during, A.'s
life. Such a trust would be valid in all states having the rule
against undue suspension. But, if the express provision were that
the trust should continue under the same terms for fifty years, the
trust would be invalid in all the 'states having the rule against un-
due suspension of the power of alienation. In all such states the
^

power must not be suspended during a period which is not measur-

ed by lives. *^
As is shown by a decision of a California court, at least two
classes of trusts by their own express provisions require a suspen-
sion of the power of alienation, naijiely, those created for the pur-
pose of having rents and profits colle^cted and paid over to a bene-
ficiary, and those created for the purpose of having a sale made
at a definite date in the future. Discussing these two classes of
trusts, the court says: "Under the first class are included all
those whose very purpose and essence it is that the land shall not^
be alienated by the trustee during the trust term, and where, con-
sequently, a sale by him would be in direct contravention of the
trust. In the case of such express trusts as occasion the suspension
of the absolute power of alienation, the term of duration is the vi-
tal subject of inquiry. * * * Trusts such as these under con-
sideration in their very nature operate to suspend the power of al-
ienation. That power must be suspended in the one case while
the trustee is distributing the rents and profits, and in the other
case it is suspended by the express duty imposed upon the trustee
to sell only at the expiration of a fixed period." "^

«i In re Fay's Estate, 5 Cal. App. 188, 89 Pae. 1065.

«2 In re Walkerly's Estate, 108 Cal. 627, 650, 651, 41 Pac. 772, 49 Am. St.
Rep. 97. The statutes of California, North Dakota, Oklahoma, and South
Dakota provide that the beneficiary of a trust to collect rents and profits
may be restrained from disposing of his interest. Civ. Code Cal. § S67;
Oomp. L,a.vfS N. D. 1913, § 5377 ; Kev. Laws Okl. 1910, § 6672 ; Rev. Code S. D.
1919, S 384. The California statute reads as follows: "The beneficiary of a
§ 49) RULE AGAINST SUSPENSION OF POWEE OF ALIENATION 175

Not only may a trust suspend the "power of alienation by its own,
provisions, but statutes have in some states caused certain classes
of trusts to result in an automatic suspension of the power of alien-
ation. In Michigan, Minnesota, New York, and Wisconsin there
are statutes providing that a beneficiary of a trust to receive the in-
come and profits of property and apply them to the use of another
cannot transfer his interest."
The result of these restraining statutes is that, in all trusts to
collect rent and income and apply it to the use of another, there is
a suspension of the power of alienation. The beneficiary cannot
transfer his interest and, unless he can do so, a perfect title cannot
be given. If the trustee, by the terihs of the, trust, also has no pow-
er to sell, then obviously there is a double suspension of the power
of alienation. If the trustee has the power to sell the particular
property in his hands at the commencement of the trust, other
property will be held by him in its place, and the cestui's interest
in the substituted property will be inalienable throughout the life of
the trust. Trusts to collect rents and income and apply to the use
of another in these four states, therefore, automatically suspend the
power of alienation of the property concerned. Their duration
must correspond to the statutory period of the rule against suspen-
sion of the power of alienation,^ which is during -two lives in being at
the time the suspension begins.**
In several states it is expressly provided by statute that the pow-
er of alienation is suspended by a trust when the trustee cannot ab-

trust for the receipt of the rents and profits of real property, or for the pay-
ment of an annuity out of such rents and profits, may be restrained from
disposing of his interest in such trust, during his life or for a term of years,
by the instrument creating the trust."
«3How. Ann. St. Mich. 1912, § 10687; Gen. St. Minn. 1913, § 6718; New
York Real Property Law (Consol. La\*s, c. 50) § 103 New York Personal
;

Property Law (Consol. Laws, c. 41) § 15; St. Wis. 1913, § 2089. The New
York statute/With respect to real property is typical : "The right of a bene-
ficiary of an express trust to receive rents and profits of real property and
apply them to the use of any person, cannot be transferred by assignment
or otherwise, but the right of the beneficiary of any other trust in real
property may be transferred."
«* For instances in which trusts in these four states have resulted in viola-
tions of the rule against undue suspension of the power of alienation, see the
following cases : Casgrain v. Hammond, 134 Mich. 419, 96 N. W. 510, 104 Am.
St. Rep. 610; Niles v. Mason, 126 Mich. 482, 85 N. W. 1100 r Rong v. Haller,
109 Minn. 191, 123 N. W. 471, 806 (but see Y. M. C. A. v Horn, 120 Mnn. 404,
139 N. W. 805, as to trust of personalty) ; Hawley v. James, 5 Paige (N. Y.)
318; Coster v. Lorillard, 14 Wend. (N. Y.) 265; Amory v. Lord, 9 (N. Y.) 403;
Scherme^horn v. Cotting, 131 N. Y. 48, 29 N. B. 980; Schlereth v. Schlereth,
173 N. Y. 444, 66 N. E. 130, 93 Am. St. Rep. 616 ; Central Trust Co. of New
York V. Egleston,'185'N. Y. 23, 77 N. E. 989; Ford v. Ford, 70 Wis. 19, 33
N. W. 188, 5 Am. St. Rep. 117.
176 THE TKUST. PURPOSE —PRIVATE TRUSTS '
(Ch. 6

solutely alien his interest, but can only exchange the trust prop-
erty, or sell it and reinvest the proceeds.'"

It will be seen that, in these states having the rule against undue
susperision of the power of alienation as their rule against perpe-
tuities, the question as to the validity of trusts under that rule is a sim-
ple one. It depends upon two factors, ijamely, whether the "trust,
either by its own express provisions or by virtue of a statute, does
actually result- in a suspension of the power of alienating a com-
plete and absolute title to the trust property; and, secondly, wheth-
er, if there be such suspension, the trust, and therefore the suspen-
sion of the power of alienation, continues for a period longer than
that allowed by the rule.
"Ordinarily a trust does not offend against the statutes relative
to perpetuities,where the trustee has a power of sale and the bene-
ficiary may dispose of his interest, even though the trust term ex-
ceeds two lives in being and twenty-one years. But where there is
no power of sale, and the statute forbids alienation by the trustee
and the beneficiary during the continuance of the trust, it does cre-
ate an unlawful perpetuity when the trust term exceeds the period
permitted by statute." °°

RULE AGAINST ACCUMULATIONS

io. At common law a trust may provide for the accumulation of
the income of real or personal property only during the ex-
istence of lives in being at the time when the trust instru-
ment takes effect and for the gross period of twenty-one
years after the ending of such lives.
In Arizona, California, Indiana, Michigan, Minnesota, New York,
North Dakota, South Dfkota, and Wisconsin the period of
accumulation is now restricted to the minority of an infant
in being, and the accumulation must be for the benefit of
such infant. In Alabama the accumulation may take place
during \the infancy of the beneficiary, or during a gross
period of ten years where no infancy is involved.
In Pennsylvania and Illinois the English statute known as Thel-
lusson's Act has been followed, an^ accumulations are sub-
ject to greater restrictions than at common law.
\

" Montana Rev. Codes § 4491. Oklahoma Rev. Laws 1910,

: :
S 6607. South
Dakota: Rev. Code 1919, S 321.
«» In re Adelman's WiU, 138 Wis. 120, 125, 119 N. W, 929.
§ 50) RULE AGAINST ACCUMULATIONS 177

For how lofig a period and for the benefit of what persons may
the income of real or personal property be accumulated? May A.
devise land to X., as trustee, and provide that X. shall collect the
rents, income and profits of the realty for a period of fifty years,
place the same in a, savings bank at compound interest and at the
end of the fifty year period pay over the accumulations to A.'s eld-
est son, or his descendants, if he be dead? May A. bequeath $10,-
000 to X., as, trustee, with a direction that the money be lent out
at interest, the interest accumulated until A.'s youngest son reach-
es twenty-one and that the trustee then pay over to the son the
principal and accumulated interest?
The problems involved here arose in a famous English case.'^
There an accumulation was directed to occur during the continu-
ance of nine lives in being at the time the testator died. The ac-
cumulation was held valid, the^ court saying that the period during
which accumulations might occur was the sapie as that during
which the vesting of property might be postponed, namely, dur-
ing lives in being and twenty-one years. "If the law is so as to
postponing alienation, another question arises out of this will,
which is a pure question of equity: Whether a testator can di-
rect the rents and profits to be accumulated for that period, during
which he may direct, that the title shall not vest, and the property
shall remain unalienable; and that he can do so is most clear
law."«»
The dangers of the vast accumulation of property which became
apparent as a result of the decision in Thellusson v. Woodford led
Parliament to enact the so-called Thellusson Act, which restricted
accumulations. Under that act there are only four lawful periods
of accumulation, namely, during the life of the giver, during twen-
ty-one yiears after thef giver's death, during the minorities 6f any
persons living at the giver's death, or during the minorities of per-
sons who would be entitled to the income of the fund, if no provi-
sion for accumulation were made.°° This act has been later amend-
ed by the so-called Accumulations Act, which provides for accunfu-
lations for the purpose of purchasing land only during the minori-
ties of the persons who would be entitled to the income, if there
were no direction for accumulations.''"
In the American states which are unaffected by local statutes,
the' common-law rule, as laid down in Thellusson v. Woodford,'^

6T Thellussonv. Woodford, 4 Ves. 227, 11 Ves. 112.

88 Lord EWon, Thellusson v. Woodford, 11 Ves. 112, 146.
«» St. 39 & 40 George III, c. 98 (1800).
"> St. 55 & 56 Viet, c, 58 (1892),
^1 11 Ves. 112.

BOGEBT TKTJSTS —12

178 THE TBUST PURPOSE —PRIVATE TRUSTS (Ch. 6

is now in force. Accumulations for the benefit of private persons,

as distinguished from charities, are allowed' to continue only dur-
ing the existence of lives in being and twenty-one years. The
measuring lives must be in existence when the accumulation be-
gins.
"At common law, the power of controlling the rents and profits
was coextensive with the power to dispose of the estate which pro-
duced them, the limit of the accumulation of annual' income was the
same as the limit of the creation of future estates, and the enjoy-
ment of the profits could not be suspended for a longer period than
the full power of alienating the estate .itself. * * * Any direc-
tions for accumulation for the benefit of individuals until the hap-
pening of a contingency which by possibility may not take place
within the period prescribed by the rule against perpetuities are
void." ^^ The principle is that "trusts for accumulation must be
strictly confined within the limits of the rule against perpetuities,
and that, if such a trust exceeds those limits, it is void." ''^
Thus, in states which have the common-law rule regarding ac-
cumulations, unaffected by local statute, a provision for accumula-
tions for twenty years,'* or for the life of a person in being at the
death of the testator, is valid.'" On the other hand, in such states
a provision that accumulations continue for twenty-five years'*
or for thirty years" is void, since the gross period involved is be-
yond the twenty-one years allowed by the rule against perpetuities.
In Arizona, California, Indiana, Michigan, Minnesota, New York,
North Dakota, South Dakota, and Wisconsin statutes exist which
restrict accumulation to the period of the minority of an infant in
being at the time the accumulation begins. The accumulation
must also be solely for the benefit of the minor. The time at which^
accumulations may be directed to commence in the future is also
restricted.'*

'2 Gray, in Odell v. Odell, 10 Allen (Mass.) 1, 5, 9,

J.,
'3 Hoadley Beardsley, 89 Conn. 270, 93 Atl. 535, 539.
v.
7* Connecticut Trust & Safe Deposit Co. v. Hollister, 74 Conn. 228, 50
Atl. 750.
" Kasey v. Fidelity Trust Co., 131 Ky. 609, 115 S. W. 739. ;

76 Hoadley v. Beardsley, 89 Conn. 270, 93 Itl. 535; KimbaU v. Crocker, 53

Me. 263.
Andrews v. Lincoln, 95 Me. 541, 50 Atl. 898, 56 L. E. A. 103.
7 7

78The New York Revised Statutes furnished the model for these stat-
utes regarding accumulations. The present New York statute regarding
accumulations of the profits of realty is typical "All directions for the
:

accumulation of the rents and profits, of real property, except such as

are allowed by statute, shall be void. An accumulation of rents and profits
of real property, for the benefit of one or more persons, may be directed by
 °

§ 50) RULE AGAINST ACCUMULATIONS '

179

These statutes regarding accumulations either expressly provide or

have been construed to mean that, where an excessive accumulation is
attempted, the entire provision will not be declared void, but only
that portion which exceeds the statutory limit. Thus, if a testator
attemptsto create an accumulation for the benefit of his son A- un-
til he reaches thirty years of age, and the son is an infant at the time

the will takes effect, the courts will hold the direction for an accu-
mulation valid as to the infancy of the minor, and will merely
strike out that portion of the will which contemplates an accumu-
lation from the age of twenty-one until the age of thirty.'
In Alabama, Illinois, and Pennsylvania peculiar local statutes re-

any will or deed sufficient to pass real property, as follows : 1. If such ac-
cumulation be directed to commence on the creation of the estate out of
which the rents and profits are to'^rise,- it must be made for the benefit of
one or more minors then in being, and terminate at or before the expiration
of their minority. 2. If such accumulation be directed to commence at any
time subsequent to the creation of the estate out of which the rents and
profits are to arise, it must commence within the time permitted, by the pro-
visions of this article, for the vesting of future estates, and during the
minority of the beneficiaries, and shall terminate at or before the expiration
of such minority." New York Real Property Law (Oonsol. Laws, c. 50) §
61. A similar statute as to personal property exists. New York Personal
Property Law (Consol. Laws, c. 41) § 16.
The statutes of California, North Dakota, and South Dakota, modeled
after the New York statute, apply alike to real and personal property. Civ.
Code Oal. S 724; Comp. Laws N. D. 1913, § 5292; Rev. Code S. D. 1919, g-299.
Similar statutes in Arizona, Michigan, Minnesota, and Wisconsin apply only
to real property. Civ. Code Ariz. 1913, S 4702; How. Ann. St. Mich. 1912,
§ 10659; Gen. St. Minn. 1913, § 6687; St. Wis. 1913, § 2061. The Indiana
statute, drawn along similar lines applies to personal property alone. Burns'
Ann. St. 1914, § 9724. For cases construing these statutes, see the following:
Goldtree v. Thompson, 79 Cal. 613, 22 Pac. 50 In re Steele's Estate, 124 Cal.
;

533, 57 Pac. 564 ; In re Haines' Estate, 150 Cal. 640, 89 Pac. 606 Hornung
;

V. Sedgwick, 164 Cal. 629, 130 Pac. 212 In re Whitney's Estate, 176 Cal. 12,
;

167 Pac. 399; Shriver v. Montgomery, 181 Ind. 108, 103 N. E. 945; Toms v.
Williams, 41 Mich. 552, 2 N. W. 814 Wilson v. Odell, 58 Mich. 533, 25 N. W.
;

506 ;Palms v. Palms, 68 Mich. 355, 36 N. W. 419 In re Pettit's Estate, 135

;

Minn. 413, 161 N. W. 158 Pray v. Hegeman, 92 N. Y. 508 Hascall v. King, 162
; ;

N. Y. 134, 56 N. E. 515,-76 Am. St. Rep. 302 United States Trust Co. v. Sober,
;

178 N. Y. .442, 70 N. E. 970 ; Central Trust Co. of New York v. Falck, 177
App. Div. 501, 164 N. Y. Supp. 473 Scott v. West, 63 Wis. 529, 24 N. W. 161,
;

25 N. W. 18; In re Stark's Will, 149 Wis. 631, 134 N. W. 389! Under the
New York statute a provision that increased capital stock or stock dividends
should be added to capital is invalid, so far as accumulation of income is
concerned. In re Megrue, 224 N. Y. 284,. 120 N. E. 651.
">In re Haines' Estate, 150 Cal. 640, 89 Pac. 606; French v. Calkins, 252
111. 243, 96 N. E. 877; New York Real Property Law (Consol. Laws, c. 50) §
61, subd. 3; New York Personal Property Law (Consol. Laws, c. 41) S 16,
subd. 3.
180 , THE TRUST PURPOSE —PRIVATE TRUSTS (Ch. 6

garding accumulations exist, and trusts in those states must com-

ply with such statutes in order to be valid.**

SPENDTHRIFT TRUSTS
51. A
spendthrift trust is a trust for the collection and payment of
rents and profits, in which the /income may not be alienat-
ed by the beneficiary by way of anticipation, and may not
be subjected to the payment of the beneficiary's debts un-
til it has been paid to the beneficiary.

Spendthrift trusts are void, as creating an unlawfxil restraint on

alienation and as against public policy, in England and a
few American states. In the majority of American states
such trusts are valid, either to an unlimited extent or sub-
ject to some statutory restrictions.

" 'Spendthrift trusts' is the term commonly

applied to those
trusts that are created with a view of providing a fund
,for the main-
tenance of another, and at. the same time securing it against his
own improvidehce or incapacity for self-protection. The provisions
against alienation of the trust fund by the voluntary act of the ben-
eficiary, or in invitum by his creditors, are the usual incidents of
such trusts." *^ Spendthrift trusts have as their object the giving

»o Alabama.— See Code 1907, § '3430: "No trust of estate for the purpose of
accumulation only can have any force or effect for a longer term than ten
years, unless when for the benefit of a minor in being at the date of con-
veyance, or if by will, at the death of the testator; in which case the "trust
may extend to the termination of such minority." See Campbell v. Weakley,
121 Ala. 64, 25 South. 694; Pearce v. Pearce (Ala.) 74 South. 952.
—
Illinois. See Laws 1907, p. 1; 1 Jones & A. Ann. St. 111. 1913, par. 189.
This statute follows closely the Thellusson Act in England. The legal periods
,

of accumulation are (1) during the life of the settlor ;(2) for twenty-one years
after the death of the settlor; (3) for the minorities of persons in being at
the death of the settlor; (4) for the minorities of the persons who would
have been entitled to the profits if no accumulation had been provided for.
Kolb V. Lahdes, 277 111. 440, 115 N, E. 539.
Pennsylvania.— See Act Apr. IS, 1858, § 9 (4 Purd. Dig. [13th Ed.] p. 4036,
par. 65). The Thellusson Act is followed in the maini Provision is made for
an accumulation during the life of the settlor and for a period of twenty-one
years after his death, or during the minorities of the persons who would be
entitled to the income of the property involved if they were of full age and
no provision for an accumulation were made. See In re Neel's Estate, 252 Pa.
394, 97 Atl. 502 In re McKeown's Estate, 259 Pa. 216, J.02 Atl. 878 In re
;
;'

Neeb's Estate, 263 Pa. 197, 106 Atl. 317.

81 Wagner v. Wagner, 244 111. 101, 111, 91 N. E. 66, 18 Ann. Cas'. 490, quoting
26 Am. & Eng. Encyc. of Law (2d Ed.) p. 138. The intent to restrict aliena-
tion may be implied. Hopkinson v. Swaim, 284 111. 11, 119 N. B. 985.
§ 51) SPENDTHRIFT TRUSTS ,
,
181

of the income of real or personal property to a beneficiary, without

liability to alienation by the beneficiary, voluntary or involuntary,
prior to its receipt by him. Thus, if A. transfer to B., as trustee,
$100,000 in bonds to hold in trust for X., with a provision that B.
shall pay to X. the netMncome of such bonds, but that X. shall not
have the right to sell or mortgage his right to receive such income,
and that the creditors of X. shall not have the power to attach such
income in the hands of the trustee, the trust is a spendthrift trust.
Such trusts are frequently highly desirable, where provision is to
be made for an inexperienced, incompetent, or wasteful person. If
such person had the power to dispose of his right to receive the in-
come from the trust, his incapacity or carelessness would lead him
to anticipate his income and convey to money lenders and credit
tors the right to receive thie income as it became due. If the hands
of the incompetent or spendthrift can be tied, so that he can do
nothing with the income until it is paid into his hands by the trus-
tee, then the beneficiary may be assured against want to sonle
extent at least.
It is never the object of the spendthrift trust to restrain the bene-
ficiary from spending the income after it has been paid to him by
the trustee, or to restrain his creditors from taking such income
.

from him after he has obtained it from the trustee. The sole object
of these trusts is to prevent anticipation of the income by assign-
ments of the right to receive future income or by attempts by cred-
itors of the cestui to reach this income in the hands of the trustee.
The validity of spendthrift trusts has been much debated it be- ;

ing contended on the one side that they are against public policy
and repugnant to correct theories of property, inasmuch as they
provide for the ownership of property without the right of aliena-
tion and without the burden of liability for debts, while it is argued
in behalf of such trusts that they are in accord with good public
policy, that they do not violate rules of property, nor work injus-
tice to creditors.*^ ,

Minority View
The English courts haye consistently opposeH such trusts.**' The
English view is maintained by a small number of American
-

cpurts.**

82 For an excellent discussion of principles and authorities, see Gray, Re-

straints on Alienation {2d Ed.) especially sections 134r-277a. See, also, Scott,
Conti-ol of Property by the Dead, 65 Pa. Law Rev. 632, 642.
88 Brandon v. Robinson, 18 Ves. 429 ; Graves v. Dolphin, 1 Sim. 66. ,

8* In Alabama the English rule is observed with some qualifications. A

beneficial interest cannot be given to one, so that it is incapable of being
reached by his creditors, unless such interest is conferred and is to be en-
Joyed jointly with others, and is also incapable or severance from the interest
of such others. Hugely v. Robinson, 10 Ala. 702 ; Robertson v. Johnston, 36
 ;

182 THE TRUST PUKPOSE —PRIVATE TRUSTS (Ch. 6

The which the American courts which follow the 'Eng-

attitude
lish rule is well expressed by Ames, C. J., speaking for a
have taken
EJiode Island court "It is quite clear that it was the intention of the
:

testator to make an alimentary provision for his son during life,

which should give him all the advantages of an estate in fee, with-
—
out the legal incidents of such an estate alienability, unless by
will, and subjectiveness to the payment of the son's debts. Such
restraints, however, are so opposed to the nature of property and, —
so far as subjectiveness to debts is concerned, to the honest policy
—
of the law as to be totally void, unless, indeed, which is not the
case here, in the event of its being attempted to be aliened, or seiz-
ed for debts, it is given over by the testator to some one else. This
has been the settled doctrine of a court of chancery, at least since
Brandon v. Robinson, 18 Ves. 429; ahd in application to such a
case as this is so honest and just that we^ would not change it if we
could. Certainly no man should have an estate to live on, b.ut not

Ala. 197 ; Jones v. Reest, 65 Ala. 134 Bell v. Watklns, 82 Ala. 512, 1 South.
;
''

92, 60 Am. Rep. 756.

In Florida th^re appear to be no decisions, but the dicta are unfavorable.
Croom V. Ocala Plumbing & Electric Co., 62 Fla. 460, 57 South. 243.
In Kentucky, after some vacillation, the courts seem to have adopted the
English rule that spendthrift trusts are not allowed. Hubbard v. Hayes,
98 S. W. 1034 ; Ratliff's Ex'rs v. Commonwealth, 139 Ky. 533, 101 S. W. 978
CecU's Trustee v. Robertson & Bro., 105 S. W. 926. "It is not the policy df the
law that a person may hold free from the claims of his creditors and enjoy
property which is not exempt from execution, and no device will be allowed
to work an evasion so long as a beneficial interest is vested in the benefi-
ciary." Cecil's Trustee v. Roberts^on & Bro., 105 S. W. 926, 928. But if the
interest of the beneficiary is owned jointly with others and is inseparable from
their Interests, the trust may be in effect a spendthrift trust. Hackett's
Trustee v. Hackett, 146 Ky. 408, 142 S. W. 673. And the last-named case also
hints at a requirement that the creditor show that there is a surplus over
and above what is necessary for the support of the beneficiary before he be
allowed to take any part of the income. The courts have held valid clauses
'
restraining the cestui que trust from aliening his interest, thereby approving
one element of the spendthrift trust. Gillespie v. Winston's Trustee, 170 Ky.
667, 186 S. W. 517 ; Sparrow v. Sparrow, 171 Ky. 101, 186 S. W. 904 Muir's
;

Ex'rs V. Howard, 178 Ky. 51, 198 S. W. 551.

, In Ohio there is a decision and dictum to the effect that spendthrift trusts
are not allowed. Wallace v. Smith, 2 Hatdy, 78; Hobbs v. Smith, 15 Ohio
St. 419. But see dictum apparently favorable to spendthrift trusts in Stanley
V. Thornton, 7 Ohio Cir. Ct, R. 455. See Babcock v. Monypeny, 34 Ohio Oir.
Ct. R. 434.
Spendthrift trusts were declared invalid in Tillinghast v. Bradford, 5 B.
I. 205. See Newport Trust Co. v. Chappell, 40 R. I. 383, 101 Atl. 323.
The South Carolina courts are opposed to spendthrift trusts and will not
uphold them. Heath v. Bishop, 4 Rich. Eq. 46, 55 Am. Dec. 654; Wylie v.'
White, 10 Rich. Eq. 294 Ford v. Caldwell, 3 Hill, 248.
;
^
The rule in Virginia remained in doubt for many years, but now seems to
 ;;;;,

a 51) SPENDTHEEPT TRUSTS 183

an estate to pay his debts with. Certainly property available for

the purposes of pleasure or profit should be also amenable to the
demands of justice."*''
Majority View
In a great majority of the American states, however, spendthrift
trusts are allowed, either without qualification, or subject to statu-
tory restrictions.*' In California, Michigan, Minnesota, Montana,
New York, North Dakota, Oklahoma, South Dakota, and Wiscon-

have been rendered certain by tbe decisions of Hutchinson v. Maxwell, 100

Va. 169, 40 S. E. 655, 57 L. R. A. 384, 93 Am. St. Rep. 944, and Honaker v.
Duff, 101 Va. 675, 44 S. E. 900. Tbese cases declare the interest of the bene-
ficiary of an attempted spendthrift trust liable for the beneficiary's, debts..
85 Tillinghast v. Bradford, 5 R. I. 205, 212.
8* Nichols v., Eaton. 91 U. S. 716, 23 L. Ed. 254 ; Shelton v. King, 229 U. S.
90, 33 Sup. C5t. 686, 57 L. Ed. 1086. Arizona.— Civ. Code 1913, § 1224, pro-
—
viding that a spendthrift trust may be created by will. Arkansas. ^The dicta
were unfavorable until the decision of Bowlin v. Citizens' Bank & Trust Co.,
131 Ark. 97, 198 S. W. 288, 2 A. L. R. 575, announced that spendthrift trusts are
valid. See Lindsay v. Harrison, 8 Ark. 302 ; Phillips v. Grayson, 23 Ark. 769
Honnett v. Williams, 66 Ark. 148, 49 S. W. 495. OaUfomia.— Civ. Code, § 859
Seymour v. McAvoy, 121 Cal. 438, 53 Pac. 946, 41 L. R. A. 544. Connecticut. —
^ Mason v. Rhode Island Hospital Trust Co., 78 Conn. 81, 61 Atl. 57, 3 Ann.
Cas. 586; Sterling v. Ives, 78 Conn., 498, 62 Atl. 948. Delaware.— Gray v.
—
Corbit, 4 Del. Ch. 135, dictum. District of Columhia. Fearson v. Dunlop, 21
D. C. 236. (Jeorpm.— Park's Ann. Civ. Code 1914, § 3729 - Sinnott v. Moore,
;

113 Ga. 908, 39 S. E. 415; Moore v. Sinnott, 117 Ga. 1010, 44 S. E. 810.
—
Illinois. Wagner v. Wagner, 244 111. 101, 91 IST. E. 66, 18 Ann. Cas. 490;
Wallace v. FoxwpU, 250 111. 616, 95 N. E. 985, 50 L. R. A. (N. S.) 632 O'Hare ;

V. Johnston, 273 HI. 458, 113 N. E. 127 ; Hartley v. Unknown Heirs of Wyatt,
281 111. 321, 117 N. E. 995; Hopkinson v. Swaim, 284 111. 11, 119 N. B. 985.
Indiana.— McCoy v. Houck, 180 Ind. 634, 99 N. E. 97; Devin v. McCoy, 48
Ind. App. 379, 93 N. E. 1013. 7owa.— Merchants' Nat. Bank v. Crist, 140 Iowa,
,308, 118 N. W. 394, 23 L. R. A. (N. S.) 526, 132 Am. St. Rep. 267 ; Keating v.
Keating, 182 Iowa, 1056, 165 N. W. 74; KifCner v. Kiffner, 185 Iowa, 1064,
171 N. W. 590 Horack, Spendthrift Trusts in Iowa, 4 Iowa Law Bui. 139.
;

—
Kansas. Everitt v. Haskins, 102 Kan. 546, 171 Pac. 632 Sherman v. Havens,
;

94 Kan. 654, 146 Pac. 1030, Ann. Cas. 1917B, 394. Mama— Roberts v. Stevens,
84 Me. 325, 24 Atl. 873, 17 L. R. A. 266 ; Tilton v. Davidson, 98 Me. 55, 56
A\i. 215. Ma/ryUnd.-^Tmila. v. Towers, 69 Md. 77, 14 Atl. 497, 15 Atl. 92, 9
Am. St. Rep. 398 ; Maryland Grange Agency v. Lee, 72 Md. 161, 19 Atl. 584
Jackson Square Loan & Sav. Ass'n v. Bartlett, 95 Md. 661, 53 Atl. 426, 93 Am.
St. Rep. 416 ;Houghton v. Tiffany, 116 Md. 655, 82 AG. 831 ; Safe Deposit &
Trust Co. of Baltimore v. Independent Brewing Ass'n, 127 Md. 463, 96 Atl. 617
Plitt V. Yakel, 129 Md. 464, 99 Atl. 669. Massachusetts.— H.&\\ v. Williams, 120
Mass. 344 Broadway Nat. Bank v. Adams, 133 Mass. 170, 43 Am. Rep. 504
;

Foster V. Foster, 133 Mass. 179 ; Wemyss v. White, 159 Mass. 484, 34 N. E.
718; Berry v. Dunham, 202 Mass. *133, 88 N. E. 904; Hale v. Bowler, 215
Ma^s. 354, 102 N. E. 415; Boston Safe Deposit Co. v. Collier, 222 Mass
390, 111 N. E. 163, Ann. Cas. 19180, 962. MicMffan.Sow. Ann. St.
1912, § 10681. —
Minnesota. Gen. St. 1913, § 6712. —
Mississippi. Leigh"^ v.
-Harrison, 69 Miss. 923, 11 South, 604, 18 L. R. A. 49; Cady v Lincoln, 100
184 THE TRUST PURPOSE —PRIVATE TRUSTS (Ch. 6

sin, "where a trust is created to receive the rents and profits of real
property, and no valid direction for accumulation is given, the sur-
plus of such rents and profits, beyond the sum necessary for the
education and support of the beneficiary, shall be liable to the
claims of his creditors in the same manner as other personal prop-

—
Miss. 765, 57 South. 213. Missouri. ^Partridge v. Cavender, 96 Mo. 452, 9 S.
W. 785; Jarboe v. Hey, 122 Mo. 341, 26 S. W. 968; Kessner v. PhiUlps, 189
Mp. 515, 88 S. W. 66, 107 Am. St. Rep. 368, 3 Ann. 'Gas. 1005; Dunephant v.
Dickson, 153 Mo. App. 309, 133 S. W. 165 ; Higbee v. Brockenbrough, 191 S.
W. 994. The presumption is against a spendthrift trust. First Nat. Bank v.
Burns (App.) 199 S. W. 282. Montana.—Rer. Codes, § 4541. Nebraska.— Well-
er V. Noffisinger, 57 Neb. 455, 77 N. W. 1075. —
New Jersey. Expressions
favorable to spendthrift trusts have appeared in Hardenburgh v. Blair,
.

30 N. J. Eq. 645, and "Wright v. Leupp, 70 N. J. Eq. 130, 62 -Atl. 464, but
the question has recently been declared to be an open one in Camden Safe
Deposit & Trust Co. v. Schellenger, 78 N. J. Eq. 138, 78 Atl. 672, and Brooks
V. Davis, 82 N. J. Eq. 118, 88 Atl. 178. See 2 Comp. St. N. J. 1910, p. 2254, §§
—
30a, 30b. New York. ^Williams v. Thorn, 70 N. X. 270 ; Tolles v. Wood, 99
N. Y. 616, IN. E. 251; Sherman v. Skuse, 166 N. T. 345, 59 N. E. 990; TJll-
man v. Cameron, 186 N. Y. 339, 78 N. B. 1074, 116 Am. St. Eep. 553^; Stringer
v. Young, 191 N. Y. 157, 83 N. E. 690; Bergmann v. Lord, 194 N. Y. 70, 86 N.
E. 828; Brearley School v. Ward, 201 N. Y. 358, 94 N. B. 1001, 40 L. B. A.
(N. S.) 1215, AUn. Ca's. 1912B, 251; New York Keal Property Law (Oonsol.
I-raws, c. 50) §§ 98, 103
; Code Civ. Proc. g 1391. In New York the creditors of
a cestui que trust have at least three possible remedies. If the trust was
created by the cestui for himself, they may resort to a creditor's bill under
sections 1871-1879 of the Code of Civil Procedure. Williams v. Thorn, 70 N. Y.
270. If the settlor was another than the beneficiary, the creditor may proceed
vmder section 98 of the Real Property Law to take all the surplus beyond
the amount necessary to the support and education of the cestui que trust,
or he may proceed under the Garnishment Act, section 1391 of the Code of
Civil Procedure, and get 10 per cent, of the trust income, if it is $12 a week
or more. Brearley School v. Ward, |201 N. Y. 358, 94 N. E. 1001, 40 L. R. A.
(N. S.) 1215, Ann. Cas. 1912B, 251; Hoye v. Hipkins, 182 App. Div. 901, 168
N. Y. ^upp. 1112. North Co'roZmo..— Eevisal 1908, § 1588 ;Vaughan v. Wise,
152 N. C. 31, 67 S. E. 33 ; Fowler & Lee v. Webster, 173 N. C. 442, 92 S. E.
157. North Dakota.— Comp. Laws 1913, § 5369. Oklahoma. —
Rev. Laws 1910,
§ 6664. —
Oregon. Mattison v. Mattison, 53 Or. 254, 100 Pac. 4, 133 Am. St
Rep. 829, 18 Ann. Cas. 218 Winslow v. Rutherford, 59 Or. 124, 114 Pac. 930.
;

—
Pemnsylvamla. Nbrris v. Johnston, 5 Pa. 287; Appeal of Ashhurst, 77 Pa.
464;Thackara v. Mmtzer, 100 Pa. 151; Appeal of Grothe, 135 Pa. 585, 19
Atl. 1058 ; Winthrop Co. v. Clinton, iS6 Pa. .472, 46 Atl. 435, 79 Am. St. Eep.
729; Board of Charifies & Corrections of City of Philadelphia v. Lockard,
198 Pa. 572, 48 Atl. 496, 82 Am. St. Rep. 817 ; In re Minnich's Estate, 206 Pa.
405, 55 Atl. 1067; South Dakota.—Rey. Code 1919, § 376. Tennessee.— noo-
berry v. Harding, 3 Tenn. Ch. 677; Staub v. Williams, 5 Lea, 458; Menken
Co. V. Brinkley, 94 Tenn. 721, 31 S. W. 92 ; Jobe v. Dillard, 104 Tenn. 658,
58 S. W. 324; First Nat. Bank v. Naslfville Trust Co. (Ch. App.) 62 S. W.
392. Teaoas.—Patten v. Herring, 9 Tex. Civ. App. 640, 29 S. W. 388 ; Wood v.
McClelland (Civ. App.^ 53 S. W. 381; McCreary v. Robinson (Civ. App.) 57
S. W. 682 ; Lindsey v. Rose (Civ, App.) 175 S. W. 829 ; Nunn v. Titche-Goet-
§ 51) SPENDTHRIFT TRUSTS 185

erty, which cannot be reached by execution."*^ In construction of

these statutes it has been held that the education and support to
which the cestui is entitled is that to which he has been accustom-
ed and to which persons of his class are used.** These statutes and
their construction have been the subject of bitter criticism by a
learned author.** In New York the statute has been applied to
trusts of personal property as well/" but not so in Wisconsin.*^
Th& position taken by a majority of the American courts' is well
stated by Morton, C. J., in a leading Massachusetts case :*^ "His
clear intention, as shown in his will, was not to give his brother an
absolute right to the income which might hereafter accrue upon
the trust fund, with the power of alienating it in advance, but only
the right to receive semiannually the income of the .fund, which up-
on its payment tb him, and not before, was to become his absolute
property. His intentions ought to be carried out, unless they are
against public policy. There is nothing in the nature or tenure of
the estate given to the cestui que trust which would prevent this.
The power of alienating in advance is not a necessary attribute or
incident of such an estate or interest, so that the restraint of such
alienation would introduce repugnant or inconsistent elements.
"We are not able to see that it would violate any principles of
sound public policy to permit a testator to give to the object of his^
bounty such a qualified interest in the income of a trust fund, and
thus provide against the improvidence or misfortune of the bene-
ficiary. The only ground upon which it can be held to be against
public policy is, that it defrauds the creditors of the beneficiary.
"It is argued that investing a man with apparent wealth tends to
mislead creditors, and to induce them to give him credit. The an-
swer is, that creditors have no right to rely upon property thus
held, and to give him credit upon the basis of an estate which, by
the instrument creating it, is declared to be inalienable by him, and
not liable for his debts. By the exercise of proper diligence they
can ascertain the nature and extent of his estate, especially in this

tinger Co., (Civ. App.) 196 S. "W. 890. yerwow*.—White's Ex'r v. White, 30
Vt. 338. —
West Virgmia. (guernsey v. liazear, 51 W. Va. 328, 41 S. B. 405;
Hoffman v. Beltzhoover, 71 W. Va. 72, 76 S. B. 968; Kerns v. Carr, 82 W.
Va. 78, 95 S. E. 606, L. R. A. 1918E, 568. Wisconsin.— St. 1917, § 2083.
87 See statutes cited in note 86, ante.
8 8 Magner v. Crooks, 139 Cal. 640, 73 Pae. 585 ; Schuler v. Post, 18 App. Div.

374, 46 N. Y. Supp. 18; Williams v. Thorn, 70 N. Y. 270.

8 9 Gray, Restraints (2d Ed.) preface, xi.
»» Williams v. Thorn, 70 N. Y. 270 ; In re Williams, 187 N. T. 286, 79 N.
E. 1019.
01 Williams ,v. Smith, 117 Wis. 142, 93 N. W. 464.
»2 Broadway Nat. Bank v. Adams, 133 Mass. 170, 173-174, 43 Am. Rep. 504.
 ;

186 THE TRUST PURPOSE —PRIVATE TRUSTS ' (Ch. 6

commonwealth, where all wills and most deeds are spread upon the
public records. There is the same danger of their being misled by-
false appearances, and induced to give credit to the equitable life
tenant when the will or deed of trust provides for a cesser or lim-
itation over, in case of an attempted alienation, or of bankruptcy;
or attachment, and the argument would lead to the conclusion that
the English rule is equally, in violation of public policy. do We
not see why the founder of a trust may not directly provide that
his property shall go to his beneficiary with the restriction that it
shall not be alienable by anticipation, and that his creditors shall
not have the right to attach it in advance, instead of indirectly
reaching the same result by a provision for a cesser or a limitation
over, or by giving his trustees a discretion as to paying it. He has
the entire jus disponendi, which imports that he may give it abso-
lutely, or may impose any restrictions or fetters not repugnant to
the nature of the estate which he gives. Under our system, cred-
itors may reach all the property of the debtor not exempted by law,
but they cannot enlarge the gift of the founder of a trust, and take
more than he has given."
It should be noted here, that a property owner may not create a
spendthrift trust in his own favor, such 'a trust being considered
void as to the creditors of the property owner.'^ To hold otherwise
would be to give unexampled opportunity to unscrupulous persons
to lay aside their property before engaging iil hazardous business
enterprises, and thereby to work a gross fraud on creditors who
might place reliance on the former prosperity and financial solidity
of the debtor.
The result of the rules of law just stated may be illustrated by a
practical application. Suppose that A., the owner of a farm, con-
veys it to X., as trustee, to hold for the benefit of tBe son of A., who
is a spendthrift and profligate. The trust instrument directs that
the entire net income shall be paid over to the son in semiannual
payments, on January 1st and July 1st. It also provides that the
son shall have no power to anticipate the income, and that such in-
come shall not be liable for the debts of the son. In those states
in which a spendthrift trust is condemned and held void, the pro-
pulsions with respect to anticipation and the rights of creditors will
be disregarded, and the son will be allowed to assign his rights, and

»3Hexter v. Clifford, 5 Colo. 168; De Rousse v. Wiiyams, 181 Iowa, 379,

164 N. W. 896 Wenzel v. Ir-owder, 100 Md. 36, 59 Atl. 194, 108 Am. St. Rep.
;

380; Pacific Nat. Bank v. Windram, 133 Mass. 175; Cunningliam v. Bright,
228 M^ss. 385, 117 N. E. 909; Jamison v. Mississippi Valley Trust. Co. (Mo.)
207 S. W. 788 ; Schenck v. Barnes, 156 N. Y. 316, 50 N. E. 967, 41 L. R. A. 395
Rienzi v. Goodin, 249 Pa. 546, 95 Atl. 259.
§ 52) PEAUDULENT PUKPOSB ' ^87

his creditors to attach the'income as it accumulates in the haftds of

the trustee. On the other hand, in the majority of American states,
since spendthrift trusts are allowed, the settlor's directions will be
respected, the son can create no present rights by means of an as-
signment of his right to receive payments, and the creditors of the
son can have a remedy only against such funds as are paid into the
son's hands on the 1st of each January and July and cannot com-
pel the trustee to pay any of the income to them directly.
The object of this section is to treat of spendthrift, trusts from
the point of view of their validity of purpose, to discuss the ques-
tion as to whether the purpose of providing for spendthrifts or oth-
ers by means of clauses restricting anticipation of ^income is a valid
trust purpose. The broader question ot the rights of creditors of
cestuis que trust in all cases, both those of spendthrift trusts and
other trusts,, will be considered later."*

FRAUDULENT PURPOSE
52. Fraudulent conveyances in trust are subject to the same ryles
as other transfers tainted with fraud, and may be set aside
at the instance of the person defrauded.
A voluritary transfer of property to be held in trust for the trans-
feror is conclusively fraudulent and void as against the ex-
isting and subsequent creditors of the transferor.

The trust purpose must, of course, be free from fraud. If the

trust was created with the actual intent to defraud another, it may
be set aside by the person injured.®® The subject of fraud on cred-
itors by means of trusts will be found treated fully in books devot-
ed to the subject of fraudulent conveyances. °° It is impossible
here to enter into a discussion of the effect of fraud on conveyances
in trust. Fraud affects such conveyances as it affects all others.
An early English statute"^ provided that voluntary transfers of
personal property to the use of the transferor should^ be void as
against creditors. Many states have adopted similar statutes,'*
\

»* See section 112, post.

1 »5 Brundage v. Cheneworth, 101 Iowa, 256, 70 N. W. 211, 63 Am. St. Rep.
382 Halliday v. Groom, 9 Lea (Tenn.) 349. The trustee may not attack the
;

trust as fraudulent regarding creditors. Henderson v. Segars, 28 Ala. ^52.

»8 Bump, Fraudulent Conveyances (Jlenn, Creditors' Rights and Remedies,
;

sf St. 3 Henry VII, c. 4.

»8 A typical statute is that of New York: "A transfer of personal proper^
ty, made in trust for the use of the person making it, is void as against the
188 THE TRUST PURPOSE —PRIVATE TRUSTS (Ch. 6

and tRe principle that fsuch trusts are void against creditors is gen-
erally in force in the United States." The rule applies to real as
well as personal property.^

existing or subsequent creditors of such person." Personal Property Law

'
(Consol. Lawsy c. 41), § 34.
o'McDermott v. Eborn, 90 Ala. 258, 7 South. 751; Innis v. Carpenter, 4
Colo. App. 30, 34 Pac. 1011; Johnson v. Sage, 4 Idaho, 758, 44 Pac. 641;
Camp T. Thompson, 25 Minn. 175 First Nat. Bank of Joplln v. Woelz, 19T
;

Mo. App. 686, 193 S. "V^f. 614 ; Kaeek v. First Nat. Bank of North Bend, 62 Neb.
669, 87 N. W. 542 ; Ward v. Marie, 73 N. J. Eq. 510, 68 Atl. 1084; Vilas Nat.
Bank of Plattsburgh v. Newton, 25 App. Div. 62, 48 N. Y. Supp. 1009 ; Nolan
V. Nolan, 218 Pa. 135, 67 Atl. 52, 12 L. R. A. (N. S.) 369; Hornsby v. City
Nat. Bank (Tenn. Ch. App.) 60 S. W. 160; Petty v. Moores Brook Sanitarium,
110 Va. 815, 67 S. E. 355, 27 L. R. A. (N. S.) 800, 19 Ann. Cas. 271; Stapleton
V. Brannan, 102 Wis. 26, 78 N. "W. 181.
1 Sandlin v. Bobbins, 62 Ala. 477, 485.
 "

^ 53) DEFINITION 189

CHAPTER VII
THE TRUST PURPOSE—CHARITABLE TRUSTS
53. Definition.
54. History —
Statute 'of Charitable Uses.
55. Indefiniteness of Purpose.
56. Religious Purposes.
57. Gifts for Masses.
68. Educational Purposes.
59. Eleemosynary Purposes.
60. Miscellaneous Public Benefits.
61. Cemetery Lots and Monuments.
I
, 62. Purposes Not Charitable.
63. The Cy Pres Doctrine.
64. The Rule Against Remoteness.
65. The Rule Against Restraints dn Alienation.
66. The Rule Against Accumulations.
67. Other Statutory Restrictions on Charitable Trusts.
68. Effect of Partial Invalidity.
69. Confiict of Laws.

DEFINITION
S3. A
charitable or public trust is a trust for the benefit of indefi-
nite persons to be selected by the trustee from all man-
kind dr from a certain class.
The charitable trust must tend to the physical, spiritual, or men-
tal improvement of society ; it need not be for the bene*
fit of persons in actual poverty or distress; the benefici-
aries must be indefinite, unascertained persons. i

If the trust is for a mixed private and public purpose, it will

fail because of indefiniteness.
The motive of the settlor of a charitable trust is 'unimportant,
if actual charitable purposes are accomplished by it.

In the preceding chapter the purposes for which private trusts

may bc' created Have been discussed. The purposes for which
charitable trusts may be created will next be treated.
A charitable trust is frequently called a public trust,' or merely
a charity.* \

1 Appeal of Eliot, 74 Conn. 586, 51 Atl. 558 Holman v. Renaud, 141 Mo.
;

App. 399, 125 S. W. 843.

2 Smith y. Havens Relief Fund Soc, 44 Misc. Rep. 594, 90 N. Y. Supp.
168 In re Centennial & Memorial Ass'n of Valley Forge, 235 Pa. 206, 83 Atl.
;

683.
190
V
THE TRUST PUKPOSE —CHAEITABLE TRUSTS (Ch. 7

The charitable trust will first be generally defined, and in later

sections that definition will be amplified and illustrated.
"A charity, in the legal sense, may be more fully defined as a
gift, to be applied consistently with existing laws, for the benefit
of an indefinite number of persons, either by bringing their minds
or hearts under the influence of education or religion, by relieving
their bodies from disease, suffering, or constraint, by assisting them
to establish themselves in life, or by erecting and maintaining pub-
lic buildings or works, or otherwise lessening the burdens of gov-
'
ernment." *

"It [a charitable trust] includes everything that is within the let-

ter and spirit of the Statute of Elizabeth,* considering such spirit
to be broad enough to include whatever will promote, in a legit-
imate way, tlie comfort, happiness, and improvement of an indefi-
nite number of persons." " Eminent counsel has stated that it in-
cludes "whatever is given for the love of God or for the love of
your neighbor in the catholic and universal senses—given from
—
these motives and to these ends free from the stain or taint of ev-
ery consideration that is personal, private, or selfish;"" "Lord
Camden defined a charity as 'a gift to a general public use, which '

extends to the poor as well as to the rich.' * * * This defini-

tion is at once concise and comprehensive, and has been adopted
by the Supreme Court of the United States. * * * It was
also approved by Chancellor Kent. * * *" i "The word
'charity,' as used in law, has a broader meaning and includes sub-
stantially any scheme or effort to better the condition of society
or any considerable part thereof. It has been well said that any
gift not inconsistent with existing laws, which is promotive of
science or tends to the education, enlightening*, benefit, or amelio-
ration of the condition of mankind or the diffusion of useful knowl-
edge, or is for the public convenience, is a charity."' Other defi-
nitions of the charitable trust in America will be found to be vari-
ations ofVthose quoted above.'

3 Gray, J., in Jackson v. Phillips, ,14 Allen (Mass.) 539, 556.

» See post, § 54.
Harrington v. Pier, 105 Wis. 485, 520, 82 K. W. 345, 50 L. R. A. 307, 76
Am. St. Rep. 924.
6 Mr. Binney in Vidal v. Girard's Ex'rs, 2 How. 127, 11 L. Ed. 205.

7 Grant v. Saunders, 121 Iowa, 80, 81, 95 N. W. 411, 100 Am. St. Rep. 310.

8 Wilson V. First Nat. Bank of Independence, 164 Iowa, 402, 145 N. W.

948, 952, Ann. Oas. 1916D, 481.

» Burke v. Roper, 79 Ala. 138 In re Lennon's Estate, 152 Cal. 327, 92
;

Pac. 870, 125 Am. St. Rep. 58, 14 Ann. Gas. 1024; Ford v. Ford's Ex'r, 91
Ky. 572, 16 S. W. 451; Carter v. WMtcomb, 74 N. H. 482, 69 Atl. 779, 17
Xj. R. a. (N. S.) 733;Johnson v. Bowen, 85 N. J. Eq. 76, 95 Atl. 370 Miller ;
 :

§ 53) DEFINITION 191

\

An analysis of these definitions of the charitable trust and

a study of other cases will, it is submitted, show several separate
elements in the composition of the trust
First, the trust must be for the mental, spiritual, or physical
improvement of mankind. It must not have a' useless or frivolous
purpose. It is not sufficient that an indefinite number of persons,
to be selected by the trustees from a class, are to receive something
under the trust, unless the recipients will thereby be substantially
benefited. "A charitable use, where iteither law nor public policy
forbids, may be applied to almost any thing that tends to promote
the well-doing and well-being of social man."^"
Secondly, a charitable trust is not necessarily confined to alms-
giving. The beneficiaries of it need not be in poverty and unable to
buy the benefits which the charity will give them. charitable A
trust is for the improvement of mankind, rich or poor. "It [a
charitable trust] is not confined to mere alms-giving, or the relief
of poverty and distress, but has a wider signification, which em-
braces the improvement of the happiness of man." ^^ "While
poverty is the condition generally recognized in the bestowal of
public charity upon individuals, it is not the only condition, as
abundantly appears from the authorities. Indeed, it is not the fact
of poverty alone which makes a person a proper object of charity,
and this is shown by the existence of penal laws in England, along
with the law of public charities, for the punishment of ^sturdy
beggars. It is the need or want of food, clothing, shelter, or other
bodily ministrations, so commonly found among the poor, which
prompts the- exercise of public charity to that class. But a person '

who is sick, injured, or afflicted, or in a helpless condition, is none

the less a proper object to be included in the purposes of a public
charity, although he may not b.e poor." ^^ In accord with this
principle it is held that an institution which is partly supported by

V. Porter, 53 Pa. 292 ; KeUy v. Nichols, 18 R. I. 62, 25 Atl. 840, 19 L. R. A.

413; Maxcy v. City of Oshkosh, 144 Wis. 238, 128 K. W. 899, 31 L. R. A.
(N. S.) 787.
10 Ould V. Washington Hospital, 95 U. S. 803, 311, 24 L. Ed. 450. For
illustrations, of trusts held invalid as charitable trusts, see post, § 62. .

11 New
England Sanitarium v. Inhabitants of Stoneham, 205 Mass. 335,
342, 91 N. E. 385.
12 Buchanan v. Kennard, 234 Mo. 117, 136 S. W. 415, 420, 37 L. R. A.
(N. S.) 993, Ann. Cas. 1912D, 50. To the same effect, see American Academy
of Arts and Sciences v. President, etc., of Harvard College, 78 Mass. (12 Gray)
582; Little v. City of Newburyport, 210 Mass. 414, 96 N. B. 1032, Ann. Cas.
1812D, 425; Godfrey v, Hutchins, 28 K. I. 517, 68 AU. 317.
 ' ;

192 THE TRUST PURPOSE —CHARITABLE TRUSTS (Ch. 7

charges made to the public \and partly by means of gifts is a char-

itable institution.^^
Thirdly, should be noticed that the beneficiaries of a charitable
it
trust must be indefinite, unascertained persons, to be sekcted by
the trustee. If the cestuis are known and identified, the trust may
be valid as a private trust; but -it cannot be a good charitable trust,
although the purpose of it may be the improvement of the spirit-
ual, mental, or physical condition of the beneficiaries. It is an
essential of charitable trusts that they be for the benefit of the
entire public or some class thereof, and that no certain persons
shall be entitled to claim the benefit of the trust until they are
chosen by the trustee as beneficiaries. This uncertainty of bene-
ficiaries is as much a requisite of charitable trusts as certainty
of beneficiaries is an essential of private trusts.^* But, where
the principal gift is to a large class of the public, an expression
by the settlor of a desire that the trustees prefer his relatives in
administering the fund does not make the trust a trust for defi-
nite persons and so vpid as a charitable trust. The trust is for
unascertained persons, to be selected by the trustees, with a re-
quest that certain definite persons be preferred in the making of
such selection.^ °
Fourthly, the class to be benefited by the charitable trust must
not be too small-. must be some considerable portion of the
It
public, as, for example, the poor of a given city, or needy clergy-
men of a given denomination. Just how small this class may be
is determine.
difficult to A
trust ior the benefit of the widows
and orphans of the future ministers of a given church has beeh
held to be a valid charitable trust, notwithstanding the fact that the
class would doubtless be very small.^^ And so, too, the smallness
of the class was held to be no objection to the validity of the char-

ts New England Sanitarium v. Inhabitants of Stoneliam, 205 Mass. 335,

91 N. E. 385; Little v. City of Newburyport, 210 Mass. 414, 96 N. E. 1032,
Ann. Cas. 1912D, 425; In re MacDowell's Will, 217 N. Y. 454, 112 N. E. 17T,
L. K. A. 19ieE, 1246, Ann. Cas. 1917E, 853; ,Butterwortli v. Keeler, 219 N.
Y. 446, 114 N. E. 803.
iiMoseley v. SmUey, 171 Ala. 593, 55 Sopth. 143; People v. Cogswell, 113
Cal. 129, 45 Pac. 270, 35 L. R. A. 269; Erskine v. Whitehead, 84 Ind. 357;
Ripley v. Brown, 218 Mass. 33, 105 N. E. 637 ; Hunt v. Edgerton, 29 Ohio
Cir. Ct. R. 377 ; Franklin's Adm'x v. City of Philadelphia, 2 Pa. Dist. R. 435
Richtman v. Watson, 150 Wis. 385, 136 N. W. 797. Upon the subject of the
necessity of definite beneficiaries in private trusts, see post, § 108.
10 Darcy v. KeUey, 153 Mass. 433, 26 N. E. 1110; Dexter v.. Harvard Col-
lege, 176 Mass. 192, 57 N. E. 371 In re MacDowell's Will, 217 N. T. 454,
;

112 N. E. 177, L. R, A. 1916E, 1246, Ann. Cas. 1917E, 853.

i« Sears v. Attorney General, 193 Mass. 551, 79 N. E. 772, 9 Ann. Gas.

1200.
§ 53) DEFINITION 193,

itable. trustwherp the beneficiaries were to be indigent and needy

Masons Boston and vicinity.^' On the other hand, a trust for
in
the benefit of the testator's lineal descendants/* or for the purpose
of educating the descendants of two persons named/* is not a
valid charitable trust.
Fifthly, the trust must be solely for charitable purposes. The
use of the property by the trustees must be limited to charitable
objects. If the trustees are allowed discretion as to the disposi-
tion of the property, and may apply it to purposes not charitable,
as well as to charitable purposes, then the trust must fail. It is
for a mixed private and public purpose, and, since it is impos-
sible to decide how much of the property should be applied to the
charitable purposes,/ the trust cannot be enforced as a charitable
trust, even in part.. It is too indefinite. For example, a trust to
apply funds to the benefit of such charities, institutions of learning
and science and to the promotion of such inventions and discov-
eries as the trustees shall select is a' trust for mixed private and
public purposes and will be held invalid."" And so, too,- a trust
-for the benefit of "religious, educational or eleemosynary institu-
tions," since it may be used to benefit noncharitable educational
institutions, is for purposes which may be partly private and partly
public, and is hence void."^ And, with respect to a gift to "hu-
manity's friend, * * * B., to use and expend the same for the
promotion of the religious, moral, and social welfare of the people
in any locality," the Court of Chancery in New Jersey has said:
"The trust here attempted to be created must therefore fail because
too general and indefinite, and by the course of decision in this
state, it must fail ahogether."^^ The trust might be administered
for both private and charitable purposes. But that the administra-
tion of a charitable trust may incidentally benefit private persons,
not beneficiaries of the trust and who needed no aid, is not an

17 Masonic Educatipn and Charjty Trust v. City of Boston, 201 Mass. 320,
87 N. E. 602.
18 Kent V. Dunham, 142 Mass. 216, 7 N. E. 730,] 56 Am. Eep. 667.
is'jolinson v.'De Pauw University, 116 Ky. 671, 76 S. W. 851, 25 Ky.
Law Rep. 950. But see Gafney v. Kenison, 64 N. H. 354, 10 Atl. 706, and Web-
ster V. Morris, 66 Wis. 366, 28 N. W. 353, 57 Am. Rep. 278, where trusts for the
benefit of needy relatives were held to be charitable trusts. Such trusts
mighit well be held to lack the unselfish motive necessary to a charitable
trust and to be mere private trusts of an indefinite nature.
20 Sutro's Estate, 155 Cal. 727, 102 Pac 920.
21 In re Shattuck's Will, 193 N. Y. 446, 86 N. E. 45^.
2 2 Livesey v. Jones, 55 N. J. Eq. 204, 207, 35 Atl. 1064. To the same ef-
fect, see Moseley v. Smiley, 17i Ala. 593, 55 South. 143; Attorney General
V. Soule,^28 Mich. 153; Mason v. Perry, 22 R, I. 475, 48 AtL 671.
BOGBET TBUSTS —13
 ; '

'
194 THE TRUST PUEPOSE^CHAEITABLE TRUSTS (Ch. 7

objection to a charitable trust. Thus, a tf.ust for the education

of poor children within a certain district is valid, even though the
administration of it might incidentally lessen the burden of taxa-
tion upon the rich as well as the poor in that district.^^
Sixthly, the motive of the settlor of the charitable trust Is not
important. Whether he intended to benefit humanity or not, is ir-
relevant, if the actual effect of his gift will be to benefit humanity.
Thus, that a settlor of a trust to establish a drinking fountain
for horses provided for the erection of a monument of a certain^
favorite horse on the fountain, and desired to perpetuate the
memory of the horse by his gift, is not important in determining
the validity of the gift, since its general result will be to benefit
the animals in the community. "Cpurts, in determining whether
or not a gift is charitable, will not look to the motives of the donor,
but rather to the nature of the gift and the object which will be at-
tained by it."=*
Nor is the wisdom of the gift made for the benefit of charity
an important consideration. If it is for charitable purposes, it
should be supported by the courts, even though equity believes that
the settlor could have made a wiser disposition of his property.''^

HISTORY— STATUTE OF CHARITABLE USES

54. Prior to 1601 charitable uses were recognized and enforced' by
the English Court of Chancery. In 1601 the Statute of
Charitable Uses was enacted. It enumerated some of the
more important charities then in force and provided for
their better protection and enforcement.
The Statute of Charitable Uses is considered a part of the com-
mon law of some American states, while in others it is
held to have no force. In nearly all states all charitable
trusts are enforced, either because of the adoption of the
English Statute of Charitable Uses or the English com-
mon law, or upon the basis of the broad, general pbwers of
«

23 Crow ex rel. Clay County, 196 Mo. 234, 95 S. W. 369.

Jones v.
24 In re Graves' Estate, 242 lU. 23, 29, 89 N. E. 672, 24 L. R. A. (N. S.)
283, 134 Am. St. Kep. 302, 17 Ann. Gas. 137. See, also, In re Coleman's Es-
tate, 167 Cal. 212, 138 Pac. 992, Ann. Cas. 1915C, 682; Haggin v. Inter-
national Trust Co. (Colo.) 169 Pac. 138, L. R. A. 1918B, 710 ; Appeal of Eliot,
74 Conn. 586, 51 Atl. 558 French v. Calkins, 252 111. 243, 96 N. E. 877
;

Bills V. Pease, 116 Me. 98, 100 Atl. 146, L. R. A. 1917D, 1060 Richardson v.
;

Essex Institute, 208 Mass. 311, 94 N. E. 262, 21 .^n. Cas. 1158.

20 Chapman v. Newkl, 146 Iowa, 415, 125 N. W. 324.
§ 54) HISTORY —STATUTE OF CHARITABLE USES 195

equ^ity. In a few jurisdictions charitable trusts ^ave a

very limited existence, and in one state they are prohibited
by the state Constitution.

In 1601 tije English Parliament enacted a statute which has

come to be known as the Statute of Charitable Uses.^° This act
recited that property had been given for charitable purposes and
that the trustees of the charities were, in many cases, neglecting the
performance of their duties, and it then proceeded to provide for
the enforcement of these charitable trusts by tl:^e appointment of
commissioners by the Chancellor.
It seeips to have been the view of some courts, manifested in early
decisions, that the Statute of Charitable Uses created charities and
that they have no life separate and -apart from that statute and
its successors.^' This question was carefully considered by Mr.
Justice Story in the important case of Vidal v. Girard's Ex'rs.^'
That learned judge there showed that charitable uses were known
and supported prior to the Statute of Charitable Uses; that the
Statute recognized the existence of such uses and merely provided
for their enforcement. He referred to the views of English judges
which supported his contention and also to the then recent report
of the Commissioners of Public Records in England, in which
a collection of early chancery cases involving charitable trusts
was made. Of these early cases, prior t9 the Statute of Charitable
Uses, he said: "They establish in the most satisfactory and con^
elusive manner that cases of charitiefe where there were trustees
appointed for general and indefinite charities, as well as for spe-
'cific charities, were familiarly known to, and acted upon, and en-
forced in the Court of Chancery. In some of these cases the char-
ities were not only of an uncertain and indefinite nature but, as far
;

as we can gather from the imperfect statement in the printed rec-

ords, they were also cases where there were either no trustees

26 St. 43 Eliz. c. 4. It enumerated the following as purposes for which

charities had been established at that time: Kelief of aged, impotent, and
poor people, maintenance of sick and maimed soldiers and mariners, schools
of learning, free' schools, and scholars in universities, repair of bridges, ports,
havens, causeways, churches, seabanks and highways, education and prefer-
ment of orphans, relief, stock or maintenance of houses of Correction, mar-
riages of poor maids, supportation, aid and help of young tradesmen, handi-'
craftsmen, and persons decayed, relief and redemption of prisoners and cap-
tives, aid of any poor inhabitants concerning payments of fifteens, setting
out of soldiers, and other taxes. 7 Pickering's English Statutes, p. 43.
2 7 Philadelphia Baptist Ass'n v. Hart, 4 Wheat. 1, 4 L. Ed. 499; Gass v.
Wilhite, 2 Dana (Ky.) 170, 26 Am. Dec. 446 ;Dashiell v. Attorfley General, 5
Har. & J. (Md.) 392, 9 Am. Dec. 572 ; Griffin v. Graham, 8 N. C. (1 HawkS)
96, 9 Am. Dec. 619.
28 2 How. 127, H li. Ed. 205,
 ;

196 THE TRUST PURPOSE —CHARITABLE TRUSTS (Ch. 7

appointed, or the trustees were not competent to take."^' To the

report of this case is attached a schedule of early cases in chancery,
showing the existence of charitable uses prior to the Statute of
Elizabeth.'"
That charitable uses were not created by the Statute of Char-
itable Uses, but have an independent existence in chancery, aside
from that statute, is now well recognized.**
The extent to which the English Statute of Charitable Uses and
the English system of charities are recognized in America varies
from state to state.'^ In Virginia, West Virginia, and Maryland
the courts were early led into error tjy the decision of the United
States Supreme Court in Philadelphia Baptist Ass'n v. Hart,*' and
held that charitable uses depended on the statute, and that, the
statute^not being in force in those jurisdictions, no charitable trusts
could exist.'* This early mistake has been somewhat rectified by
legislation, sanctioning some, though by no means all, charitable
trusts.'"
In New York the English Statute of Charitable Uses was re-
pudiated in 1788.'* The Revised Statutes of 1830 provided for only
four classes of express trusts in land and did not mention chari-

28 2 Ho)i7. 127, 196, 11 li. Ed. 205.

so 2 How. 127, 155, 11 h. Ed. 205.
31 Carter v. Balfour Adm'r, 19 Ala. 814; In re Hinckley's Estate, 58 Cal.
457; State v. Griffith, 2 Del. Ch. 392; Beall v. Fox's Ex'rs, 4 Ga. 404;
Grimes' Ex'rs v. Harmon, 35 Ind. 198, 9 Am. Rep. 690; Miller v. Chitten-
den, 2 Iowa, 315; Tappan v. Deblois, 45 Me. 122; Going v. Emery, 16 Pick.
(Mass.) 107, 26 Am. Dec. 645 ; Chambers v. City of St. Louis, 29 Mo. 543
Williams v. Williams, 8 N. Y. 525 Griffin v. Graham, 8 N. C. (1 Hawks) 96,
;

9 Am. Dec. 619; Landis v. Wooden, 1 Ohio St. 160, 59 Am. Dec. 615; Zim-
merman V. Anders, 6 Watts & S. (Pa.) 218, 40 Am. Dee. 552; Shields v. Jolly,
1 Rich. Eq. (S. C.) 99, 42 Am. Dec. 349; ^Hopkins v. Upshur, 20 Tex. 89,
70 Am. Dec. 375 ;Burr's Ex'rs v. Smith, 7 Vt. 241, 29 Am. Dec. 154.
^'^
A valuable summary of the history and present status of charities is
given by Mr. Carl Zollman in 19 Col. Law Rev. 91, 286. See, also, M. A.
Barwise, The Modem Charitable Trust, 9 Me. Law Rev. 225.
8 3,4 Wheat. 1, 4 L. Ed. 499.

8*Gallego's Ex'rs v. Attorney General, 3 Leigh, 450, 24 Am. Dec. 650;

American Bible Soc. v. Pendleton, 7 W. Va. 79 ; State v. Warren, 28 Md. 338.
36 Code Va. 1904, §§ 1396-1426; Barnes' W. Va. Code 1916, c. 57 (Code W.
Va. 1913, c. 57, §§ 1-11 [sees. 3292-3304]) Const. Md. Declaration of Bights,
;

art. 38; Ann. Code Md. art. 23, § 354; Board of Foreign Missions of Gen-
eral Synod of Evangelical Lutheran Church v. Shoemaker, 133 Md. 594, 105
Atl. 748. Instead of validating all charitable gifts, the Legislature of Mary-
land seems to adopt the cumbersome method of sanctioning specific chari-
table gifts from year to year. See Laws Md. 1916, c. 369; Laws Md. 1918,
ce. 285, 453. \

'38 Laws 1788, c. 46; Beekman v. Bonsor, 23 N. Y. 298, 307, 80 Am. Dec.
269.
 § 54) mSTORT —STATUTE OF CHARITABLE USES 197

table trusts.*' It became a much-disputed question whether char-

itable 'trustshad any existence after the adoption of the Revised
.

Statutes. On the one hand, it was claimed that no charitable trust

could exist, since the Statute of Charitable Uses was not in force
and since the Revised Statutes made no provision for charitable
trusts. On the other, it was maintained that the original juris-
'
diction of chancery over charitable trusts, irrespective of the Stat-
ute of Elizabeth, ought to enable the courts to suppor^t charitable
trusts. This contention went on for many /years; th^ courts at
firstleaning to the view that charitable trusts could be supported
under equity's general jurisdiction, but later taking a definite
stand that charitable trusts Were not possible in New York, in view
of the statute of 1788 and the Revised Statutes of 1830.'^ The
only method by means of which a charitable object could be ac-
complished during this, period was by a gift to a charitable cor-
poration absolutely, either by a donation to a corporation already
in existence or to one to be formed within the period allowed
by the rule against perpetuities; that is, two lives in being.^' In
1893 the Legislature passed what wis known as the Tilden Act,
which has restored the English system of charities as it was in
force before the Revolution.*"
In Michigan, Wisconsin, and Minnesota the history of charitable
trusts has been somewhat similar to that of York. Early leg- New
islation in these three states repudiated the Statute of Elizabeth
and also adopted practically verbatim the York chapter on New
uses and trusts, which declared that only four enumerated real i

property trusts were valid and made no mention of (tharitable

trusts.*^ In Michigan and Minnesota this was held to prohibit char-
itable trusts both as to real and personal property;*^ in Wisconsin,

ST
See ante, § 47. ,

Williams v. Williams, 8 N. Y. 525; Bascom v.jAlbertson, 34 N. Y. 584;

88
Holmes V. Mead, 52 N. Y. 332 Holland v. Alcock, 108 N. Y. 312, 16 N. E.
;

305, 2 Am. St. Rep. 420; Tilden v. Green, 130 N. Y. 29, 28 N. E. 880, 14 L.
K. A. 33, 27 Am. St. Rep. 487.
saWetmore v. Parker, 52 N. Y. 450; Cottman v. Grace, 112 N. Y. 299, 19
N. E. 839, 3 L. R. A. 145; Riker v. Leo, 115 N. T. 93, 21 N. E. 719; Bird v.
Merklee, 144 N. Y. 544, 39 N. E. 645, 27 h. R. A. 423.
40 Allen V. Stevens, 161 N. Y. 122, 55 N. E. 568 Murray v. Miller, 178 N.
;

Y. 316, 70 N. E. 870 Trustees of Sailors' Snug Harbor in City of New York

;

V. Carmody, 211 N. Y. 296, 105 N. E. 543; New York Real Property Law
(Consol. Laws, c. 50) § 113; New York Personal Property Law (Consol. Laws,
c. 41) § 12. >

41 Rev. St. Mich. 1846, c. 63; Rev. St. Wis. 1849, c. 57; St. Minn. 1851,
'

c. 44.
*2 Methodist Episcopal Church of Newark v. Clark, 41 Mich. 730, 3 N. W.
198 THE TRUST PURPOSE —CHARITABLE TRUSTS (Ch. 7

as a result of this legislation, charitable trusts of realty were

held to be impossible,*^ but gifts of personalty in trust for char-
itable uses were allowed,_^because the Statute of Uses and Trusts
had no application to personal property.** Recent legislation in
Michigan and Wisconsin has validated all charitable trusts by
statutes modeled after the Tilden Act of New York.*^ A general
charitable trust act in Minnesota was declared unconstitutional
because of a defect in its title *° but statutes give municipal char-
;

itable trusts of real and personal property limited scope for oper-
ation.*^
In. Mississippi a constitutional provision bars charitable trusts.*'
In the remainder of the states charitable trusts have from the
beginning been enforced, either because of the adoption of the
Statute of Elizabeth or the common law of England, or because of
the enactment of statutes similar to the Statute of Elizabeth, or
merely on the basis of equity's general jurisdiction.*'

207 Hopkins v. Crossley, 132 Mich. 612, 96 N. W. 499 Little v. Willford, 31

; ;

Minn. 173, 17 N. "^V. 282; Shanahan v. Kelly, 88 Minn. 202, 92 N. W. 948.

43 Danforth v. City of Oshkosh, 119 Wis. 262, 97 N. W. 258.
a Dodge v. Williams, 46 Wis. 70, 1 N. W. 92, 50 N. W. 1103.
*5 Pub. Acts Mich. 1907, No. 122, formerly How. Ann. St. Mich. 1912, §
10700, but repealed by Pub. Acts Mich. 1915, No. 280, which re-enacts sections
10700 and 10701, How. Ann. St. 1912, and adds the sentence, "Evtery such trust
shall be' liberally construed by s'uch court so that the intentions of the cre-
ator thereof shall be carried out whenever possible," and validates all gifts
'

under the former statute. In re Brown's Estate, 198 Mich. 544, 165 N. W.
929 St. Wis. 1917, § 2081, subds. 6, 7 WiUiams v." City of Oconomowoe, 167
; ;

Wis. 281, 166 N. W. 322.

46 Laws Minn. 1903, c. 132 ;Watkins v. Bigelow, 93 Minn. 210, 100 N. W.
1104.
Gen. St. Minn. 1913, § 6710, subd. 7, as amended by Laws 1915, c. 98 (Gen.
47
St. Supp. 1917, § 6710). See E. S. Thurston, Charitable Gifts in Minnesota,
1 Minn. Law Eev. 201. ^
4 8 Const. 269, 270.
48 Carter v. Balfour's Adm'r, 19 Ala. 814; Blscoe v. Thweatt, 74 Ark. M5,
86 S. W. 432, 4 Ann. Cas. 1136 In re Hinckley's Estate, 58 Cal. 457
; ; Mills'
Ann. St. Colo. 1912, § 6992 Clayton v. Hallett, 30 Colo. 231, 70 Pac. 429, 59
;

L. K. A. 407, 97 Am. St. Rep. 117 Haggin v. International Trust Co. (Colo.)
;

169 Pac. 138, L. R. A. 1918B, 710; Gen. St. Conn. 1918, § 5081; Eccles v.
Rhode Island Hospital Trust Co., 90 Conn. 592, 98 Atl. 129; Doughten v.
Vandever, 5 Del. Ch. 51; Park's Ann. Civ. Code Ga. §§ 4603^608; Bolick
v. Cox, 145 Ga. 888, 90 S. E. 54; 6 Jones & A. Ann. St. 111. 1913, p. 6443;
Erskine v. Whitehead, 84 Ind. 357; Beidler v. Dehner, 178 Iowa, 1338, 161
N. W. 32; Ky. St. §§ 317-319; Simmons' Ex'r v. Hunt, 171 Ky. 397,
188 S. W. 495 ;Miller v. Taitum,^ 131 Ky. 490, 205 S. W. 557 ;Act No. 124
of 1SS2, La.; Succession of Meunier, 52 La. A!nn. 79, 26 South. 776, 48
'

L. R. A. 77 ; Preachers' Aid Soc. of Maine Conference of Methodist Episcopal

Church V. Rich, 45 Me. 552 ; Bills v. Pease, 116 Me. 98, 100 Atl. 146, L. R. A-
§ 54) HISTOET —STATUTE OP CHARITABLE USES 199

The enumeration of charitable purposes in the Statute of' Char-

itable Uses not considered exclusive, even in those states
is
where that statute is adopted as a part of the common law. Many-
other analogous and similar purposes are allowed as valid char-
itable objects. The statute merely set forth some of 'the more
common charities then in force."" "From the foregoing authorities,
it clearly appears that the statute cannot be looked to as the sole
test of what is a public charity, but that 'many other uses, not
named, and not within the strict letter of the statute, but which,
coming within its spirit, equity and analogy, are considered char-
itable.' " "
T^e English law with respect' to charitable trusts is affected
by two recent statutes."^

1917D, 1060; Sanderson v. White, 18 Pick. (Mass.) 328, 29 Am. Dec. 591;
Thorp V. Lund, 227 Mass. 474,yll0 N. E. 946, Ann. Oas. 1918B, 1204; Const.
Mo. art. 2, § 8; Rev. St. Mo. 1909, § 8047; Buchanan v. Kennard, 234 Mo.
117, 136 S. W. 415, 37 L. E. A. (N. S.) 998, Ann. Cas. 1912D, 50 Catron v.
;

Scarrltt Collegiate Institute, 264 Mo. 713, 175 S. W. 571; In re Nilson's Es-
tate, 81 Neb. 809, 116 N. W. 971; In re Hartung's Estate, 40 Nev. 262, 160 Pac.
782 ; Gagnon v. Wellman, 78 N. H. 327, 99 Atl. 786 Board of Education of
;

City of Albuquerque v. School Dist. No. 5 of Bernalillo County, 21 N. M. 624,

157 Pac. 668; Revisal N. C. 1908, §§ 3922, 3923; Hagen v. Sacrison, 19 N. D.
160, 123 N. W. 518, 26 L. R. A. (N. S.) 724 Landis v. Wooden, 1 Ohio St. 160,
;

59 Am. Dec. 615 ; Pennoyer v. Wadhams, 20 Or. 274, 25 Pac. 720, 11 L. R. A.

210 1 Purd. Pa. Dig. (13th Ed.) p. 592 et seq. In re Close's Estate, 260 Pa.
; ;

269, 103 Atl. 822; Rhode Island Hospital Trust Co. t. Olney, 14 R. I. 44^;
Shields v. Jolly, 1 Rich. Eq. (S. C.) 99, 42 Am. Dec. 349; Gibson v. Frye
Institute, 137 Tenn. 452, 193 S. W. 1059, L, R. A. 1917D, 1062 Hopkins v.
;

TTpshur, 20 Tex. 89, 70 Am. Dec. 375 ; Lightfoot v. Poindexter (Tex. Civ. App.)
199 S. W. 1152 ; United States v. Late Corporation of Church of Jesus Christ
of La tter-Day Saints, 8 Utah, 310, 31 Pac. 436; Burr's Ex'rs v. Smith, 7 Vt.
241, 29 Am. Dec. 154; In re Stewart's Estate, 26 Wash. 32, 66 Pac. 148, 67
Pac. 723 ; Susmann v. Xoung Men's Christian Ass'n of Seattle, 101 Wash. 487,
172 Pac. 554 ; Comp. St. Wyo. 1910, § 3588.
00 Clayton v. Hallett, 30 Colo. 231, 70 Pac. 429, 59 L. R. A. 407, 97 Am. St.
Rep. 117; Garrison v. Little, 75 111. App. 402; Strother v. Barrow, 246 Mo.
241, 151 S. W. 960 HayVs v. Carr, 70 N. H. 463, 49 Atl. 638 In re Kim-
;'
;

berly's Estate, 249 Pa. 483, 95 Atl. 86 ; Harrington v. Pier, 105 Wis. 485, 82
N. W. 345, 50 L. R. A. 307, 76 Am. St. Rep. 924.
Bi Buchanan v. Kennard, 234 Mo. 117, 136 S. W. 415, 420, 37 L. R. A. (N.
S.) 993, Ann. Cas. 1912D, ^0.
/ 52 Mortmain and Charitable Uses Act, 51 & 52 Vict. c. 2 (1888) ; Charitable
Uses Act, 54 & 55 Vict. c. 73 (1891).
 200 THE TUUST PURPOSE^CHARITABLE TRUSTS (Ch. 7

INDEFINITENESS OF PURPOSE
55. While a charitable trust must be indefinite as to beneficiaries,
it must be definite as to purpose. If the attempted char-
itable trast is so vague Or indefinite as to the class to be
benefited ot the purpose to be accomplished that it is in-
capable of being understood, equity will declare it void.

has previously been shown that indefiniteness of beneftciaries

It
is necessary to a charitable trust. On the other, hand, indefinite-
ness of purpose is fatal to a charitable trust, as it is to a private
~

trust. /

If a contract is so uncertain, vague, and indefinite that its mean-

ing cannot be ascertained by a court, the court will declare it void
for uncertainty, and will not specifically enforce it or give damages
for its breach. ^ Any transaction from which it is claimed legal or
'

equitable rights have arisen may be so ambiguous and equivocal

that courts cannot give effect to it. A
trust, private or public, is
no exception to this rule. If the court cannot tell what the settlor
meant to be done by' the trustee, it cannot tell whether the trustee
has performed his duty, it cannot direct the trustee, and it will de-
cline to sustain the trust.
While the settlor of a charitable trust must leave the selection
of the specific beneficiaries to the trustees, the settlor must make
clear the class from which the selection is to be made. The set-
tlor, if he wishes the trust to be charitable, must not make the
beneficiaries A., B., and C, definite persons but he must clearly
;

name the class from which ~the trustee may select definite per-
sons, as, for example, the poor of the town of X., or all the Protes-
- tant clergymen of the state of Michigan.
This rule against too great vagueness and uncertainty of pur-
pose has been variously stated by the courts. The New Yotk Court
of Appeals has/ said that a charitable trust "may be so indefinite
and uncertain in its purposes as distinguished from its beneficiaries
as to be impracticable, if not impossible for the courts to admin-
ister." °^ "It is sufficient if there be a trust and a particular char-
itable purpose, as distinguished from a gift to charity generally.
* * * A public charity, within the rule ijnentioned, is sufficient-
ly definite as to purpose if its general nature be clearly stated, or
it can be made otherwise certain by the trustees clothed with the

power of administering the trust within the limits of the declared

B8 In re Shattuck's Will, 193 N. Y. 446, 451, 86 N. E. 455. ,

 ,

55^ INDEFINITENESS OF* PURPOSE 201

purpose." "* "Indefiniteness as to the individual beneficiary is no

objection to the validity of a charitable trust. On the cofatrary,
such indefiniteness is rather a characteristic feature of a good de-
vise to charitable uses. It is sufficient if the class to be bene-
fited is designated in a general way and the practical, application
of the gift to its intended uses is confided to a trustee."°° "It is
necessary only that the object of a benevolent trust^should be cer-
tain. To designate the individuals who are intended to be benefited
would be to destroy its character as a charitable trust.""*
No rules can be stated which will be of much assistance in de-
termining when a charitable trust is too vague as to purpose and
when not. The following illustrative cases will show the practical
construction given to the words "vagueness" and "indefiniteness of
purpose."
The following directions concerning charitable trusts have been
held to be sufficiently definite as to purpose and class, and, there-
fore, to create enforceable trusts: To be expended in said city
by the erection of schoolhouses for the education of the poor;"''
to be used for the benefit of the white public schools or ^or a city
hospital, as the city authorities should elect; ""^ to the vestrymein
>

of a church, to be used as they deem best for the interests of the

church; °° to be devoted perpetually to human beneficence and
charity; "'' in trust for the worthy poor of the town of P., as
may be in needy and -necessitous circumstances, and in any mis-
fortune;*^ for the support of the poor of a certain county;'^
for the diffusion of useful knowledge and instructioij among
the institutes, clubs or meetings' of the working classes, or
manual laborers, by the sweat of their brow *^ to establish at
;

I. an industrial training school for children and a library to be

used by the people of I.; ** to be used in distributing Bibles to the

poor and destitute ;*° for the establishment of a home, for poor
,

B4 Harringt(*n v. Pier, 105 Wis. 485, 504, 82 N. W. 345, 50 L. R. A. 307, 76

Am. St. Rep. 924.
56 Wilson V. First Nat. Bank of Independence, 164 Iowa, 402, 145 N. W. 948,
951, Ann. Cas. 1916D, 481.
66 Hays V. Harris, 73 W. Va. 17, 80 S. E. 827, 830.
67 Handley v. Palmer (C. C.) 91 Fed. 948.
68 City of Huntsville v. Smith, 137 Ala. 382, 35 South. 120]
6 8 Biscoe V. Thweatt, 74 Ark. 545, 86 S. W. 432^4 Ann. Cas. 1136.

60 In re Hinckley's Estate, Myr. Prob. (Cal.) 189*

61 Strong's Appeal, 68 Conn. 527, 37 Atl. 395.
62 Heuser v. Harris, 42 111. 425.
88 Sweeney v. Sampson, 5 Ind. 465. '

«* Wilson V. First Nat. Bank of Independence, 164 Iowa, 402, 145 N. W. 948,
Ann. Cas. 1916D, 481.
5 Kasey v. Fidelity Trust Co., 131 Ky. 609, 115 S. W. 739.
 ;

202 THE TRUST PURPOSE —CHARITABLE TRUSTS (Ch. 7

Catholic men;°° to be used in the dissemination of the gospel at

home and abroad "' in trust to be used purely and solely for char-
;

itable purposes, for tlje greatest relief of human suffering, human

wants, and for the good of the greatest number; ** for benevolent
and charitable purposes ;°° to the cause of Christ, for the benefit
and promotion of true evangelical piety and religion '"' for the
propagation of the Christian religion among the heathen '^ to ;

be applied for the prqrhotion of agricultural or horticultural im-

provement, or other philosophical or philanthropic purposes, at
their discretion; ^^ for such charitable objects as the trustee shall
think proper; ''^ for the repair and maintenance of parsonages and
church edifices and secondarily for the general advancement of
Christianity '* for the benefit of the poor in the state and for char-
;

itable and benevolent purposes therein; ''^ for the promotion of the
religion of Christian Science, as taught by me; '" to provide shel-
ter, necessaries of life, education, general or specific, and such
other financial aid as may seem to them fitting and proper to such
other persons as they ^hall select as being in need of the same;''
to be applied to the benefit of such charitable' and benevolent as-
sociations and institutions of learning for the general uses and
purposes of such associations and institutions as my
said execu-
tors shall select; '* to the advancement of the Christian religion; '°
for foreign missionary work *" for such religious, charitable and
;

benevolent purposes as the trustees think best; *^ for the tuition of

«« Coleman v. O'Leary's Bx'r, 114 Ky. 388, 70 S. W. 1068.

8'' Attorney. General v. Wallace's Devisees, 7 B. Mon. (46 Ky.) 611.
8 8 Everett v. Carr, 59 Me. 325. "To be spent in charity in Italy and New
York City" is not too indefinite. Stewart v. Fradchetti, 167 App. Div. 541,
153 N. T. Supp. 453.
8 8 Fox V. Gibbs, 86 Me. 87, 29 Atl. 940.
TO Going V. Emery, 16 Pick. (Mass.) 107, 26 Am. Dec. 645.
''^ Phillips Academy
v. King, 12 Mass. 546. A gift "for missions and like
good objects" is valid. Coffin v. Attorney General, 231 Mass. 579, 121 N. B.
397.
T2 Rotch V. Emerson, 105 Mass. 431.
T3 Gill V. Attorney General, 197 Mass. 232, 83 N. fi.676.
'* Sandusky v. Sandusky, 261 Mo. 351, 168 S. W. 1150.
'6 Haynes v. Carr, 70 N. H. 463, 49 Atl. 638.
" Glover v. Baker, 76 N. H. 393, 83 Atl. 916.
^''
In re Robinson's Will, 203 N. Y. 380, 96 N. E. 925, 37 L. R. A. (N. S.)
1023. V
78 In re Cunningham's Will, 206 N. Y. ,601, 100 N. E. 437.
T» Miller v. Teachout, 24 Ohio St. 525.
8" Presbyterian Board of Foreign Missions v. Culp, 151 Pa. 467, 25 Atl. 117.
»i In re Dulles' Estate, 218 Pa. 162, 67 Atl. 49, 12 L. R. A.
(N. S.) 1177.
 ;

§ 55) INDEPINITENESS OF PURPOSE 203

poor children ;
*^ for the benefit of public schools ;
*' for mission
work in the United States;** for such charitable purposes and
uses as the trustees may select.*®
On the other hand, the following provisions have been held too
vague and indefinite as to purpose to create valid charitable trusts:
For the benefit of widows and orphans of Masons or other worthy
objects of charity, and, if G. should be living and couy be found,
for his benefit also ; ** for the publication of a revised edition of the
New Testament, King James version *' for the most deserving
;

poor of the city of N. ; ** for the benefit of a designated anti-saloon

league; *° for the education of pious, indigent youth who are pre-
paring themselves for the rfiinistry and those who adhere strictly
to the Westminster Confession in its literal meaning '" to be di-
vided among the Sisters of Charity by T., M., and R. ;'^ foi- good
a:nd charitable purposes, according to the judgment of the trustee °^ ;

to the Jesuit order for the purposes of education or religion '* for ;

the purpose of converting and Christianizing the African race °* ;

for religious and charitable purposes-and objects, in such sums and

in such manners as will, in the, trustee's judgment, best promote
the cause of Christ ; *' to the owner of a sanitarium to be used as
he sees best for carrying on the work of relieving suffering; °* to
,
advance the cause of religion and promote the cause of charity in
such a manner as the wife of the settlor might think would be most
conducive to carrying out the settlor's wishes;"' to 'a trustee for

82 DyeV. Beaver Creek Ohurch,\48 S. C. 444, 26 S. E. 717, 59 Am. St. Rep. 724.
83 Bell County v. Alexander, 22 Tex. 350, 73 Am. Dec. 268.
8* Jordan v. Universalist General Convention Trustees, 107 V^. 79, 57 S. E.
652.
85 In re Stewart's Estate, 26 Wash. 32, 6g Pac. 148, 67 Pac. 723.
88 Crim V. Williamson, 180 "Ala. 179, 00 South. 293.
8' In re Budd's Estate, 166 Cal. 286, 1^5 Pac. 1131.
88 Hughes V. Daly, 49 Conn. 34.
8»- Volunteers of America v. Peirce, 267 111. 406, 108 N. E. 318.
»» McCord V. Ochiltree, 8 Blackf. (Ind.) 15.
»i Moran v. Moran, 104 Iowa, 216, 73 N. W. 617, 39 L. K. A. 204, 65 Am.
St. Rep. 443.
»2 Gerick'sEx'r v. Geriek, 158 Ky. 478, 165 S. W. 695. Under the Kentucky
statute a gift "for charity" has been held too uncertain. Simmons' Ex'r v.
Hunt, 171 Ky. 397, 188 S. W. 495.
98 Coleman v. O'Leary's Ex'r, 114 Ky. 388, 70 S. W. 1068.
o*Rizerv.' Perry, 58 Md. 112.
95 Maught v. Getzendanner, 65 Md. 527, 5 Atl. 471, 57 Am. Rep. 352. In
Jones V. Pktterson, 271 Mo. 1, 195 S. W. 1004, L. R. A. 1917P, 660, a gift "for
missionary purposes for the propagation of the Christian religion" was held
void.
96 Stoepel V. Satterthwaite, 162 Mich. 457, 127 N. W. 673.
97 Hadley v. Forsee, 203 Mo. 418, 101 S. W. 59, 14 L. R. A. (N. S.) 49.
 '

204 THE TRUST PURPOSE^CHAEITABLE TRUSTS (Ch. 7

the purpose of making such distribution among religious, benevo-

lent and charitable objects as he may select; °' to use as the trustee
may desire in the Master's work;** to the poor of, a certain
church ^ for the Lord's work ; to be applied to foreign missions
;
'^

and poor saints ; ^ to be used in a manner best to promote the inter-

est of the church and the cause of God;* for the benefit of the
New Jerusalem Church, as the trustees deem best ; ' for the prop-
agation of the gospel in foreign lands ;
" for the benefit and behoof
pf the Roman Catholic Church.'

RELIGIOUS JURPOSES
56. The maintenance and propagation of religion by providing for
places of worship, the salaries and maintenance of reli-
gious workers, the education of the young in religion, the
upkeep of home and foreign missions, and other similar re-
ligious objects are valid charitable purposes.
The religion to be forwarded need not necessarily be the Chris-
tian religion or any branch or sect thereof, but may be any
^
religion which does not teach immoral or criminal doc-
trines.

The maintenance and encouragement of religious institutions

are valid charitable purposes. A
charitable trust may be for the
benefit of religion in any one of many ways. Thus, the valid char-
itable trust for religious purposes may provide a site for the erec-
tion of a house .of worship ;* or for the erection of a church build-
/ -^

»8 v. Roome, 70 N. J. Eq. 562, 62 Atl. 392.

Hegeman's Ex'rs
In re Seymour, 67 Misc. Rep. 347, 124 N. Y. Supp. 637.
»9

1 Pratt V. Roman Catholic Orphan Asylum, 20 App. Div. 352, 46 N. T. Supp.

1035, affirmed Conkling v. Same, 166 N. Y. 593, 59 N. E. 1120.

2 In re Compton's Will, 72 Misc. Rep. 289, 131 N. T. Supp. 183.
3 Bridges y. Pleasants, 39 N. C. (4 Ired. Eq.) 26, 44 Am. Dec. 94.

* Reeves v. Reeves, 5 Lea' (Tenn.) 644. ,

5 Fifield V. Van Wyck's Ex'r, 94 Va. 557, 27 S. E. 446, 64 Am. St. Rep. 745.

« Carpenter v. Miller's Ex'rs, 3 W. Va. 174, 100 Am. Dec. 744.

' McHugh v. McCole, 97 Wis. 166, 72 N. W. 631, 40 L. R. A. 724, 65. Am. St.
'
Rep. 106.
8 Grundy v. Neal, 147 Ky. 729, 145 S. W. 401; Little v. WiUford, 31
Minn. 173, 17 N. W. 282 Mott v. Morris, 249 Mo. 137, 155 S. W. 434. On this
;

general subject see Notes on the Strict Interpretation of Ecclesiastical Trusts,

H. J. Laski, 36 Can. Law T. 190. ,
 ;

§ 56) RELIGIOUS PURPOSES 205

ing; or to repair a church edifice; ^* or for the 'construction of a

*

a^ particular church or denomina-

parsonage ;
^^ for the support of

tion ^^ for the support of a course of sermons " for the support of
; ;

the rector or pastor of a particular church ^* for the support of ;

home or foreign missions ; ^° for the education of young men in the

ministry ; ^° for the dissemination of religious books ^^ for the use ;

of a Sabbath school or other religious educational institution;^'

or for the benefit of a Young Men's Christian Association.^®
Must the trust, in order to be valid as a charitable trust, be for
the support of any particular religion? Must the religion be some

9 Appeal of Eliot, 74 Conn. 586, 51 Atl. 558 In re Bartlett, 16S Mass. 509,
;

40 N. E. 899 Teele v. Bishop of Derry, 168 Mass. 341, 47 N. E. 422, 38 L. R.

;

A. 629, 60 Am. St. Hep. 401 Attorney General v. Armstrong, 231 Mass. 196,
;

120 N. E. 678.
10 Jones V. Habersham, 107 U. S. 174, 2 Sup. Ct. 336, 27 L. Ed. 401; French
V. Calkins, 252 111. 243, 96 N. E. SSi Chase v. Dickey, 212 Mass. 555j, 99 N.
;

E. 410; Glover v. Baker, 76 N. H. 393, 83 Atl. 916.

11 In re Bartlett, 163 Mass. 509, 40 N. E. 899; Sandusky v. Sandusky, 261
Mo. 351, 168 S. W. 1150 Van Wagenen v. Baldwin, 7 N. J. Eq. 211.
; ,

i2Blscoe V. Thweatt, 74 Ark. 545, 86 S. W. 432, 4 Ann. Cas. 1136; People

V. Braucher, 258 111. 604, 101 N. E. 944, 47 L. R. A. (N. S.) 1015; Appeal of
Eliot, 74 Conn. 586, 51 Atl. 558; Parish of Christ Church v. Trustees of
Donations & Bequests for Church"^ Purposes, 67 Conn. 554, 35 Atl. 552 Smith ;

V. Gardiner, 36 App. D. C. 485; Crawford v. Nies, 220 Mass. 61, 107 N. E.

3S2; Osgood v. Rogers, 186 Mass. 238, 71 N. E. 306; Attorney General v.
Town of Dublin, 38 N. H. 459 Glover v. Baker, 76 N. H. 393, 83 Atl. 916
;

De Camp v. Dobbins, 29 N'. J. Eq. 36 Trustees of Associate Reformed Church

;

in Newburgh v. Trustees of Theological Seminary at Princeton, 4 N. J. Eq.

77 Congregational TJnitarian Soc. v. Hale, 29 App. Div. 396, 51 N. Y. Supp!
;

704 Potter v. Thornton, 7 R. I. 252.

;

13 Attorney General v. Rector,, etc., of Trinity Church, 9 Allen (91 Mass.)

422.
i*Prettyman v. Baker, 91 Md. 539, 46 Atl. 1020; Trustees of Cory Uni-
versalist Soc. at Sparta v. Beatty, 28 N. J. Eq. 570 Tucker v. St. Clement's
;

Church, 5 N. X. Super. Ct. 242. Support of superannuated ministers is also

naturally charitable. Buckley v. Monck (Mo.) 187 S. W. 31.
15 Hitchcock V. Board of Home Missions of Presbyterian Church, 259 111.

288, 102 N. E. 741, Ann. Cas. 1915B, If Miller v. Tatum, 181 Ky. 490, 205 S.
W. 557 ; Board of Foreign Missions of General Synod of Bvangelickl Lutheran
Church V. Shoemaker, 133 Md. 594, 105 Atl. 748 Bartlet v. King, 12 Mass.
;

537, 7 Am. Dec. 99; Bruere v. Cook, 63 N. J. Eq. 624, 52 Atl. 1001.
16 Field V. Drew Theological Seminary (C. C.) 41 Fed. 371; Rainey v.
Laing, 58 Barb. (N. Y.) 453.
i^ Magill V. Brown, Fed. Cas. No. 8952 Simpson v. Welcome, 72 Me.
; 490,
39 Am. Rep.""349.
18 Morville v. Fowle, 144 Mass. 109, 10 N. B. 766; Newcomb v. St. Peter's
Church, 2 Sandf. Ch. (N. Y.) 636.
19 GoodeU v. Union Ass'n of Children's Home of Burlington Cotinty,
^
29 N.
J. Eq. 32.
 206 THE TRUST PURPOSE —CHARITABLE TRUSTS (Ch. T

siect or denomination of Christianity ? May it be in aid of the Jew-

ish religion, or of Mormonism, or of Mohammedanism ? ,

The original idea of religious charitable trusts in England was

undoubtedly that they were for the benefit of the Established
Church but it is now clear that religious trusts for th'e benefit of
;

dissenting churches are valid,^" and by statute Jewish and Roman

Catholic religious charities have been given the same support ac-
corded to the dissenting Protestant charities. ^^
Trusts for the purpose of having masses said for the souls of de-
ceased persons have until recently been regarded as void as super-
stitious uses in England ^^ but in America the doctrine of super-
;

stitipus uses has no force.^^

In Thornton v. Howe ^*
the nature of the religion which equity
would support was considered.
as a charity A
testatrix created a
trust to aid in the propagation of the writings of Joanna Southcote,
a person who believed that she was with child by the Holy Ghost
and had received divine revelations. The court sustained the trust,,
notwithstanding that much of the writings of Joanna Southcote ap-
peared to the court foolish and profitless. The court said that "the
Court of Chancery makes no distinction between one sort of relig-
ion and another. * * * Neither does the court, in this respect,
make any distinction between one sect and another. It may be that
,
the tenets of a particular sect inculcate doctrines adverse to the very
foundations of all religion, and that they are subversive of all moral-
ity. In such a case, if it should arise, the coiftt will not assist the
execution of the bequest, but will declare it void. * * * But if
the tendency were not immoral, and although this court might con-
sider the opinions sought to be propagated foolish or even devoid of
foundation, it would not, on that account, declare it void, or take it
out of the class of legacies which are included in the general terms
of charitable bequests." ^^

20 Shrewsbury Hornby, 5 Hare, 406 Attorney General v. Cock, 2 Ves. 273.

y. ;

21 St. 8 & 9 Vict.

59, S 2c.St. 3 & 4 Wm. IV, c. 115
; In re Michel's Trusts,
;

28 Beav. 39 Bradshaw v. Tasker, 2 Myl. & K. 221.

;

22 In re Blundell's Trusts, 30 Beav. 360; In re Fleetwood, 15 Ch. Div. 594;

In re Elliott, 39 Wkly. Kep. 297. The House of Lords held masses valid
charitable uses in Bourne v. Keane, 121 L. T. E. 426 (1919).
23 In re Kavanaugh's Will, 143 Wis. 90, 126 N. W. 672, 28 L. E. A. (N. S.)

470.
2* 31 Beav. 14.
^5 31 Beav. 14, 19-20. In Bowman v. Secular Soc, Limited [1917] App. Cas.
406, the House of Lords manifested a liberal tendency by sustaining a gift to
a society the object of which was in part to promote atheism. No trust was
Involved, but by analogy a trust to oppose religion would seem to be valid.
The case was discussed in 31 Harv. Law Eev. 289. Compare Zeisweiss v.
 '
§ 56), RELIGIOUS PURPOSES 207

In an early Supreme Court decision'" Mr. Justice Story, by way

of^ dictum, considered this problem. He seems to have been of the
opinion that a charitable trust which repudiated or attacked the
Christian religion would not be sustained. Said he : "It is unnec-
essary for us, however, to consider what would be the legal eflfect
of a devise in Pennsylvania for the establishment of a school or
college for the propagation of Judaism, or Deism, or any other form
of infidelity. Such a case is not to be presumed to exist in a Chris-
tian coufitry, and therefore it must be made out by clear and indis-
putable proof. Remote inferences, or possible results, or specula-
tive tendencies, are not to be drawn or adopted for such purposes.
There must be plain, positive, and express provisions, demonstrat-
ing, not only that Christianity is not to be taught, but that it is to
be impugned or repudiated." ^''
Probably in the United States at the present time a trust for the
propagation or support of any religion which did not have immoral
or criminal tendencies would be supported as a charitable trust.
Thus, a trust for the benefit of Shakers has been held valid,^* as
havq trusts in aid of the Swedenborgian religion ^° and trusts to
promote the doctrines of Christian Science.^"
In the case involving the propagation of Christian Science the
court'says: '^ "Mrs. Eddy had the constitutional right to entertain
such opinions as she chose, and to make a religion of them, and to
teach them to all others and their rights of belief are as extensive
;

as hers. Her legal right to teach was not ended with her death.
She might dispose of her property by a gift in public charity 'for
any use that is not illegal.' Whether her opinions are theological-
ly true, 'the court are not competent to decide.' To suffer the civil
magistrate to intrude his powers into the field of opinion, and to re-
strain the profession or propagation of principles on supposition of
their ill tendency, is a dangerous fallacy which at once destroys all
religious liberty ; * * * it is time enough, fpr the rightful pur-
poses of civil government, for its officers to interfere when princi-
ples break out into overt acts against peace and good order."

James, 63 Pa. 465, 3 Am. Rep. 558, where a gift to aid an infidel society
was held void as a charity. )

28 Vidal V. Girard's Ex'rs, 2 How. 127, 11 L. Ed. 205.

2 7 2 How. 127, 198, 199, 11 L. Ed. 205.
2 8Gass V. Wilhite, 2 Dana (Ky.) 170, 26 Am. Dee. 446.
29 In re Kramph's Estate, 228 Pa. 455, 77 Atl. 814.
80 Glover v. Baker, 76 N. H. 393, 83 Atl. 916.
»i Glover v. Baker, 76 N. H. 393, 420~83 Atl. 916.
208 THE TRUST PUBPOSE —CHARITABLE TRUSTS (Ch. 7

GIFTS FOR MASSES

57. In a majority of the American states trusts for the purpose of
having masses said for the soul of the settlor or for the
souls of others are valid charitable trusts for religious pur-
poses.
In a few jurisdictions gifts for the purpose of having masses said
are valid, although not considered charitable trusts.
'

In England trusts for the purpose of having masses said were

formerly held void as for superstitious uses,^^ but a recent decision
has held that the effect of modern legislation recognizing the Cath-
olic religion in England is to make gifts for masses valid.'* In Ire-
land they were regarded as valid as honorary trusts, though not le-
gally enforceable.^* But even in Ireland it was held the trust for
masses was void, if it created a perpetuity, inasmuch as it was not
a charity.'"
The doctrine of superstitious uses never had any force in Ameri-
ca, where freedom of worship is guaranteed to all. The New York
Court of Appeals, in discussing a case where a gift for masses was
inide, said that "in this state, where all religious beliefs, doctrines,
and forms of worship are long as the public peace is not
free, so
disturbed, the trust in question cannot be impeached on the ground
that the use to which the fund was attempted to be devoted was a
superstitious use. The efficacy of prayers for the dead is one of
the doctrines of the Roman Catholic Church, of which the testator
was a member; and those professing that belief are entitled in law
to the same respect and protection in their religious observances as
tljose of any other denomination. These observances cannot be
condemned by any court, as matter of law, as superstitious, and the
English statutes against superstitious uses can have no effect
'«
here."
In many American
states trusts for the purpose of having masses
said for the soul of the settlor, or of his family, or of persons gener-
ally, are held valid as charitable trusts. They are deemed to be
trusts for the purpose of having religious services performed, and

32 In re Fleetwood, 15 Ch. Div. 596; In re Blundell, 30 Beav. 360.

»' Bourne v. Keane, 121 L. T. R. 426. -
»* Keichenbach v. Qnin, 21 L.E. Ir. 138; Perry v. Tuomey, 21 L. R. Ir. 480.
8 5 Dillon T. Beilly, Ir. R. 10 Eq. 152; Beresford v. Jervis, 11 Ir. L. T. Rep.

128.
»8 Holland v. Alcock, 108 N. Y. 312, 329, 16 N. E. 305, 2 Am. St. Rep. 420.
 § 57) GIFTS FOE MASSES 209

the performance of such service is said to be a public benefit, and

not merely beneficial to the souls of the deceased persons.^' >

"The nature of the mass, like preaching, prayer, the communion,

and other forms of worship, is well understood. It is intended as
a repetition of the sacrifice on the cross, Christ offering Himself
,
again through the hands of the priest, and asking pardon for sin-
ners as He did on the cross, and it is the chief and central act of
worship in the Roman Catholic Church. It is a public and exter-
—
nal form of worship a ceremonial which constitutes a visible ac-
tion. It may be said for any special purpose, but from a liturgical
^oint of view every mass is practically the same. The Roman
Catholic Church believes that Christians who leave this world
without having sufficiently expiated their sins are obliged to, suffer
a temporary penalty in the other and among the special purposes
for which masses may be said is the remission of this penalty. A
bequest for such special purpose merely adds a particular remem-
brance to the mass, and does not, in our opinion, change the char-
acter of the religious service and render it a mere private benefit.
While the testator may have a belief that it will benefit his soul or
the souls of others doing penance for their sins, it is also a benefit to
all others who may attend or participate in it. * * * The be-
quest is not only for an act of religious worship, but it is an aid to
the support of the clergy. Although the money is not regarded as
a purchase of the mass, yet it is retained by the clergy, and, of
°'
course, aids in the maintenance of the priesthood."
"Masses are religious observances, and come within the religious
or pious uses, which are upheld as public charities." ^°
In one state it has been suggested that a trust for the purpose of
having masses said for the benefit of all souls is valid as a charita-
ble trust, but that a trust for masses for the souls of particular in-

s7in re Hamilton's Estate (Cal.) 186 Pac. 587; HoefCer v. Clogan, 171 111.
462, 49 N. E. 527, 40 L. R. A. 730, 63 Am. St. Rep. 241 Gllmore v. Lee, 237
;

111. 402, 86 N. E. 568, 127 Am. St. Rep. 330; Burke v. Burke, 259 111. 262, 102
N. E. 293; Coleman v. O'Leary's Ex'r, 114 Ky. 388, 70 S. W. 1068; In re,
Schouler, 134 Mass. 426; Kerrigan v. Tabb (N. J. Ch.) 39 Atl. 701; In re
Eppig, 63 Misc. Rep. 613, 11^ N. Y. Supp. 683 In re Rywolt's Estate, 81 Misc.
;

Rep. 103, 142 N. "?. Supp. 1066; Clark v. Halligan, 158 App. Div. 33, 142 N. T.
Supp. 980 ; In re Morris, 227 N. Y. 141, 124 N. E. 724 (prior to the statute of
1893 in New York all charitable trusts were impossible, and trusts for masses
were not sustained, therefore. See Holland v. Alcock, 108 N. Y. 312, 16 N. E.
305, 2 Am. St. Rep. 420) ; Appeal of Rhymer, 93 Pa. 142, 39 Am.' Rep. 736; In
re Kavanaugh's Will, 143 Wis. 90, 126 N. W. 672, 28 L. R. A. (N. S.) 470.
38 HoefCer v. aogan, 171 111. 462, 469, 470, 49 N. E. 527, 40 L. R. A. -730, 63

Am. St. Rep. 241.

3 9 In re Kavanaugh's Will, 143 Wis. 90, 126 N. W. 672, 675, 28 L. R. A.

(N. S.) 470.

BoGEET Trusts —14
 ;

210 THE TRUST PURPOSES-CHARITABLE TRUSTS (Ch. 7

ditiduals might be a private trust. In a case in which the masses

were to be "for the repose of all poor souls" the court said: "It
[the mass] is common, and public to all, as a religious ceremony,
and is therefore a religious or pious use, and is ,a public charity, as
distinguished from a private charity, which it might be if restricted
to masses for the souls of designated persons." *"
In two states trusts for masses seem to have been held valid as
private trusts.*^ This is upon reasoning which is not very clear,
unless the trusts are considered merely honorary and the gift prac-
, tically an absolute gift to the donee.
In two other states a gift for the purpose of having masses said
is held not to create any trust, but merely to amount to an absolute gift,
with a request as to its disposition.*^ In a Kansas case the words
of gift were "I give and bequeath to Rev. James Collins, for mass
:

for his grandfather's and grandmother's soul." The court said:

"The will does not undertake to create a trust. The language in
which it is made is advisory, persuasive, expressive of desire, 'prec-
atory,' as called in the law of wills ; but the pissing of the gift is
not conditioned upon the performance of the act enjoined. Upon
the conscience of the donee alone is laid the duty of performing the
sacred service named." "^
Occasionally courts have taken the stand that trusts for masses
are invalid, since they are not charities, and since there is no bene-
ficiary to enforce them as private trusts.** An Alabama court has
,
thus expressed its view "The bequest, in the present case, is, ac-
:

cording to the religious belief of the testator, for the benefit alon^
of his soul, and cannot be upheld, as a public charity, without of-
fending every principle of law by which such charities are sup-
ported. * * * It is not valid as a private truest, for the want of

*o Ackerman
v. Fichter, 179 Ind. 392, 101 N. E. 493, 496, 46 L. K. A. (N. S.)
221, Ann. Cas. 1915D, 1117.
*i In re'Lannon's Estate, 152 Cal. 327, 92 Pac. 870, 125 Am.
St. Eep. 58, 14
Ann. Cas. 1024 (but see In re Hamilton's Estate [Cal.] 186 Pac. 587) Moran ;

V. Moran, 104 Iowa, 216, 73 N. W. 617, 39 L. R. A. 204, 65 Am. St. Rep. 443
Wilmes v. Tiernay (Iowa) 174 N. W. 271, discjissed in 5 Iowa Law Bui. 253.
*2 Harrison v. Brophy, 59 Kan. 1, 51Pac. 883, 40 L. R. A. 721; Sherlnan r.
Baker, 20 R. I. 446, 40 ^Atl. 11, 40 L. R. A. 717.
*3 Harrison v. Brophy, 59 Kan. 1, 2, 51 Pac. 883, 40 L. R. A. 721.
**Festorazzl v. St. Joseph's. Catholic Church of Mobile, 104 Ala. 327, 18
South. 394, 25 L. R. A. 360, 53 Am. St. Rep. 48 McHugh v. McCole, 97 Wis.
;

166, 72 N. W. 631, 40 L. R. A. 724, 65 Am. St. Rep. 106. But this case seems
overruled by In re Kavanaugh's Will, 143 Wis. 90, 126 N. W. 672, 28 L. R. A.
(N. S.) 470. In 'Minnesota a trust for masses was declared invalid under
the peculiar statutory condition there prevailing. Shanahan v. Kelly, 88 Minn.
202, 92 N. W. 948.
 ;

§ 58) EDUCATIONAL PURPOSES 211

a living beneficiary. A trust in form, with none to enjoy or enforce

the use, is no trust." *° '

Where a trust for masses is regarded as invalid as a trust, it has

been held that a contract inter vivos to use money for the purpose
of having masses said was valid.**

EDUCATIONAL PURPOSES
58. Trusts for the foundation, support, and maintenance of schools,
colleges, libraries, art galleries, museums, and other simi-
lar institutions, and for the aid of students, teachers^ and
Trusts to pro-
investigators, are vcdid charitable trusts.
cure changes in the laws of the state or nation are valid
charitable trusts.

It is elementary law that trusts for the benefit of education are

charitable. "Not only are charities for the maintenance and relief
of the poor, sick, and impotent charities in the sense of the common
law, but also donations for the establishment of colleges, schools,
and seminaries of learning, and especially such as are for the edu-
cation of orphans and poor scholars." " "It is a rule in equity that
a gi£t of real or personal estate, either inter vivos or by will, to
**
promote education, is a charity."

The range of educational benefactions which are valid as chari-

table trusts is wide. Trusts are valid as educational charitable
trusts, if for the purpose of founding or maintaining a school *° or
college ; °* or for the purpose of aiding or supporting public

*B Festorazzl v. St. Joseph's Catholic Church of Mobile, IW Ala. 327, 330,

18 South. 394, 25 L. R. A. 360, 53 Am. St. Rep. 48.
*6 Oilman v. McArdle, 99 N. X. 451, 2 N. B. 464, 52 Am. Rep. 41.
*' Story, J., in Vidal v. Girard's Ex'rs, 2 How. 127, 191, 192, 11 L. Ed. 205.
*8 Inhabitants of Hadley v. Trustees of Hopkins Academy, 14 Pick. (Mass.)
240, 253.
*» Russell V. Allen, 107 U. S. 163, 2 Sup. Ct. 327, 27li. Ed. 397; Bolick v.
Cox, 145 Ga. 888, 90 S. B. 54; Gran;! Prairie Seminary v. Morgan, 171 111.
444, 49 N. B. 516 ; Wilson v. First^ Nat. Bank of Independence, 145 N., W.
948, 164 Iowa, 402, Ann. Cas. 1916D, 481 ; Curling's Adm'rs v. Curling's Heirs,
8 Dana (Ky.) 38, 33 Am. Dec. 475; Halsey v. Convention of Protestant
Episcopal Church, 75 Md. 275, 23 Atl. 781 ; Sears v. Chapman, 158 Mass. 400,
33 N. E. 604, 35 Am. St. Rep. 502 Keith v. Scales, 124 N. C. 497, 32 S. B. 809
;

Price V. Maxwell, 28 Pa. 23; Franklin v. Armfleld, 2 Sneed (Tenn.) 305;

Kelly V. Love's Adm'rs, 20 Grat. (Va.) 124.
5 Connecticut College for Women v. Calvert, 87 Conn. 421, 88 Atl. 633, 48 L.
R. A. (N. S.) 485; Dexter v. President, etc., of Harvard College, 176 Mass.
192, 57 N. B. 371 ; Alfred University v. Hancock, 69 N. J. Bq. 470, 46 Atl. 178
212 THE TRUST PURPOSE —CHARITABLE TR,USTS (Ch. 7

'" ; "'
schools,"* or to procure a site or erect a building for a school
or for the purpose of employing more teachers °* or paying higher
salaries to those already employed ; '*' or to aid needy students in ob-
taining an education,' ° or to found scholarships '^ or award medals
for good work in educational institutions ; °' or for the foundation
or maintenance of Jibraries,°° historical societies,'" schools, labora-
tories, or museums dedica,ted to the advancement of science or
art ;
**
or for the education of certain classes of persons,, as, for ex-
ample, Indians °^ or the poor or orphans ®* or for education in cer-
;

tain branches of study, as, for example, in preparation for the min-

Ealey v. Umatilla County, 15 Or. 172, 13 Pac. 890, 3 Am. St. Bep. 142 ; In re
Stewart's Estate, 26 Wash. 32, 66 Pac. 148, 67 Pac. 723.
"1 Trustees of New Castle Common v. Megginson, 1 Boyce (Del.)v 361, 77
Atl. 565, Ann. Oas. 1914A, 1207; Davis v. Inhabitants of Barnstable, 154
Mass. 224, 28 N. E. 165; Smart v. Town of Durham, 77 N. H. 56, 86 Atl. 821;
In re John's WUl, 30 Or. 494, 47 Pac. 341, 50 Pac. 226, 36 L. R. A. 242.
5 2 Price V. School Directors, 58 111. 452; Baldwin's Ex'rs v. Baldwin, 7
N. J. Eq. 211.
"3 Meeting St. Baptist Soe. v. Hail, 8 R. I. 234.
04 Webster v. Wiggin, 19 R. I. 73, 31 Atl. 824, 28 U R. A. 510.
»5 Price V. Maxwell, 28 Pa. 23. <

"* Sawyer v. Dearstyne (Sup.) 139 N. Y. Supp. 955; In re Curtis' Estate,

88 Vt. 445, 92 Atl. 965. It is not necessary -ihat the trust be to aid poor
'
students only. Hoyt v. Bliss, 93 Conn. 344, 105 Atl. 699.
87 In re Miller, 149 App. Div. 113, 133 N. Y. Supp. 828.
5 8 In' re Bartlett, 163 Mass. 509, 40 N. E. 899.
s» Duggan V. Slocum, 92 Eed. 806, 34 C. C. A. 676 ; Fordyce v. Woman's
Christian Nat. Library Ass'n, 79 Ark. 550, 96 S. W. 155, 7 L. R. A. (N. S.)
485 ; Franklin v. Hastings, 253 111. 46, 97 N. E. 265, Ann. Cas. 1913A, 135 ; ^

Minns v. Billings, 183 Mass. 126, 66 N. E. 593, 5 L. R. A. (N. S.) 686, 97 Am.
St. Rep. 420 ; Maynard v. Woodard, 36 Mich. 423. That a library and lecture
room is to have a dance hall attached does not vitiate the charity, even
if it be assumed that the furtherance of dancing is not a charitable purpose.
Gibson v. Frye Institute, 137 Tenn. 452, 193 S. W. 1059, L. R. A. 1917D, 1082.
60 Missouri Historical Soc. v. Academy of Science, 94 Mo. 459, 8 S. W. 346.
«i Mason v. Bloomington Library Ass'n, 237 111. 442, 86 N. E. 1044, 15 Ann.
Cas. 603; Richardson v. Essex Institute, 208 Mass. 311, 94 N. E. 262, 21
Ann. Cas. 1158 Lackland v. Walker, 151 Mo. 210, 52 S. W. 414 Farmers'
; ;

Loan &. Trust Co. v. Ferris, 67 App. Div. 1, 73 N. Y. Supp. 475; Palmer v.
Union Bank, 17 R. I. 627, 24 Atl. 109; Almy v. Jones, 17 R. I. 265, 21 Atl.
'

616, 12 L. R. A. 414.
6 2Magill V. Brown, Fed. Cas. No. 8952.

6 3 Clayton v. Hallett, 30 Colo. 231, 70 Pac. ,429, 59 L. R. A. 407, 97 Am. St

Rep. 117; Moore's Heirs v. Moore's Devisees, 4 Dana (Ky.) 354, 29 Am. Dec.
417 ; Crow ex rel. Jones v. Clay County, 196 Mo. 234, 95 S. W. 369 Mason's ;

Ex'rs V. Trustees of Methodist Episcopal Church at Tuckerton, 27 N. J. Bq.

47; Green v. Blackwell (N. J. Ch.) 35 Atl. 375; Clement v. Hyde, 50 Vt. 716,
28 Am. Rep. 522; Kinnaird v. Miller's Bx'r, 25 Grat. (Va.) 107.
§ 58) EDUCATIONAL PURPOSES 213

istry,"* or in preparation for admission to the 'Naval Academy," or

in the domestic and useful arts ; ** or for the distribution of
books,"^ or the diffusion of knowledge/^ Or for social service
work among young men and boys/* or for the erection of a monu-
ment in a public park dedicated to and illustrative of music.^°
It is not essential that the instruction to be given in the educa-
tional institution should be gratuitojus. That the gift aids members
of the public in obtaining an education is sufficient, even though
they are obliged to bear part of the expense themselves."-
IThe question has arisen w^hether a trust for the purpose of pro-
curing a change in the Constitution or laws of the nation or a state
is a valid educational charitable trust. In a Massachusetts case '^
the view was taken that a trust for the purpose of obtaining laws
granting the suffrage to women was not a valid charitable trust,
but the later and apparently better view is that such trusts are law-
ful as educational trusts. If they encourage progress and change by
means of evolution rather than revolution, they ought to be protect-
ed as of the highest advantage to the public. So, in a later Illi-
nois case,^' it has been held that a trust for the purpose of obtain-
ing the passage of laws giving women the right to vote is a yalid
charitable trjust.;} And in a New Jersey decision '* a, trust for the
dissemination of the writings of^ Henry George was upheld, al-
'

though these writings advocate a radical change in the method of

landholding, in the United States and characterize the present sys-
tem as unjust. Beasley, C.J., makes the following statement: "I
cannot pefceive for what reason it is incompatible with judicial
position to aid, if invested with such power, in the circulation of
the works of a learned and ingenious man, putting under exami-
nation and discussion any part of the legal system. Jt would not
seem to me that, as a judge, I was called upon to discard the use

6*Woodroof V. Hundley, 147 Ala. 287, 39 South. 907; Trustees of Wdsh-

bupn College v. OfHara, 75 Kan. 700, 90 Pac. 234.
»5 Taylor v. Columbian University, 226 U. S. 126, 33 Sup. Ct. 73, 57 L. Ed.
152.
66 Webster Morris, 66 Wis. 366, 28 N. W. 353, 57 Am. Rep. 578.
v.
•' Pickering Shotwell, 10 Pa. 23.
v.
6 8 Sweeney v. Sampson, 5 Ind. 465. A trust for "the furtherance of the
broadest interpretation of metaphysical thought" was sustained in Vineland
Trust Co. v. Westendorf, 86 N. J. Bq. 343, 98 Atl. 314.
'
6» Starr v. Selleck, 145 App. Div. 869, 130 N. Y. Supp. 693.
7 Rhode Island Hospital Trust Co. v. Benedict, 41 R. I. 143, 103 Atl. 146.
71 Burke ,v. Burke, 259 lU. 262, 102 N. E. 293.
'2 Jackson v. Phillips, 14 Allen, 539.
'8 Garrison V. Little, 75 111. App. 402.
'* George t. Braddock, 45 N. J, Eq. 757, 18 Atl. ^81, 6 L. R. A. 511, 14 Am.
St. Rep. 754.
214 THE TRUST PURPOSE —CHARITABLE TRUSTS (Ch. 7

of means in thg development of the law, which, in every other sci-

ence, are regarded as absolute essentials." In a recent Washing-
ton case "" a gift to propagate Socialism was sustained as a valid
charity.

ELEEMOSYNARY PURPOSES
59. A trust for the relief of human want or suffering isa valid char-
itable trust. Such trusts may
provide for giving food, '

shelter, clothing, medical attendance, and other similar

necessities to the needy.
A trust for "benevolent" objects may be declared a valid chari-
table trust, if the word "benevolent" is used as a synonym
of "charitable," but not if "benevolent" is construed as
meaning any object which indicates good will toward
mankind, whether the beneficiary be needy or not.
A trust to prevent cruelty to animals generally, or to promote the
comfort of animals generally, is valid as a charitable trust.

Trusts for eleemosynary purposes, as, for example, for the relief
of human want or suffering, are valid charitable trusts. Instances
of valid charitable trusts of this sort are found in trusts for the ben-
efit of the poor generally or the poor of a given locality;
'"^
or for
the friendless poor; '^ or for widows or orphans; ^' or for clothing
poor children;" or for providing shelter and the necessaries of
life ; *" or for the benefit of the aged and infirm ; *^ or for the aid of

'» V. Spear, 63 Wafsh. 291, 115 Pac. 164.

Peth
Strong's Appeal, 68 Conn. 527, 37 Atl. 395
""> Trustees of New Castle Com-
;

mon V. Megginson, 1 Boyce (Del.) 361, 77 Atl. 565, Ann. Cas. 1914A, 1207;
Grant v. Saunders, 121 Iowa, 80, 95 N. W. 411, 100 Am. St. Eep. 310 Klumpert ;

V. Vrieland, 142 Iowa, 434, 121 N. W. 34; Bills v. Pease, 116 Me. 98, 100 Atl.
146, L. R. A. 1917D, 1060; Darcy v. Kelley, 153 Mass. 433, 26 N. E. 1110;
Hesketh v. Murphy, 35 N. J. Eq. 23 State ex rel. Wardens of Poor of Beau-
;

fort County V. Gerard, 37 N. C. (2 Ired. Bq.) 210; Trim's Estate, 168 ta. 395,
31 Atl. 1071 Derby v. Derby, 4 K. I. 414.
; A
gift to "a fresh air fund" is a
valid charity.. White v. aty of Newark, 89 N. J. Eq. 5, 103 Atl. 1042.
77 Kemmerer v. Kemmerer, 233 111. 327, 84 N. E. 256, 122 Am. St. Rep. 169;
Bowden v. Brown, 20O Mass. 269, 86 N. B. 351, 128 Am. St. Rep. 419.
'7 8 Jones T. Habersham, 107 XJ. S. 174, 2 Sup. Ct. 336, 27 L.
Ed. 401; De
Bruler v. Ferguson, 54 Ind. 549 ; Board of Com'rs of Rush Co. v. Dinwiddle,
139 Ind. 128, 37 N. E. 795; Rader v. Stubblefleld, 43 Wash. 334, 86 Pac. 560,
10 Ann. Cas. 20.
7 9Eccles V. Rhode Island Hospital Trust Co., 90 Conn. 592, 98. Atl. 129;

Swasey v. American Bible Soc, 57 Me. 523.

8 In re Robinson's Will, 203 N. X. 380, 96 N. E. 925, 37 L. R. A. (N. S.)
1023.'
81 Fellows y. Miner, 119 Mass. 541. ,
§ 59) ELEEMOSTNAEY PURPOSES 215

freedmen and refugees,'^ fugitive slctves/' disabled firemen,'* or

cjisabled sailors and soldiers.''
The eleemosynary trust may. also be worked out as a valid char-
itable trust through the establishment of an institution. Provisions
for hospitals,'* or a home or a seamen's home," or
for the poor; '^

an orphan asylum;^* or homes for old men,"", or old'women,'^ or

for girls,'^ are held to be valid charitable trusts.
Trusts for carrying on temperance worfc,"^ for aiding young men
to obtain a start in business,**, and to provide better housing con-
ditions for laboring men "^ have been sustained as charitable trusts
of this class, j

A trust solely for the benefit of needy relatives of the settlor is

not a charity."" The charitable nature of an institution is not neg-
atived by the fact that a charge is made to those who are able to
pay for its services."'

8 2 White Lick Quarterly Meeting of Friends v. White Lick Quarterly Meet-

ing of Friends, 89 Ind. 136.

83 Jackson v. Phillips, 14 Allen (Mass.) 539.
8* Potts V. Philadelphia Ass'n for Relief of Disabled Firemen, 8 Phila.
(Pa.) 326.
' 86 Holmes V. Coates, 159 Mass. 226, 34 N. E. 190.
88 0uld V. Washington Hospital, 95 U. S. 303, 24 L. Ed. 450; Hayden v.
Connecticut Hospital for Insane, 64 Conn. 320, 30 Atl. 50; French v. Calkins,
252 ni. 243, 96 N. E. 877; Dykeman v. Jenkines, 179 Ind. 549, 101 N. B.
1013, Ann. Cas. 1915D, lOll ; Webber Hospital Ass'n v. McKenzie, 104 Me.
320, 71 Atl. 1032; Ware v. City of Fitchburg, 200 Mass. 61, 85 N. B. 951;
Ely V. Ely, 163 App. Div. 320, 148 N. Y. Supp. 691 Mayor, etc., of City of
;

Philadelphia v. Elliott, 3 Rawle (Pa.) 170; Hays v. Harris, 73 W. Va. 17, 80

S. E. 827.
8 7 Amory v. Attorney General, 179 Mass. 89, 60 N. E. 391.
8 8 Petition of Pierce, 109 Me. 509, 84 Atl. 1070; Trustees of Sailor's Snug

Harbor in City of New York v. Carmody, 211 N. Y. 286, 105 N. E." 543.
8 9 Green's Adm'rs v. Fidelity Trust Co. of Louisville, 134 Ky. 311, 120 S.

W. 283, 20 Ann. Cas. 861 In re Vaux, 16 Wkly. Notes Cas. (Pa.t 229.
;

90 Cresson v. Cresson, Fed. Cas. No. 3389.

91 Appeal of Eliot, 74 Conn. 586, 51 Atl. 558; Norris v. Loomis, 215 Mass.
344, 102 N. E. 419.
92 Sherman v. Congregational Home Missionary Soc, 176 Mass. 349, 57 N.
E. 702 ; Thornton v. Franklin Square House, 200 Mass. 465, 86 N. E. 909, 22
L. R. A. (N. S). 486 ; In re Daly's Estate, 208 Pa. 58, 57 Atl. 180.
9 3 Haines v. Allen, 78 Ind. 100, 41 Am. Rep. 555; BueU v. Gardner, 83
Misc. Rep. 513, 144 N. Y. Supp. 945; Harrington v. Pier, 105 Wis. 485, 82
N. W. 345, 50 L. R. A. 307, 76 Am. St. Rep. 924.
94 Franklin's Adm'x v. City of Philadelphia, 2 Pa. Dist. R. 435.
96 Webster v. Wiggin, 19 R. I. 73, 31 Atl. 824, 28 L. R. A. 510.
9 6 Kent V. Dunham, 142 Mass. 216, 7 N. E. 730, 56 Am. Rep. 667.
97 Jensen v. Maine Eye & Ear Infirmary, 107 Me. 408, 78 Atl. 898, 33 L. R.
A. (N. S.) 141. :
V
216 THE TEUST PUKPOSE —CHARITABLE . TEtTSTS (Ch. 7

"Benevolenf and "Charitable"

r It is a mooted question in what cases the use of the word "benev-
olent" will create a charitable trust. In the early leading case of
Morice v. Bishop of Durham,*' it was held that a trust "for such
objects of benevolence and liberality" as the Bishop of Durham
should select was not a charitable trust. Lord Eldon thought that,
the trustee in that case might use the property exclusively to aid
persons who did" not need aid, and to aid them in ways which would
not result in their spiritual, mentalj, or physical betterment, and'
that, therefore, the trust was not charitable. The view that a trust
for merely "benevolent" objects is not ordinarily a charitable trust
has been voiced by other courts."" Gray, J., says in the last-cited
case :
^ 'benevolent,' of itself, without anything in the
"The word
text to qualify orN restrict its ordinary meaning, clearly includes
not only purposes which are deemed charitable by a court of equi-
ty; but also many'' acts dictated by kindness, good will, or a dis-
position to do good, the objects of which have no relation to the
promotion of education, learning or religion, the relief of the needy,
the sick or the afflicted, the support of public works or the relief
of public burdens, and cannot be deemed charitable in the technical
and legal sense."
But>in a recent statutory provision for charitable trusts the word
"benevolent" is treated as the equivalent of charitable.^ 1.

In a number of cases where the gift has been to "charity and

benevolence," it has been held that the use of "benevolence" was
merely as an explanatory term, amplifying the meaninj^ of "chari-
ty," and that therefore the trust was a valid charitable trust.'
"The courts appear to have been in some cases astute to frus-
trate the charitable intentions of donors who, meaning to devote
their property to uses strictly charitable, have, unfortunately, em-
ployed language admitting of a wider scope in the use of the gift
than is judicially ^iven to the word 'charity.' It would be far more
in accordance with enlightened jurisprudence to exercise in such
cases the power of construction so as to effectuate, if possible, the in-
tention of the testator. A latitudinarian interpretation of the words
'charity' and 'charitable' has been unhesitatingly given in order to

»8 10 Ves. 522.
»8 Chamberlain v. Stearns, 111 Mass. 267.
1 Chamberlain v. Steams, 111 Mass. 267, 268.
2 New York Real Property Law (Consol. Laws, c. 50) § 113 ;New Tork Per-
sonal Property Law (Consol. Laws, c. 41) § 12.
8 Fox V. GiWbs, 86 Me. 87, 29 Atl. 940; De Camp v. Dobbins, 29 N. J. Eq.

36; People v. Powers, 147 Ijr. Y. 104, 41 N. E. 432, 35 L. R. A. 502; In re

Murphy's Estate, 184 Pa. 310, 39 Atl. 70, 63 Am. St. Rep. 802 In re Dulles'
;

U
Estate, 218 Pa. 162, 67 Atl. 49, 12 R. A. (N. S.) 1177,
 .

§ 59) '
ETiEEMOSYNAEY PURPOSES 217

effectuate the intention of testators why should not, for the same
;

purpose, a restricted one be given to the words 'benevolence' and

'benevolent' ? Why
may they not be interpreted according to their
popular signification, and so be held to mean just what the testator,
in the great majority of cases, understands them to mean?"*
In cases where the gift was to "charitable or benevolent" objects
there has been a marked difference of opinion as to whether the gift
could be sustained as a charitable trust. Some cases have held that
the use of "benevolent" was to be qualified by its connection with
"charitable," and that it was practically synonymous w\th "chari-
table." ° "Whatever", theTefore, may be the meaning, in the law of
Massachusetts, of the wordJbpnevolence' by itself, there can be no
doubt that, when used in connection with 'charity,' as in this will, it
is synonymous with it; and the connecting 'or' must be taken in
the sense of defining and limiting the nature of the charity intend-
*
ed, and of explaining one word by the other."
But in other cases it has been maintained that the use of the
words "benevolent or charitable" indicates an intent to provide for
purposes not technically charitable; i. e., for purposes consistent
only with a private trust. Hence in these cases it has been held
that the trust is for a mixed charitable and private purpose, with
no separation of funds to be applied to each, and that, therefore, the
whole trust mtist fail for indefiiliteness.''
In a recent English case the trust was for "purposes charitable
or philanthropic." The court held the ttust invalid as a charitable
trust and said: "Then what is the meaning of the word 'philan-
thropic'? He means by that something distinguished from chari-
table in the ordinary sense but I cannot put any definite meaning
;

on the word. All I can say is that a philanthropic purpose must be

a purpose which indicates good will to mankind in general. Can
anything be looser than that? And here arises the difficulty of
which the Attorney General has availed himself with great skill.
He says, 'What philanthropic purpose is not charitable?' My an-
swer is: You are dealing with two words of so vague a meaning
that it is extremely difficult to say, but we can suggest purposes
—
which might be philanthropic and not charitable purposes indi-
cating good will to rich men, to the exclusion of poor men. Such

* De Camp v. Dobbins, 29 N. J. Eq. 30, 50.

5 Saltonstall v. Sanders; 11 Allen (Mass.) 462 ; Weber v. Bryant, 161 Mass.
400, 37 N. E. 203 ; Pell v. Mercer, 14 R. I. 412.
6 Saltonstall v. Sanders, 11 Allen (Mass.) 462, 470.
> In re Macduffr-[1896] 2 Ch. 451; Thomson's Ex'rs v. Norris, 20 iN.
J. Eq.
489 Hegeman's Ex'r v. Koome, 70 N. J. Eq. 562, 62 Atl. 392; Smith v. Pond,
;

90 N. J. Eq. 445. 107 Atl. 800.

218 THE TEUST PURPOSE —CHARITABLE TRUSTS (Cll. 7

purposies would be philanthropic in the ordinary acceptation of the

word —that to say, in the wide, loose sense of indicating good
is

will towards mankind, or a great portion of them; but I do not

think they would be charitable. I am quite aware that a trust may
be charitable, though not confined to the poor but I doubt very
;

much whether a trust would be declared to be charitable which ex-

cluded the poor." *
It is submitted that the word "benevolent" in a trust instrument
should be given a reasonable construction, for the purpose of as-
certaining the meaning which the settlor intended to give to it. If
the other statements in the instrument and the surro^unding circum-
stances show that he meant by "benevolent" the equivalent of
"charitable," then it would seem proper to declare the trust a valid
charitable trust. The modern tendency is toward considering the
words "benevolent" and "philanthropic" as synonyms of "chari-
table."
Trusts to aid in studying and curing diseases of animals useful to
man," or to promote prosecution for cruelty to animals, or to pro-
'^''

mote an anti-vivisection society,^^ or to provide a fountain where

animals may drink,^^ have been held valid charitable trusts. It is
probable that the advancement of the spirit of kindness and hu-
manity among men is as important in these trusts as the aid given
to animals. They may be said to be educational or moral in their
effect, although they bear resemblances in other respects to elee-
mosynary charitable trusts.

MISCELLANEOUS PUBLIC BENEFITS

60. Trusts for relieving citizens from the burden of supporting the
government, for maintaining necessary public buildings
or institutions, to encourage patriotism, or to promote the
general public safety, comfort, and happiness, are valid
charitable trusts.,

There is an important class of charitable trusts which do not fall

within the subdivisions previously mentioned. They are sometimes
called "governmental" trusts^. Their nature can best be explained

8 In re Macduff, [1896] 2 Ch. 451, 464. See, also, Thorp v. Lund, 227 Mass.
474, 116 N. E. 946,Ann. Cas. 1918B, 1204.
University of London v. Yarrow, 1 De Gex & J. 72.
10 In re Vallance, Seton on Decrees (5th Ed.)
1141; In re Douglas, 35 Ch.
Div. 472.
11 In re Foveaux, [1895] 2 Ch. 501.
12 In re Oolemaii's Estate, 167 CaL 212, 138 Pac. 992, Ann. Cas.
1915C, 682.
 § 60 MISCELLANEOUS PUBLIC BENEFITS 219

by a reference to typical examples. Thus, trusts for the purpose of

assisting in the payment of public debts,^* or for the benefit of the
inhabitants of a given town ^* or state,^^ are valid charitable trusts
of this variety. And so, also, a trust to pay the general expenses of
a town,'® or to provide a townhouse '^ or a courthouse,'* is a trust
of this class.
Further illustrations of these charitable trusts may be found in
trusts to repair bridges and highways,' ° to provide a fire engine
and house,^" to assist a fire company,^' to aid a life-saving sta-
fire
tion,^^ to provide a fountain for furnishing drinking water ^* or for
ornamental purposes,^* and to construct a children's playhouse and
playground in a public park.^° i

Trusts for laying out and improving streets,^' planting shade

^*
trees,^' beautifying grounds,^* constructing or improving parks,
making agricultural or horticultural improvements ^° or providing
municipal improvements,^' are valid charitable trusts, because of
their enhancement of human comfort and happiness and the aes-
'

thetic pleasure which they give the residents of the cities or towns
concerned.

is Girard Trust Co. v. Russell, 179 Fed. 446, 102 a 0. A. 592. But see In
re Fox's Estate, 63 Barb. (N. Y.) 157.
14 Trustees of New Oastle Common v. Megginson, 1 Boyce (Del.) 361, 77
Atl. 565, Ann. Cas. 1914A, 1207.
16 Franklin's Adm'x v. City of Philadelphia, 2 Pa. DIst R. 435.
18 Collector of Taxes of Norton v. Oldfield, 219 Mass. 374, 106 N. E. 1014.
IT Coggeshall v. Pelton, 7 Johns. Ch. (N. Y.) 292, 11 Am. Dec. 471.
18 Stuart V. City of East6n, 74 Fed. 854, 21 C. O. A. 146. But see Kerlin
•
V. Campbell, 15 Pa. 500. /

19 Town of Hamden v. Rice, 24 Conn. 350.

20 MagiU V. Brown, Fed. Cas. No. 8952.
21 Bethlehem Borough v. Perseverance Fire Co., 81 Pa. 445.
22 Richardson v. Mullery, 200 Mass. 247, 86 N. B. 319.
28 Roach's Ex'r v. City of Hopkinsville, 18 Ky. Law Rep. 543.
24 Hosmer v. City of Detroit, 175 Mich. 267, 141 N. W. 657.
25 In re Smith's Estate, 181 Pa. 109, 37 Atl. 114.
26 Beck V. City of Philadelphia, 17 Pa. 104.
27 Appeal of Oresson, 30 Pa. 437. '

28 Penny v. Croul, 76 Mich. 471, 43 N. W. 649, 5 L. R. A. 858.

2 9 In re Bartlett, 163 Mass. 509, 40 N. E., 899; Richardson v. Essex Insti-
tute, 208 Mass. 311, 94 N. E. 262, 21 Ann. Cas. 1158 ; Burr v. City of Boston,
'

208 Mass. 537, 95 N. E. 208, 34 L. B. A. (N. S.) 143. Trusts for establishing
an ornamental gate (Haggin v. International Trust Co. [Colo.] 169 Pac. 138,
L. R. A. 1918B, 710), or a tabernacle (Lightfoot v. Poindexter [Tex. Civ. .A.pp.]
199 S. W. 1152), in a public park, have been held valid charitable trusts.
80 V. Emerson, i05 Mass. 431.
Rotch
Trustees of New Castle Comriion v. Megginson, 1 Boyce (Del.) 361, 77 Atl.
•31
565,' Ann. Cas. 1914A, 1207; Franklin's Adm'x v. City of Philadelphia, 2 Pa.
Dis't. R. 435.
 ;

220 THE TRUST PUKPOSE —CHARITABLE TRUSTS (Ch. T

Trusts for the erection of^ monuments to soldiers, sailors, and

public men encourage and/ foster patriotism, and are sustained as
charitable trusts ^^ so, too, of a trust for the purchase and distribu-
;

tion of flags. ^*
These trusts will be seen to advance the merital, moral, or phys-
icalwelfare of the citizens generally. They make life safer or more
comfortable, or minister to the aesthetic senses of the members of
the community. They aid in the support of government and the
consequent protection of life and property and the enforcement of
law. Thus they enhance the happiness and well-being of mankind.

CEMETERY LOTS AND MONUMENTS

61. A trust for the erection of a monument to the testator is regard-
ed as a valid provision for the pasmient of his funeral ex-
penses.
At common law a trust for the perpetual care and maintenance of
a private cemetery or single lot or monument is a private
trust and void as providing for a perpetuity. Statutes in
many American jurisdictions have made these trusts valid,
in some cases only when a cemetery association is the trus-
tee, in other states generjilly, on the theory that such
trusts are charitable trusts.
Trusts for the care and maintenance of public cemeteriefe are gen-
erally regarded as valid charitable trusts.

The erection of a monument to a deceased person, or in honor of

his family,'is generally regarded as a part of his funeral expenses.

The executor or admiiiistrator is justified in expending a reasona-

ble portion of the funds coming into hi^ hands for the purpose of
the decent interment of the dedeased and for the construction of a
monument above his grave. Naturally provisions in wills directing
executors to perform such acts and bequeathing definite sums of
money ,to the executors for that purpose are valid, and will be en-
forced by the courts.^*

3 2 Gilmer's Legatees v. Gilmer's Ex'rs, 42 Ala. 9; Eliot v. Trinity Church,

'

232 Mass. 517, 122 N. E. 648 Beecher v. Yale (Sup.) 45 N. Y. Supp. 622 In
; ;

re Smith's Estate, 181 Pa. 109, 37 Atl. 114; Petition of Ogden, 25 R. I. 378,
55 Atl. 933. See Keasbey, Gifts for Public Monuments, 29 Yale Law J. 729,
discussing particularly Lawrence v. Prosser, 89 N. J. Eq. 248, 104 Atl. 772.
3 3 Sargent v. Town of Cornish, 54 N. H. 18.
siBeU V. Briggs, 63 N. H. 592, 4 Atl. 702; Detwiller v. Hartman, 37 N. J.
Eq. 347 ; Emans v. Hickmkn, 12 Hun (N. Y.) 425 ; In re Frazer, 92 N. Y. 239
Clark V. Halllgan, 158 App. Div. 33, 142 N. Y. Supp. 980; Fite v. Beasley, 12
Lea (Tenn.) 328.
§ 61) CEMETERY LOTS AND MONUMENTS - 221

"The erection of a suitable headstone at the decedent's own

grave may properly be considered as a part of his funeral expens-
es, in a case where the rights of creditors cannot be defeated there-
by." ==
"We are of opinion that it is legal for a testator to provide in
his will for the purchase and erection of a 'monument to be placed
at his grave ; that such expense would be a proper and legitimate
part of the fuenral expenses. In the absence of such a provision in
the will, the probate court would be -authorized in making provi-
sion for the purchase and erection of a suitable monument at the
grave of the testator, the amount or cost of which should be regu-
lated by the value of the estate." '°
It is generally held that, in the absence of statute, a trust, for the
perpetual care and maintenance of a private monument or cemetery
lot is void as creating a perpetuity. It is not a trust for a charita-
.

ble purpose. It involves the suspension of the alienation of prop-

erty perpetually, and thus violates one form of the rule againk per-
petuities.^^ V

"The law well settled in this country that a perpetual trust

is
cannot be created to take care of a private burial lot, unless the
creation of such trust is authorized by statute." *' "Our law does
not permit the creation of trusts in perpetuity, except for charitable
or public purposes. It has been repeatedly determined in this
court that a trust for the purpose of keeping in repair the burial
I

place of testator is a purely private trust, and is not a trust the ob-
ject of which is a charity." '*

85 Wood V. Vandenbuigh, 6 Paige (N. T.) 277, 285.

88 Mcllvain v. Hockaday, 36 Tex. Civ. App. 1, 2, 81 S. W. 54.
37 In re Vaughan, 33 Ch. Div. 187 Johnson v. Holifield, 79 Ala. 423, 58
;

Am. Rep. 596; In re Gay's Estate, 138 Cal. 552, 71 Pac. 707, 94 Am. St. Rep.
70 Igleliart v. Iglehart, 204 U. S. 478, 27 Sup. Ot. 329, 51 L. Ed. 575 Burke
; ;

V. Burke, 259 111. 262, 102 N. E. 293 ; Phillips v. Heldt, 33 Ind. App. 388, 71
N. E. 520 Piper v. Moulton, 72 Me. 155 Bates v. Bates, 134 Mass. 110, 45
; ;

Am. Rep. 305 (but see .statutory change later noted) Lounsbury v. Trustees
;

of Square Lake Burial Ass'n, 170 Mich. 645, 129 N. W. 36 Detwiller v. Hart-
;

man, 37 N. J. Eq. 347 In re Corle, 61 N. J. Eq. 409, 48 Atl. 1027 Hilliard

; ;

V. Parker, 76 N. J. Eq. 447, 74 Atl. 447 Sherman v. Baker, 20 R. t. 446, 40

;

Atl. 11, 40 L. R. A. 717 Drennan v. Agurs, 98 S. O. 391, 82 S. E. 622 Horn-

; ;

berger v. Hornberger, 12 Heisk. (Tenn.) 635 Mcllvain v. Hockaday, 36 Tex.

;

Civ. App. 1, §1 S. W. 54. See G. L. Clark, Unenforceable Trusts and the

Rule against Perpetuities, 10 Mich. Law Rev. 31, in which the thesis is main-
tained that trusts of this sort should be held valid if "limited in duration to
a period not longer than twenty-one years after lives in being at the creation
'
of the trust."
88 Mason Bloomington Library Ass'n, 237 111. 442, 446, 86 N. E. 1044, 15
v.
Ann. Cas. 603, discussed by A. M. Kales in 5 111. Law Rev. 379.
89 Hilliard v. Parker, 76 N. J, Eq. 447, 448, 74 Atl. 447.
222 THE TRUST PURPOSE —CHARITABLE TRUSTS (Ch. 7

"Among all classes there' is a pervading' sentiment of reverence ^

for the burial places of the dead, which springs naturally from the
Christian belief in the resurrection of the body. This sentiment is
recognized in this state and elsewhere, by the creation of corpora-
tions for maintaining and adorning cemeteries, and by statutes
which allow town coimcils to receive and hold funds in trust for
the care of burial lots. However general and commendable this
sentiment may be, and however desirable it may be that the graves
of the dead be decently and reverently cared for, ilevertheless we
do not think a bequest of this kind falls within the limits of a char-
itable use. It is not a gift in aid of any public object, nor for a
purpose which afifects the public in any way. It benefits no one.
Its purpose is purely private and personal. It seeks to create a per-
petuity simply to insure the care of the testator's own burial lot." *"
In a few states the view has been maintained that a trust for the
perpetual care of a private grave, monument, or cemetery lot is a
charitable trust. This is apparently on the theory that the public
is benefited by the encouragement of reverence for the dead and
that such sentiments improve the morals of the members of the
community.*^
In a number of states the care and maintenance of cemeteries is
now provided for by statutes allowing gifts to be made to cemetery
associations or corporations, to be held in trust for the perpetual
xare of the entire cemetery or of any lot or monument.*^
In still other states a gift to any trustees for the care or main-
tenance of a public cemetery or any private lot or monument is
made a charitable trust by statute.*^
'

'^

4 Nichols, 17 R. I. 306, 317, 318, 21 Atl. 906.

Kelly V.
41 Ford V. Ford's Ex'r, 91 Ky. 572, 16 S. W. 451 ; Webster v. Sughrow, 69
N. H. 380, 45 Atl. 139, 48 L. R. A. 100; Rollins v. Merrill, 70 N. H. 436, 48
Atl. 1088 (but see Smart v. Town of Durham, 77 N. H.-56, 86 Atl. 821) ; Tier-
ney's Estate, 2 Pa. DIst. R. 524 ; Nauman v. Weidman, 182 Pa! 263, 37 Atl. 863.
In Trustees of Methodist Episcopal Church of Milford v. Williams, 6 Boyce
(Del.) 62, 96 Atl. 795, such a gift was upheld without a statement of reasons.
* 2 In re Gay's Estate, 188 Cal. 552, 71 Pac. 707, 94 Am. St. Rep. 70; 1 Jones
& A. Ann. St. 111. § 1913, par. 862 Rev. Laws Mass. 1902, c. 78, § 5 ; Green
;

V. Hogan, 153 Mass. 462, 27 N. E. 413 In re Bartlett, 163 Mass. 509, 40 N. B.

;

899 ; Morse v. Inhabitants of Natick, 176 Mass. 510, 57 N. E. 996 McCoy v. ;

Inhabitants of Natick, 223 Mass. 322, 111 N. E. 874; 1 Comp. St. N. J. 1910,
p. 374; 1 Purd. Dig. Pa. (13th Ed.) p. 558; In re Close's Estate, 260 Pa.
269, 108 Atl. 822.
4 3 Gen. St. Conn. 1918, § 5081; Hewitt v. Wheeler School and Library, 82

Conn. 188, 72 Atl. 935; Park's Ann. Civ. Code Ga. 1914, § 4605; Jones v.
'Habersham, 107 U. S. 174, 2 Sup. Ct. 336, 27 L. Ed. 401 Laws Mo. 1919, p.
;

181 New York Real Property Law (Consol. Laws, c. 50) § 114a
; New Xorb
;

Personal Profierty Law ((3onsol, Laws, c. 41) § 13a ; DriscoU v. Hewlett, 132
 " ;

§ 62) PURPOSES NOT CHAKITABLE 223

It is now quite generally^ held that a trust for the establishment

and perpetual maintenance and care of a public cemetery is a valid
charitable trust.** "That the providing and maintenance of a suit-
able place for the burial of the dead is one of public use and bene-
fit is not open to question'. A decent respect for the memory of the
dead is a, universal characteristic of civilized society." *"
Trusts for the erection of inonuments to soldiers, sailors, and
public men are held valid as charitable trusts on the ground that
-*
they foster patriotism.*"

PURPOSES NOT CHARITABLE

62. Trusts which are not for the general benefit of the community,
as, for example, trusts fo;r the benefit of private persons, or
to encourage sport, or for the care of inanimate objects, or
for purposes of mei^e liberality, or for carrying out mere
whims, are not charitable trusts.

In numerous cases the element- of public beAefit has been lacking

and the trusts have been held private. Thus, a trust for the bene-
fit of a private school,*'' or a waterworks corporation,** or for the

aid and support' of the children of the testator and their descendants

App. Div. 125, 116 N. Y. Supp. 466, affirmed, 198 N. Y. 297, 91 N. E. 784;
First Presbyterian Church in Village of Waterford v. McKallor, 35 App. Div.
98, 54 N. Y. Supp. 740 In re Periling' Will, 68 Misc. Rep. 255, 124 N. Y.
;

Supp. 998.. The Important portion of the New York statute relating to real
property reads as follows: "Gifts; grants and devises of real property, in
trust for the purpose of applying the proceeds or Income thereof to the per-
petual care and maintenance, improvement or embellishment of private burial
lots and tombs thereon, are permitted and shall be deemed to be for chari-
table and benevolent uses. * * *
*4in re Vaughan, 33 Ch. Div. 187'; Hewitt v. Wheeler School and Library,
82 Conn. 188, 72 Atl. 935 Swasey v. American Bible Soc, 57 Me. 523 Collec-
; ;

tor of Taxes of Norton v. Oldfleld, 219 Mass. 374, 106 N. E. 1014 Stewart v.
;

Coshow, 238 Mo. 662, 142 S. W. 283 Corin v. Glenwood Cemetery (N. J. Ch.)
;

69 Atl. 1083 Bliss v. JLrinden Cemetery Ass',n, 81 N. J. Bq. 394, 87 Atl. 224
;

Hullman v. Honcomp, 5 Ohio St. 237; Ritter v. Couch, 71 W. Va. 221, 76

S. E. 428, 42 L. R. A. (N. ^.) 1216; Webster v. Morris, 66 Wis. 366, 28 N.
W. Am. Rep. 278.
353, 57 I

45 Chapman v. Newell, 146 Iowa,415, 125 N. W. 324, 327.

46 Gilmer's Legatees v. Gilmer's Ex'rs, 42 Ala. 9; Beecher v. Yale (Sup.)
45 N. Y. Supp. 622 In re Smith's Estate, 181 Pa. 109, 37 Atl. 114 ; Petition
;

of Ogden, 25 R. 373, 55 Atl. 933.

I.
47 Greene v. Dennis, -6 Conn. 293, 16 Am. Dec. 58. For a discussion of
some eccentric gifts, hciid invalid as charities, see Scott, Control of Property
by the Dead, 65 Pa. Law Rev. 632.
48 Dough ten v. Vandever, 5 Del. Ch. 51.
224 THE TRUST PURPOSE —CHARITABLE TRUSTS (Ch. 7

who may be destitute,** or for the support of a home for indigent,

and aged Free Masons,"" or for providing a home and
afflicted,
school for the maintenance and education of the children of de-
ceased members of the Odd Fellows," or for theSnaintenanceof a
private estate,"'^ is a private trust. In all these cases it was not the
general public, the community at large, which was to be assisted,
but named private persons, or a small class, not open to all.
An English court has considered the question whether a trust
to aid a game or sport is a charitable trust. °' The gift was of a
fund in trust to provide annually a cup to be given to the most suc-
cessful yapht of the season. The testator stated that his object was
to encourage the sport of yacht racing. It was contended that the
gift was charitable, in that it tended to promote the public health
and to train men for the navy. The court held that a gift for the
encouragement of a mere sport or game was not charitable, al-
though there might result some incidental benefit to the public at
large. The leading object was the amusement of private persons.
Rigby, L. J., made the following statement °* "There are many
:

things which are laudable and useful to society, which yet cannot
be considered charitable, and this, in my opinion is one of them."
The lack of community aid or improvement is obvious in the fol-
lowing trusts: Agift to keep in perpetual repair the testator's
clock; ^^ a gift to keep a house open for the reception and enter-
tainment of ministers and others traveling in the service of the
truth; "' a bequest to be used in making Christmas presents to the
scholars of a Sunday school."' In the case of the first-named trust,
no living person would be benefited; in the instances last men-
tioned certain individuals might receive benefits, but the element
of charity was lacking. The bounty of the donor was evidence of
liberality rather than charity.
Gifts for the purpose of carrying out mere whims of the testator
are, of course, not charitable. Thus a bequest for the erection of a
flagstaff in a public park in memory of the testator's father is not

48 Kent V. Dunham, 142 Mass. 216, 7 N. E. 730, ,56 Am. Eep. 667.
5 dty of Philadelphia v. Masonic Home of Pennsylvania, 160 Pa. 572, 28
Atl. 954.
'

SI Troutman v. De Boissiere Odd Fellows' Orphans' Home & Industrial

School Ass'n, 66 Kan. 1, 71 PaC. 286.
6 2 Thorp V. Lund, 227 Mass. 474, 116 N. E. 946, Ann. Gas. 1918B, 1204.

3 In re Nottage, [1895] 2 Ch. 649.

Si [1895] 2 Ch. 649, 656.
66 Kelly V. Ni<^ols, 17 R. I. 306, 21 Atl. 906.
86 Kelly V. Nichols, 18 R. I. 62, 25 Atl. 840, 19 L. R. A. 413.
67 Goodell V. Union Ass'n of Children's Home of Burlington County, 29 N.
J. Eq. 32.'
§ 63) THE CY PEES DOCTRINE 225

charitable;"' nor is a gift to be applied to the maintenance di a

brass band to march to the testator's grave on holidays and other
appropriate occasions and play dirges valid as a charity."* In one
case a gift to aid an infidel sociiety in the discussion of religion and
politics was held invalid as a charity, although it might seem to
have some educational features.*" _

THE CY PRES DOCTRINE

63. The attitude of chancery towards charitable trusts is extremely
friendly. It exercises great liberality in the establishment
and construction of such trusts.
The judicial cy pres power is the authority of equity to apply
property given to charity to a purpose as nearly like that
of the original purpose as possible, when the carrying out
of the original charitable trust becomes impossible or in-
'
expedient, due to changes in conditions^ or when the set-
tlor has imperfectly outlined the scheme for his charity.
This power is possessed by a great majority of American
courts of equity. It is exercised with var5ring degrees of
liberality.
The prerogative cy pres power is the authority of the crown of
England, through the Court of Chancery, to dispose of
property to such charitable uses as it sees fit, when the
original charity was unlawful, or when the original charity
was too vague to be enforced and there were no trustees
to render it certaiiL This power is rarely used in England.
In America it rests in the several Legislatures and is not
possessed by the courts of equity.

The attitude of equity is exceedingly favorable to charitable

trusts.®^ The court will be keen-sighted to discover an intent to
create a charity,*^ and, where a will is capable of two constructions,
one of which sustains a charitable trust and the other of which is
unfavorable to such trust, equity will be disposed to accept the

58 Morristown Trust Co. v. Town of Morristown, 82 N. J. Eq. 521, 91 Atl.

7§6.
69 Detwiller v. Hartman, 37 N. Eq. 347. Upon
J. similar grounds a gift
to support and maintain a person, "show people"
to where testator's monu-
ment was, was held void in Re Palethorp's Estate, 249 Pa. 389, 94 Atl. 1060.
60 Zeisweiss v. James, 63i Pa. 465, 3 Am. Rep. 558.
81 In re Goodfellow's Estate. 166 Cal. 409, 137 Pae. 12; Duggan v. Slocum,
92 Fed. 806, 34 C. C. A. 676.
02 Quimby v. Quimby, 175 111. App. 367.
BOGEET TBUSTS —15
226 THE TRUST PURPOSE —CHARITABLE nTRUSTS (Ch. 7

former construction."' All presumptions are indulged in favor of

the validity of such trusts."* Equity gives them a more liberal con-,
strutftion than it accords to private trusts,"^ and will carry them in-
to effect wherever this can be done consistently with established
rules of law."" But equity will not ignore established principles of
law in order to give a charitable trust effect,"^ nor will it treat with
favor a charitable gift made near the time of the settlor's death."'
"The meaning of the doctrine of cy pres, as received by us, is that
when a definite function or duty is to be performed, and it cannot
be done in exact conformity with the scheme of the person or per-
sons who have provided for it, it must be performed with as close
approximation to that scheme as reasonably practicable; and so,
of course, it must be enforced. It is the doctrine of approximation,
and it is not at all confined. to the administration of charities, but
is equally applicable to all devises and contracts Wherein the fu-
ture is provided for, and it is an essential element of equity juris-
prudence .""°
The general theory of the cy pres doctrine has been well explain-
ed in a New Hampshire case,"* "When the gift cannot be carried
out in the precise mode prescribed by the donor, effect has been
gi'v^en \.o his general purpose by adopting a method which seemed
to be as near his intention as existing conditions would permit. Such
a construction ig not the Result of an arbitrary power' exercised in
disregard of th^ donor's wishes for the public benefit, but is as truly
based upon a judicial finding of his intention as applied to new con-
ditions as the construction of a will, deed, or other written con-
is
tract. The makingof a gift for charitable purposes, which is unlim-
ited ^s to the length of time it may continue, presupposes a knowl-
edge on the part of the donor that material changes' in the attend-
ing circumstances -will occur which may render a literal complir
ance with the terms of the gift impracticable, if not impossible;
and it is not unreasonable to infer that under such circumstances
the nearest practicable 'approximation to his expressed wish in the

63 In re Robinson's Will, 203 N. Y. 380, 96 N. E. 925, 37 L. R. A. (N. S.)

1023.
64 Franklin Hastings, 253 111. 46, 97 N. E. 2G5, Ann. Cas. 1913A, 135.
v.
65 Ingraham Ingraham, 169 111. 432, 48 N. B. 561, 49 N. E. 320.
v.
«6 In re Johnston's Estate, 141 Iowa, 109, 119 N. W. 275 ; St. James Orphan
Asylum v. Shelby, 60 Neb. 796, 84 N. W. 273, 83 Am. St. Rep. 558.
6 7 Klumpert v. Vrieland, 142 Iowa, 434, 121 N. W. 34.
68 In re Kessler's Estate) 221 Pa. 314, 70 Atl. 770, 128 Am. St. Rep. 741, 15
Ann. Cas. 791.
6 Lowrie, C. J., in City of Philadelphia v. Girard's Heirs, 45 Pa. 9, 28, 84
Am. Dec. 470.
'0 Walker, J., in Keene v. Eastman, 75 N. H. 191, 193, 72 AU. 213.
 ;

§ 63) THE CT PEES DOCTKINE 227

management and development of the trust will promote his inten-

tion to make his charitable purpose reasonably effective; for it
would be rash to infer that he intended that the trust fund should
be used only in such a way that it could not result in a public ben-
—
efit in other words, that he wishes his general benevolent purpose
to be defeated, if his method of administering the trust should be-
come impracticable."
In some st9,tes the doctrine of cy pres has been put in statutory
form/^ Thus, in New York the statutory provision is as follows '" :

"The Supreme Court shall have control over gifts, grants and de-
vises in all cases provided for by subdivision one of this section,
and whenever it shall appear to the court that circumstances have
so changed since the execution of an instrument containing a gift,
grant or devise to religious, educational, charitable or benevolent
uses as to render impracticable or impossible a literal compliance
with the terms of such instrument, the court may, upon the appli-
cation of the trustee or of the person or corporation having the cus-
tody of the property, and upon such notice as the co'urt shall direct,
make an order directing that such gift, grant or devise shall be ad-
ministered or expended in such manner as in the judgment of the
court will most effectually accomplish the general purpose of the
instrument, without regard to and free from any specific restriction,
limitation or direction contained therein Provided, however, that
:

no such order shall be made without the consent of the donor or

grantor of the property,- if he be living."
The meaning of the cy pres rule can best be explained by illus-,
trations of its application. In the leading case of Jackson v. Phil-
lips,^ ^ a testator provided for two trusts, the first to create a sen-
timent which would put an end to slavery, and the second for the
aid of fugitive slaves. Shortly after the death of the testator slav-
ery was abolished by the Emancipation Proclamation. The court
held that the change in conditions warranted the application of the
first tru.st fund to the education of freedmen in the South and the
use of the second fund in aiding needy negroes in the city where the
testator had resided. So, too, in Ely v. Attorney General,^* where
the trust was for the founding of a home for deaf children, to be

71 fn re Royer's Estate, l33 Oal. 614, 56 Pac. 461, 44 L. R. A. 364; Ford v.

Thomas, 111 Ga. 493, 36 S. E. 841 Gen. Laws R. I. 1909, c. 259, S 9.
;

7 2 New York Real Property Law (Consol. Laws, c. 50) § 113. See, also.
In re Brundage's Estate, 101 Misc. Rep. 528, 167 N. Y. Supp. 694; Camp v.
Presbyterian Soc. of Sackets Harbor, 105 Misc. Rep. 139, 173 N. Y. Supp. 581
Sherman v. Richmond Hose Co., No. 2, 186 App. Div. 417, 175 N. Y. Supp. 8.
73 14 Allen (Mass.) 539.
7*202 Mass. 545, 89 N. E. 166.
228 THE TRUST PURPOSE —CHARITABLE TRUST [Ch. 7

located on the testator's land, but, due to the inadequacy of the

sum left, the exact intent of the testator could not be carried out,
the court allowed the fund to be applied in assistance of a similar
home a few miles distant from the testator's former residence.
In Rector, etc., of St. James Church v. Wilson ^° the trust was
for the purpose of building an Episcopal Church at a specified
place. When the fund became available, the place would not sup-
port a church. It was held that under the cy pres doctrine the fund
would not go to the next of kin, but would be applied to the use of
the Episcopal church in that neighborhood according to a scheme
to be approved by the court. And so, too, in Mason v. Blooming-
ton Library Ass'n,^° where, the trust was for the establishment of
an art gallery in connection with a certain library association, but
the library association conveyed its property to another institution
and ceased to exist before the gift could be carried out, the court
applied the cy pres rule and directed that the property given in
trust be used for the benefit of the successor association, since th^
latter had similar purposes.

Judicial and Prerogative Cy Pres

—
There are two kinds of cy pres power the prerogative cy p^'es
and the judicial cy pres. The former is based on (he authority of
the crown in England. ^ As parens patriae the crown disposes of
gifts made to charitable uses. Where the purpose of the gift is un-
lawful, or where there is no trustee to administer the gift and the
charitable purpose is stated in general terms only. This power is
exercised comparatively rarely. An illustration of the application
of the prerogative cy pres is found in Cary v. Abbot,''' where prop-
erty was given to trustees "for the purpose of educating and bring-
ing up poor children in .the Roman Catholic faith." At the time
.

of this gift it was unlawful in England as for a superstitious use.

The court held that the property involved was not to be given to
the next of kin,[but was to be applied to such charitable purposes
as the, king should direct. Lord Eldon describes'^ another class
of cases in which this power is to be applied as those in which
"there is a general indefinite purpose, not fixing itself on any
object."
This prerogative cy pres power is not possessed by any courts
in America,''"but is vested in the several Legislatures.*" "There

" 82 N. J. Eq. 546, 89 Atl. 519.

^ 78 237 lU. 442, 86 N. E. 1044, 15 Ann. Gas. 603.
" 7 Ves. 490.
'SMoggridge v. Thackwell, 7 Ves. 36, 86.
7» Robbins v. Boeder County Com'rs, 50 Colo. 610, 115 Pac. 526; Kemmerer

8 Late Corporation of the Church of Jesus Christ of Latter-Day Saints v.

United .States, 136 U. S. 1, 10 Sup. Ct. 792, 34 L. Ed. 481.
 ;

§ 63) THE CT PRES DOCTRINE 229

are some cases, however, which are beyond its' jurisdiction, as

.

where, by statute, a gift to certain uses is declared void and the

property goes to the king, and in some other cases of failure of the
charity. In such cases the king, as parens patriae; under his sign
manual, disposes of the fund to such uses, analoggus to those in-
tended, as seems to him expedient and wise. * * * i^ this
^
country, there is no royal person to act as parens patriae, and to give
direction for the application of charities which cannot be adminis-
tered by the court. * * * g^t here the L,egislature is the par-
ens patriae, afad, unless restrained by constitutional limitations, pos-
sesses all the powers in this regard which the sovereign possesses
in England." "
The cy pres power is that exercised by equity, where
judicial
the execution of the charitable trust as directed by the settlor is
impossible, impracticable, or inexpedient, or where the settlor has
imperfectly stated his purpose or the method of administration.
It is incommon use in the United States.'^
In a few states the doctrine of cy pres is not recognized, although
equity treats charitable trusts with great liberality and friendli-
ness.°*

T. Kemmerer, 233 111. 327, 84 N. E. 256, 122 Am. St. Rep. 169; Erskine v.
Whitehead, 84 Ind. 357; Lepage v. McNamara, 5 Iowa, 124; American
Academy of Arts and Sciences v. President, etc., of Harvard College, 12 Gray
(Mass.) 582 In re Nilson's Estate, 81 Neb. 809, 116 N. W! 971 Dickson v.
; ;

Montgomery, 1 Swan (Tenn.) 348.

8^ Mr. Justice Bradley in Late Corporation of the Church of Jesus Christ of
Latter-Day Saints v. United States, 136 U. Si 1, 51, 52, 56, 57, 10 Sup. Ct.
792, 34 L. Ed. 481.
82 In re Royer's Estate, l23 Cal. 614, 56 Pac. 461, 44 L. R. A. 364; Lewis
V. Galllard, 61 Fla. 819, 56 South. 281 ; Heuser v. Harris, 42 111. 425 ;, Trout-
man V. De Boissiere Odd Fellows' Orphans' Home & Industrial School Ass'n
(Kan.) 64 Pac. 33, 5 L. R. A. (N. S.) 692; Lynch v. South Congregational
Parish of Augusta, 109 Me. 32, 82 Atl-. 432 Norris v. Lopmis, 215 Mass. 344, 102
;

N. E. 419 Catron v. Scarritt Collegiate Institute, 264 Mo. 713, 175 S. W. 571
;

Lackland v. Walker, 151 Mo. 210, 52 S. W. 414; Adams v. Page, 76 N. H. 96,

79 Atl. 837 Gagnon v. Wellman, 78 N. H. 327, 99 Atl. 786 Nichols v. Newark
; ;

Hospital, 71 N. J. Eq. 130, 63 Atl. 621 ;Utica Trust & Deposit Co. v. Thom-
son, 87 "Misc. Rep. 31, 149 N. X. Supp. 392 In re Kramph's Estate, 228 Pa.
;

455, 77 Atl. 814 Brice v. Trustees of All Saints Memorial Chapel, 31 R. 1. 183,
;

76 Atl. 774 Ingllsh v. Johnson, 42 Tex. Civ. App. 118, 95 S. W. 558.

;

8 3 TJnlversalist Convention of Alabama v. May, 147 Ala. 455, 41 South. 515;

Filkins v. Severn, 127 Iowa, 738, 104 N. W. 346 Adams v. Bohon, 176 Ky. 66,
;

195 S. W. 156; McAuley v. Wilson, 16 N. C. (1 Dev. Eq.) 276, 18 Am. Dec.

587 Hathaway v. New Baltimore^ 48 Mich. 251, 12 N. W. 186 (but see Pub.
;

Acts Mich. 1915, No. 280) ; Mars v. Gibert, 93 S. C. 455, 77 S. E. 131 Fi-
;

field v. Van Wyck's Ex'r, 94 Va. 557, 27 S. E. 446, 64 Am. St. Rep. 745;
Pack v. Shanklin, 43 W. Va. 304, 27 S. E. 389; McHugh v. McCole, 97
230 THE TRUST PURPOSE —CHARITABLE TRUSTS .
(Ch. 7

That the cy pres doctrine exists does not mean that some kind
of charitable trust will he enforced every time a testator expresses
a charitable intent. The court will not do violence to the settlor's
intent. Conditions may be such that to carry out any other than
the settlor's exact plan would be obviously unjust and contrary to
the settlor's wishes. For example, when a trust was created for
the benefit of the First Universalist Society of Lincoln, and later
that society abandoned its religious work, and there was no other
religious organization in the same vicinity leaving similar doctrines,
equity refused to apply the property to some other charitable use.**
And so, too, where a gift was in trust for the education of colored
children for the purpose of promoting the well-being of that race,
itwas held that the gift could not be supported, that the preroga-
power did not rest in the court, and that the charitable
tive cy pres
purpose expressed was too vague to permit of enforcement.*'*
.A further illustration of the limits of the cy pres doctrine may be
seen in a Maine case,*^ where funds were left in trust for the
establishment and maintenance of an institution for the education
of young women. An effort was made to obtain the authority
of the court for the use of these funds to aid a high school in the
town concerned. The court held that this would be violating rath-
er than approximating the testator's intent, and that the case was
nof one for the application of the cy pres rule. Likewise in the
case of Bowden v. Brown *^ the court refused to make use of this
doctrine where money was left to a town for the erection of a
building to be used in aiding the sick and poor. The town refused
to accept the legacy or erect the building. The gift was specific,
and no other similar charity would satisfy the court.
In a Kentucky case ** the gift was to a trustee to be distributed
to the poor in his discretion. The court held that the gift could

Wis. 166, 72 N. W. 631, 40 L. R A. 724, 65 Am. St. Rep. 106 Harrington v.

;

Pier, 105 "Wis. 485, 82 N. W. 345, 50 L. R. A. 307, 76 Am. St. Rep. 924.
8* People V. Braucher, 258 111. 604, 101 N. E. 944, 47 L. R. A. (N. S.) 1015.
8 5 Grimes; Ex'rs v. Harmon, 35 Ind. 198, 9 Am. Rep. 690.

8 6 Allen V. Trustees of Nasson Institute, 107 Me. 120, 77 AU. 638.

87 200 Mass. 269, 86 N. E. 351, 128 Am. St. Rep. 419. And so, also, a gift to
use a farna for aiding needy unmaryied women formerly employed in the
straw industry indicated a specific and not a general charitable intent, and,
the trust as planned being impracticable, cy pres could not be applied. Gil-
man V. Burnett, 116 Me. 382, 102 Atl. 108, L. R. A. 1918A, 794. In Eliot v.
Trinity Church, 232 Mass. 517, 122 N. E. 648, the court refused to or(}er the
s^ubstitution of one statue of Phillips Brooks for another under the cy pres
doctrine.
88 Thompson's Ex'r v. Brown, 70 S. W. 674, 24 Ky. Law Rep. 1066, 62 L-
R. A. 398.
 § 64) THE RULE AGAINST BEMOTENESS 231

not be carried out under the cy pres power, and that that power was
restricted to "carrying out an available charity to an identified
and ascertainable object, where the mode provided by the gift is
inadequate, illegal, or inappropriate, or which happens to fail."
The impracticability of carrying out the settlor's original trust
plan need not amount to physical impossibility. It is sufficient to
invoke the application of the cy pres doctrine that the difficulty of
executing the plan is extreme.**
The cy pres power rests entirely with the court of equity and
never in the trustees. The latter may not apply the funds, except
accor.ding to the literal terms of the trust, even though it seems to
them obviously desirable.*"
The cy pres doctrine can have no application, of course, when
the settlor expressly provides for the disposition of the trust proper-
ty in the event of the failure of the charitable use to which he in
the first instance directed that it be devoted."^ But a mere general
residuary clause, even if the residuary gift is to charity, does not
prevent the use of the cy pres doctrine.*^

THE RULE AGAINST REMOTENESS

64. Charitable trusts are not objectionable on the ground that they
are to last perpetually. The law places no limits on their
duration.
With one exception the rule against remoteness applies to the
vesting of gifts in trust for charity and to gifts following
charitable trusts. The gift must vest within lives in being
and twenty-one years.
'
The exception exists in the case of a gift in trust for one cjiarity,
followed by a gift in trust for a second charity, to take
effect on the happening of a certain event. The second
charitable trust need not begin at a time measured by lives
in being and twenty-one years, but may be limited to com-
mence at any time.

The statement will frequently be found in the decisions that the

rule against perpetuities does not apply to charitable trusts. "It is
'
common knowledge that the rule as to perpetuities does not apply
8 Women's Christian Ass'n v. Kansas City, 147 Mo. 103, 48 S. W. 960.
00 Lakatong Lodge, No. 114, of Quakertown, etc., v. Board of Education of
Franklin Tp., 84 N. J. Eq. 112, 92 Atl. 870.
01 Larkin v. Wikoff, 75 N. J. Eq. 462, 72 Atl. 98, 79 Atl.
365, aflfirmed 77 N.
J. Eq. 589, 78 Atl. 1134.
02 Atto;:ney General y. Briggs, 164 Mass. 561, 42 N. E.
1J8.

\
232 THE TEUST PURPOSE —CHARITABLE TRUSTS (Ch. 7

to property given to charities." •' But, for the reason that "the
rule against perpetuities" an ambiguous phrase, these statements
is
have been provocative of much confusion of thought. In some in-
stances the rule against perpetuities means, to the court using it,
the rule against remoteness in other cases it means a rule against
;

suspending the power of alienation. As has been well said by a

Maine court "* "The statement is often found in the books that the
:

law against perpetuities does not apply to public charities. But

the statement is misleading. It is undo,ubtedly true that the prin-
ciple of public policy, which declares that estates shall not be
indeiinitely inalienable in the hands of individuals, is held inappli-
cable to public charities. But it must be remembered that the rule
against perpetuities, in its proper legal sense, has relation ohly to
the time of the vesting of an estate, and in no way afifects its con-
tinuance after it is once vested."
That a charitable trust may be perpetual, no matter to -what ex-
tent the trustees are prohibited from alienating the trust property,
is not doubted. The desire of the common law that all property
should be kept in the field of commerce, available for sale from
hand to hand, is overcome in the case of charities by ,a stronger
desire that the public should be benefited by the establishment and
maintenance of trusts which aid the needy and improve the con-
dition of mankind. It is no objection to a charitable trust to say
that it must last forever, or that no limit to its existence is set."^
With respect to the application of the rule against too remote
vesting to charitable trusts, four main situations may arise: (1)
There may be a trust for charity, followed by a gift over to a
private person ; (2) there may be a gift to a private person, follow-
,

ed by a trust for charitable uses to take effect upon certain con-

ditions ; (3) an instrument may provide for the vesting of property
in a trustee for charitable purposes at a future time ; (4) provision
may be made for one charitable trust which is to end on the happen-
ing of certain events, the property then to be held for the benefit
of anothpr charity, either by the same trustee, or by a new trustee. '"'

9 3 Lindley, L. J., in In re Tyler, [1891] 3 Ch. 252, 257. See, also, Trustees
of New Castle Common v. Megginson, 1 Boyce (Del.) 361, 77 Atl. 565, 570, Ann.
Cas. 1914A, 1207 ; Bauer' v. Myers, 244 Fed. 902, 157 0. C. A. 252.
0* WMtehouse, J., in Brooks v. City of Belfast, 90 Me. 318, 324, 38 Atl. 222.
» 5 Dexter v. Gardner, 7 Allen (Mass.) 243; Farmers' & Merchants' Bank
of Jamesport v. Robinson, 96 Mo. App. 385, 70 S. W. 372 ; Smart v. Town of
Durham, 77 N. H. 56, 86 Atl. 821 ; Hilliard v. Parker,- 76 N. J. Eq. 447, 74
Atl. 447; Stanly v. McGowen, 37 N. O. (2 Ired. Eq.) 9; In re Smith's Estate,
181 Pa. 109, 37 Itl. 114 Young v. St. Mark's Lutheran Church, 200 Pa. 332,
;

49 Atl. 887; Franklin v. Armfield, 2 Sneed (Tenn.) 305.

"o "The application of the rule against remoteness to charitable trusts has
 § 64) ^
THE RULE AGAINST BEMOTENESS 23S

The first problem suggested above is illustrated by the case of

In re Bowen.®^ In that case property was given in trust to estab-
lish schools in certain parishes; but if the government should
at any time establish a general systeni of education, the charitable
trust was to end and the property to go over to certain prjivate
persons. The gift over might take effect at any time in the future.
The vesting of the property in .the private persons was not certain
to occur at a time measured by lives in being and twenty-one years.
That the gift over followed a charitable trust was no reason why
the ordinary rule against 'remoteness should not be followed. This
is the view taken by those American courts which have considered
the question."* '

,
'

In the second instance suggested, namely, that of a gift to an

individual, followed by a gift over to, charity to vest at a future day,
the courts are likewise unanimous in holding that the charitable
gift must vest at a time which satisfies the rule against remote-
ness, or it will be void."' Thus, in Village of Brattleboro v. Mead,^
the gift was to the testator's son absolutely, with a provision that,
if the testator's heirs should fail at any time in the future, the prop-

erty should be used for the establishment of an industrial school

in the village of Brattleboro. It was held that the gift for the
school was void as too remote, since the vesting of it was not mea-
sured by the period fixed by the rule against remoteness. In this
respect it is evident that the rule against remoteness makes no ex-
ception of charitable trusts.

been learnedly and thoroughly discussed by the late Professor Gray in his
.
Eule against Perpetuities (3d Ed.) §§ 589-628. On the English cases see
Sanger, Remoteness and Charitable Gifts, 29 Yale La-w'J. 46.
»' [1893] 2 Ch. 491.
»8 Starr V. Minister and Trustees of Starr Methodist Protestant Church, il2
Md. 171, 76 Atl. 595 Proprietors of Church in Brattle Square v. Grant; 3
; i

Gray (Mass.) 142, 63 Am. Dec. 725; Wells v. Heath, 10 Gray (Mass.) 17;
Society for Promoting Theological Education v. Attorney General, 135 Mass.
285 Rolfe & Rumford Asylum v. Lefebre, 69 N. H. 238, 45 Atl. 1087. But if
;

the provision is merely that the charitable trust is to end upon the happening
of a certain contingency and that the property is then to revert to the settlor's
next of kin, this possibility of reverter is not void under the rule against
remoteness, even though it may take effect at a time not measured by lives
in being and twenty-one years. Hopkins v. Grimshaw, 165 U. S. 342, 17 Sup
Ct. 401, 41 li. Ed. 739.
»» Attorney General v. Gill, 2 P. Wms. 369; Merritt v. Bucknam, 77 Me.
253 MerriU v. American Baptist Missionary Union, 73 N. H. 414, 62 Atl. 647,
;

3 li. R. A. (N. S.) 1143, 111 Am. St. Rep. 632, 6 Ann. Cas. 646 Leonard v.
;

Burr, 18 N. X. 96 Smith v. Towosend, 32 Pa. 434. In re Penrose's Estate^

;

257 Pa. 231, 101 Atl. 319.

1 43 Vt. 556.
234 THE TRUST PURPOSE — CHARITABLE TRUSTS (Ch. 7

In the third division of cases are those in which a gJft to -a

trustee is made, the gift to vest at a future time, but no gift of

the intermediate interest in the property is made. This class of

cases is illustrated by Girard Trust Co. v. Russell.^ The settlor,
in that case provided for the accumulation of the income of a
certain fund until it was equal to the debt of the state of Pennsyl-
vania. At that time it was to be pajd to the treasurer of the
state, to be held by him in trust for the payment of the state debt.
The gift in trust to pay off the state debt was a charitable trust
of the governmental variety. But its date^of vesting was not meas-
ured according to the rule against remoteness. The charitable trust
might begin at any time in the future. It was held that the trust
was void, as conflicting with' the rule against remoteness. Such
is the general rule.* But a gift to a charitable corporation to be
formed in the future may escape the rule against remoteness by
the application of the cy pres doctrine.*
The only case in which the rule against remoteness makes an
exception regarding charitable trusts is in the fourth class men-
tioned above. Where a provision is made for the transfer of prop-
erty from one charity to another at a future time, the rule does not
apply. The possible remoteness of the event is not important.
Thus, in Christ's Hospital v. Grainger ° property was given in 1624
to the town of Reading, in trust for the poor of the- town, with a
clause that, if the town neglected, to perform the trust, the property
should go over to London' in trust for Christ's Hospital. The court
held that the devise over was not objectionable, saying: "In this
case there is a gift in trust for one charity, and, on the happening of
a certain contingency, a gift in trust for another charity. There
is no more perpetuity created by giving property to two charities,

in that form, than by giving it to one. The evil meant to be

guarded against by the rule of law against perpetuities is the mak-
ing of the property inalienable." This view has been generally
accepted in England and America.*

2 179 Fed. 446, 102 C. C. A. 592.

3 Chamberlayne v. Brockett (1872) 8 Ch. App. 206 ; Jocelyn v. Nott, 44 Conn.
55 ; Washburn v. Acome, 74 Misc. Rep. 301, 131 N. T. Supp. 963, affirmed 151
App. Div. 948, 136 N. T. Supp. 1150; In re Galland's Estate, 103 Wash. 106,
173 Pac. 740 (semble). Contra: French v. Calkins, 252 111. 243, 96 N. B. 877;
Franklin v. Hastings, 253 111. 46, 97 N. E. 265, Ann. Cas. 1918A, 135.
* See Gray, Rule against Perpetuities (3d, Ed.) § 608 et seq.
5 16 Sim. 83.
6 In re Tyler, [1891] 3 Ch. 252; Jones v. Habersham, 107 V. S. 174, 2 Sup.
Ot. 336, 27 L. Ed. 401
; Brigham v. Peter Bent Erigham Hospital, 134 Fed. 513,
67 C. C. A. 393; Storrs Agr. School v. Whitney, 54 Conn. 342, 8 Atl. 141;
MacKenzie v. Trustees of Presbytery of Jersey City, 67 N. J. Eq. 652, 61 Atl.
 ;

§ 65) THE BULE AGAINST EESTEAINTS ON ALIENATION 235

I

The reason for this exception to the rul,e in favor of charities

seems to be that where the remote gift over is to a charity the
inalienability of the property is not in any way increased. Prop-
erty held to charitable uses is for all practical purposes inalien-
able — is withdrawn from commerce. The addition of a provisioij
for a remote gift over, thus making the title uncertain and inca-
pable of absolute alienation, does not render the property inalien-
able, for it is already so.
Some courts have given as a reason for the exception, that the
tying up of property through two charitable trusts is no more ob-
jectionable than the restriction of the property by means of one
charitable trust.'^ But ;this seems to be dodging the question of re-
moteness entirely and laying stress on the inalienable nature of
property held under a charitable trust. The objection to a remote
gift to a charity is not that charitable property is inalienable, but
that the gift is remote, and all remote gifts seem to be prohibited
by the rule against remoteness.

THE RULE AGAINST RESTRAINTS ON ALIENATION

65. It is of the essence of charitable trusts that the principal fund
be kept intact and that the duration of the trust be indefi-
nite. In those states which have as their rule against per-
/ petuities the rule that the power of alienating property
cannot be restrained for an undue length of time it is uni-
versally held that such rule has no application to charitable
trusts and that by mecins of a charitable trust the power of
alienating real or personal property may be perpetually
suspended.

As has been previously noted,* the- rule against perpetuities in

many states is 'not a rul-e against remoteness, but is a rule that
the power of alienating property cannot be suspended longer than
3. given period. In some states the period is two lives in being;
in others, any number of lives in being. In the states which have
this form of the rule against perpetuities it is held without excep-
tion that the rule has no application to charitable trusts." The

1027, 3 L. B. A. (N. S.) 227; Almy v. Jones, 17 R. I. 265, 21 Atl. 616, 12 L. R.

A. 414 Webster v. Wiggin, 19 R. I. 73, 31 Atl. 824, 28 L. B'. A. 510.
;

T Jones V. Habersham, 107 U. S. 174, 185, 2 Sup. Ct. 336, 27 L. Ed. 401

Storrs Agr. School v. Whitney, 54 Conn. 342, 345, 8 Atl. 141.

8 See page 171, ante.

» Const. Cal. art. 20, § 9 ; Chew v. First Presbyterian Church of Wilming-

ton, Del. (D. C.) 237 Fed. 219; In re Coleman's Estate, 167 Cal. 212, 138 Pac.
236 THE TEUST PURPOSE —CHARITABLE TRUSTS Ch. 7

charitable trust does naturally result in suspending the power of

alienating the property which is subject to the trust. tThe trustees
are expected to retain the principal fund intact and use the in-
come for the carrying out of the charitable purposes of the settlor.
The trust results in withdrawing from commerce a certain fund of
money or certain other property. But the desirability of encour-
aging trusts which make for the general benefit of mankind offset,s
the dislike which the courts and legislators have of suspension of
the power of alienating property. The settlor is allowed to sus-
pend the power of cilienation of the property involved, so long as
he does it fot the benefit of the 'publicj

THE RULE AGAINST ACCUMULATIONS

66. In England all accumulations for the benefit of charity, are
on the ground that they constitute an illegal restric-
void,
tion on the enjoyment of property, and the charity is en-
titled to tiie income as fast as it accrues.
The leading American view, is that acciunulations for charity are
subject to the control of equity, and will be allowed when
reasonable and not prejudicial to the best interests of
society. In several states the matter is. now controlled by
>

statute.

Attention has previously been directed to the so-called rule

against accumulations, which provides that the income of property
shall not be accumulated, except for a restricted period and in
some states for the benefit of certain persons.^" An important ques-
tion is whether this rule applies with equal force to private trusts
and charitable trusts. May a settlor direct that the income of-^rop-

992, v. Heldt, 33 Ind. App. 388, 71 N. B. 520;

Ann. Cas. 19150, 682; Phillips
Dykeman Jenkines, 179 Ind. 549, 101 N. E. 1013, Ann. Cas. 1915D, lOJl;
v.
Wilson V. First Nat. Bank of Independence, 164 Iowa, 402, 145 N. W. 948,
Ann. Cas. 1916D, 481 ; Penny v. Croul, 76 Mich. 471, 43 N. W. 649, 5 L. R. A.
858 Lounsbury v. Trustees of Square Lake Burial Ass'n, 170 Mich. 645, 129
;

N. W. 36 In re Brown's Estate, 198 Mich. 544, 165 N. W. 929 How. Ann.

; ;

St. Mich. 1912, § 10700 Allen v. Stevens, 161 n: Y. 122, 55 N. B. 568 Decker
; ;

V. Vreeland, 170 App. Div. 234, 156 N. Y. Supp. 442 Brown v. Brown, 7 ,0r.
;

285; Lightfoot v. Poindexter (Tex. Civ. App.) 199 S. "W. 1152; Staines v..
Burton, 17 Utah, 331, 53 Pac. 1015, 70 Am. St. Rep. 788 Harrington v. PiAv
;

105 Wis. 485, 82 N. W. 345, 50 L; B. A. 307, 76 Am. St. Rep. 924 Danforth ;

v. City of Oshkosh, 119 Wis. 262, 97 N. W. 258; In re Kavanaugh's Will, 143

Wis. 90, 126 N. W. 672, 28 L. R. A. (N. S.) 470; Williams v. City of Oconomo-
woc, 167 Wis. 281, 166 N. W. 322 St. Wis. 1913, § 2039.
;

10 See page 176, ante. ^

% 66) THE RULE AGAINST ACCUMULATIONS 237

«rty be accumulated for the benefit of a charity with any greater

freedom than he "may provide for accumulations for his own chil-
dren? May a testator decree that half the income of the ppperty
given to charity shall be accumulated and added perpetually to-ihe
principal? Varying answers have been given to these questions
b)y the several courts which have considered them.
In England it is now established that all provisions for the
accumulation of income for the benefit of charity are void as illegal
restraints on the use of property.^^ In the case last cited the tes-
tator had directed that the trustees should pay certain annuities
and accumulate the surplus incon^e for the benefit of certain hos-
pitals. The court held that the charities were immediately entitled
to all surplus income, and need not wait for such surplus until
the time which the testaitor had set. The court stated that the
property in the surplus was vested in the charities and that a di-
rection that this property should not be enjoyed, for a given, period
-was void. It held that the rule of Saunders v. Vautier^^ was ap-
plicable to charitable corporations and 'trustees for charity as well
as to private persons.
This view has not been taken by the American courts, however.
The question was given careful consideration in St. Paul's Church
V. Attorney General.^' The court said "In regard to this matter,
:

one of three rules must be true The accurriulation must be valid

: .

forever," or it may be controlled by the court within reasonable and

desirable bounds; or it must be subject to the same rules as an
accumulation for private purposes. There is good reason to sup-
pose that the rule last named should not apply, for, if the object
is not subject to the rule against perpetuities, there is no good rea-
son why an accumulation for that object should be. It certainly
would be as much the policy of the law to favor an accumulation
for charitable objects as to favor charitable objects. It often hap-
pens that the charitable purpose cannot be carried out without
accumulation of a fund, sometimes .for a long period of time. There
are also good objections to a compulsory perpetual accumulation
even for a charitable purpose. Much would depend on the terms
under which the accumulation was to be made. There would be
great public danger in allowing an "accumulation indefinitely for
a charitable purpose that was not to be carried out within some
definite time. Such a purpose would be practically no charitable
purpose at all. On the other hand, however, there are cases where

"Wharton v. Mastermah, [1895] App. Cas. 186.

i2 4Beav. 115.
18 164 Mass* 188, 203, 204, 41 N. E. 231.
238 THE TBUST PURPOSE —CHAEITABLE TRUSTS (Ch. 7

the income from property might be directed to be accumulated

to form a fund, the income of which fund was to be annually ap-
plied to charitable purposes, as in the case at bar. Such an ac-
cumulation, it is evident, is less objectionable, as the income from
the accumulating fund is constantly being applied to the charity
year by year in larger amount. There seems to be no more objec-
tion to such an accumulation than to the holding of property con-
stantly increasing in Value for the benefit of the charity. are of We
opinion, however, that the proper course is to hold that the lim-
its of an accumulation for the benefit of charity are subject to the
order of a court of equity. By this method of solving the difficulty,
on the one hand an unreasonable and unnecessary trust for accu-
mulation can be restrained, and on the other hand a reasonable ac-
cumulation can be allowed to carry out the intention of the bene-
factor and to secure the accomplishment of the trust in the best
manner."
This view, that the limit of the accumulation for charity will be
prescribed by the court of equity in each individual case, has been
followed in Massachusetts and also adopted in Connecticut.^*
Thus, in Woodruff v. Marsh, ^^ where the testator had given $400,-
000 to trustees to establish a children's home, he directed that $10,-
000 of the income of this $400,000 should be accumulated and added
to the principal for a period of one hundred years. This was held
by the Connecticut court to be a reasonable accumulation for
charity.
In New York it has been held that the general statute relative to
accumulations, which prohibits accumulations except during a
minority for the benefit of a minor, applies to charitable trusts,
and that a provision for the accumulation of the income of a fund
for the benefit of a charitable corporation, pending the organiza-
tion of that corporation, is invalid.^" But by statute limited excep-
tions are made in favor of trusts for educational purposes.^' -An
accumulation may be directed .to occur until a sufficient sum is
raised to accomplish a given charitable object, and the sufficiency
I

1* Codman 187 Mass. 309, 72 N. E. 1008, 105 Am. St. Itep. 394;
v. Brigliain,
Ripley v. Brown, 218 Mass. 33, 105 N. E. 637 Collector of Taxes of Norton
;

V. Oldfield, 219 Mass. 374, 106 N. B. 10l4 Brlgham v. Peter Bent Brigham
;

Hospital, 134 Fed. 513, 67 C. 0. A. 393 Woodruff v. Marsh, 63 Conn. 125, 26-x
;

Atl. 846, 38 Am. St. Rep. 346; Duggan v. Slocum, 92 Fed. 806, 34 C. 0. A.
676. See, also, Girard Trust Co. v. Russell, 179 Fed. 446, 452, 102 C. C. A. 592.
15 63 Conn. 125, 26 Atl. 846, 38 Am. St. Rep. 346.
16 St. John V. Andrews Institute for Girls, 191 N. T. 254, 83 N. E. 981, 14
'

Ann. Cas. 708.

.i^Real Property Law (Consol. Laws, c. 50) § 61; Personal Property Law
(Oonsol. Laws c. 41) § 16.
 ;

§ 67) _ OTHER STATUTORY RESTRICTIONS 239

of the sutri is to be determined by the regents of the University

of the State of New York. Likejvise an accumulation to make up a
deficiency in the capital sum is allowed, and an accumulation may '

be provided for as to the income of not more than one-fourth of a

gift in trust for education (the sum not to exceed $50,000), the
accumulation to continue till the sum has been raised to $100,000.
In Pennsylvania and Wisconsin the accumulation of ii;icome
for charitable purposes is authorized to a limited extent by the
Legislature.^*

OTHER STATUTORY RESTRICTIONS ON CHARITABLE

TRUSTS
67. In some states limitations upon the rights of the settlor of a
charitable trust will be found in three classes of statutes,
namely:
(a) Acts restricting the amount of property which a charitable
'
corporation may hold;
(b) Laws declaring void gifts to charity made within a brief
period before the death of the donor
(c) Statutes prohibiting the giving of more than a certain part
of the testator's fortune to charity, when such testator
leaves given relatives.

,Certain statutes, which place restrictions upon a settlor of a

charitable trust and often render such trust invalid, deserve brief
consideration liere. They have to do with the capacity of cor-
porations to receive gifts for charit>ible uses and with the power
of a testator to give property to charity. A fuller discussion of
such statutes will be found in works on corporations and wills. ^^
Ip the first place, if the charitable gift is to be made to a cor-
poration, the settlor should ascertain that the corporation has
capacity to take the property which he intetids to give to it. The

18 1 Purd. Dig. Pa. (13th Ed.) p. 594. Charitable societies and corporations
are prohibited from ^adding accumulated income to capital, "so as that the
clear annual value thereaf, as regards future acquisitions with those now
held, shall exceed the limitation hereinbefore contained." The limitation men-
tioned seems to restrict such charitable bodies to holding property having an
annual income of $30,000, unless expressly authorized by the legislature t»
hold more. St. Wis. 1913, § 2061, allows accumulations "for the sole bene-
fit of a literary or charitable corporation which shall have been organized
under the laws of this state, but such accumulation must terminate upon the
expiration of twenty-one years from the time when the same shall be directed
to commence." This statute applies to real estate only.,
i» See Underhill on the Law of Wills, §S 841, 842.
 '

"240 THE TEUST PUKPOSE —CHARITABLE TRUSTS (Ch. 7

general laws of the state or the charter of the corporation may pre-
vent the corporation from taking the property which he desires
to give to it. This class of statutes is illustrated by the case of
In re McGraw's Estate.^" A testatrix made a gift to Cornell Uni-
versity, to be held by it' for library purposes. That corporation was,
hy its charter, restricted to holding property not to exceed $3,000,-
000 in value. The gift in question was declared void, because the
University already held property in excess of the value named in
the charter. The court held that the next of kin of the testatrix
might raise the question of the invalidity of the gift, and that that
right did not rest in the state of New York alone. Upon this latter
point, namely, that as to the right to contest the validity of a
.gift to a corporation on the ground of its lack of capacity, there is a
difference of opinion ;the prevailing view being opposed to that of
the New York court, and being that only the state involved is
entitled to attack the gift on such, ground.^^
A second class of statutes has placed limitations upon the in-
tending charitable settlor by declaring void gifts made to charitable
Tises immediately before the dealh of the donor. The theory of such
laws is' that gifts made to charity on the threshold of death are
apt to be made without due consideratidn, in an unnatural state
of mind, and often under undue influence. The Pennsylvania stat-
aite is a good illustration. It provides: "No estate, real or per-
sonal, shall hereafter be bequeathed, devised or conveyed to any
body or to any person, in trust for religious or charitable
politic,
uses, except the same be done by deed or will, attested by two cred-
ible and, at the time, disinterested witnesses, at least one calendar
month before the decease of the testator or alienor arid all dispo-
;

sitions of property contrary thereto, shall be void and go to the

residuary legatee or devisee, vnext of kin or heirs, according to
law. * * *" '^^

20 111 N. y. 66, 19 N. E. 233, 2 L.

p. A. 387, affirmed Cornell University v.
Fiske, 136 U. S. 152, 10 Sup. Ct. 775, 34 L. Ed. 427. See 1 Purd. Dig. Pa.
(13th Ed.) p. 594, for a statutory rule regarding the amount of property which
charitable corporations may hold.
21 Brigham v. Peter Bent Brigham Hospital, 134 Fed. 513, 67 C. O. A. 393;

Hewitt V. Wheeler School & Library, 82 Conn. 188, 72 Atl. 935; Francis v.
Preachers' Aid Soc, 149 Iowa, 158, 126 N. W. 1027 ;Farrington v. Putnam,
90 Me. 405, 37 Atl. 652, 38 L. R. A. 339 Chase v. Dickey, 212 Mass. 555, 99
;

N. E. 410 ; In re Kortrigljt's Estate, 237 Pa. 143, 85 Atl. ,111 ; Heiskell v.

Chickasaw Lodge, 87 Tenn. 668, 11 S. W. 825, 4 L. R. A. 699.
22 1 Purd. Dig. (13th Ed.) p. 595; Appeal of McGlade, 99 Pa. 338; Reimen-

snyder v. Cans, 110 Pa. 17, 2 Ati. 425 Flood v. Ryan, 220 Pa. 450, 69 Atl. 908,
;

22 L. R. A. (N. S.) 1262, 13 Ann. Cas. 1189, discussed in an article by Mr.

G. Bryan on Judicial Evasion of Statutes, in 15 Va. Law Hegj 577. See, also,
Civ. Code Cal. S 1313, and Bowdoin College v. Merritt (C. C.) 75 Fed. 480.
§ 68) EFFECT OS" PARTIAL INVALIDITT 241

a third class of restricting statutes is illustrated by the laws

Still
of New York: "No person having a husband, wife, child or parent,
shall, by his or hejr last will and testament, devise or bequeath to
any benevolent, charitable, literary, scientific, religious or mis-
sionary society, association or corporation, in trust or otherwise,
more- than one-half part of his or her estate, after the payment of
his or her debts, and such devise or bequest shall be valid to the
extent of one-half, and no more." ^'
The limitations upon one intending to become the settlor of a
charitable trust are obvious. The statutes of the state concerned
should be consulted, to learn whether the Legislature has required
that the gift be made a certain time before the death of the donor,
or whether there is a prohibition placed upon the giving of more
than a certain proportion of the testator's fortune.

EFFECT OF PARTIAL INVALIDITY

68. If an instrument makes provision for a valid cheiritable trust
- and also for an invalid trust, the charity will be enforced
by equity, if it can be separated from the invalid trust
without doing violence to the settlor's apparent intent.

The questions arising when a charitable trust is linked with a

trust provisionwhich is invalid are the same as those arising in the
construction of any will or deed which is partially invalid. The
prime problem is always the divisibility of the two provisions. Are
they inseparably woven together, so that they must stand or fall to-
gether, or may they be divided, and the invalid clause stricken out,
witho'ut thwarting what would have been the settlor's intent, had he
foreseen that such a condition would arise?
Thus, in a New Jersey case,^* a testator provided for a trust to
care for a private cemetery lot and graveyard, and directed that
any surplus income derived from the trust .funds should be applied
to the payment of any deficiency in the salary of the pastor of a
certain church. The provision for the cemetery' trust was invalid,
as not charitable, and as providing for a perpetuity. The gift for
church purposes was valid. The court held that the two were, how-
ever, so connected that the valid could not be separated and stand

28 New Xork Decedent Estate Law (Consol. Laws, c. 13) § 17. See, also,
Civ. Code 1313, where the amount is limited to one-third.
Cal. S
2* Van Syckel v. Johnson, 80 N. J. Eq. 117, 70 Atl. 657. See, also,. Andrew
V. New Xork Bible & Common Prayer Book Soc, 6 N. T." Super. Ct. (4
Sandf.) 156; Levy v. Levy, 33 N. Y. 97; In re Lyon, 173 App. Div. 473, 159
N. Y. Supp. 951 Commonwealth v. Levy, 23 Grat. (Va.) 21.
;

BOGEET TEUSTS 16 —
242 THE TRUST PUEPOSE —CHARITABLE TRUSTS (Ch. 7

alone, but must fall with the illegal gift. "When an u'nascertainable
part of a fund is given upon a void trust, and the residue upon a
valid trust, the whole fails." '/ '

On the other hand, in Lewis v. Lusk '^^ the testator gave funds
to trustees, and directed that $3,500 thereof should be paid to trus-
tees for the American Colonization Society and the balance divided
equally between two church boards. The bequest to the Coloniza-
tion Society was void under the then laws of the state, as being con-
trary to the public policy of the state, which encouraged slavery.
Bjit the gift to the church boards was valid as a religious charitable
trust, and, since the void gift was certain as to amount and not con-
nected in any way with the gift to the churches, the court sustained
the latter gift and declared void the gift to aid the emancipation of
slaves.
If the settlor's heirs know of the application of funds of the es-
tate to a void charitable trust and acquiesce in such application,
they are estopped later to clairri such funds, even though the court
may declare the trust void.^'

CONFLICT OF LAWS
69. The validity of the purpose of charitable trusts is determined
in the same manner as that of private trusts. If the sub-
ject-matter is land, the law of the jurisdiction where the
land is located controls; if the subject-matter is person-
alty, and the trust is created by deed inter vivos, the law
of the place where the instrument was executed controls;
if the subject-matter is personalty, and the trust is created

by will, by the weight of authority the law of the testator's

domicile controls the validity of the charitable trust.

The rules respecting the conflict of laws as applied to the validity

of the purpose of trusts have previously been discussed.^' Upon
this point qharitable trusts do not differ from private trusts. It
is sufficient to refer to the cases dealing^with the subject in connec-
tion with charitable trusts. When land is involved, the law of the
situs of the land is that governing the validity of the charity."'
If the property devoted to charity is personal property, and the

"» Van Syckel v. Johnson, 80 N. J. Eq. 117, 70 Atl. 657, 658.

28 35 Miss. 401. See, also. In re Peabody's Estate, 154 Cal. 173, 97 Pac. 184;
Webster v. Morris, 66 Wis. 366, 28 N. W. 353, 57 Am. Rep. 278.
-27 Coleman v. O'Leary's Ex'r, 114 Ky. 388, 70 S. W. 1068.
2 8 See ante, S 46. .

20 Brigham v. Peter Bent Brigham Hospital, 134 Fed. 513, 67 0. C. A, 393

§ 69) CbNFLlCT OP LAWS 243

gift is made during the settlor's life by means of a deed, it is agreed

that the law of the place where the trust instrument is executed is
the law which determines the validity of the trust purpose.^" On
the other hand, if the instrument creating the charitable trust is a
will and the property personalty, the better view is that the law of
the testator's domicile at the time of his death will give the con-
trolling rules,'^ although the courts of New York have in some cases
applied the law of the domicile of the legatee.*''

3» Girard Trust Co. v. Kussell, 179 Fed. 446, 102 0. C. A. 592.

aiDuggan t. Slocum, 92 Fed. 806, 34 C. C. A. 676; Klumpert v. Vrieland,
142 Iowa, 434, 121 N. W. 34 In re Sturgis, 164 I^. Y. 485, 58 N. E. 646 United
; ;

States Trust Co. of New York v. Wood, 146 App. Div. 751, 131 N. Y. Supp.
427; American Bible Soc. v. Pendleton, 7 W. Va. 79.
82 Kennedy v. Town of Palmer, 1 Thomp. & C. 581 ; Moimt v. Tuttle, 183 N.
X. 358, 76 N. B. 873, 2 L. R. A. (N. S.) 428; In re Weeks, 85 Misc. Rep. 280, 146
N. T. Supp. 1006; Stieglitz v. Attorney General of State of New lork, 91
Misc. Rep. 139, 154 N. Y, Supp. 137.
244 THE SETTLOR (Ch- 8

CHAPTER VIII
THE SETTLOR
70. Qualifleaaons of Settlor.
71. Settlor's Eights —
Construction and Enforcement of Trust
72. —
Settlor's Rights Revocation or Modification.

THE QUALIFICATIONS OF THE SETTLOR

70. Any person capable of conveying property absolutely may cre-
ate a trust therein by a declaration of trust or transfer in
trust. The power to be a settlor is restricted by the same
rules which govern the disposition of property frfee from
trust.
The crown, a state, and municipal and private corporations may
settle property in trust. Infants, married women, luna-
tics, and aliens may create trusts in their property, sub-
ject to the same rules as to disaffirmance' and avoidance
which affect their ordinary transactions.

The settlor of a trust has previously been defined to be the person

who intentionally causes the trust to come into existence.^ The
settlor is also sometimes called the creator or trustor. Having
discussed elsewhere the definition of this party to the trust, it re-
mains to consider the small number of problems which arise
with respect to him. Ordinarily, upon the complete creation of the
trust, the settlor drops out of the transaction and has few, if any,
rights or duties. There are, however, a few questions which con-
cern the settlor more than any other element of tlje trust relation.
These questions will be treated at this point.
The first query is: Who may be the settlor of a trust? What
qualifications, if any, must the settlor possess, in order that equity '

will recognize and enforce the trust which he has attempted to

create ?
The answer is that the capacity to create a trust is restricted
only by the, ability of the party to convey or transfer property.
"In general, every person competent to make a will, enter into
a contract, or hold the legal title to and manage property, may
dispose of it as he chooses, and, sui juris, has the power to create
a trust, and dispose of his property in that way. * * * " 2 if one

''
1 See ante, p. 1.
2 Skeen v. Marriott, 22 Utah, 73, 89, 61 Pac. 296. See, also, ReifC v. Horst, 52
 '

§ 70) THE QUALIFICATIONS OP THE SETTLOR 24p

may convey his property absolutely, he may convey it upon

legally
trust, or declare himself to hold it upon trust.
The sovereign has the power to convey property upon trust.
Thus, in England the crown may grant upon trust, as in the case
of a. conveyance of a prize in trust for the captors.* And so, in the
United States, the Legislature of a state has the authority to
convey upon trust property which is vested in the state.*
Corporations, both municipal ° and private,' have the power to
becomes settlors of property in trust for purposes which are within
their corporate powers.
The conveyances of infaiits,^' married women,* insane persons,
and aliens upon trust are subject to the same restrictions as ab-
solute transfers by such persons would be. The trust instruments
may be set aside on' account of the disability of the settlor when-
ever a grant without trust could be overturned for the same reason.
Naturally a bankrupt cannot create a trust in property already
in the hands of the trustee in bankruptcy.'
The beneficiary of a trust may settle his equitable interest in
trust in the same way that the owner of the legal title may create
a trust.^" There may be a trust within a trust.
A court of equity cannot properly be said to have the power of
settling a trust. It finds trusts to exist, but does not create them
itself. "Our courts have no common-law authority to create any
kind of trusts, certainly not express trusts. In the exercise of
equity jurisdiction, they find and adjudge trusts to exist by reason
of contracts, devises, bequests, gifts, or wrongful or fraudulent
acts, and may always appoint trustees when necessary to execute
them, but never, by common-law authority, create them." ^^

Md. 255, 267. The beneficiary of a trust may contribute to the trust fund and
thus make himself in part a settlor. Central Trust Co. of New York v. Falck,
177 App. Div. 501, 164 N. T. Supp. 473.
3 Stevens v. BagweU, 15 Ves. 139; Lewin, Trusts (12th Ed.) 20.
* Commissioners of Sinking Fund v. Walker, 6 How. (Miss.) 143, 38 Am.
Dec. 433.
5 Mayor of Colchester v. Lowten, 1 Ves. & B. 226.

« State V. President, etc., of Bank of Maryland, 6 Gill & J. (Md.) 205, 26

Am. Dec. 561 Dana v. Bank of United States, 5 Watts & S. (Pa.) 223.
;

T Ownes V. 'Ownes,' 23 N. J. Bj. 60 ; Starr v. Wright, 20 Ohio St. 97.

8 Durant v. Ritchie, 4 Mason, 45, Fed. Cas. No. 4190. In Brandan v. Mct
Curley, 124 Md. 243, 92 Atl. 540, L. K. A. 1915C, 767, it was held that, although
a married woman could not convey property to her husband directly, she and
he might join in a deed to him as trustee, since his capacity as grantee was
differentfrom his status as grantor.
9 Gardner v. Rowe, 5 Russ. 258.
lOTierney v. Wood, 19 Beav. 330; Kronheim v. Johnson, 7 Ch.,D. 60.
11 VancUef, C, in Simpson v. Simpson, 80 Cal. 237, 242, 22 Pac. 167, 168.
246 THE SETTLOR (Ch. 8

Attention has hitherto been called to some statutory limitations

upon the rights of certain persons to settle property upon chari-
able trusts.^^ Foi- the purpose of protecting the families of set-
tlors and to prevent fraud and duress the creators of charitable
trusts are in some states limited as to the amount of property
which they may give to charity and the time before death within
which it must be given.

SETTLOR'S RIGHTS— CONSTRUCTION AND ENFORCE-

MENT OF TRUST
71. A settlorwho conveys his entire title to trustees has no right
to bring a bill in equity for the construction or enforce-
ment of the trust. Such right rests with the beneficiaries.

Ordinarily the settlor of a trust in which the fee is granted has

no interest in the trust property after the complete creation of the
trust.^' He is as much a stranger to that property as a third per-
son who has had no connection with it. The legal title to the prop-
erty the trustee, and the equitable interest rests in the bene-
is in
ficiary. All estates not expressly granted by the settlor of the
trust to the trustee remain in the settlor.^*
It is obvious that the settlor has no right to obtain a construction
of the trust instrument by a court of equity.^^ What the trust in-
strument means is of no importance financially to him, for under no
construction of it will he be adjudged to have property rights.
Nor is it the right of the settlor to obtain the enforcement of
the trust. Its enforcement will not make him a penny richer.
Equity will give aid to such enforcement only on the applica-
tion of the trustee or a cestui que trust." "It is a general rule
that a suit to enforce a trust can only be maintained by the trustee
pr the cestui que trust. As against a third person, the- trustee, he

12 See ante, p. 244.

1' Boone v. Davis, 64 Miss. 138, 8 South. 202 Marvin v. Smith, 46 N. Y. 571.
;

1* Townshend v. Frommer, 125 N. Y. 446, 26 N. E. 805 Monday v. Vance,

;

92 Tex. 428, 49 S. W. 516.

15 Carroll v. Smith, 99 Md. 653, 59 Atl. 131 ; Levy v. Hart, 54 Barb. (N. Y.)
348.
i*! Rodney v. Shankland, 1 Del. Ch. 35, 12 Am. Dec. 70; Culbertson^v.
Matson, 11 Mo. 493 Foster v. Friede, 37 Mo. 36 Carter v. phlein (N. J. Ch.)
; ;

36 Atl. 956. Contra Abbott v. Gregory, 39 Mich. 68, where the agreement of
:

the trusteee to carry out the trust is viewed as a contract apparently enforce-
able by either the cestui or the settlor. The settlor's administrator or execu-
tor, of course, stands in his shoes. Kellogg v. White, 103 Misc. Rep. 167, 169 N.
Y. Supp. 989; Barrette v. Dooly, 21 Utah,, 81, 59 Pac. 718.
 ;

§ 71) CONSTRUCTION AND ENPOECEMENT OF TEUST 247

being regarded as the representative of the cestui que trust, is the

proper party to bring the action. As against the trustee himself,
the suit can only be maintained by the cestui que trust. Where the
trus^ is for a public charity, there being no certain persons who
are entitled to it, so as to be able t,o sue in their own names as
cestuis que trust, a suit for the purpose of having the charity
duly administered must be brought in the name of the Attorney
General. In such a case that officer, as representative of the pub-
^^
lic, would occupy the relation of ^cestui que trust to trustees."

Naturally, if the settlor has an interest in remainder following

the trust, he can, after the expiration of the trust, compel a recon-
veyance, or the delivery of pdssession, by the trustee.^' And ob-
viously, if the trust is for the benefit of the settlor, he may enforce
it; but here he occupies a double role, and. the enforcement is by the
cestui, and not by tHe settlor.^'
Although in a few cases the settlor of a charitclble trust has been
given the power to compel the trustees to carry out the triist,^"
the general rule is that the Attorney General or other public
prosecuting officer is the proper party to enforce the charitable
trust."^ He represents the public from whom the beneficiaries
are to be selected. He appears for the indefinite cestuis que trust.

1''
Harris, J., in Association for the Relief of Respectable, Aged Indigent
Females v. Beekman, 21 Barb. (N. Y.) 565, 568, 569.
18 Eaton T. Tillinghast, 4 R. I. 276.
19 Backes v. Crane, 87 N. J. Bq. 229, 100 Atl. 900; Hamilton v. Muncie, 182
App. Div. 630, 169 N. Y. Supp. 826.
"" Garrison v. Little, 75 111. App. 402 Chambers v. Baptist Education So-
;

ciety, 1 B. Mon. (Ky.) 215; Tate v. Woodyard, 145 Ky. 613, 140 S. W. 1044;
Warren v. Mayor of City of Lyons, 22 Iowa, 351; Mills v. Davison, 54 lir.
J. Eq. 659, 35 Atl. 1072, 35 L. R. A. 113, 55 Am. St. Rep. 594 In re St. Michael's
;

Church, 76 N. J. Eq. 524, 74 Atl. 491; Chapman v. Wilbur, 4 Or. 362.

21 People ex rel. EUert v. Cogswell, 113 Cal. 129, 45 Pac. 270, 35 L. R. A.
269; People v. Braucher, 258 111. 604, 101 N. E. 944, 47 L. B. A. (N. S.) 1015;
Parker v. May, 5 Gush. (Mass.) 336; Burbank v. Burbank, 152 Mass. 254, 25
N. E. 427, 9 L. B. A. 748; Attorney General v. Bedard, 218 Mass. 378, 105
N. E. 993; Tyree v. Bingham, 100 Mo. 451, 13 S. W. 952; New Tork Real
Property Law (Consol. Laws, c. 50) § 113; Personal Property Law (Consol.
Laws, c. 41) 8 12; Buell v. Gardner (Sup.) 149 N. T. Supp. 803; Ewell v.
Sneed, 136 Tenn. 602, 191 S. W. 131, 5 A. L. R. 303 (but, in Tennessee the
Attorney General cannjjt act unless a trustee is appointed) Kemper v.
;

Trustees of Lane Seminary, 17 Ohio, 293. In Michigan the prosecuting attor-

ney acts. How. Ann. St. § 10701. The best-reasoned cases have denied to
the settlor or his heirs the right to enforce the charitable trust. Sanderson
V. White, S5 Mass. (18 Pick.) 328, 29 Am. Dec. 591 Sandusky v. Sandusky,
;

265 Mo. 219, 177 S. W. 390 Petition of Bumham, 74 N. H. 492, 69 Atl. 720
;

Glover v. Baker, 76 N. H. 393, 83 Atl. 916;' Strong v. Doty, 32 Wis. 381.

 .

248 THE SETTLOR (Ch. 8

SETTLOR'S RIGHTS—REVOCATION OR MODIFICATION

72. Unless a power to revoke or modify is expressly reserved, or
the creation of the trust is affected by fraud, dvu^ess, or
mistake, the settlor has no power to revoke or modify
the trust, even though it was created without considera-
tion.

May the settlor destroy or revoke the trust after its complete
creation? If the settlement is founded on consideration, obvious-
ly it is without the powers of the settlor to revoke the trust, unless
he has bargained for such a right. And so, also, if the settlement
of the trust was voluntary, there may be no revocation unless
that right was resierved. Of 'course, frequently the right to revoke
is expressly provided, and in such "case there can be no dispute

about the power of the settlor to destroy the trust.^^

But where such right of revocation is not retained by the settlor,
and he effects a complete trust, he has lost all control over the
property. Thefe is no implied power of revocation."^ The case
of Viney v. Abbott"* is a good illustration of this rule. There one

''^ Kansas City Theological Seminaryv. Kendrick (Mo. App.) 203 S. W.

628; Van Cott 104 N. X. 45, 10 N. E. 257; Wood v. Paul, 250 Pa.
v. Prentice,
508, 95 Atl. 720. Where a settlor creates a trust for herself for life and
after death for her children, with a prcivision that, if the settlor at any time
convey the land by deed, the trustee should thereafter hold for such grantee,
a power to revoke the trust is reserved, and the settlor is in the position of a
fee-simple owner. Culpeper Nat. Bank v. Wrenn, 115 Va. 55, 78 S. E. 620. If
the right to revoke is made dependent on the consent of the trustee, of
course the settlor alone cannot destroy the trust. Downs v. Security Trust
Co., 175 Ky. 789, 194 S. W. 1041.
For a further discussion of the power of the settlor to terminate the trust,
'
see section 128, post.
2s Gray v. Union Trust Co. of San Francisco, 171 Cal. 637, 154 Pac. 306;
Lovett V. Farnham, 169 Mass. 1, 47 N. E. 246 Thorp v. Lund, 227 Mass. 474,
;

116 N. B. 946, Ann. Cas. 1918B, 1204 (semble) Stein v. Nat. Bank of Com-
;

merce (Mo. App.) 181 S. W. 1072; New Jersey Title Guarantee & Trust Co.
V. Parker, 84 N. J. Eg. 351, 93 Atl. 196 Hammerstein v. Equitable Trust Co.
;

of New York, 156 App. Div. 644, 141 N. X. Supp. 1065; Dorman v. Balestier
(Sup.) 175 N. X. Supp. 677; Fishblate v. Fishblate, 238 Pa. 450, 86 Atl.
469 ;In re Greenfield's Estate, 14 Pa. 489 ; Reidy v. Small, 154 Pa. 505, 26
Atl. 602, 20 L. R. A. 362 Barber v. Thompson, 49 Vt. 213 Sargent v. Bald-
; ;

win, 60 Vt. 17, 13 Atl. 854 ; Howard v. Howard, 60 Vt. 362, 14 Atl. 702.
In Richards v. Wilson, 185 Ind. 335, 112 N. E. 780, it is held that, upon a
subscription to a charitable trust fund without mention of revocation, there
is an implied condition against revocation. Obviously a completed trust with
no power of revocation reserved cannot be revoked by a will of the settlor.
McElveen v. Adams, 108 S. C. 437, 94 S. E. 733.
2* 109 Mass. 300.
 ;

§ 72) settlor's bights —revocation or modification 249

William Viney had transferred personal property to a trustee, to be

held, for the support of Viney during his life, and after his death
for the benefit of certain relatives. No power of revocation was
expressed in the instrument. Only a week after the creation of this
trust Viney married, and desired to destroy the trust and retake
the property. The court said: "It is immaterial whether there
was any other consideration than appears upon the face of the in-
denture for, even if the settlement was purely voluntary, the case
;

falls within the doctrine, now well established in equity, that a

voluntary settlement, completely executed, without any circum-
stances tending to ,show mental incapacity, mistake, fraud, or
undue iniluence, is binding and will be enforced against the set-
tlor and his representatives, and cannot be revoked, except so far as
a ptfwer of revocation has been reserved in the deed of settlement,
and that the fact that by the terms of the deed the income of the
property is to be applied by the trustee to the benefit of the settlor
during his lifetime does not impair the validity or effect of the fur-
ther trusts declared in the instrument." "
The courts of Rhode Island have taken the position that in a vol-
untary trust the insertion of a power of revocation is so natural and
reasonable that failure to reserve such power will be regarded
as prima facie evidence of mistake,^* but this doctrine has not
received general acceptance.^' Iii New York by statute, upon the
consent of all persons beneficially interested in a trust in personal
property, the creator thereof may revoke it.^*

25 Gray,' J., in Viney v. Abbott, 109 Mass. 300, 302, 303. For similar views
see Appeal of Fellows, 93 Pa. 470 Kraft v. Neilffer, 202 Pa. 558, 52 Atl. 100.
;

28 Aylsworth v: Whitcomb, 12 R. I. 298.

""^
Sands v. Old Colony Trust Co., 195 Mass. 575, 81 N. E. 300, 12 Ann. Cas.
837.
2 8 New lork Personal Property Law (Consol. Laws, c. 41) § 23. The word-
ing of the statute is as follows "Upon the written consent of all the persons
:

beneficially interested in a trust in personal property or any part thereof here-

tofore or hereafter treated, the creator of such trust may revoke the same as
to the whole or such part thereof, and thereupon the estate of the trustee
shall cease in the whole or such part thereof." For cases construing this
statute, see'Cazzain v. Title Guarantee & Trust Co., 175 App. Div. 369, 161
N. Y. Supp. 884, affirmed 220 N. T. 683, 116 N. E. 1040 ; Sperrjr v. Farmers'
Loan & Trust Co., 154 App. Div. 447, 139 N. T. Supp. 192 Crackanthorpe v.
;

^Sickles, 156 App. Div. 753, 141 N. T. Supp. 370; Whittemore v. Eqvi table Trust
Co., 162 App. Div. 607, 147 N. T. Supp. 1058 ; Goodwin v. Broadway Trust Co., 87
Misc. Rep, 130, 149 N. Y. Supp. 10^3; Court v. Bankers' Trust Co. (Sup.) 160
N. Y. Supp. 477 ; Cruger v. Union Trust Co. of New York, 173 App. Div. 797,
160 N. Y. Supp. 480 Craih v. Walker, 173 App. Div. 804, 160 N. Y. Supp. 486
;

In re Berry, 178 App. Div. 144, il64 !n. Y. Supp. 990 ; Williams v. Sage, 180
App. Div. 1, 167 N. Y. Supp. 179.
 250 THE SETTLOB (Ch. 8

Neither the absence "" nor the presence'" of a power of revocation

has "any effect upon the validity of a trust. Either the absence
or presence of such power is consistent with a completed trust.
On elementary principles, a voluntary agreement to convey upon
trust may be abandoned without obligation.'^
A settlor may not modify the terms of the trust after its com-
plete creation.''' Thus, where land was given in trust for school
purposes, the settlor could not later add to the trust the restriction
that the school should admit white children only." Th6 settlor
of a passive trust cannot change it to an active one.'* A
power of
revocation reserved does not authorize the settlor to alter^the terms
of the trust by his will.'"

2» Lawrence v. Lawrence, 181 111. 248, 54 N. B. 918; Riddle v. Cuttgr, 49

Iowa, 547 Mlddleton v. Shelby County Trust Co., 51 S. W. 156, 21 Ky. Law
;

Rep. 183; CarroU v. Smith, 99 Md. 653, 59 Atl. 131; Rogers v. Rogers, 97 Md.
573, 55 Atl. 450; Brown v. Mercantile Trust & Deposit Co., 87 Md. 377, 40
Atl. 256.
'0 Stone V. Hackett, 78 Mass. (12 Gray) 227; Seaman v. Harmon, 192 Mass.
5, 78 N. E. 301 ; Mize v. Bates County Nat. Bank, 60 Mo. App. 358 ; Schreyer
V. Schreyer, 101 App. Div. 456 91 N. Y. Supp. 1065 ; Locke v. Farmers' Loan
"

& Trust Co., 140 N. T. 135, 35 N. E. 578 f Brown v. Spohr, 180 N. T. 201, 73
N. E. 14 ; Witherington v. Herring, 140 N. C. 495, 53 S. E. 303, 6 Ann. Cas.
188 ; Springs v. Hopkins, 171 N. C. 486, 88 S. E. 774. "The reservation of a
reversion is not inconsistent with the creation of a trust to continue until the
death of the reversioner." Doctor v. Hughes, 225 N. Y. 305, 311, 122 N. B.
221. A power of revocation in a deed of trust does not render the instrument
testamentary. Wilcox v. Hubbell, 197 Mich. 21, 163 N. W. 497.
31 McCartney v. Ridgway, 160 111. 129, 43 N. B. 826, 32 L. E. A. 555.
32 Anderson v. Kemper, 116 Ky. 339, 76 S. W. 122 ; Sewall v. Roberts, 115

Mass. 262 Pacific Nat. Bank v. "Windram, 133 Mass. 175

; ; Gulick v. Gulick,
39 N. J. Eq. 401; Taylor v. James^ 4 Desaus. (S. C.) 1.
3 3 Price V.' School Directors, 58 111. 452.
3* Fish V. Prior, 16 R. I. 566, 18 Atl. 162.
3= Appeal of Dickerson, 115 Pa. 198, 8 Atl. 64, 2 Am. St. Rep. 547.
§ 73) THE SUBJECT-MATTER OF THE TRUST 251

CHAPTER IX
THE SUBJEdT-MATTER,
73. The Subject-Matter of the Trust

THE SUBJECT-MATTER OF THE TRUST

73. Every trust must have some property as its subject-matter.
This property may be of any kind recognized as valuable
*

by a court of equity. It may be legal or equitable, real or

personal. The subject-matter of the trust must be certain,
in order that the trust be enforceable.

A trust without subject-matter is inconceivable. It could not ex-

ist, more than a trust without a trustee or a beneficiary.^ Some
any.
property must be fixed as the res, to be held by the trustee for the
beneficiary. In a few cases eflforts have been made to prove that a
trust existed where no property could be found as the subject-mat-
ter. Thus, in several cases a testator has requested that a certain
person b^ employed by the executors as solicitor or attorney or
clerk. It has been held in these cases that the testator's direction
did not create a trust, because of 4;he lack of subject-matter.'' No
.sum was left in trust to employ the person named. And so, also,
the proceeds of property not in existence cannot be made the sub-
ject-matter of a trust ;^ nor does any trust arise from a request
that the testator's wife and sister should live together.*
"In general, any right, interest, or thing which may be the subject
of property may be granted in trust. Every kind of vested right
which .the. law recognizes as valuable- may be transferred in
trust." " This property may be land, money, a patent right,^ grow-

1 "In order that there may be a trust of any kind, there must be a trust
fund." Koehler v. Koehler (Ind. App.) 121 N. E. 450, 455.
2 Foster v. Blsley, 19 Ch. Div. 518; Jewell v. Barnes' Adm'r, 110 Ky. 329,

61 S. W. 360, 53 L. R. A. 3T7; In fe Thistlethwaite (Sur.) 104 N. Y. Supp.

264 Matter of Wallaeh, 164 App. Div. 600, 150 N. T. Supp. 302.
;

3 Mitchell V. Bilderback, 159 Mich. 483, 124 N. W. 557. In Fidelity Title

& Trust Go. V. Graham, 262 Pa. 273, 105 Atl. 295, it was held that the bene-
ficiary of a life insurance policy might declare a trust of the right to the
proceeds, although such right was contingent on the failure of the insured
to 'change the beneficiary.
4 Graves v. Graves, 13 Ir. Ch. 182.
s Dunn, J., in Burke v. Burke, 259 111. 262, 268, 102 N. B. 293, 295. See^
also, Haulman v. Haulman, 164 Iowa, 471, 145 N. W. 930, 933.
8 In re Russell's Patent, 2 De G. & Jon. 130.
252 '

THE SUBJECT-MATTER (Ch. 9

ing crops/ a promissory note," a claim against a bank,' an equi-

table interest/" a ship in construction/^ or unaccrued rents and
profits.^^
It is obvious that the subject-matter of the trust must be certain,
if a court of equity is to enforce it. An uncertain trust res is as fa-
tal to the trust as no subject-matter whatever. Thus, where a tes-
tator provided that after a certain date the trustees might give such
portions of the estate as they thought proper to any of the testa-
tor's brothers and sisters who might stand in need of the aid, and
that the trustees should devote the remainder of the property ta
the advancement of the cause of temperance or in aid of a manual
training school, it was held that the gift in trust for the cause of
temperance or the school was void ior uncertainty, since there' was
no assurance that there would be any of the property of the testa-
tor left after his brothers and sisters were provided for.^' On the
other hand, a legacy in trust of a sufficient sum of money to pro-
duce $50 per annum is not void for uncertainty of the subject-
matter.^*

7 Mauldin v. Armlstead, 14 Ala. 702.

8 Broughton v. West, 8 Ga. 248 Duly v. Duly, 2 Ohio Dec. 425.
;

» McCarthy v. Provident Institution for Savings, 159 Mass. 527, 34 N. E..

1073.
10 Tarbox
.v. Grant, 56 N. J. Eq. 199, 39 Atl. 378. In Clark v. Prazier,.
(Okl.) 177 Pac. 589, it was held that a school land certificate entitling its
holder to a preferential right to buy the land was an equitable Interest, which
could be the subject-matter of a trust.
11 StarbuGk v. Farmers' Loan & Trust Co., 28 App. Div. 272, 51 N. Y.
Supp. 58.
12 GIsborn v. Charter Oak Life Ins. Co., 142 U. S. 326, 12 Sup. Ct. 277^
35 L. Ed. 1029.
13 Wilce V. Van Anden, 248 111. 358, 94 N. E. 42, 140 Am. St. Rep. 212, 21
Ann. Cas. 153. Property expected to be received under the will of a relative
may not, be made the subject-matter of a trust. In re Lynde's Estate (Sur.)'
175 N. X. Supp. 289.
i< Crawford v. Mound Grove Cemetery Ass'n, 218 111. 399, 75 N. B. 998.
For other cases, in which doubt has been raised as to the certainty of the
subject-matter, hut the trusts have been sustained, see Speer v. Colbert, 200
U. S. 130, 26 Sup. Ct. 201, 50 L. Eid. 403-; French v. Calkins, 252 111. 243, 96-
N. E. 877 Haynes v. Carr, 70 ' N. H. 463, 49 Atl. 638 ; Beurhaus v. Cole, 94
;

Wis. 617, 69 N. W. 986.

§ 74) THE TEUSTEE —HIS QUAIiIi;iCATIONS 253

CHAPTER X
THE TEUSTEE: HIS QUALIFICATIONS, APPOINTMENT AND
REMOVAL 1

74. The Trustee—His Qualifications.

75. Trust will Not Fail for Want of Trustee.
76. Original Appointment of Trustee.
77. Trustee's Bond.
78. Acceptance by Trustee.
79. Resignation by Trustee.
80. Removal of Trustee.
81. Death of Trustee.
82. Vacancies in Trusteeship —Appointment of Successors.

*rHE TRUSTEE—HIS QUALIFICATIONS

74. Any
person capable of taking and holding the title to property
may
be a trustee. >>
,

The crown in England,' the United States, or a state may be a

trustee, although the trust may be unenforceable in the
courts.
Corporations, both privatie and municipal, may accept trusts for
purposes within their corporate powers.
An unincorporated association has not the capacity to be a trus-
tee, but a trust naming such an organization as trustee will
not fail for that reason.
Married women, infants, aliens, and lunatics may be trustees,
subject to the disabilities which affect them in all their
transactions.
The settlor may declare himself a trustee, or may make the bene-
• ficiary trustee. Where the cestui que trust is the sole ben-
eficiary, the trust "will be destroyed by a merger of the le-
gal and equitable interests of the trustee-beneficiary. But
where the beneficiary is only one of several trustees, the
trust will continue, although the trustee-beneficiary will,
according to the better view, be incompetent to act where
his private interests are concerned.

Whatvare the qualifications of a trustee? What persons, natural

and artificial, may hold the ofiice of trustee?
Any person capable of taking and holding the title to real or per-
sonal property jnay be a trustee. If one has the power to become
the owner of property absolutely and for ^his own benefit, he may
likewise become seized of property in trust for another.
 )

254 THE TEUSTEB (Ch. 10

The sovereign in England may be a trustee, although the bene-

ficiary has no power to enforce the trust against the crown. Re-
cent statutes^ have provided against escheat to the crown upon the
death of a trustee without heirs, and have also made it possible for
the crown to transfer the duties of a trusteeship to another.
By way of dictum the New York Court of Appeals has said that
the United States is incapable of holdings property in trust for the
establishinent of a school. "Is it, therefore, within the scope of its
[the federal ,government's] political corporate capacity to adminis-
ter indefinit^e charitable trusts? It seems to me there can be but
one answer. The United States exists under grants of power, ex-
press or implied, in a written Constitution, and the functions nf all
the departments are definitely limited and arranged. It i§ not
within the express or implied powers of the government, as organ-
ized, to administer a charity." *
While there seems to be a dearth of law on this subject, there is
no reason in principle why the federal government may not Hold
property in trust for governmental purposes, and leading writers
agree that it has such power.^
A stat6 may be a trustee,* as for example, when the holder of
property in trust to establish a home for insane persons," or when
taxes are illegally collected,' or when money is given for the bene-
fit of the children living in the state,^ or when the fore'shore of the

ocean is held for the public,' or where land is held for the benefit of
soldiers."
"It may be stated as a general proposition of law that a corpora-
tion capable of holding real estate is capable also of executing a
charitable trust, unless the statute or the articles of incorporation
prohibit it. And, unless specially restrained, municipal corporations
may take and hold property in their own right by direct gift, con-
veyance, or devise, in trust, for purposes germane to the objects of
the corporation, or which will promote, aid, or assist in carrying
out or perfecting those objects." ^°

1 39 40 Geo. Ill, e. 88 (1800) 4 & 5 Wm. IV, e. 23 (1834) 13 & 14 Vict.

& ;
;

c. 60, §§ 15, 46,47 (1850).

2 Wright, J., in Levy v. Levy, 33 N. Y. 97, 122.
3 1 Perry, Trusts (6th Ed.) p. 31 ; 28 Amer. & Eng. Enc. of Law (2d Ed
p. 954 39 Gyp. 247.
; ^
"

1 Preston v. Walsh (C. 0.) 10 Fed. 315.

5 Tale College's Appeal, 67 Conn. 237, 34 Atl. 1036.

« Shoemaker v. Board of iCom'rs of Grant County, 36 Ind.

175.
7 Bedford v. Bedford's Adm'r, 99 Ky. 273, 35 S. W.
926.
8 Allen V. Allen, 19 R. I. 114, 32 Atl. 166, 30 L. R. A.
497, 61 Am. St Rep.
738. . I
,

Pinson v. Ivey, 1 Yerg. (Tenn.) 296.

10 Clayton v. Hallett, 30 Colo. 231, 249, 70 Pac.
429, 59 ":. R. A. 407, 97
 § 74) THE TRUSTEE — ^HIS QUALIFICATIONS
'

255

Instances in which gifts to cities to hold in trust for governmen-

tal or other charitable purposes have been sustained are frequent.^^
These trusts are generally in aid of objects which the municipality-
is under a duty to forward or might well forward. Thus, one trust
was for the establishment of a hospital for foundlings/^ another for
the purpose of making loans to needy young artificers,^' and still a
third for the planting and care of shade trees in the city.^*
A town or village may become a trustee to carry o-ut purposes
for which it was incorporated.^^ "A trust for the support of
schools, or of a particular^ school as a high school, or for any pur-
pose of general public utility is a valid trust. So towns can hold
property in trust for purposes within the general scope of their cor-
porate existence." ^*
It is obvious that a private corporation may be a. trustee whenev-
er the purposes of the trust are consistent with the objects of the
corporation. If carrying out the trust is within the powers granted
to the corporation by its charter or certificate of incorporation, then
the corporation may validly act as trustee.^' But a corporation

Am. Kep. 117. A legislature may authorize a county to hold property as a

St.
trustee. Pirkey v. Grubb's Ex'r, 122 Va. 91, 94 S. B. 344.
iiMcDonogh V. Murdoch, 56 TJ. S. (15 How.) 367, 14 L. Ed. 732; In re
Coleman's Estate, 167 Cal. 212, 138 Pac. 992, Ann. Cas. 1915C, 682; Dyke-
man V. Jenkines, 179 Ind. 549, 101 N. E. 1013, Ann. Cas. 1915D, 1011 Rich- ;

ards V. Wilson, 185 Ind. 335, 112 N. E. 780; Board of Trustees of Schools
for Industrial Education in City of Hoboken v. City of Hoboken, 70 N, J. Eq.
, 630, 62 Atl. 1 ; State v. City of Toledo, 23 Ohio Oir. Ct. R. 327 ; Mcintosh v.
City of Charlesf5n, 45 S. C. 584, ^3 S. E. 943 Maxcy v. City of Oshkosh, 144
;

Wis. 238, 128 N. W. 899, 1136, 31 L,. R. A. (N. S.) 787. By Laws N. H. 1915,
c. 162, cities and toivns are authorized to act as trustees for certain purposes.
12 Phillips V. Harrow, 93 Iowa, 92, 61 N. W. 434.
IS Higginson v. Turner, 171 Mass. 586, 51 N. E. 172.
1* Cresson's Appeal, 30' Pa. 437.
15 Roe V. Doe, 2 Boyce, 348, 80 Atl. 250; Chapman v. Newell, 146 Iowa,
415, 125 N. W. 324 ; Higginson v. Turner, 171 Mass. 586, 51 N. E. 172 ; Hath-
eway v. Sackett, 32 Mich. 97; A^ams v. Highland Cemetery Co. (Mo.) 192 S.
W. 944 Glover v. Baker, 76 N. H. 393, 83 Atl. 916 ; Stearns v. Newport Hos-
;

pital, 27 R. I. 309, 62 Atl. 132, 8 Ann. Cas. 1176.

18 Piper V. Moulton, 72 Me. 155, 159, in which case the trust was
for edu-
cational purposes. In Sargent v. Cornish, 54 N. H. 18, the town held prop-
erty for the purpose of buying and displaying flags for patriotic uses.
17 Perin v. Carey, 65 TJ. S. (24 How.) 465, 16 L. Ed. 701; Hossack
v. Ot-
tawa Development Ass'n, 244 111. 274, 91 N. E. 439; State v. Higby Co 130
Iowa, 69, 106 N. W. 382, 114 Am. St. Rep. 409; White v. Rice, 112 Mich.
403, 70 N. W. 1024; Chapin v. School Dist. No. 2 in Winchester, 35 N. H.
445 De Camp v. Dobbins, 29 N. J. Eq. 36 ; Ex parte Greenville Academies^
;

^ Rich. Eq. (S. C.) 471 Bell County v. Alexander, 22 Tex. 350, 73 Am, Dec!
;

268 Latshaw v. Western Townsite Co., 91 Wash. 575, 158 Pac. 248. In Ne-
;

braska foreign corporations may not take title to real estate, and hence may
256 THE TRUSTEE (Ch. 10

which was empowered to establish an institution in the town of

Newmarket for the instruction of youth may not be a trustee for
the purpose of aiding missionaries. Such a trust would be beyond
the powers of the corporation.^'
/Unincorporated Associations
The question has frequently arisen whether an unincorporated
association may be a trustee. Such a body is not recognized by the
law as a legal entity. It has a shifting membership. The decisions
have, however, almost uniformly sustained a trust in which an un-
incorporated association was named as a trustee, sometimes merely
with a statement that such a trust was valid; ^° in other cases with
the assertion that, while the association could not act as a trustee,
equity would hold the heirs or devisees as trustees for the purpose
named; "" and on other occasions the court has stated that it would
appoint new trustees in place of the incompetent association.''^
The correct view would seem to be that a trust ought not to fail
because an unincorporated association was named as its trustee.
Such an association is not a legal entity. The title to the trust
property could not rest in it, but would necessarily rest in the mem-
bers of- the association, if the association were allowed to be a trus-
tee. But such members are constantly changing, and there is no
provision for the transfer of the title to the property onxthe change
of membership. But, even if it be conceded that an unincorporated
association is not competent to serve as a trustee, the trust may
well be saved under the established principle that equity will not

not be trustees of real property trusts. Gould v. Board of Home Missions

of Presbyterian Churcb, 102 Neb. 526, 167 N. W. 776. Trust companies are
generally authorized by statute to act as trustee. Laws Ohio 1919, p. 118;
Acts W. Va. 1919, c. 80. Banks satisfying certain conditions are also fre-
quently given power by statute to be trustees. Laws Colo. 1915, p. 135 Acts ;

Ind. 1915, c. 97; Code Supplemental Supp. Iowa, 1915, § 18S9d; Acts Ky.
1920, c. 128; Laws N. H. 1917, c. 193; Laws N. H. 1919, c. 121; Laws Pa.
1919, p. 1032. The whole subject of the appointment, removal, and many of
the powers and duties of trustees is now covered in Pennsylvania by the
Fiduciaries Act of 1917, Laws Pa. 1917, p. 447. See K. J. Le Boeuf, National
Banks as Fiduciaries, 5 Cornell Law Quarterly, 128.
18 Trustees of South Newmarket Methodist Seminary y. Peaslee, 15 N. H.
SIJ.
19 Biscoe v. Thweatt, 74 Ark. 545, 86 S. W. 432, 4 Ann. Cas. 1136; Burbank
V. Whitney, 24 Pick. (Mass.) 146, 35 Am. Dec. 312 ;Missouri Historical Soci-
ety: V. Academy of Science, 94 Mo. 459, 8 S. W. 346 ;LUly v. Tobbein, 103 Mo.
477, 15 S. W. 618, 23 Am. St Eep. 887 ;Dye v. Beaver Creek ChurSh, 48 S. C.
444, 26 S. E. 717, 59 Am. St. Rep. 724.
By Laws Neb. 1917, c. 11, fraternal orders, though not incorporated, are
authorized to receive devises and bequests.
20 Johnson v. Mayne, 4 Iowa, 180 ; Bartlett v. Nye, 4 Mete. (Mass.) 378.
21 Estate of Upham, 12!7 Cal. 90, 59 Pac. 315; Washburn v. Sewall, 9 Mete
<Mass.) 280; Guild v. Allen, 28 R. I. 430, 67 Atl. 855.
§ 74) THE TRUSTEE —HIS QUALIFIOATIONS 257

allow a trust to fail for want of a trustee." The better method of

dealing with such attempts to create a trust would seem to be to
appoint new trustees.
Married women, even at common law, were capable of becoming
trustees, although hampered in the administration of trusts by the
rules restricting their dealing with property apart from their hus-
bands.*^ Under modern legislation,', giving married women po-yver
to take, convey, and manage their property as if single, married
women, may, of course, act without any disability as trustees, and
they frequently are appointed.**
An infant may be a trustee, ^1 though subject to the usual dis-
^abilities of infancy, and not accountable for acts of maladministra-
tion.*^ Equity will, on application, decree that the infant convey
to/ a new trustee of full capacity.**
A lunatic may be a trustee, although subject to the same inca-
pacities and disabilities as if acting with reference to his own prop-
erty.*^ As a trustee the lunatic cannot alone or with the cestui que
trust do any valid act.** Equity will remove the title from the lu-
natic trustee and vest it in a competent person.*'
An insolvent'" or bankrupt'^ person may be a trustee, although
equity wifl ordinarily remove him on application.'* Such a person
has the capacity to hold and manage property, although his finan-
cial condition makes it highly dangerous to the cestui que trust
that he continue in the trust office. ^

An alien may be a trustee to the same extent that he may own ,

property absolutely. In most of the American states friendly aliens

have full property holding rights, and the ancient disability of
aliens to take and hold real property has been abolished.''

22 See post,
p. 261. 23 stUl v. Ruby, 35 Pa. 373.
Eoge V. Rose, 93 Ind. 179; In re Stewart, 56 Me. ?00; Springer v. Berry,
2*
47 Me. 330; Jones v. Roberts, 60 N. H. 216; Schluter v.' Bowery Savings
Bank,' 117 N. T. 125, 22 N. E. 572, 5 L. E. A. 541, 15 Am. St. Rep. 494 ;Clarke
V. Saxon, 1 Hill EJq. (S. C.) 69.
2 5 Jevon V. Bush, 1 Vernon, 342; Des Moines Ins. Co. v. Mclntire, 99 Iowa,

50, 68 N. W. 565; McClellan v. McClellan, 65 Me. 500; Levin v. Ritz, 17

Misc. Rep. 737, 41 N. Y. Supp. 405. "
2 8 Walsh V. Walsh, 116 Mass. 377, 17 Am. Rep. 162. Where infant tmistees
have conveyed to their cestui que trust, equity will confirm this voidable title.
Clary v. Spain, 119 Va. 58, 89 S. B. 130.
2T Pegge V. Skynner, 1 Cox, Eq. Cas. 23; Eyrick v. Hetrick, 13 Pa. 488.
28 Bailey v. HiU, 77 Va. 492.
29 See discussion of removal of trustees, post, § 80.
so Shryock v. Waggoner, 28 Pa. 430.
51 Rankin v. Barcroft, 114 111. 441, 3 N. E. 97.
52 In re Barker's Trusts, 1 Oh. Div. 43. ^

3* For a discussion of the comparative law on this subject In the United

BOGEET Tbusts —
^17
258 THE TRUSTEE (Ch. 10
\

Frequently a settlor of a charitable trust provides that the trustee

shall be a corporation to be. created in the future. In such cases
the trustee is not in existence when the trust takes effect. Nev-
ertheless equity doe^ not allow the trust to fail, but considers the
property held by the grantor, or testator's heirs, or by the jcourt
itself in trust, pending the creation of the corporation which is to
'

be the trustee.'* *

"There is no rule of law that prohibits the donor from constitut-

ing himself a trustee for the donee, and in such case no further de-
*"
livery is necessary, provided the trust is expressed."
Merger
Frequently the trustee is also named as a beneficiary of the trust.
Is a cestui que trust competent to act as a trustee? The question
may arise in several ways. A. may have been appointed a trustee
for himself alone. In such case the sole trustee is also sole bene-
ficiary. There can be no doUbt aboufthe result in such an instance.
The equitable estate merges in the legal, and A. becomes the own-
er of the property freed from any trust.'® "The, trustee and the
beneficiary must be distinct personalities, or, otherwise, there could
be no trust, and the merger of interests in the same person ^ould
effect a legal estate in him, of the same duration as the beneficial
interest designed. * * * That the legal and beneficial estate
can exist and be maintained separately in the same person is an in-
conceivable proposition." '' And so a gift to a corporation in trust
for its corporate purposes will be construed as an absolute gift,
rather than as a trust;'* But if the settlor appoints A. and B. as
trustees for A., and B. fails tb qualify, leaving A. as the sole trus-
tee, there will be no merger. The court will appoint a new trustee

States, see 5 Cornell Law Quarterly, 209. By a recent statute in New York
no person Is competent to serve as a testamentary trustee who is an alien not
an inhabitant of the state. Section 3564, Code Civ. Proc. In re Eipley, 101
Misc. Rep. 465, 167 N. Y. Supp. 162.
34 Town of Shapleigh v. Pilsbury, 1 Me. (Greenl.) 271; Keith v. Scales, 124
N. C. 497, 32 S. E. 809; Pennoyer v. Wadhams, 20 Or. 274, 25 Pac. 720, 11 L.
B. A. 210; In re Eewis' Estate, 11 Pa. Co. Ct. R. 561; Dodge v. Williams,
46 Wis. 70, 1 N. W. 92, 50 N. W. 1103.
36 Yokem v. Hicks, 93 111. App. 667, 670.
3 6 Nellis V. Rickard, 133 Cal. 617, 66 Pac. 32, ^5 Am. St. Rep. 227; Matter
of Hitchuis, 39 Misc. Rep. 767, 80 N. Y. Supp. 1125; Butler v. Godley, 12 N.
C. 94 ; Danf orth v. Oshkosh, 119 Wis. 262, 97 N. W. 25& Upon the termina-
tioif of trusts by merger see post, § 123.
In Re Hance's Estate, 69 Pa. Super. Ct. 432, two sons of the testator were
both trustees and cestuis que trust. The court held that the case differed
from that of a single trustee holding for himself alone, and that there was
no merger.
3 7 Greene v. Greene, 125 N. Y. 506, 510, 26 N. E. 739, 21 Am. St. Rep. 743.
38 Clarke v. Sisters of Society, 82 Neb. 85, 117 N. W.'l07.
§ 74) THE TRUSTEE —HIS QUALIFICATIONS 259

to take A.'s place ; he being incompetent to act.'° Equity will ordi-

narily refuse to appoint a cestui que trust ^.s trustee of his own
trust.*"
A different question is raised where A. is appointed trustee for
'
A. and B. Here A.'s legal estate is not the same as his equitable
interest. Upon this case there are a variety of holdings. In some
courts the .validity of the trust has been sustained, and A. treated
as a normal trustee.*^ In other cases the courts have held that a
partial merger arose in such a situation, and that A. became the
absolute owner of part of the property, freed from the trust, but
continued to be trustee as to the balance for the benefit of B.*^
In Woodward v. James the testator's widow was made trustee
for herself and certain other relatives. The widow was to have
one^half the income from the trust property. The court said "It :

is undoubtedly true that the same person cannot be at the same

trme trustee and beneficiary of the same identical interest. To say

that he could would be a contradiction in terms, as complete and vi-
olent as to declare that two solid- bodied can occupy the same space
at the same instant. Where, however, the trustee is made benefici-
ary of the same estate, both in respect to its quality and quantity,
the inevitable result is that the equitable is merged in the legal es-
tate, and the latter alone remains. If, then, it be granted that, as

to her half of the income, the widow was not trustee, and took
what was given to her by a direct legal right, it does not follow
that her trust estate in the corpus of the property is in any man-
ner destroyed, or that there is any the less a necessity for its ex-
istence. She can be trustee for the heirs, and that trust ranges
oyer the whole estate for the purpose of its management and dis-
position." *^ '

Still a third view has been expressed, namely, that A. may act for
B., in the situation described, but is incompetent to act for him-
sfelf, and that the court will act with respect to trusty questions in-

volving the interests of A. alone.** In a later New York case *"

the Court of Appeals indicates by way of dictum that its view is
I

89 Haendle v. Stewart, 84 App. Div. 275, 82 N. Y. Supp. 823

40 Woodbridge v. Bockes, 170 N. Y. 596, 601, 63 N. B. 362.
41 Tyler' V. Mayre, 95 Oal. 160, 27 Pac. 160, 30 Pac. 196; Nichols v. Nichols,
42 Misc. Kep. 381, 86 N. T. Supp. 719; Doscher v. WyckofC (Sifp.) 113 N. Y.
,Supp. 655. ,

*2 Woodward v. James, 115 N. Y. 346, 22 N. E. 150; Weeks v. Frankel, 197

N. Y. 304, 90 N. E. 969.
4 8 115 N. Y. 346, 357, 22 N. E. 150.
4 4 Rogers V. Rogers, 111 N. Y. 228, 18 N. E. 636.

45 Robertson v. De Brulatour, 188 N. Y. 301, 317, 80 N. E. 938.

260 THE TRUSTEE (Ch. 10
\

that A. would not be competent to actiat all when he was appoint-

ed as trustee for himself and for B.
The authorities oh this second class of cases are thus seen to be
in considerable conflict as to the correct theory to be followed, al-
though the trust has been usually sustained as a valid trust.
A third possible trust, namely, one where A. and B. are appoint-
ed trustees for A. alone, does not seem to have arisen often in liti-
gation. A
trust of this kind seems to have been sustained as a val-
id trust by way of dictum in one case.*"
The fourth and last contingency is that in which A. and B. are
appointed trustees for A. and C. A. here has conflicting interests.
He has a private interest as a beneficiary and an official interest as
the representative of C. A
variety of views have been expressed
by the courts relative to" tjhe effect of such a settlement. The rha-
jority of courts which have had occasion to consider the question
have held that the trust was a vali4 trust and that no merger oc-
curred as to A.'s interest.*' "The title held by the trustees is joint,
and there is no merger of separate interests in the different trustees
arising out of the fact that they are also beneficiaries." **
Two objections to a merger of the trustee-beneficiary's interests
are urged in a New York case, namely, that the doctrine of merger
is aimed at passive trusts only, and that the title of the trustees is
joint, whereas the interest of the cestuis que trust is separate and
several.*" In some cases, howev6r, the courts have taken the posi-
tion that, where A. and B. are trustees for A. and C, there is a
partial merger, and A. becomes the absolute owner of ipart of the
property dedicated to the trust.^" The New Jersey court, in mak-
ing its decision, says "It may be he is trustee for his children, but
:

he cannot be trustee for himself. He is one of the bfeneficiaries of

the trust, and also trustee, and therefore, to the extent of ^his per-
sonal interest in the trust property, both the equitable and legal
estates are vested in the same person. This union works a merger
of the equitable estate. Where the equitable and legal estates unite
in the same person, the equitable sinks or merges into the legal,
provided the" legal estate is as extensive as the equitable.""^

4 Bull 19 App. Div; 605, 46 N. T. Supp. 306.

V. Odell,
*' Burbach Burbach, 217 111. 547, 75 N. E. 519; Story v. Palmer, 46 N. J.
v.
Eq. 1, 18 Atl. 363 Amory v. Lord, 9 N. Y. 403 Tiffany v. Clark, 58 N. X.
; ;

632; Weeks v. Frankel, 197 N. Y. 304, 90 N. E. 969; Ck)cks v. Barlow, 5

Redf. Sur. (N. Y.) 406; Moke v. Norrie, 14 Hun, 128; Denniston v. Pierce,
260 Pa. 129, 103 Atl. 557.
4 8 Burbach v. Burbach, 217 111. 547, 550, 75 N. E. 519.
4 Amory v. Lord, 9 N. Y. 403, 412.
BO Holies V. State Trust Co., 27 N. J. Eq. 308; Craig v.
Hone, 2 Edw. Ch.
(N. Y.) 554 Mason v. Mason's Ex'rs, 2 Sandf. Ch. (N. Y.) 432.
;

01 BoUes V. State Trust Co., 2T N. J. Eql 308, 310.

§ 75) TRUST WILL NOT FAIL FOB WANT OF TRUSTKB 261

Lastly, with respect to class four of these trustee-beneficiary

cases, there are some cases which maintain that the trust is valid,
but that the trustee who is also a beneficiary is disabled from acting
where his interests as a beneficiary are involved, but may act in all
other cases. The noninterested trustees must act alone when the
rights of the combination" trustee and beneficiary are at stake.""
"But, however this may be, it is clearly the law that where two or
more trustees are appointed to execute a trust, and one or both is
under the infirmity of being a beneficiary, neither the trust nor its
execution fails, as each may act for the other where disqualification
exists', and all can act with respect to that portion of the property in
which they have no interest." **
It would seem that, where a trustee is also a beneficiary, a con-
flict of interest exists which is dangerous to the cestuis que trust
who are not trustees. The trustee who is also a cestui que trust
should be disqualified from acting where his private interests may
be involved. This disqualification may be effected either by wiping
out the trust as to the trustee beneficiary by applying the doctrine
of merger, or by holding that the trust still exists, but that the
trustee benpficiary may not act with respect to that trust, but the
administration of it must be left to the noninterested trustees.

TRUST WILL NOT FAIL FOR WANT OF TRUSTEE

75. Equity will n6t allow a trust to fail for want of a trustee. If
no trustee is named, or the trustee named is nonexistent or
incompetent or refuses to accept the trust, chancery will
supply a trustee, and the settlor's intent will be effectuated.

No trust can exist without a trustee, but the failure of the settlor
to select a trustee or his selection of a trustee who cannot or will
not act is not fatal to the trust. If the settlor has clearly indicated
an intent that a trust shall exist, equity will, because of its desire to
support the trust, supply the trustee in case of need. This prin-
ciple is generally expressed in the -maxim that "equity will not al-
low a trust to fail for want of a trustee." °* AYhether A. or B. is the

6 2 Bundy v. Bundy, 38 N. Y. 410 ; Robertson v. De Brulatour, 188 N. Y.

301, 317, 80 N. E. 938 ; Rankine v. Metzger, 69 App. Dlv. 264, 74 N. Y. Supp.
649, affirmed 174 N. Y. 540, 66 N. E. 1115.
6 3 Rankine v. Metzger, 69 App. Div. 264, 269, 74 N. Y. Supp. 649.

6*Handley v. Palmer (C. C.) 91 Fed. 948; KIdd v. Borum, 181 Ala. 144,
61 South. 100 Appeal of Eliot, 74 Conn. 586, 51 Atl. 558 Hitchcock v. Board
; ;

of Home Missions of Presbyterian Church, 259 111. 288, 1021 N. E. 741, Ann.
Cas. 19rl5B, 1 ; In re Freeman's Estate, 146 Iowa, 38, 124 N. W. 804 Harris ;
 ;

262 THE TRUSTEE (Ch. 10

trustee to administer the trust is not especially important. Any

competent and honest man can carry out the intent of the settlor.
Thus, where the settlor describes the trust completely, except
that he fails to name any trustee, equity will supply the want and
appoint a trustee to administer the trust." And by virtue of the
same rule, if the trustee named by the settlor is a corporation which
has passed out of existence, or a body which has no legal exist-
ence,=° or if such trustee be dead," or incompetent to act,°' or re-
fuse the trust,°° equity will provide a trustee and tjie trust will be
carried out.

V. Rucker, 52 Ky. (13 B. Mon.) 564 ; Attorney General v. Goodell, 180 Mass.
538, 62 N. E. 962; Penny v. Croul, 76 Mich. 471, 43 N. W. 649, 5 L. B. A.
858 Taylor v.
; Watkins (Miss.) 13 South. 811 Eothenberger v. Garrett, 224
;

Mo. 191, 123 S. W. 574; Jones v. Watford, 62 N. J. Eq. 339, 50 Atl. 180;
In re Powell's Will, 136 App. Div. 830, 121 N. Y. Supp. 779; Goodrum v.
Goodrum, 43 N. C. 313 Hill v. Hill, 49 Okl. 424, 152 Pac. 1122 In re Ste-
; ;

vens' Estate, 200 Pa. 318, 49 Atl. 985 Shields v. Jolly, 1 Eich. Eq. (S. C.)
;

99, 42 Am. Dec. 349; Gidley v. Lovenberg, 35 Te?:. Oiv. App. 203, 79 S. W.
831 ; Whelan v. Eeilly, 3 W. Va. 597.
5B Carpenteria School Dist. v. Heath, 56' Cal. 478; Grand Prairie Seminary
V. Morgan, 171 111. 444, 49 N. B. 516 Howard v. American Peace Society, 49
;

Me. 288; Brown v. Kelsey, 2 Gush. (Mass.) 243 Buckley v. Monck (Mo.) 187
:

S. W. 31; Case 'v. Hasse, 83 N. J. Eq. 170, 93 Atl. 728; Shotwell v. Mott, 2
Sandf. <ai. (N. T.) 46; GofEe v. Goffe, 37 R. I. 542, 94 Atl. 2, Ann. Gas. 1916B,
240 Porter v. Bank of Eutland, 19 Vt. 410 In re Kavanaugh's Estate, 143
; ;

Wis. 90, 126 N. W. 672, 28 U R. A..(N. S.) 470. But in Tennessee, if the trust
'is charitable and nb trustee is named, equity will not supply one. EweU v.
Sneed, 136 Tenn. 602, 191 S. W. 131, 5 A. L. E. ^03. See, also, in accord with
the Tennessee view, Eobinson v. Oruteher, 277 Mo. 1, 209 S. W. 104.
5 6 In re Crawford's Estate, 148 Iowa, 60, 126 N. W. 774, Ann. Ga^. 1912B,

992 Darcy v. Kelley, 153 Mass. 433, 26 N. E. 1110 Bruere v. Cook, 63^ N. J.
; ;

Eq. 624, 52 Atl. 1001 McBride v. Elmer's Ex'rs, 2 Halst. Gh. (6 N. J. Eq.) 107.
;

5 7 O'Brien v. Bank of Douglas, 17 Ariz. 203, 149 Pac. 747; Babcock v.

African Methodist Episcopal Zion Society, 92 Go£n. 466, 103 Atl. 665 Gar- ;

rison V. Little, 75 111. App. 402; Herrick v. Low, 103 Me. 353, 69 Atl. 314; In
re De SUver's Estate, 211 Pa. 459, 60 Atl. 1048.
6 8 Culver V. Lompoc Valley Sav. Bank, 22 Gal. App. 379, 134 Pac. 355;

Burke v. Burke, 259 111. 262, 102 N. B. 293; Guild v. Allen, 28 E. I. 430, 67
Atl. 855 ; Willis v. Alvey, 30 Tex. Civ. App. 96, 69 S. W. 1035 Lightfoot v.
;

Poindexter (Tex.Giv.A^ip,) 199^8. W. 1152. In Gould v. Board of Home Mis- |

sions of Presbyterian Church, 102 Nejj. 526, 167 N. W. 776, the trustee named
was incompetent because a foreign corporation. The court supplied a trustee,
but said that it would not have done so, if the trust had been private.
6 9 Dailey_ v. City of New Haven, 60 Conn. 314, 22 Atl. 945, 14 L. R. A. 69;

Dykeman v. Jenkines, 179 Ind. 549, 101 N. E. 1013, Ann. Gas. 1915D, 1011
Kelly V. Anderson, 173 Ky. 298, 190 S. W. 1101; Richards v. Church Home
for Orphan & Destitute Children, 213 Mass. 502, 100 N. E. 631; McLean v.
Nelson, 46 N. G. 396 ; Atwood v. Shenandoah Val. E. Co., 85 Va. 966, 9 S.
E. 748.
 76) ORIGINAL APPOINTMENT OF TRUSTEE 263

ORIGINAL APPOINTMENT OF TRUSTER

76. The trustee is ordinarily originally appointed by the settlor.
If the settlor fails to appoint a trustee, but creates a trust
otherwise complete, equity will supply the deficiency and
appoint the original trustee.

The original appointment of the trustee is, of course, ordinarily

the function of the settlor."" By very definition the settlor is the
person who selects the trustee, trust property, and beneficiary, and
establishes the trust. In (appointing the trustee, the settlor is not
under any obligation to consider the wishes of the cestui que
trust.*^ After the settlor has created the trhst and named the ;trus-
tee, the court of equity has no power, except in case of failure of
the trustee to qualify or for cause shown, to appoint a trustee in
place of the one selected by the settlor."^
In appointing the trustee the settlor need not use any particular
language or describe the trustee as such."^ It is sufficient if he
clearly shows a purpose that a trust arise and that a given person
shall administer it. Thus, that the word "committee," rather than
"trustee," was used, is not important, if the intent to create a trust
was evident."* And so, also, where a will makes a bequest in trust,
but no trustee is named to carry out the trust, the e;xecutor will be
deemed to have been appointed a trustee for that purpose.""
In some instances the original trustee may be appointed by the
court of chancery rather than by the settlbr. Thus, if the settlor
establishes a trust, but fails to name any trustee, the court will
supply the deficiency, and appoint a trustee to administer the
trust."" Or if the trustee named by the settlor can nevei' enter upon
the performance of his duties, due to the fact that he has died prior

8 Cruse v. Axtell, 50 "ind. 49; Leonard v. Haworth, 171 Mass. 496, 51

'

N. E. 7. /

81 In re Naglee's Estate, 52 Pa. 154.

82 Gibney v. Allen, 156 Mich. 301, 120 N. W. 811; In re Goulden, 102 Misc.
Eep. 642, 170 N. Y. Supp. 154.
83 Grant Trust & Savings Co. v. Tucker, 49 Ind. App. 345, 96 N. E. 487.
84 Boreing v. Farls, 127 Ky. 67, 104 S. W. 1022, 31 Ky. Law Rep. 1265.
SB Groton v. Ruggles, 17 Me. 137 Dorr v. Wainwright, 13 Pick. (Mass.)
;

328; Holbrook v. Harrington, 16 Gray (Mass.) 102; Wheeler v. Perry, 18 N.

H. 307 Terry v. Smith, 42 N. J. Eq. 504, 8 Atl. 886 Montfort v. Montfort,
; ;

2,4 Hun, 120.

88 Bundy v. Bundy, 38 N. Y. 410; In re Weed, 181 App. Div. 921, 167 N. Y.
Supp. 862. S&S ante, p. 262.
264 THE TRUSTEE (Ch. 10

to the taking effect of the trust instrument,*^ or because he declines

the\rust,°* or because he is disqualified ®' or incompetent,'" equity-
willsupply the trustee. In some cases, also, the number of trustees
appointed by the settlor is not sufficient to manage the trust, and in
such instances equity may appoint additional trustees to assist
those whom
the settlor has selected.'^
The subject of the filling of vacancies in the trusteeship will later
be considered." At this point only the original appointment of the
trustee is discussed.

TRUSTEE'S BOND ,

77. In the absence of statute the court of equity may in its discre-
tion require the trustee to giye a bond for the faithful per-
formance of his duties. In many states the occasions when
a trustee must give a bond are now set forth in statutes.

Whether a trustee will be required to give a bond for the faithful

performaijce of his duties is, in the absence of statute, in the dis-
cretion of the court of equity. If the character and situation of the
trustee seem to render security necessary, the court may require it.
If the trust property does not appear to be in any danger, equity
may dispense with the bond.''' Where the trustee is insolvent or
of weak or doubtful financial condition, the court will generally
require a bpnd.'* If the trustee is a nonresident of the state having

6T Ex parte Schouler, 134 Mass. 426; Woodruff v. Woodruff, 44 N. J. Bq.

349, 16 Atl. 4, 1 L. R. A. 380.
ssiCarruth Carruth, 148 Mass. 431, 19 N. E. 369; In re Snyder's Will
v.
(Sup.) 136 N. Y. ^upp.' 670; King v. Merritt, 67 Mich. 194, 34 N. W. 689i;
Prince v. Barrow, 120 Ga. 810, 48 N. E. 412 Offutt v. Jones, 110 Md. 233, 73
;

Atl. 629; Lee v. Randolph, 2 Hen. & M. (Va.) 12.

6 9 Ogilby V. Hickok, 144 App. Div. 61, 128 N. Y. Supp. 860.
ToFltchie V. Brown, 211 U. S. 321, 29 Sup. Ct'. 106, 53 L. Ed. 202; Bccles
V. Rhode Island Hospital Trust Co., 90 Conn. 592, 98 Atl. }29; Childs v.
Waite, 102 Me. 451, 67 Atl. 311 ; Force v. Force (N. J. Ch.) 5,7 Atl. 973.
71 In re Townsend's Estate, 73 Misc. Rep. 481, 133 N. T. Supp. 492; Orlck-
ard's Ex'r v. Crickard's Legatees, 25 Grat, (Va.) 410.
'2 See post, p. 282.
7 3Reedei^ v. Reeder, 184 Iowa, 1, 168 N. W. 122; Dresser v. Dresser, 46
Me. 48 Munroe v. Whitaker, 121 Md. 396, 88 Atl. 237 Holcomb v. Coryell,
; ;

12 N. J. Eq. 289; In re Burke's Estate, 1 N. T. St. Rep. 316; In re Whitet

head, 3 Dem. Sur. (N. Y.) 227; Strayhorn t. Green, 92 N. C. 119; Ex parte
Conrad, 2 Ashm. (Pa.) 527; Clarke v. Saxon, 1 Hill Eq. (S. C.) 69; Duns-
comb V. Dunscomb, 2 Hen; & M. (Va.) 11.
7 4 Bailey v. Bailey, 2 Del. Ch. 95; Trabue v. Reynolds, 9 Ky. Law Rep^
360; In re Sears, 5 Dem. Sur. (N. Y.) 497; In re Deaven's Estate, 32 Pa.
Super. Ot. 205.
 ;

§ 7%) teustee's bond 265

jurisdiction of the trust, the court will be inclined to require se-

curity."* But if a trustee has been appointed by a Massachusetts
court and given bond in that state, it is withiti tiie discretion of an
Illinois court to relieve the trustee from givi*ng a bond in Illinois.''"
That the trustee has refused to obey an order of the court,'' or
that the cestuis que trust are infants,'* may easily influence the
court to require security of the trustee.
It is improper ^or the court to require the trustee to give a bond,
when no reason for apprehension as to the safety of the fund exists,
and the. administration of the trust has been entirely satisfactory.'*
The settlor may provide in the trust instrument that the trustee
shall not be obliged ta give a bond, and this direction will be re-
spected ,by the cburts.*" And in some instances the consent of the
cestuis que trust has been held sufficient authority for excusing the
trustee from giving security.'^
i

In many states trustees are required by statute to give bond for

the faithful performance of their duties.'^ It is impossible here to
state the various statutory provisions.** '

'5 In re Satterthwaite's Estate, 60 N. J. Eq. 347, 47 Atl. 226; In re Stro-

bel's Estate, 11 Phila. (Pa.) 122; GasUill v. GaskUl, 7 R. I. 478; Ex parte
Robert, 2 Strob. Eq. (S. O.) 86.
76 Regan v. West, 115 111. 603, 4 N.E. 365.
T7 Holcomb V. Coryell, 12 N. J. Eq. 289.
T 8 In re Jones, 4 Sandf. Cb. (N. Y.) 615.
79 Crawford v. Creswell, 55 Ala. 497; Ladd v. Ladd, 125 Ala. 135, 27 South.
924; Berry v. Williamson, 11 B. Mon. (Ky.) 245; Holcomb y. Coryell, 12 N.
J. Eq. 289.
80 Parker v. Sears, 117 Mass. 513 Liesemer v. Burg,
; 102^ Mich. 20, 60 N.
W. 290 ;In re Kelley's Estate, 250 Pa. 177, 95 Atl. 401 Kerr v. White, 9
;

Baxt. (Tenn.) 161. i

By Laws Ga. 1918, pt 234, the court may upon the application of the cestui
que trust require the trustee to give a bond, even though the trust instrument
directs that none shall be required.
81 Dexter v. Getting, 149 Mass. 92, 21 N. E. 230.
82 Thiebaud v. Dufbur, 54 Ind. 320 Sneer y. Stutz, 102 Iowa, 462, 71 N.
;

W. 415 Butler v. Taggart's Trustee, 86 S. W. 541, 27 Ky. Law Rep. 708

;

Stevens v. Burgess, 61 Me. 89 Bryan v^, Hawthorne, 1 Md. 519 McClernan

; ;

v. McClernan, 73 Md. 283, 20 Atl. 908; Coudon v. Updegraf, 117 Md. 7], 83
Att. 145 BuUard v. Attorney General, 153 Mass. 249, 26 N. E. 691 Gibney
; ;

V. Allen, 156 Mich. 301,-120 N. W. 811; Gartside v. Gartside, 113 Mo. 348, 20
S. W. 669; West v. Bailey, 196 Mo. 517, 94 S. W. 273; .Ffernald v. First
Church of Christ, Scientist, in Boston, 77 N. H. 108, 88 Atl. 705 New York ;

Code Civ. Proc. § 2639 In re Keene's Estate, 81 Pa. 133 Kerr v. White, 9
; ;

Baxt. (Tenn.) 161 Lackland v. Davenport, 84 Va. 638, 5 S. E. 540. In Wis-

;

consin, in the case of testamentary trusts, the giving of a bond is a prerequi-

site to obtaining title to the trust property. In re Davies' Estate, 161 Wis.
598, 155 N. W. 152. By Laws Wis. 1919, c. 506, the requirement of a bond

*° See note 83 on following page. i

 266 THE TRUSTEE (Ch. 10

If the same person be named as executor and trustee, he must

'give separate bonds for the faithful performance of the duties of
each office.'*

is left tothe discretion of the court. By Laws Colo. 1915, c. 177, a testamen-
tary trustee is required to give bond, unless the will excuses him.
83 Extracts from two of the statutes may serve as illustrations. The New
York rule is now embodied in section 2639 of the Code of Civil Procedure,
which reads as follows: "Whenever by any last will and testament, or by
an order of the Surrogate's Court, a trustee is appointed, or an executor is
appointed who is required to hold, manage, or invest any money, securities
or property real or persona;i for the benefit of another, such trustee, or exec-
utor, before receiving any such property into his possession or control shall,
unless contrary to the express terms of the will, execute to the people of the
state of New York, in the usual form, a bond with sufficient surety or siu:eties
in an amount to be fixed by the surrogate. Upon any judicial settlement and
partial distribution of such estate or fund the decree may provide for the dis-
charge of the existing bond, and the filing of a new bond covering the amount
'

still remaining^in the hands of such executor or trustee. This section shall
not affect any executor or trustee named in a will executed, before this sec-
tion takes effect."
The Massachusetts statute provides: "An executor, administrator, admin-
istrator with the will annexed, special administrator, receiver of an absentee,
temporary guardian and, imless otherwise expressly provided, a guardian
or trustee under a will or appointed by the probate court, before entering
upon the duties of his trust, shall give bond with sufficient sureties, in such
sum as the probate court may order, payable to the judge of said court and
his successors, and with condition substantially as follows: * * * 7. In
case of a trustee under a will or appointed by the probate court: First, to
make and return to the probate court at such time as it orders a true in-
ventory of all the real and personal property belonging to him as trustee
which at the time of the making of such inventory shall have come to his
possession or knowledge second, to manage and dispose of all such prop-
;

erty, and faithfully to perform his trust relative thereto according to law
and to the wUl of the testator third, to render upon oath' at least once a year
;

until his trust is fulfilled, unless he is excused therefrom in any year by the
court, a true account of the property in his hands and of the management
and disposition thereof, and also to render such account. at such other times
as said court orders and fourth, at the expiration of his trust to settle his
;

accouht in the probate court, and to pay over and deliver all the property
remaining in his hands, or due from him on such settlement, to the person
or persons entitled thereto. * * * .A testamentary guardian and a trustee
under a will shall be exempt from giving surety or sureties on his bond, if
the testator has ordered or requested such exemption, or that no bond should
be required, or in the case of a trustee, if all the persons beneficially inter-
ested In the trust who are of full age and legal capacity, other than credi-
tors, request such exemption; but not until the guardian of any minor in-
terested therein and such other persons as the court orders, have Ijeen noti-
fied and have had opportunity to show cause against the same. The probate
court may however at any time require such guardian, trustee or trustees^ ap-
pointed by the probate court to give a bond 'with surety or sureties." Rev.
8'4 Groton v. Kuggles, 17 Me. 137 ; Williams v. Cushing, 34 Me. 370.
,
§ 78) ACCEPTANCE BY TRUSTEE 267
I

The failure of a trustee to give bond when required to do so does

not defeat the trust.*^ If the trustee accept-s the trust, the fact that
he later fails to give the bond required does not divest him of the
title to the trust property.*^ But the court may reipdve a trustee
who. fails to furnish security when required/'' and in many states
the failure to give bond is deemed a declination of the trust.'*
The failure of the trustee to give a bond as' required by law can-
not be set up collaterally as an attack upon the trustee's power to
act under the trust.**

ACCEPTANCE BY TRUSTEE
78. It isnot necessary to the validity of a trust that the particular
named by the settlor acpept the trust. Equity will
trustee
'

not allow the trust to fail for want of a trustee.

But it is necessary that a trustee accept the trust before the title
to the trust property vests in him and before he is bound
by the trust obligations. Acceptance of a trust by the
trustee is presumed, and may be shown as well by any
acts expressly or impliedly recognizing the existence of
the trusteeship.

The trustee may refuse to accept thfe trust. He cannot be com-

pelled to undertake the duties of the trusteeship against his will.""
If he clearly indicates that he declines the trust, he will not become
a trustee. And the trustee may also accept the trust upon a condi-
tion, as, for instance, upon the condition that he be allowed to re-
I

Laws Mass. 1902, c. 149, §§ 1 and 4. By St. Mass. 1908, c. 295, this provision
requiring the giving of a bond was extended to charitable trustees.
85 Butler V. Hill, 1 Bazt. (Tenn.) 375.
88 Young V. Oardwell, 6 Lea (Tenn.) 168;- McWilliams v. Gough, 116 Wis.
576, 93 N. W. 550.
87 Appeal of Johnson, 9 Barr (9 Pa.) 416; Williams v. Gideon, 7 Heisk.
(Tenn.) 617. '. ~
.,

88 Groton v. Ruggles, 17 Me. 137;

Appeal of lawyer, 16 N. H. 459; Foss
V. Sowles, 62 Vt. 221, 19 Atl. 984. "A person required by the l)rovisions of
the preceding sections to give a bond who, for thirty days after his appoint-
ment or after the entry of the decree requiring him to give bond, fails to file
the bond, &uly approved, may be found to >have declined or resigned the
trust." Rev. Laws Mass. 1902, c. 149, § 7. i

8 9 Keichert v. Missouri & I. Coal Co., 231 111. 238, 83 N. E. 166, 121 Am.

St Kep. 307.
80 Dailey v. City of New Haven, 60 Conn. 314, 22 Atl. 945, 14 L. R. A. 69;
Tn re Yale College, 67 Conn. 257, 34 Atl. 1036; Silvers v. Canary, 114 Ind.
129, 16 N. ^. 166; Carruth v. Carruth, 148 Mass. 431, ,19 N, E. 369.
 ;

268 THK TRUSTEE (Ch. 10

sign and surrender the trust at any time he desires.'^ As has pre-
viously been shown,''' a trustee is presumed to accept a trust. rThis
presumption is based on still another presumption, namely, that
every grant is presumed to be beneficial. In the absence of any
evidence of refusal, therefore, the trustee named will be presumed
to have accepted the trust.®^
Generally, however, there is evidence of acceptance or refusal
on tlje part of t'he trustee other than mere presumptions. Some
positive acts on the. part of the trustee are usually to be found.
Thus it has been held that an oral acknowledgment by the trustee
that he had accepted the trust,'* failure to object to the trust after
knowledge of its existence for some time,'" taking out letters testa-
mentary when the trustee was also the executor under the will,'*
the writing of the trust deed under which the trustee was ap-
pointed,*^ accepting the delivery of that deed,'* joining in the ex-
ecution of the trust deed," taking possession of the trust prop-
erty ^ or exercising control over it,^ or the performance of any acts
which amount to a carrying out of the trust,^ are all acts on the
part of the trustee which show an acceptance of the trust by him.
In many cases where the question of acceptance was in dispute,
acts of a similar nature have been held to show an acceptance of
the trust.*

»i Schreyer v. Schreyer, 182 N. T. 555, 75 N. E. 1134.

»2 See ante, p. 74.,
,

83 McLean v. Nelson, 46 N. C. 396 ; Harvey v. Gardner, 41 Ohro St. 642

Eyrick v. Hetrick, 13 Pa. 488; Goss v. Singleton, 2 Head. (Tenn.) 67; Bow--
den V. Parrish, 86 Va. 67, 9 S. B. 616, 19 Am. St. Rep. 873. '

94 Elizalde v. Elizalde, 137 Cal. 634, 66 Pac. 369, 70 Pac. 861.

8 5 Salter v. Salter, 80 Ga. 178, 4 S. B. 391, 12 Am. St. Rep. 249; Roberta
V. Moseley,'64 Mo. 507. Standing mute on the statement of the trust was
held sufficient in Heitman v. Cutting, 37 Cal. App. 236, 174 Pac. 675.
»6 Coudon V. Updegraf, 117' Md. 71, 83 Atl. 145. '

9 7 Young V. Cardwell, 6 Lea (Tenn.) 168.

^
98Hitz V. National Metropolitan B^nk, 111 IT. S. 722, 4 Sup. Ct. 613, 28
L. Ed. 577. "
9 9 Dayton v. Stewart, 99 Md. 643, 59 Atl. 281.

1 McBrlde v. Mclntyre, 91 Mich. 406, 51 N. W. 1113 ; PuUis v. PuUis Bros.

Iron Co., 157 Mo. 565, 57 S. W. 1095; Chaplin v. Givens, Rice Eq. (S. O.) 132.
2 Freeman v. Brown,' 115 Ga. 23, 41 S. E. 385.
s Patterson v. Johnson, 113 111. 559.

4 Kennedy v. Winn, 80 Ala. 165; St. Mary's Hospital v. Perry, 152 Cal.
338, 92 Pac. 864; Hearst v. Pujol, 44 Cal. 230 Baldwin v. Porter, 12 Conn.
;

473; Wilson v. Snow, 35 App. D. C. 562 Johnson v. Cook, 122 Ga. 524, 50
;

S. E. 367; Copeland v. Summers, 138 Ind. 219, 35 N. E. 514, 37 N. E. 971;

Henderson v. McDonald, 84 Ind. 149; Ridenour v. Wherritt, 30 Ind. 485;
Barclay v. Goodloe's Ex'r, 83 Ky. 493 ; Sangston v. Hack, 52 Md. 173 Lyl6
;

V. Burke, 40 Mich. 499; Jamison v. Zausch, 227 Mo. 406, 126 S. W. 1023, 21
 § 78) ACCEPTANCE BY TRUSTEE ,
269

In some cases doubt has arisen as to whether certain acts

amounted to a refusal of the trust by the trustee. It has been held
that the failure to qualify ° or to give a bond ° may show a rejec-
tion of the tEust. But a refusal to act as executor, when the same
•oerson is appointed trustee and executor, does not prove a refusal
of the trusteeship/ Where a trustee refused to take any steps
, under his appointment for more than two years, or to file a bond, or
take possession of or manage the property, and suffered the build-
ings to become out of repair and untenantable and the land to be
sold for the payment of taxes, his acts justify the inference that he
has declined the trust.' In numerous other cases similar acts have
been held to show a rejection of the trust duties by the trustee.*
The validity of a trust is not affected by the acceptance or rejec-
tion of the trust by any particular trustee, except in the, rare cases
where the trust is personal and can be carried out only by the trus-
tee named.^" Ordinarily, if John Doe decline to accept the trust,
Richard Roe may be substituted for Doe, and the trust carried out
without difficulty.^^ The refusal of the trustee to accept the office
does not cause the title to the trust property to vest in the cestui
que trust,^* but it remains in the settlor (if the trust was created
inter vivos) or passes to the heir or next of kin subject to the trust
(if the trust was created by will).^* Equity will then, upon

Ann. Cas. 1132;' Daly v. Bernstein, 6 N. ^. 380, 28 Pac. 764; Rowe v. Rowe,
103 App. Div. 100, 92 N. Y. Supp. 491; Ohristlan v. Yancey, 2 Pat. & H.
<Va.) 240.
SeUs V. Delgado, 186 Mass. 25, 70 N. E. 1036 ; In re Robinson, 37 N. Y.
261.
6 Attwlll V. Dole, 74 N. H. 300, 67 Atl. 403., But see Coates.v. Lunt; 213
Mass. 401, 100 N. E. 829.
7 Pomroy v. Lewis, 14 R. I. 349 Garner v. Dowling, 11 Heisk. (Tenn.) 48.
;

8 Adams v. Adams, 64 N. H. 224, 9 Atl. 100.

9 Wlute V. "White, 107 Ala. 417, 18 South. 3 Dodge v. Dodge, 109 Md. 164,
;

71 Atl. 519, 130 Am. St. Rep. 503 Bowden v. Brown, 200 Mass. 269, 86 N. e!
;

351, 128 Am. St. Rep. 419 Brandon v. Carter, 119 Mo.. 572, 24 S. W. 1035,
;

41 Am. St. Rep. 673 ;^ Mutual Life Ins. Co. v. Woods, 121 N. Y. 302, 24 N. E.
€02 Anderson v. Eafle, 9 S. O. 460.
;

10 Richardson v. MuUery, 200 Mass. 247, 86 N. E. 319.

11 Bras well v. Downs, 11 Fla. 62; Wells v. German Ins.
Co. of Freeport,
128 Iowa, 649, 105 N. W. 123 Stebbins v. Lathrop, 4 Pick. (Mass.) 33 Mlnot
; ;

V. Tilton, 64 N. H. 371, 10 Atl. 682; Rhode Island Hospital Trust Co. v.

Town Council of Warwick, 29 R. I. 393, 71 Atl. 644 Cloud v. Calhoun, 10
;

Rich. Eq. (S. C.) 358. So held in the case of a charitable trust in Winslow
V. Stark, 78 N. H. 135, 97 Atl. 979.
12 Bennett v. Bennett, 2l7 111. 434, 75 N. E. 339, 4 L. R. A.
(N. S.) 470.
IS Owens v. Cowan's Heirs, 7 B. Mon. (Ky.) 152; Cushney v.
Henry 4
Paige (N. Y.) 345 Goss v. Singleton, 2 Head (Tenn.) 67. In an English case,
;

where the trustees under a deed disclaimed, the court said: "Under these cir-
 ;

270 THE TRUSTEE (Ch. 10

I

application, appoint a new trustee to execute the trust in the place

of the trustee who
has declined the trust.^* If two trustees are
named in the original settlement, and one rejects the trust, the ti-
tle to the trust property vests in the other trustee as if the trustee
who declines had not been named. ^°
While acceptance is unnecessary to the validity of the trust, this
principle should be carefully distinguished from the doctrine that
acceptance of the trjist is necessary to the vesting of the title to the
trust property in any particular trustee and to the fastening of the
trust duties upon him. In order that John Jones may become the
owner of the trust property,^* and in order that he may assume the
office of trustee, ^^ he must accept the trust and consent to become a
trustee. If he declines, the trust will proceed to ks execution by
another trustee; but it cannot be carried out by him without an
express or implied acceptance of its duties on his part.
When the trustee does accept, his title relates back to the time of
the creation of the trust, so that he is deemed to have been the own-
er of the property from the time when the will or deed creating the
trust took, effect.^*
j

It is axiomatic that when a trustee has once accepted the trust

he cannot by a later act reject it. ^Having manifested his intent to
assume the trust duties, he can only be relieved of his trust by a
resignation or removal, and not by' a mere casting off of the trust
'

upon his own motion.^® And, having once disclaimed -the trust, the
trustee may not thereafter change his mind and accept it.'"' His
action of acceptance or renunciation is final.
'(
-
,

cumstances I think that the trust was really created, and that the fact that
the trustee subsequently disclaimed did not destroy the trust, but that upon
the revesting the settlor bimself held in trust. * * * Mallott v. Wilson,
[1903] 2 C!h. 494, 502.
i« Adams v. Adams, 88 U. S. (21 Wall.) 185, 22 L. Ed. 504; Storr's Agr.
School V. Whitney, 54 Conn. 342, 8 Atl. 141 Eichardson v. Essex Institute,
;

208 Mass. 311, 94 N. E. 262, 21 Ann. Cas. 1158 ; American Academy of Arts
and bciences v. Jtrresident, etc., of Harvard College, 12 Gray (Mass.) 582
Towle V. Nesmith, 69 N. H. 212, 42 Atl. 900 Stone v. Griffin, 3 Vt. 400.
;

15 In re Kellogg, 214 N. Y. 460, 108 N. E. 844, Ann. Cas. 1916D, 1298.

18 F. G. Oxley Stave Co. v. Butler County, 166 U. S. 648, 17 Sup. Ct. 709,
41 L. Ed. 1149 McFall v. Kirkpatrick, 236 111. 281, 86 N. E. 139 ; Brandon
;

V. Carter, 119 Mo. 572, 24 S. W. 1035, 41 Am. St. Rep. 673. \

17 Maccubbin v. Cromwell's Ex'rs, 7 Gill & J. (Md.) 157

18 Christian v. Yancey, 2 Pat. & H. (Va.) 240.
i»Cauhape v. Barnes, ,135 Gal. 107, 67 Pac. 55; Hanson v. Worthington,
12 Md. 418; Drury v. Inhabitants of Natick, 10 Allen (Mass.) 169; In re
Kellogg, 214 N. Y. 460, 108 N. B. 844, Ann. Cas. 1916D, 1298; Appeal of
Brooke, 109 Pa. 188.
20 In re Van Schoonhoven, 5 Paige (N. T.) 559; In re Kello^, 214 N. I.
460, 108 N. E. 844, Ann. Cas. 1916D, 1298.
 § 79) EESIGNATION BY TEUSTEE 271

RESIGNATION -BY TRUSTEE i

79. The tru^ee may resign the trust by obtaining a decree of a

court of equity accepting his resignationi or by secxuring
the consent of all the beneficiaries, if they are competent
to give their consent. The trustee cannot by his own act
discharge himself from the obligations of the trust. Equi-
ty will accept a resignation for good cause shown and on
such terms as seem to it just.

When and by what method may a trustee resign a trusteeship

and be freed from- its obligations ? Chancery has the power to ac-
cept a trustee's resignation and discharge him from the trust.^^ It
may use its discretion in accepting or rejecting the resignation of
a trustee. His resignation will not be accepted as a matter of
course. The mere filing of the resignation with the court, or no-
tification of the cestuis que trust of his resignation, does not re-
,
lease the trustee."" „
The rule is generally stated to be that the trustee cannot resign
without a decree of the courl permitting his resignation or the con-
sent of all the cestuis que trust.^^ "But it is a settled rule of law
that a trustee, after he has accepted the office, cannot discharge
himself from liability by a subsequent resignation merely. He must
either be discharged from the trust by virtue of a special provision
in the deed, or will, which creates the trust, or by an order or de-
cree of the court of chancery, or with the general consent of all
persons interested in the execution of the trust." "* "The authori-
ties are clear that a trustee cannot rfivest himself of the obligation
to perform the duties of the trust, without an order of the pourt, or
the consent of all the ce'stuis que trust." ^°
The statements sometimes made that the trustee cannot resign
without an order of the court and the consent of the cestuis que

•2iDu Puy V. Standard Mineral Co., o8 Me. 202, 33 Atl. 976; Bowditch v.
Banuelos, 1 Gray (Mass.) 220; Craig 7. Craig, 3 Barb. Ch. (N. X.) 76; Young
V. Barker, 141 App. Div. 801, 127 N. Y. Supp. 211.
22 Tucker v. Grundy, 83 Ky. 540; In re Miller, 15 Abb. Prac. (N. Y.) ,277
Perkins v. McGavock, 3 Hayw. (Tenn.) 265.
2 3Badgett V. Keating, 31 Ark. 400; Jones v. Stockett, 2 Bland (Md.) 409
Henderson t. Sherman, 47 Mich. 267, 11. N. W. 153 Green v. Blackwell, 31
;

N. J. Hq. 37; Shepherd v. M'Evers, 4 Johns. Ch. 136, 8 Am. Dec. 561.
Thatcher v. Candde, 33 How. PraC. (N. Y.) 145; Anderson v. Bobinson, 57
Or. 172, 110 Fac. 975; Breedlove v. Stump, 3 Yerg. (Tenn.) 257.
24 Cruger v. Halliday, 11 Paige (N. Y.) 314, 319.
2 6 Thatcher v. Candee, 33 How. Prac. (N. X.) 145, 149.
272 THE TRUSTEE '
(Ch. 10

trust are clearly inaccurate. The court may accept the resignatioti,
even though the beneficiaries, or «ome
of them, object to such ac-
ceptance."* Where the cestuis que trust are infants, or otherwise
incapable of giving consent to the resignation of the trustee, no
resignation based on their consent alone will be valid. In such in-
stances resignation can only occur through a decree of the court."'^
The usual method of resignation is by application to the court
rather than by securing consents from the beneficiaries. In some
states statutory proceedings for resignation are now provided."*
The trustee must allege some cause for his desire to resign."' If
it appears that a resignation at that time will be disadvantageous

to the beneficiaries, the court will refuse to allow the trustee to re-
sign. ,An example of such a situation is found in the cases where
pending actions brought by the trijstee or other unsettled matters
render it desirable to retain the trustee in office until the conclusion
of the unfinished business. '"' The following have been held to be
sufficient grounds for resignation That continuance in office would
:

be inconvenient to the trustee ; ^^ that the trustee is unwilling to

continue and that there has been, an increase in the amount of the
trust property since the original acceptance ; '" that the trustee is
about to leave the United States ; ^^ that there is friction and dis-
agreement between the trustee and the sestuis^que trust.^*

28 In re Nixon's Estate, 235 Pa. 27, '83 Atl. 687.

2T Cruger v. Halliday, 11 Paige (N. T.) 314.
28 A New Tork statute upon the subject reads as follows: "An executor,
administrator, guardian or testamentary trustee may, at any time, present
to the Surrogate's Court a petition,- praying that his account may be judi-
cially settled that a decree may- thereupon be made, revoljiuig his letters
;

or permitting him to resign, and discharging him accordingly; and that the
same persons may be cited to show cause why such a decree should not be
made who must be cited upon a petition for a judicial settlement of his ac-
count. The petition must set forth the fact's upon which the application is
founded ; and it must, in all other respects, conform to a petition praying
for a judicial settlement of his account. The surrogate may, in his discre-
tion, entertain or decline to entertain the application." Code Civ. Proc. N. X.
§ 2572. See, also, Drane v. Gunter, 19, Ala. 731.
29 Craig V. Craig, 3 Barb. Ch. (N. Y.) 76.
3 In re Olmstead, 52 App. Div. 515, 66 N. Y. Supp. 212, affirmed 164 N. X.
571, 58 N. E. 1090; In re Longstreth's Estate, 12 Phila. (Pa.) 86. '

31 Bogle V. Bogle, 3 Allen (Mass.) 158. ,

'

3 2 Green v. Blackwell, 31 N. J. Eq. 37.

3 3 Tilden v. Fiske, 4 Dem. Sur. (N. Y.) 357.

3 4 In re Bernstein, 3 Kedf. Sur. (N. X.) 20; Parker v.' Allen (Sup.) 14 N. Y.

Supp. 265. For other cases construing the New York statutes, see In re Cut-
ting, 49 App. Div. 388, 63 N. Y. Supp. 246 Smith v. Lansing, 24 Misc. Eep.
;

566, 53 N. Y. Supp. 633 Rothschild v. Goldenberg, 33 Misc. Rep. 646, 68 N.

;

Y. Supp. 955 ; In re Abbot, 39 Misc. Rep. 760, 80 N. Y. Supp. 1117.

§ 80) REMOVAL OF TRUSTEE ' 273

A
trustee may, at any time before the court has taken final ac-
tion on his resignation, withdraw it and resume his duties as trus-
tee."
In the proceeding to obtain a release from the trust the cestuis
que trust are necessary parties.^' The court may impose a condi-
tion upon the acceptance of the trustee's resignation, as, ^ for ex-
ample, that the trustee waive his commissions.'^ Where the res-
ignation is solely to promote the convenience of the trustee, the
court will oblige him to pay the costs of the proceeding ** but in ;

other instances, where the cause for resignation is not personal

with the- trustee, the court may direct that the costs be paid out of
the trust estate.'*

REMOVAL OF TRUSTEE
80. Unless the power of removal is expressly reserved to the set-
or other person, in tiie trust instrument, a
tlor, beneficiary,
court of equity alone may remove the trustee against his
v^dll.

Equity will remove a trustee, upon notice to the trustee and all
other parties interested 'in the trust, if the trustee is shown
to have been guilty of such misconduct in office that the
financial interests of the cestui que trust are endangered.

The general rule is that the sole powerof removing a trustee

rests in the court of equity. That court admitted to have plenary
is

power to revoke the trustee's authority, upon cause shown.*" Nei-

ther the settlor *^ nor the cestui que trust *^ has the i^iplied power

so Dillard v. Winn, 60 Ala. 285. But after action upon the resignation by
the court, even If no successor has been appointed, the resignation may not
be retracted. Lednum v. Dallas Trust & Savings Bank (Tex. Civ. Aj^p.) 192
S. W. 1127.
38 Clay's Adm'r v. Edwards' Trustee, 84 Ky. 548, 2 S. W. 147.
3T to re-Curtiss, 15 Misc. Rep. 545, 37 N. Y. Supp. 586.
S8 In re Jones, 4 Sandf. Ch. (N. Y.) 615.
89 Green v. Blackwell, 31 N. J. Eq. 37; Richmond v. Arnold (R. I.) 68 Atl.
427.
40 v. Suydam, 6 Wall., 723, 1§ L. Ed. 967; Parker v. Kelley
Williamson
(C. C.y 166 Fed. 968 Mazelln v. Rouyer, 8 Ind. App. 27, 35 N. E. 303; "VY^ller
;

V. Hosford, 152 Iowa, 176, 130 N. W. 1093; City of St. Louis v. Wenneker,
145 Mo. 230, 47 S. W. 105, 68 Am. St. Rep. 561; Gaston v. Hayden, 98 Mo.
App. 683, 73 S. W. 938;, Quackeifboss v. Southwick, 41 N. Y. 117; In re
McGillivray, 138 N. Y. 308, 33 N. E. 1077; Appeal of Piper, 20 Pa. 67; Bailey
V. Rice, 1 Tenn. Vh. App. 645 Lamp v. Homestead Bldg. Ass'n, 62 W. Va.
;

56, 57 S. E. 249.
*i Pierce v. Weaver, 65 Tex. 44.
*2 Bouldin v. Alexander, 15 Wall. 131, 21 L. Ed. 69.

BOGEBI TBUSTS —18

274 THE TEUSTEB (Ch. 10

to remove a trustee, but the Settlor may reserve to. himself *' or
vest in the cestui que trust/* or in the cestui que trust and a co-
trustee,*" the authority toremove a trustee from office. All reason-
able provisions which the settlor makes regarding removal in the
trust instrument will, of course, be respected.
No attempt can be made, here to show in what courts in the sev-
eral states the general equity jurisdiction which gives the right of
removal is vested.** In many states, there are now statutes which
state the procedure to be followed in removal cases and the grounds
upon which removal will be ordered.*^
What are sufficient grounds for the removal of the trustee rests
in the discretion of the court of' equity, in the absence of statute.*'
The trustee will not be relieved of his office, except upon a showing
of the clearest necessity in order to preserve the interests of the
beneficiaries.*" It has been said that fraud, negligence, or willful
breach of trust alone justify the removal,"" while another court has
required proof that the trustee has been acting wrongfully or in a
manner which constitutes mischievous or negligent conduct in re-
lation to the trust,"^ and still another court has stated that danger
to the trust fund alone would justify- removal."'' Where the trustee
has been guilty only of a misunderstanding "* or of an honest mis-
take "* he wiir not be removed. In determining the question of re-

4S Bowditcli V. Banuelos, 1 Gray (Mass.) 220.

*4 May V. May, 167 U. S. 310, 17 Sup. Ct. 824, 42 L. Ed. 179.
if May V. May, 167 U. S. 310, J7 Sup. Ot. 824, 42 L. Efl. 179.
18 For some decisions on the subject, see Attorney General v. Barbour, 121
Mass. 568; Widmayer v. Widmayer, 76 Hun, 251, 27 N. Y. Supp. 773; Jones
V. Jones, 8 Misc. Rep. 660, 30 N. j. Supp. 177; Stafford t. American Mis-
sionary Ass'n, 22 Ohio Cir. Ct. R. 399; Baird's Case, 1 Watts & S. (Pa.) 288;
Ex parte Hussey, 2 Whart. (Pa.) 330; Jenkins v. Wilkins, 10 Heisk. (Tenn.)
52 Lewis' Adm'r v. Glenn, 84 Va. 947, 6 S. E. 866.
;

47 Parker v. Kelley (C. C.) 166 Fed. 968 (construing Massachusetts stat-
ute) ;Nutt V. State, 96 Miss. 473, 51 South. 401 Holman v. Renaud, 141 Mo.
;

App. 399,, 125 S. W. 843 Code Civ. Proc. N. Y. | 2569

; ; Real Property Law
(Consol. Laws, c. 50) § 112; Act March 29, 1917 (107 Ohio Laws, p. 421); In
re Strickler's Estate, 28 Pa. Super. Ct. 455; In re Price's Estate, 209 Pa.
210, 58 Atl. 280.
48 Scott V. Rand, 118 Mass. 215; Ward v. Dortch, 69 N. C. 277 Lamp v.
;

Homestead Bldg. Ass'n, 62 W. Y&. 56,^57 S. E. 249.

49 Preston v. Wilcox, 38 Mich. 578;' Waller v. Hosford, 152 Iowa, 176, 130
N. W. 1093 ; Wiegand v. Woerner, 155 Mo. App. 227, 134 S. W. 596 Appeal
;

of Williams, 7S Pa. 249.

BO Thompson v. Thompson, 2 B. Mon. (Ky.) 161.
01 Mannhardt v. Illinois Staats-Zeituiig Co., 90 111. App. 315.
B2 Satterfield v. John, 53 Ala. 127.
63 Matthews v. Murchison (O. C.) 17 Fed. 760.
4 In re Durfee, 4 R. I. 401.
§ 80) REMOVAL OF TRUSTEI) 275

mdval the court should consider the wishes of the beneficiary."

In many of the statutes the grounds of removal are set forth at
length."*
Grounds for Removal
The following have been held to be good reasons for the removal
of a trustee; insolvency;''^ mingling the trust funds with private
property; °* inability to produce the trust funds upon an accounts
ing;"* misconduct in office;*" use of the trust property for his
own benefit *^ placing himself in a position iVhere his private in-
;

terests conflict with his interests as trustee "^ nonresidence or re-

;

moval from the jurisdiction; ** inattention to the trust business; ®*

BB In re Morgan, 63 Barb. (N. Y.) 621, affirmed 66 N. X. 618.
s« Thus, by the New York statute having to do with testamentary trustees
removal may be had where the trustee has become incompetent or disquali-
fied to act; or has wasted or improperly applied or invested the funds, or
otherwise improvidently managed or injured the property committed to his
charge, or by reason of other misconduct in the execution of his office, or dis-
honesty, drunkenness, improvidence, or want of understaiiding, is unfit for
the due execution of his office or where he has refused to obey an order of
;

the court or where his appointment was procured by fraud. Code Civ. Proc.
;

N. Y. § 2569. And in the statute having to do with all trustees removal is

allowed. when the trustee has "violated or threatens to violate his, trust," or
when he is insolvent, or when his insolvency is apprehended, or for any other
reason he is deemed an unsuitable person to execute the tiust. Real Prop-
erty Law N. Y. (Consol. Laws, c. 50) § 112.
B^ In re Wiggins, 29 Hun (N. Y.) 271; Cohn v. Waxd, 32 W. Va. 34, 9 S.
E. 41.
68 Sparhawkv. Sparhawk, 114 Mass. 356; Gaston v. Hayden, 98 Mo. App.
683, 73 S.-W. 988; Ldwe v. Montgomery, 117 Mo. App. 273, 92 S. W. 916;
"been v. Oozzens, 30 N. Y. Super. Ct. 178; In re Strickler's Estate, 28 Pa.
Super. Ct. 455.
B» In re Mallon's Estate, 38 Misc. Hep. 27, 76 N. Y. Supp. 879.
<™ Ehlen v. Ehlen, 63 Md. 267 ; Scott v. Rand, 118 Mass. 215 ; Billings v.
Billings, 110 Mass; 225; Lister v. Weeks, 60 N. J. Eq. 215, 46 Atl. 558; In
re McGillivray, 138 N. Y. 308, 33 N. E. 1077 i Haight v. Brisbin, 100 N. 1.
219, 3 N. E. 74; Appeal of Johnson, 9 Pa. 416; Gilbert v. Johnson, 49 Pa.
Super. Ct. 191; Cooper v. Day, 1 Rich, Eq. (S. C.) 26. A practical repudia-
tion of the trust was held sufficient ground for removal in Keating v. Keat-
ing, 182 Iowa, 1056, 165 N. W. 74.
BiWheatcraft v. Wheatcraft, 55 Ind. App. 283, 102 N. E. 42; State v.
^
Ausmus (Tenn. Ch. App.) 35 S. W. 1021.
62 Clemens v. Caldwell,' 7 B. Men. (Ky.) 171; Barbour v. Weld, 201 Mass.
513, 87 N. E. 909; In re Keller, 142 App. Div. 454, 127 N. Y. Supp. 16, af-
firmed 201 N. Y. 590, 95 N. E. 1131 Elias v. Schweyer, 13 App. Div. 336, 43
;

N. Y. Supp. 55 In re Etgen, 146-App. Div. 932, 132 N. Y. Supp. 308

; ; Pyle
V. Pyle, 137 App. Div. 568, 122 N. Y. Supp. 266; Warren v. Burnham, 125
App. Div. 169, 109 N. Y. Supp. 202 In re Hirsch's Estate, 188 N. Y. 584, 81
;

N. B. 1165; DIekerson v. Smith, 17 S. C. 289; Fisk v. Patton, 7 Utah, 399,

27 Pac. 1. /
63Ketchiun v. Mobile & O. R. Co., Fed. Cas. No. 7737; Letcher's Trustee
s4 In re Boyle, 166 App. Div. 504, 151 N, Y. Supp. 1022.
 ;

276 THE TBUSTEK (Ch. JO

refusal to obey the orders of the court ; " disagreement and fric-
tion -vyith the fellow trustees,*' or with the cestuis que trust;''
refusal to give information regarding the trust business ;
" failure
to furnish the bond required; '° intemperante ''"
lunacy
or oth- '^

er incompetency ; '* lack of discretion ; '* failure to carry out the

trust/* The court may also remove a trustee on the ground that

V. German Nat. Bank, 134 Ky. 24, 119 S. W. 236, 20 Ann. Cas. 815 Dorsey ;

V. Thompson, 37 Md. 25; Barkley Cemetery Ass'u v. McCune, 119 Mo. App.
349, 95 S. W. 295 Lane v. Lewis, 4 Dem. Sur. (N. T.) 468 Ex parte Tunno,
; ;

Bailey Eq. (S. 0.) 395; Carr v. Bredenberg, 50 S. 0. 471, 27 S. E. 925; Max-
well V. Finnie, 6 Cold. (Tenn.) 434. But see, contra, La Forge v. Binns, 125
111. App. 527; Bonner v. Lessley, 61 Miss. 392.
85 Appeal of Morse, 92 Conn. 286, 102 Atl. 586; In re Pott's Petition,,!
Ashm. (Pa.) 340 Tunstall v. Wormley, 54 Tex. 476.
;

»» Quackenboss v. Southwick, 41 N. Y. 117; In re Morgan, 63 Barb. (N. Y,)

621, affirmed 66 N. Y. 618; McKenna v. O'Oonnell, 84 Misc. Rep. 582, 147 N. Y.
Supp. 922; In re Myers' Estate, 205 Pa. 413, 54 AtL 1093. Contra: Cornett v.
West, 102 Wash. 254, 173 Pac. 44.
6 7 May V. May, 167 TJ. S. 310, 17 Sup. Ct. 824, 42 L. Ed. 179; Polk v. Lin-
thicum, lOO Md. 615, 60 Atl. 455, 69 L. R. A. 920; WUson v. Wilson, 145
Mass. 490, 14 N. E. 521, 1 Am. St. Rep. 477; Gartside v. Gartside, 113 Mo.
348, 20 S. W. 669 Austin v. Austin, 18 Neb. 306, 22 N. W. 116; In re Chap-
;

man (Sup.) 2 N. Y. Supp. 248; Disbrow v. Disbrow, 46 App. Div. Ill, 61 N.

Y. Supp. 614, affirmed 167 N. Y. 606, 60 N. B. 1110; In re Martin's Estate,
4 Pa. Dist. R. 219 In re Marsden's Estate, 166 Pa. 213, 31 Atl. 46 In re
; ;

Price's Estate, 209 Pa. 210, 58 Atl. 280 In re Nathan's Estate, 191 Pa. 404,
;

43 Atl. 313. But if the disagreement between trustee and cestui que trust is
not dangerous to the best interest of the trust, but a mere personal differ-
ence, the trustee will not be removed on that account. McPherson v. Cox,
96 U. S. 404, 24 L. Ed. 746; Nickels v. Philips, 18 Fla.'732; Parsons v. Jones,
26 Ga. 644; Lorenz v. Weller, 267 111. 230, '108 N. E. 306; Anderson v. Kem-
per, 116 Ky. 339, 76 S. W. 122; Clark v. Anderson, 73 Ky. (10 Bush.) 99;
Polk V. Linthicum, 100 Md. 615, 60 Atl. 455, 69 L. R. A. 920; Starr v. Wiley,
89 N. J. Eq. 79, 103 Atl. 865; Trask v. Sturges, 170 N. Y. 482, 63 N. B. 534;
In re Price's Estate, 209 Pa. 210, 58 Atl. 280 In re Neafle's Estate, 199 Pa.
;

307, 49 Atl. 129; Gibbes v. Smith, 2 Rich. Eq. (S. C.) 131. But where the
trustee has discretion as to the amount to be given the cestui que trust and
hostility will thus result disadvantageously to the cestui, friction will au-
thorize removal even though the trustee has been capable and honest. May-
dwell V. Maydwell, 135 Tenn. 1, 185 S. W. 712, Ann. Cas. 1918B, 1043.
8 8 Gartside v. Gartside, 113 Mo. 348, 20 S. W. 669.

9 Suit v.'Creswell, 45 Md. 529.

'oBayles v. Staats, 5 N. J. Eq. 513; In re Oady's Estate, ipS N. Y. 678,

9 N. B. 442, affirming In re Cady, 36 Hun (N. Y.) 122; In re Bell's Estate,
44 Pa. Super. Ct. 60.
71 In re Wadsworth, 2 Barb. Ch. (N. Y.) 381.
7 2 Savage v. Gould, 60 How. Prac. (N. Y.) 234; In re Smith's Estate (Sur.)
7 N.-Y. Supp. 327.
7 3 Attorney General v. Garrison, 101 Mass. 223; but see Preston v. Wilcox,

38 Mich. 578.
7^ Cavender v. Cavender, 114 U. S. 464, 5 Sup. Ct. 955, 29 L. Ed. 212; Fris-
 ;

§ 80) EEMOVAL OP TRUSTEE 277

it is expedient to intrust the management of the estate to a smaller

number of trustees.'" i

But it has. been heldthat the trustee will not be removed on the
ground of insolvency, if the trust fund is guarded by a proper
bond;'" nor will he be removed on the ground of negligence
alone," nor because of a failure to carry out the provisions of the
trust due to a misconception of his duties,'* nor because of miscon-
duct in office','® when the safety of thfe trust fund is not enda-nger-
ed nor merely because of enemy alienage and internment.*" And
;

in many other cases slight misconduct, inefficiency, or impropriety

has been held insufficient ground for the removal of the trustee,
where the trust fund was not placed in jeopardy.*^
Where trust duties are attached to the office of executor, and
the executor is removed or resigns, he will be treated as having
been relieved of his duties as trustee also ;
*" bfit if the offices of ex-

bie V. Fogg, 78 Ind. 269; Robinson v. Cogswell, 192 Mass. 79, 78 N. E. 389;
In re Mechanics' Bank, 2 Barb. (N. Y.) 446 In re McKeon, 37 Misc. Bep. 658,
;

76 N. Y. Supp. 312; In re Hoysradt, 20 Misc. Rep. 265, 45 N. Y. Supp. 841

Anderson' v. Robinson, 63 Or. 228, 126 Pac. 988. Acquiescence in a breach by
a cotrustee may also be a ground. Harvey v. Schwettman (Mo. App.) 180 S.
W. 413. Threatened insolvency of the t;:ust estate may authorize the transfer
of the charity to a municipal corporation. Woods v. Bell (Tex. Civ. App.) 195
S. W. 902.
75 Barker v. Barker, 73 N. H. 353, 62 Atl. 166, 1 L. R. A. (N. S.) 802, 6
Ann. Cas. 596.
-8 Moorman v. Crockett, 90 Va. 185, 17 S. E. 875.
77Waterman v. Alden, 144 lU. 90, 32 JS'. E. 972.
78In re Rotfiaug's Estate, 51 Misc. Rep. 548, 101 N. Y. Supp. 973 In re ;

Ward's Estate (Sur.) 175 N. Y. Supp. 655.

79 Haines v. Mliot, 77 Conn. 247, 58 Atl. 718; W^lie v. Bushnell, 277 111.
484, 115 N. E. 618 ; Lathrop v. Smalley's Ex'rs, 23 N. J. Eq. 192 Oorlies v. ;

OorUes' Ex'rs, 23 N. J. Eq. 197 ; In re Engel, 83 Misc. Rep. 675, 146 N. Y.

Supp. 793; Brackett v. Seavey (Sup.) 131 N. Y. Supp. 664; In re Thieriot,
117 App. Div. 686, 102 N. Y. Supp. 952 In re O'Hara, 62> Hun, 531, 17 N. Y.
;

Supp. 91.
80 In re Amsinck's Estate, 103 Misc. Rep. 124, 169 N. Y. Supp.
336.
81 Chambers v. Mauldin, 4 Ala. 477; Williamson v. Grider, 97 Ark.
588,
135 S. W. 361; McNair v. Montague, 260 111. 465, 103 N. E. 450; Olive v.
Olive, 117 Iowa, 383, 90 N. W. 827; Berry v.' Williamson, 11 B. Mon. (Ky.)
245; Dailey v. Wight, 94 Md. 269, 51 Atl. 38; Preston v. Wilcox, 38 Mich.
578; Wiegand v. Woerner, 155 Mo. App. 227, 134 S. W. 596; Jacobus v.
Munn, 37 N. 3. Eq. 48; Wiggins v. Burr, 54 Misc. Rep. 149, 105 N. Y. Supp.
'649; In re Wallace's Estate, 206 Pa. 105, 55 Atl. 848; Ourran v. Green, 18
B. I. 329, 27 Atl. 596 Carr v. Bredenberg, 50 S. C. 471, 27 S. H. 925 Clausen
;
;

V. Jones, 18 Tex. Civ. App. 376, 45 S. W. 183 Wisconsin TJniversalist Conven-

;

tion V. Union Unitarian and Universalist Soc. of Prairie du Sac, 152 Wis 147
139 N. W. 753.
82 Randall v. Gray, 80 N. J. Eq. 13, 83 Atl. 482; Cushman v.
Cushman, 191
N. Y. 505, 84 N. E. 1112, affirming 116 App. Div. 763, 102 N. Y. Supp. 258.
278 THE TRUSTEE (Ch. 10

ecutor and trustee are expressly made separate by the will, but the
same person occupies both offices, the revocation of the appoint-
'ment as executor will not affect the trusteeship.'^
Proceeding for Removal
The application for the removal of the trustee may be made by
any one having a financial interest in the execution of the trust. It
may be made by one or all of the cestuis que trust,** whether their
interests are vested or contingent.*' The Attorney General should
apply for the removal of an improper trustee of a charitable trust.'*
The settlor, unless a beneficiary, has not the interest requisite to
enable him to apply for the removal of the trustee.*^
In a proceeding for the removal of the trustee, the cestuis que
trust should all be made parties or their interests represented;"
and all other persons interested in the trust should be joined in the
action.** If one of several trustees is to be removed, the cotrustees
should be made parties to the proceeding.®"- The trustee surely
should be given notice of the proc'eeding to remove him, in order
that he may have the opportunity to defend, himself."^
A trustee who unsuccessfully resists an application for his re-
moval may be held liable for the costs of the proceeding; °^ but, if
he shows that there is no cause for his removal and that he has

88 Tuckerman v. Currier, 54 Colo. 25, 129 Pac. 210, Ann. Cas. 1914C, 599.
84 Barbour v. Weld, 201 Mass. 513, 87 N. E. 909 Goncelier v. Foret, 4
;

Minn. 13 (Gil. 1) Cooper v. Day, 1 Rich. Eq. (S. O.) 26.

;

85 Wilson V. Wilson, 145 Mass. 490, 14 N. E. 521,' 1 Am. St. Jlep. 477 In re ;

Bartells' Will, 109 App. Dlv. 586, 96 N. Y. Supp. 579; Bailey v. Rice, 1 Tenn.
Oh. App. 645.
86 State V. Fleming, 3 Del. Ch. 153.
87 Thompson v. Childress, 4 Baxt. (Tenn.) 327.
88Farmers' Loan & Trust Co. v. Lake St. El. R. Co., 177 U. S. 51, 20 Sup.
Ct. 564, 44 L. Ed. 667 Jones v. Bryant, 204 111. App. 609 Butler v. Butler,
; ;

164 111. 171, 45 N. E

426; Elias v. Schweyer, 13 App. Div. 336, 43 N. X.
Supp. 55.
8 Goodwin v. Goodwin, 69 Mo. 617. But see lii re Gilbert's Estate, 3 N. T.
St. Rep. 208, holding that the matter of parties Is within the discretion of the
court.
9 Hamilton v. Faber, 33 Misc. Rep. 64, 68 N. T. Supp. 144w
01 Ex parte Kilgore, 120 Ind. 94, 22 N. E. 104; Hitch v. Stonebraker, 125
Mo. 128, 28 S. W. 443 Holcomb v. Kelly (Sup.) 114 N, Y. Supp. 1048 In re
; ;

Sterling, 68 Misc. Rep. 3, l24 N. Y. Supp. 894; Foss v. Sowles, 62 Vt. 221,
19 Atl. 984. But see Letcher's Trustee v. German Nat. Bank, 134 Ky. 24, 119
S. W. 236, 20 Anil. Oas. 815, and State, to Use of Napton, v. Hunt, 46 Mo.
App. 616, where no actual notice was given to the trustee. Where the trustee
is a defaulter and a fugitive from justice, and his whereabouts unknown,
he may be removed without citation served upon him. Commonwealth V.
Allen, 254 Pa. 474, 98 Atl. 1056.
02 Lape's Adm'r t. Taylor's Trustee (Ky.) 23 S. W. 960. '
§ 81) DEATH OP TRUSTEE 279
\

been performing liis duties satisfactorily, the court may charge the
CLrsts of the proceeding to the trust estate."*

DEATH OF TRUSTEE
81. The death of the trustee does not affect the life of the trust.
Equity will fill the vacancy, and the trust will continue.

In the absence of statute, upon the death of a sole trustee, the

title to the trust property vests in the trustee's heirs or
personal representative, depending upon the nature of the
property, whether real or personal. Where one of several
trustees dies, the surviving trustees become the sole own-
ers of the trust property by virtue of the right of survivor-
ship in joint tenancy.
By statute in several states, on the death of a sole trustee the
title to the trust property vests in the coi^rt of equity.
There is no right of dower or curtesy in the estate of the trustee.

The death of the trustee will not terminate the trust. The con-
tinuance of the trust is not dependent on the life of any particular
trustee. Equity will supply a successor."*
After the trustee's death, however, it is obvious that the legal
title to the trust property which has been vested ^n him can no
longer remain there. It must be transferred to some one upon the
trustee's 'death. It cannot'^ remain in suspense.
By common law the holding is that the ownership of the trust
property devolves upon the persons who would take the absolute
property of the deceased. ""The general principle is not questioned
that trusts of real estate upon the trustee's death devolve upon his
heir at law, and trusts of personalty devolve upon the executor or
administrator for the preservation of the title, until the appointment
of a new trustee. * * * " '= That the heir becomes the owner
of real property "° held in trust, and, the personal representative the

OS Appeal of. Bloomer, 83 Pa. 45.

»* See ante, An ei^ception must be made, of course, where the trust
p, 261.
was personal. In such casqs, on the death of the trustee, equity will not ap-
point a successor. Rogers v. Rea, 98 Ohio St. 315, 120 N. E. 828.
95 Baltimore Trust Co. v. George's Creek Coal & Iron Co., 119 Md. 21, 34,
85 Atl. 949.
9 6 Greenleaf v. Queen, 26 U. S. (1 Pet.) 138, 7 L. Ed. 85; Lawrence v.
Lawrence, 181 111. 248, 54 N. E. 918; Bloom v. Ray (Ky.) 16 S. W. 714;
Laughlin v. Page, 108 Me. 307, 80 Atl. 753 Hawkins v. Chapman, 36 Md.
;

83; Ewing t. Shannahan, 113 Mo. 188, 20 S. W. 1065; Kirkman v. Wads-

worth, 137 N. C. 453, 49 S. B. 962 Jenks' Lessee v. Backhouse, 1 Bin. (Pa.)
;

91; Watkinsv. Specht, 7 Cold. (Tenn.) 585; Williams v. Moliere, 60 Vt 378,

280 THE TRUSTEE (Ch. 10

owner of personal property,'' upon the death of the trustee, is well

recognized.
Due to the inconvenietices which would arise from tenancy in
common, it is generally provided by statute or decision that trus-
tees hold as joint tenants. Where there are several trustees, and
one dies, it is preferable that the surviving trustees, who have
,

knowledge of| the trust and have been selected by the settlor, should
administer the trust, rather than that the administration should be
continued by such survivors in common with the heirs or personal
representatives' of the deceased trustee. Such heirs or personal
representatives may*have no special fitness for the task of carrying
on the trust. It is only when the title can rest nowhere else that the
trust devolves upon them.
It is, of course, a characteristic of joint tenancy, that, upon the
death of one of the joint tenants, the title to the property remains
in the surviving joint tenants as a whole, and that no rights de-
scend to the heirs or personal representatives of the deceased joint
tenant. Thus, in cases of trusts, if A., B., and C. are trustees, and
A. dies, B. and C. w;ll hold the title to the trust property, free from
any claims by the heirs or personal representatives of A.** "Upon
the death of one of several cotrustees, the office of trustee will de-
volve, with the estate, upon the survivpr, and ultimately upon the
heir or personal representative of the last survivor. Trusts of real

15 Atl. 192. But see Birks y. McNeill, 177 Iowa, 567, 159 N. W. 210. In New-
Jersey and South Carolina the heir who takes the trust property, if it be real,
is the eldest son ; the old rule of primogeniture being followed in this re-
spect. Zabriskie v. Morris & E. K. Co., 33 N. J. Eq. 22 ; Cone v. Cone, 61
S. O. 512, 39 S; E. 748 ; Breeden v. Moore, 82 S. C. 534, 64 S. E. 604. If the
trustee devise the real property held in trust, the devisees will be held to the
trust. Cresap v. Brown, 82 W. Va. 467, 96 S. B. 66.
oTConaway y. Third Nat. Bank, 167 Fed. 26, 92 C. C. A. 488; Gregg v.
Gabbert, 62 Ark. 602, 37 S. W. 232 Tyler v. Mayre, 95 Cal. 160, 27 Pac. 160,
;

30 Pae. 196 ; Frledley v. Security Trust & Safe Deposit Co., 10 Del. Ch. 74,
84 Atl. 883; Anderson v. Northrop, 30 Fla. 612, 12 South. 318; Lucas v. Don-
aldson, 117 Ind. 139, 19 N. E. 758; Safford v. Rantoul, 12 Pick. (Mass.) 233;
Gulick V. Bruere, 42 N. J. Eq. 639, 9 Atl. 719 ; Appeal of Baird, 3 Watts &
S. (Pa.) 459; Merriam v. Hemmenway, 26 Vt. 565. In Virginia by statute the
pergonal representative of a deceased trustee is under a duty to complete an
unexecuted trust. Williams v. Bond, 120 Va. 678, 91 S. E. 627.
9 8 p. G. Oxley Stave Co. v. Butler County, 166 V. S. 648, 17 Sup. Ct. 709,

41 L. Ed. 1149 ; Wilson v. Snow, 35 App. D. C. 562 ; Relchert v. Missouri

& I. Coal Co., 231 111. 238, 83 N. E. 166, 121 Am. St. Rep. 307 l&oyer v. Sims,
;

61 Kan. 593, 60 Pac. 309 Kutherf ord Land & Improvement Co. v. Sanntrock,
;

60 Nr J. Eq.' 471, 46 Atl. 648 ; In re Ziegler, 168 App. Div. 735, 154 N. Y.
Supp. 652; Mafflet v. Oregon & C. B. Co., 46 Or. 443, 80 Pac. 489; Mattison
V. M^tttson, 53 Or. 254, 100 Pac. 4, 133 Am. St. Rep. 829, 18 Ann. Cas. 218.

But see, contra, Sander's Heirs v. Morrison's Ex'rs, 7-T. B. Mon, (Ky.) 54,
 ;

§ 81) DEATH OF TRUSTEE 281

estate, upon the death of the trustee, devolve upon his heir at law.
Trusts of personalty vest in 'his executor or administrator."'"
Even in states where joint tenancy is generally abolished, it still
exists among trustees,^ and in other states, where all grants to two
or more persons are presumed to be to them as tenants in common,
there is an exceptibn in the case of trustees, and they are to hold as
joint tenants.^
In several states statutes modifying the common-law rule regard-
ing the devolution of trust property have been enacted. These
statutes vest the title to trust property, upon the death of the
sole trustee, in the court having general equity jurisdiction, and re-
quire the court to appoint a trustee to carry out the trust to its
conclusion.^ ,

Where the title to the trust property passes to the heir or per-
. sonal representative of a deceased trustee, the court may, upon
proper application, appoint a new trustee to carry on the trust and
relieve the heir or executor.*
It is now provided by statute in England that, if a trustee dies
-without heirs and the property escheats to the crown," the trust
shall not be destroyed thereby, and such doubtless is the rule in
America, although there is a dearth of authority upon the question.
It is well settled that the widow of a trustee is not entitled to
dower in the trust property," and that the widower of a trustee has

18 Am. Dec. 161. The statute in California reads as follows: "On. the death,
renunciation, or discharge of one of several cotrustees the trust survives to
the others." Civ. Code, § 2288.
»» Schenck v. Schenck, 16 N. J. Eq. 174, 182.
1 Boyer v. Sims, 61 Kan. 593, 60 Pac. 309.
2 New York Eeal Property Law (Coiisol. Laws, c. 50) § 66.
8 Code Ala. 1907, § 3415; Whitehead v. Whitehead, 142 Ala. 163, 37 South.

929; Lecrolx v. Malone, 157 Ala. 434, 47 South. 725; Burns' Ann. St. Ind.
1914, § 4021; Gen. St Kan. 1915, § 11683; Collier v. Blake, 14 Kan. 250;
How. Ann. St. Mich. 1912, § 10692 Gen. St. Minn. 1913, § 6723 New York
; ;

Personal Property Law (Oonsol. Laws, c. 41) '§ 20 ; New York Eeal Property
Law (Consol. Laws, c. 50) § 111 Stewart -v. Franchettl, 167 App. Dlv. 541,
;

153 N. Y. Supp. 453; In re Meehan's Estate, 104 Misc. Eep.'219, 171 N. Y,

Supp. 766; St. Wis. 1913,- § 2094.
i Gregg V. Gabbert, 62 Ark. 602, 37 S. W. 232 ; Civ. Code Cal. § 2289
Ewing V. Shannahan, 113 Mo. 188, 20 ^. W. 1065.
5 47 & 48 Vict, c: 71, § 6.

e Barker v. SmUey, 218 111. 68, 75 N. E. 787; Gritten v. Dickerson, 202 111.
372, 66 N. E. 1090; Sanford v. Sanford, 157 111. App. 350; Tevis v. Steele,
4 T. B. Mon. (Ky.) 339; Miller v. Miller, 148 Mo. 113, 49 S. W. 852; Van Pelt
V. Parry, 218 -Mo. 680, 118 S. W. 425 Kager v. Brenneman, 47 App. Div. 63,
;

62 N. Y. Supp. 339 Hendren v. Hendren, 153 N. C. 505, 69 S. E. 506, 138 Am.

;

St. Eep. 680; Kaphan v. Toney (Tenn. Ch. App.) 58 S. W. 900; Wilson v.
Wilson, 32 Utah, 169, 89 Pac. 643.
282 THE TRUSTEE (Ch. 10

no rights of curtesy.'' The seizin of the trustee not being beneficial,

and his title being the dry legal title only, there is no basis for the
award of dower or curtesy. "Where a person holds land in trust
for another, ithe husband or wife of such trustee is not entitled to
dower jn such premises." *

VACANCIES IN TRUSTEESHIP—APPOINTMENT OF
SUCCESSORS
82. The settlor may reserve to himself or vest in others the power
of filling vacancies in the trusteeship. If he makes no such
provision, the court of chancery will appoint the new trus-
tee.
In appointing a trustee, equity will prefer unbiased persons of
full capacity.
The application for the appointment is generally required to be
made by a party financially interested in the trust, upon
notice to all others so interested.
An administrator with the will annexed does not ordinarily suc-
ceed to trust duties conferred upon an executor.
A trustee appointed by the court becomes vested with the title
to the trust property by virtue of the decree of the court
No conveyance from the retiring trustee is necessary.
The question next arises as to the method of filling a vacancy in
a trusteeship. If the original trustee is removed from office by
natural or artificial causes, voluntarily or involuntarily, by whom
and in what way will his successor be appointed?
The settlor may devise a method of filling vacancies, and this
method must be respected, if reasonable.®
Neither a surviving trustee ^° nor a cestui que trust ^^ has im-
plied authority to fill a vacancy in the trusteeship. Only when ex-
pressly empowered may they appoint the successor trustee.
The' persons whom the settlor rtiay empower to fill vacancies are
numerous and restricted only by the settlor's imagination. He may
reserve to himself the right to fill vacancies,^^ or may vest such

7 King V. Bushnell, 121 111. 656, 13 N. E. 245 ; Chew v. Commissioners of

Southwark, 5 Kawle (Pa.) 160.
8 King V. Bushnell, 121 111. 656, 660, 13 N. B. 245.
Tuckerman v. Currier, 54 Colo. 25, 129 Pac. 210, Ann. Gas. 1914C, 599.
10 Whitehead v. Whitehead, 142 Ala. 163, 37 South. 929; Mallory v. Mal-
lory, 72 Conn. 494, 45 Atl. 164; Adams v. Highland Cemetery' Co. (Mo.) 192
S. W. 944; Wilson v. Towle, 36 N. H. 129.
11 Grundy v. Drye, 104 Ky. 825, 48 S. W. 155, 49 S. W. 469.
12 Equitable Trijfit Co. v. Fisher, 106 111. 189.
§ 82) VACANCIES IN TRUSTEESHIP —APPOINTING SUCCESSOES 283

right in the surviving trustees,^' or in the surviving trustees and

the cestuis que trust,^* or in the beneficiaries alone.^" The creator
of the trust cannot ves/t this power in a court which has no ju-
risdiction over the subject of trusts,^' for this would be allowing
an individual to enlarge the jurisdiction of the courts but the set- ;

tlor may
proVide that a court of chancery shall fill vacanciies,^^ or
that the court shall perform th,is duty, subject to the approval of
the interested parties,^^ or that the trustees shall nominate the suc-
cessor and the court appoint.^" But in cases where the power of
appointment is given to the trustee, or cestui que trust the court
will nevertheless supervise the filling of the vacancy.^"
In the event that the settlor forms no plan for the filling of va-
cancies in the trusteeship the court of chancery has jurisdiction to
supply a new trustee.^^ On the death of a trustee,^^ or his resigna-

is Yates, 255 111. 66, 99 N. E. 360, Ann. Cas. 1913D, 143; Orr v.
Yates v.
Yates, 209 222, 70 N. E. 731; In re eleven's Estate, 161 Iowa, 289, 142
111.
N. W. 986; Carr v. Corning, 73 N. H. 362, 62 Atl. 168; Jacobs V. MeClintock,
53 Tex. 72; Mitchell v. Stevens, 1 Aikens (Vt.) 16; Whelan v. Eeilly, 3 W.
Va. 597. 1

14 Grisvyold v. Sackett, 21 R. I. 206, 42 Atl. 868. ,

15 March v. Romare, 116 Fed. 355, 53 C. C. A. 575; Poster v. Goree, 4 Ala.

440 ; Leggett v. Grimmett, 36 Ark. 496 McGonnell v. Day, 61 Ark. 464, 33
;

S. W. 731; Fuller v. Davis, 63 Miss. 78; Clark v. Wilson, 53 Miss. 119;

Guion V. Pickett, 42 Miss. 77 Frank v. Colonial & United States Mortg. Co.,
;

86 Miss. 103, 38 South. 340, 70 L. R. A. 135, 4 Ann. Oas. 54 Miller v. Knowles

;

(Tex. Civ. App.) 44 S. W. 927 Gates v. Mayes (Tex. Sup.) 12 S. W. 51.

;

18 Harwood v. Tracy, 118 Mo. 631, 24 S. W. 214. Thus in Petition of

Straw, 78 N. H. 506, 102 Atl. 628, it was held that the settlor could not give
to the Supreme Court power to fill vacancies, since such power was vested
by statute in the probate court. • •,

17 Cruit V. Owen, 203 U. S. 368, 27 Sup. Ct. 71, 51 L. Ed. 227; Appeal of
Allen, 69 Conn. 702, 38 Atl. 701 Morrison v. Kelly, 22 111. 610, 74 Am. Dec.
;

169 ; Shaw v. Paine, 12 Allen (Mass.) 293.

18 Cole V. City of Watertown, 119 Wis. 133, 96 N. W. 538.
19 Huston V. Dodge, 111 Me. 246, 88 Atl. 888.
20 BaUey v. Bailey, 2 Del. Ch. 95 Yates v. Yates, 255 111. 66, 99 N. B. 360,
;
"^

Ann. Oas. 1913D, 143.

21 Doe V. Roe, 1 Boyce (Del.) 216, 75 Atl. 704; Thompson v. Hale, 123 Ga.
305, 51 S. E. 383 Mason v. Bloomington Library Ass'n, 237 111. 442, 86 N. B.
;

1044, 15 Ann. Cas. 603 Sawtelle vT Witham, ^4 Wis. 412, 69 N. W. 72.

;

2 2 Allison V. Little, 85 Ala. 512, 5 South. 221; In re Gay's Estate, 138 Cal.

552, 71 Pac. 707, 94 Am. St. Rep. 70; O'Brien v. Battle, 9% Ga. 766, 25 S. E.
780; People, Use otBrooks, v. Petrie, 191 111. 497, 61 N. E. 499, 85 Am. St.
Rep. 268 ;Cruse v. Axtell, 50 Ind. 49 Kennard v. Bernard, 98 Md, 513, 56
;

Atl. 793; Hildreth'v. Eliot, 8 Pick. (Mass.) 293; Weiland v. Townsend,' 33

N. J. Eq. 393; Farmers' Loan & Trust Co. v. Pendleton, 179 N. Y. 486, 72
N. E. 508 Thornton v. Harris, 140 N. C. 498, 53 S. E. 341 In re Kane Bor-
; ;

ough Park Lands Trustees' Appointment, 177 Pa. 638, 35 Atl. 874; Ex parte
O'Brien, 11 R. I. 419; Somers v, Craig, 9 Humph. (Tenn.) 467; Buchanan
 ;;

284 THE TRUSTEE (Cll. 10

tioti,^'or declination ** of the trust, or when he is unable to ad-

minister the trust,"" 'or is removed,^* or, being a corporation, ceases
to exist,"' equity will appoint a new trustee. In many states stat-
utes prescribe when and how equity may appoint trustees."' It is
impossible here to enter into a discussion of the jurisdictfon of the
various state courts over the appointment of new trustees. This
subject has been litigated in many cases which are here cited for
the convenience of the investigator."* The location of general
equity jurisdiction is a purely local question.
Whether or not equity will appoint a new trustee is a matter

V. Hart, 31 Tex. 647; Fisher v. Dickenson, 84 Va. 318, 4 S. E. 737; Forsyth

V. City of Wheeling, 19 W. Va. 318. But if the trust is personal, so that it
ends on the death of the trustee, the court will not appoint a successor. Rog-
ers V. Rea, 98 Ohio St 315, 120 N. E. 828.
23 Reese v. Ivey, 162 Ala. 448, 50 South. 223; Vernoy v. Robinson, 133 Ga.
653, 66 S. E. 928; French v. Northern Trust Co., 197 lU. 30, 64 N. E. 105;
Petition of Pierce, 109 Me. 509, 84 Atl. 1070; Massachusetts General Hospital
V. ^Lmory, 12 Pick. (Mass.) 445 ; Schehr v. Look, 84 Mich. 263, 47 N. W. 445
In re Pitney, 186 N. Y. 540, 78 N. B. 1110.
24 Roberts v. Roberts, 259 111. 115, 102 N. E. 239; Whallen v. Kellner, 104
S. W. 1018, 31 Ky. Law Rep; 1285 Greene v. Borland, 4 Mete. (Mass.) 330
;

Brush V. Yoiing, 28 N. J. Law, 237; Anderson v. Robinson, 57 Or. 172, 110

Pa& 975 Gamble v. Dabney, 20 Tex. 69.
;

25 Spengler'v. Kuhn, 212 lU. 186, 72 K. E. 214; Dean v. Northern Trust

Co., 259 ill. 148, 102 N. E. 244.
2 6 In re Burk's Estate, IN. T. St. Rep. 316.
'

2 7Lanning v. Commissioners of Public Instruction of City of Trenton, 63

N. J. Eq. 1, 51 Atl. 787; Town of Montpelier v. Town of East Montpelier,

29 Vt. 12, 67 Am. Dec 748.
28 Huston V. Dodge, 111 Me. 246, 88 Atl. 888; Md. Lqws 1918, ch. 431;
Sells V. Delgado, 186 Mass. 25, 70 N. E.' 1036 ; In re Satterthwaite's Estate,
60 N. J. Eq. 347, 47 Atl. 226; New York Personal Property Law (ConsoL
Laws, c. 41) I 20; New York Real Property Law (Consol. Laws, c. 50) § 112;
Acts Va. 1910, c. 355 (applying to trusts not involving personal confidence,
Roller V. Oatlett, 118 Va. 185, 86 S. E. 909).
2 8 Whitehead v. Whitehead, 142 Ala. 163, 37 South. 929; Appeal of Beards-

ley, 77 Conn. 705, 60 Atl. 664; Dailey v. City of New Haven, 60 Conn. 314,
28 Atl. 945, 14 L. R. A. 69; Mitchell v. Pitner, 15 Ga. 319; Woodbery v.
Atlas 'Realty Co., 148 Ga. 712, 98 S. E. 472; Dwyer v. Cahill, 228 111. 617, 81
N. B. 1142; Shepard v. Meridian Nat. Bank, 149 Ind. 532, 48 N. E. 346;
White V. Hampton, 10 Iowa, 238 Haggin v. Straus, 148 Ky. 140, 146 S. W.
;

391, 50 L. R. A. (N. S.) 642; Coudon v. TJpdegraf, 117 Md. 71, 83 Atl. 145;
Sells V. Delgado, 186 Mass. 25, 70 N. E. 1036; Bredell v. Kerr, 242 Mo. 317,
147 S. W. 105; Zabriskie's Ex'rs v. Wetmore, 26 N. J. Eq. 18; People v.
Norton, 9 N. Y. 176 ; Sowers v. Cyrenius, 39 Ohio St. 29, 48 Am. Rep. 418
Richards v. Rote, 68 Pa. 248; Mask v. Miller, 7 Baxt. (Tenn.J' 527; In re
Gary's Estate, 81 Vt. 112, 69 Atl. 736; Morse v. Stoddard's Estate, 90 Vt.
479, 98 Atl. 991; Shelton v. Jones' Adm'x, 26 Grat (Va.) 891 ; McWilliams
V. GoUgh, 116 Wis. 576, 93 N. W. 550.
§ 82) VACANCIES IN TEUSTEESHIP —^APPOINTING SUCCESSORS 285

wholly within its discretion.^" Even though a trustee may have

,

been removed from the trusteeship, the court may deem it unwise
to fill his place. Thus, if there is a surviving trustee who is ad-
ministering the trust successfully, chancery may deem it unneces-
sary to fill the vacancy *^ and if the only duty left to the trustees
;

is to transfer the property to the beneficiaries, equity miy deem it

superfluous to appoint new trustees and may transfer the property
itself."
If equity does fill the vacancy, it will, of course, select a trustee,
who will be apt to administer the affairs of the trust with fairness
and ability. It will not choose a prejudiced or incompetent person.
Thus the court will not appoint, as a trustee of a religious charitable
trust, a person hostile to the religion to be promoted ; '* nor will
the court name as a successor a person who is biased and apt to
favor one or more of the cestuis que trust as against the others.'*
It is the;better .practice to appoint a resident of the jurisdiction,'^
but circumstances inay justify the choice of a nonresident.'" The
court should consider the wishes of the interested parties in its
appointment, though not bound to follow them.''
Proceeding for Appointment
The application for the appointment of a new trustee may be
made by any one interested fincl.ncially in the execution of the
trust. Thus a cestui que trust," or the guardian of an infant cestui

30 City Council of Augusta v. Walton, 77 Ga. 517, 1 S. E. 214; Ex parte

Knust, Bailey Eq. (S. C.) 489. The discretion warrants the appointment of a
trust company as sole trustee, although the instrument provided for several
individual trustees. In re Battin's Estate, 89 N. J. Eq. 144, 104 Atl. 434.
31 MuUanny v. Nangle, 212 lU. 247, 72 N. E. 385 ; In re Dietz, 132 App.
Div. 641, 117 N. i. Supp. 461; In re Z6rega, 81 Misc. Eep. Il3, 142 N. Y.
Supp. 144 In re Physic's Estate, 2 Phila. (Pa.) 2^78. And on the removal of
;

two trustees the court may appoint only Tone in their places. Harvey v.
Schwettman (Mo. App.) 180 S. W. 413.
32 In re Kittinger's Estate, 9 Del. Ch. 71, 77 Atl. 24; Frledley v. Security
Trust & Safe Deposjt Co., 10 Del. Ch. 74, 84 Atl. 883; Boyer v. Decker, 5
App. Div. 623, 4Q N. T. Supp. 469.
33 Glover v. Baker, 76 N. H. 393, 83 Atl. 916.
84 Waller v. Hosford (Iowa) 132 N. W. 426; In re Welch, 20 App. Div.
412, 46 N. Y. Supp. 689.
3 5 Dodge V. Dodge, 109 Md. 164, 71 Atl. 519, 130 Am. St. Rep. 503.
3 8 Appeal of Wilcox, 54 Conn. 320, 8 AtL 136. For example, where a trust
was to be administered in Germany an Iowa court appointed a resident of
Germany as trustea Beidler v. Dehner, 178 Iowa, 1338, 161 N. W. 32.
3 7Thornburg v. Macauley, 2 Md. Ch. 425; Coster v. Coster, 125 App. Div.
516, 109 N. Y. Supp. 798. By Civ. Code Cal. § 2287, the cestui que trust, if
fourteen years of age, may nominate the trustee and the court must appoint
the nominee, unless be is incompetent.
8 8 Cone V. Cone, 61 S. C. 512, 39 S. E. 748.
 286 THE TRUSTEE (Ch. 10

que trust," may apply, and, in the case of a religious charitable

trust, a member of the church to be benefited may make applica-
- tion,*" although the fact that a person is a citizen and taxpayer in

the county where the charity is to be carried on does not show

sufficient interest to enable one to' secure the ear of the court.*^
The question of notice upon the application for the appointment
of a new trustee is one affected by statute to a large extent, and
the courts have not been in accord in their views upon the subject.
In many instances they have held that the notice necessary to be
given was entirely in the discretion of the court,*^ while in other
cases notice to all interbsted parties has been required.*' Occa-
sionally new trustees seem to have been appointed ex parte.** It
has been held that th^ beneficiaries are necessary parties to the ap-
plication,*" but not if their interests are of a future or contingent
nature.*' So, too, the heirs of the deceased trustee whose place is
to be, filled have been called necessary parties,.*' as well as the Attor-
ney General in the case of a charitable trust.*' But a person claim-
ing the trust property adversely to the trustee is not a necessary
party when the question of filling a vacancy in the. trusteeship is
being considered.*'
Frequently an executor is given the duties of a trustee, and later
a vacancy in the executorship occurs. In such a case an adminis-
trator with the will annexed is appointed. The general rule is that
under such circumstances the administrator cum testamento an-
nexo does not succeed to the position of trustee, which the former
executor held but that such administrator is vested only with thef
;

»» Hallinan v. Hearst, 133 Cal. 645, 66 Pac. 17, 55 L. R. A. 216.

*o Harris v. Brown, 124 Ga. 310, 52 S. E. 610, 2 L. K. A- (N. S.) 828.
*i Harris v. Brown,, 124 Ga. 310, 52 S. E. 610, 2 L. R. A. (N. S.) 828.
< 2 Dyer v. Eeach, 91 Cal. ISl, 27 Pac. 598, 25 Am. St. Rep. 171; In ^e
Eamshaw, 196 N. T. 330, 89 IT". E. 825 ; Bransford Realty Co. v. Andrews,
128 Tenn. 725, 164 S. W. 1175.
48 Simmons v. McKinlock, 98 Ga. 738, 26 S. E. 88 Dexter v. Getting, 149
;

Mass. 92, 21 N. B. 230 Greene v. Borland, 4 Mete. (Mass.) 330 Clarke v.

; ;

Inhabitants of Andover, 207 Mass. 91, 92 N. E. 1013.

44 SiUlivan v. Latimer, 35 S. C. 422, 14 S. E. 933 Reigart v. Ross, 63 Wis.
;

449, 23 N. W. 878.
4B In re Earnshaw (Sup.) 112 N. T. Supp. 197,; Henry
v. Doctor, 9 Ohio,
49 Boiling v. Stokes, 7 S. C. 364.
;

48Whallen v. Kellner, 104 S. W. 1018, 31 Ky. Law Rep. 1285; Fitzgibbon

V. Barry, 78 Va. 755.
47 In re Abbott, 55 Me. 580; Plimiley v. Plumley, 8 N. J. Eq. 511. But see,
contra, Hawley v. Boss, 7 Paige (N. Y.) 103.
48Lakatong'L6dge, No. 114, of Quakertown, etc., v. Board of Education
o^f Franklin Tp., Hunterdon County, 84 N. J. Eq. 112, 92 Atl. 870.

4 White River Lumber Co. t. Clark, 75 N. H. 585, 70 Atl. 247.

§ 82) VACANCIES m TRUSTEESHIP —APPOINTING SUCCESSOES 287

duties of the executorship, and that a new trustee must be appoint-

ed to undertake the separate duties of the trusteeship.^" How-
ever, in some cases the administrator with the will annexed has
been held to become vested with the trusteeship as well as with
the position of the deceased executor."^ These latter cases seem to
proceed upon the ground of a distinction between cases where the
trust duties are attached to the office of the executor- and cases
where the trust duties are attached to the executor personally and
are separated from the executorial functions.
This attempted distinction is "^ illustrated by the statements of a
New York court: "The Revised Statutes provide that, in all cases
where letters of administration with the will annexed shall be
granted, the will of the deceased shall be observed and performed;
and that the administrators with such will shall have the rights and
powers, and be subject to the same duties, as if they had been
named as executors in such will. * * * There can be no doubt,
therefore, that in cases where the execution of a trust, or of a power
in trust, is confided by a testator to his executors as such, they
cannot execute the trust without also taking out letters testamen-
tary, and assuming the office of executors. In such cases the ad-
ministrator 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 the executor and trustee. The 'difficulty
in the present case, on that subject, is that the testator appears to
have intended to give to the three individuals named in his will a
distinct character as trustees, entirely independent of their char-
acter of executors. * * *" It is difficjilt to see how an execu-
tor can be a trustee, also, without having a distinct office and char-
acter. His successor in the executorial office ought not to succeed
to the trust duties as incidental.
When the new trustee is appointed to fill the vacancy, his title

Hayes v. Pratt, 147 U. S. 557, 13 Sup. Ct. 503, 37 L. Ed. 279; Warfield
00
V. Brand's Adm'r, 13 Bush (Ky.) 77 Knight v. Loomis, 30 Me. 204 Stouten-
; ;

burgh V. Moore, 37 N. J. Eq. 63; Dunning v. Ocean Nat. Bank of City of

New York, 61 N. X. 497, 19 Am. Rep. 293 Kelsey v. McTigue, 171 App. Div.
;

877, 157 N. Y. Supp. 730; In re Sheaffer's Estate, 230 Pa. 426, 79 Atl. 651;
Harrison v. Henderson, 7 Heisk. (I'enn.) 315.
SI Jones V. Jones, 17 N. O. 387; Mathews v. Meek, 23 Ohio St. 272;
Com.
T. Barnitz, 9 Watts (Pa.) 252 ; In re Sheet's Estate, 215 Pa. 164, 64 Atl. 413.
G2 De Peyster v. Clendening, 8 Paige (N. Y.) 295, 310, 311; In re
Welch, 20
App. Dlr. 412, 46 N. Y. Supp. 689 Guion v. Melvin, 69 N. C. 242 Pitzer v.
; ;

LiOgSLU, 85 Va. 374, 7 S. E. 385; Fitzglbbon'v. Barry, 78 Va. 755. But see,
contra, to the effect that it ip not necessary that all interested parties should
be given notice. Kennard v. Bernard, 98 Md. 513, 56 Atl. 793 rfencks v. Safe
;

Deposit & Trust Co. of Baltimore, 120 Md. 626, 87 Atl. 1031.
288 THE TRUSTEE (Ch. 10

to the trust property acquired by virtue of the order of the court.

is

No is needed in order to vest

conveyance from the retiring trustee
the property rights in the succeeding trustee." ° Where one is
appointed trustee in place of another who has declined the trust,
the title to the trust property vesjs in the appointed as of the date
of the inception of the trust, by virtue of the doctrine of relation."

ssRelUy V. Conrad, 9 Del. Ch. 154, 78 Atl. 1080; Security Trust & Safe
Deposit Co. V. Ward, 10 Del. Ch. 408, 93 Atl. 385; Golder v. Bressler, 105
111. 419 Eeichert v. Missouri & I. Coal Co., 231 111. 238, 83 N. E. 166, 121
;

Am. St. Kep. 307 ; Bloodgood v. Massachusetts Ben. Life Ass'n, 19 Misc. Rep.
460, 44 N. Y. Supp. 563 ;Coster v. Coster, 125 App. Div. 516, 109 N. Y. Supp.
798 ;McNish, v. Guerard, 4 Strob. Eq. (S. C.) 66 ; Wooldrldge v. Planter's
Bank, 1 Sneed (Tenn.) 297. "At common law the appointment of new trustees
by 'parties (not in execution of a special power) did not vest the title in the
new trustees without conveyance." But a statute changes the common law
in Massacjiusetts. Glazier v. Everett, 224 Mass. 184, 187, 112 N. E. 1009.
Contra: Koehne v. Beattie, 36 R. I. 316, 90 Atl. 2ll.
Bi Parkhiil v. Doggett, 135 Iowa, 113, 112 N. W. 189.
 83) POWERS OF TRUSTEE CLASSIFIED 289

CHAPTER XI
THE POWERS OF THE TRUSTEE
83. Powers of Trustee Classified.
84. Estate of Trustee.
85. Custody of Trust Res.
86. Repairs and Improvements.
87. Power to Bind Estate in Contract or Tort
88. Power to Sell.
89. Power to Mortgage.
90. Power to Lease.
91. Power toRepresent Beneficiary.
92. Miscellaneous Implied Powers.
93. Maintenance of Actions.
94. Powers as AfEected by Peculiarity of Trustee's Status.
95. Discretionary Powers may Not be Delegated.
96. The Court's Supervision of Powers.

POWERS OF TRUSTEE CLASSIFIED

83. The powers of the trustee are called general if they are attach-
ed to the' office by implication of law, and special if they
are expressly granted to the trustee by the trust instru-
ment.
The trustee's powers are also classified as discretionary and in
trust. Discretionary powers are frequently called naked
powers, and may be exercised or not, at the option of the
trustee. Powers in trust, or in the nature of a trust, on the
other hand, cire imperative, and must be exercised by the
trustee.

In the chapter on the powers of the trustee it is intended to dis-

cuss the authority of the trustee, to perform acts while in office. The
question desired to be answered by the material presented in this
chd!pter is: Has the trustee authority to perform the act in ques-
tion? In a sepal'ate chapter on the duties of the trustee, the rules
and standards of action which trustees must observe in exercising
their powers are stated. Thus, if A. is a trustee of land and has
sold it as trustee, at least two questions may arise regarding the
propriety of the sale. It may be asked whether A. had authority
to sell the real estate, either by virtue of the terms of the trust in-
strument, or because of a power granted by implication of law.
This question will be answered by the material found in the chap-
ter on the powers of a trustee. In the second place, the inquiry
BOGEBT TBUSTS 19 —
290 -THE POWERS OP THE TRUSTEE (Ch. 11

may be made whether A. has properly conducted the sale by giving

notice of it and obtaining the best possible price. This question.

has to do with the duties of a trustee and the rules with respect to
that subject wiH be stated in the chapter entitled "The Duties of a
Trustee."
The powers of a trustee may be classed as general and special.
The general powers are those which the court of equity considers
attached to the office of trustee by implication. The special pow-
er'sare those vested in the trustee by virtue of express provisions
of the trust instrument. Thus, where a farm and dwelling house
are conveyed to a trustee for the benefit of the wife of the gran-
tor, the purchase of furniture, stock, and farming utensils, for the
purpose of, operating the farm and making the house habitable, is

within the general powers of the trustee. The trust could not be
carried out as the grantor obviously intended, unless such a pow-
er were implied.^
On
the other hand, if a testator devises land to A. in trust for the
purpose of supporting his children, and declares in the will that A.
shall have the power to sell the land, this authority is called special.
Discretionary Powers
The powers of trustees are also divided into discretionary powers
and powers in trust. Discretionary powers are also called naked
powers. "A power ani»exed to the trust, which may be executed or
not in the judgment or discretion of the trustee, is a mere naked
power, and will not devolve upon a trustee appointed by the court
upon the death of the original trustee. Such a power must be exe-
cuted by the original trustee, and by no one else, and, if not exe-
cuted by him, fails." ^ Thus, where trustees are authorized to con-
vey the real estate of the testator at such times as they shall think
proper, and such sale is not required for the purpose of effecting
any provisions of the will, the power is a mere naked power to sell
and entirely discretionary.'
A power given to a /trustee in trust is one which is imperative
and must be executed. Thus, where a fund is given to a trustee
with a direction that' the income be used for the support of the
daughter of the settlor and with power in the trustee to pay to
such daughter any portion of the principal of the trust fund' which
the trustee shall deem proper for the support and comfort of the
beneficip-ry, the power to pay oyer the principal is imperative and
a power in trust. When the original trustee dies without executing
it, his successor, appointed by the court,-may do so.*

1 Mayfield Kllgour, 31 Md. 240.

v.
2 Osborne Gordon, 86 Wis. 92, 96, 56 N. W. 334,
v.
8 Shelton v. Homer, 5 Mete. (Mass.) 462. ,

* Osborne v. Gordon, 86 Wis. 92, 56' N. W. 334.

 ,

§ 84) ESTATE OP TRtrSTEB 291

The powers of a trustee are, of course, limited .by abnormalities

or disqualifications which may exist with respect to him. Thus, if
the trustee be insane, he has no power to do any valid act, no mat-
ter iiow much authority may be attached to the office of trustee
which he occupies.'
A persondealing with a trustee is under the duty of learning the
powers of such officer and will be charged with notice of the ex-
tent of his authority. If he acts without knowledge of the trustee's
powers, he does so at his peril.*
\Where express powers are named in the trust instrument, the
trustee should follow specifically the directions there given.^ If
express power to do an act is not given, the trustee will have im-
plied power to do such act, if it is reasonably necessary for the ex-
ecution of the trust. "Where a trustee conforms with the provi-
sions of the trust in their true spirit and meaning, he has authority
'toadopt measures and to do acts which, though not specified in
the instrument, are implied in its general directions, and are rea-
sonable and proper means for making them effectual.' " *

ESTATE OF TRUSTEE
84. Theestate which the trustee has is governed by the needs of
the trust. If a fee isi required in order that the trust may
be properly executed, the trustee will be deemed to have
that estate, regardless of the wording of the trust instru-
ment. The settlor will be deemed to have conveyed to the
trustee an interest in the property sufficient to enable him
to perform the trust.
Since the trustee holds the trust property for the benefit of others
and has no personal interest therein, the trust property is
npt liable for the payment of his debts.
On the death of the trustee intestate and without heirs, the crown
or state takes subject to the rights of cestui que trust.

5 HiU, 77 Va. 492.

Bailey v.
e OwenEeed, 27 Ark. 122 ; Jones v. Holladay, 2 App. D. C. 279
T. ; Zion
Church of Evangelical Ass'n of North America in Charles City v. Parker,
114 Iowa, 1, 86 N. W. 60 Horton v. Tabitha Home, 95 Neb. 491, 145 N. W.
;

1023, 51 L. R. A. (N. S.) 161, Ann. Cas. 1915D, 1139; Griswold v. Perpy,
'
7 Lans. (N. Y.) 98.
'I Clark V. Magulre, 16 Mo. 302; Price v. Methodist Episcopal Church, 4
Ohio, 515; Haldeman v. Openheimer, 103 Tex. 275, 126 S. W. 566; Atkin-
son V. Beckett, 34 W. Va. 584, 12 S. E. 717.
8 Kipp V. O'Melveny, 2 Cal. App. 142, 144, 83 Pac. 264, 265.
 292 '
THE POWERS OP THE TRUSTEE (Ch. 11
^

The powers of the trustee are affected by the nature of the prop-
erty rights which he holds in trust. Whether the estate granted to
him in trust is a fee, a life estate, or other interest, is ordinarily de-
termined by the trust instrument. But the important principle that
a trustee takes such an estate or interest as is necessary to enable
him to perform the trust should be observed.' If the trust can be
administered only through the ownership of a fee simple, such an
interest will be deemed granted,^" although the limitations of the
deed or will may not clearly show that a fee simple was transfer-
red- If a life estate will suffice to enable the trustee to perform his
duties, such an estate will be deemed vested in the trustee, regard-
less of the particular wording of the trust instrument.^^
Ordinarily, of course, the legal estate is vested' in the trustee,^*
although a trust may be" created with an equitable interest as the
subject-matter. The principle that, where the trust is passive, the
legal estate vests in the cestui que trust by virtue of the Statute of
Uses or its modern successors, has been explained at another
point.^* Attention has also been directed to the merger which
sometimes takes place when the trustee is also the sole beneficiary,
or one of several beneficiaries.^*
The estate of the trustee being a bare legal interest, and not a
~

beneficial interest, his creditors cannot satisfy their claims from

the trust property. A judgment against the trustee personally is

not a lien upon trust real estate.^" The modern rule is that, if the

» Christopher v. Mungen, 61 Fla. 513, 55 South. 273; Nixon v. Nixon, 268

111. 524, 109 N. B. 294; Defrees v. Brydon, 275 111, 530, 114 N. E. 336; Lyon
V. Sale Deposit & Trust Co., 120 Md. 514, 87 Atl. 1089 ; Cleveland v. Hallett,
'

6 Gush. (Mass.) 403; Wright V-'Keasbey, 87 N. J. Eq. 51, 100 Atl. 172;
Brown v. Kichter, 25 App. Div. 239, 49 N. Y. Supp. 368; Walker v. Scott,
7 Ohio App. 335 ; Holder v. Melvin, 106 S. C. 245', 91 S. E. 97 ; Joy v. Mid-
land State Bank, 26 S. D. 244, 128 N. W. 147; Ellis v. Fisher, 3 Sneed
(Tenn.) 231, 65 Am. Dec. 52 ; Montgomery v. Trueheart (Tex. Civ. App.)
146 S. W. 284.
10 McFall V. Kirkpatrick, 236 111. 281, «6 N. E. 139.
11 In re Spreckel's Estate,' 162 Cal. 559, 123 Pac. 371.
12 Ware v. Kichardson, 3 Md. 505, 56 Am. Dec. 762; Welch v. City of Bos-
ton, 221 Mass. 155, 109 N. E. 174, Ann. Cds. 1917D, 946.
i»See § 45, ante; Palmer v. City of Chicago, 248 111. 201, 93 N. B.
765; Guild v. Allen, 28 H. I. 430, 67 Atl. 855; Schumacher v. Draqger, 137
Wis. 618, 119 N. W. 305.
1* See § 74, ante.
15 Lavender v. Lee, 14 Ala. 688; Aicardl v. Craig, 42 Ala. 311; H. B.
Claflin Co. v. King, 56 Fla. 767, 48 South. 37; Taylor v. Brown, 112 Ga.
758, 38 S. E. 66; Cox v. Arnsmann, 76 'Ind. 210; Brown v. Barngrover,
82 Iowa, 204, 47 N. W. 1082; Harrison v. Andrews, 18 Kan. 535; Emery
v. Farmers' State Bank, 97 Kan. 231, 155 Pac. 34; Feagan v. Metcalfe, 150
 ; ,

§ 85) CUSTODY OP TEUST BBS 293

trustee dies without heirs and escheat takes place, the crown, or
state holds for the beneficiary of the trust.*'

CUSTODY OF TRUST RES

85. Except in unusual cases, where possession of the trust property
by the beiieficiary is directed by the settlor or is peculiarly
advantageous to the beneficiary, the trustee is entitled to
secure and retain possession of the trust res.

One of the important general or implied powers which the trus-

tee possesses is that of taking and retaining possession of the trust
res. There can, obviously, be no doubt about the power of a trus-
tee to take and retain such possession as against a stranger to the
trust. The only cases of difficulty arise where the beneficiary
claims to be entitled to the custody of the trust property.
Ordinarily the very nature 'of -the trust requires that the ,trustee
have custody of the property. His duties generally ihclude collec-
tion of the profits of the property and care and maintenance of it.
These functions cannot be performed without possession.*^ But
occasionally the nature of the property or peculiar purposes of the
trust entitle the cestui que trust to the custody of it against the
trustee. Thus, beneficiaries of a trust of slaves have been held en-

Ky. 745, 150- S. W. First Nat. Bank of Catonsville v. Carter, 132 Md.
988;
218, 103 Atl. 463; Hussey
v. Arnold, 185 Mass. 202, 70 N. E. 87; Lee v.
Enos, 97 Mich. 276, 56 N. W. 550 ; Fleming v. Wilson, 92 Minn. 303, 100 N.
W. 4 ; Dalrymple v. Security Loan & Trust Co., 11 N. D. 65, 88 N. W. 1033
Amtson V. First Nat. Banlc, 39 N. D. 408, 167 N. W. 760, L. E. A. 1918F,
1038 ; Manley v. Hunt, 1 Ohio, 257; J. I. Case Threshing Mach. Co. v. Wal-
ton Trust Co., 39 Okl. 748, 136 Pac. 769; Dimmick v. Kosenfield, 34 Or. 101,
55 Pac. 100; Barnes v. Spencer, 79' Or. 205, 153 Pac. 47; Eldredge v. Mill
Ditch Co., 90 Or. 590, 177 Pac. 939 Nashville Trust Co. v. Weaver, 102 Tenn.
;

66, 50 S. W. 763 Williams v. FuUerton, 20 Vt. 346 ; Da:venport v. Stephens,

;

95 Wis. 456, 70 N. W. 661. This rule applies, even though the trustee is also
the settlor of the trust, in the absence of fraud. Wulff v. Roseville Trust Co.
of Newark, N. J., 164 App. Div. 399, 149 N. Y. Supp. 683.
i« St. 47 & 48 Vict. c. 71,
§ 6; N. X.- Public Lands Law (Consol. Laws, c.
46) § 68; New York Cent. & H. E. E. Co. v. Cottle, 102 Misc. Eep. 30, 168 N.
Y. Supp. 463.
17 Gunn V. Barrow, 17 Ala. 743; Davis 'v. Hunter, 23 G^a. 172 Thieme v.
;

Zumpe, 152 Ind. 359, 52 N. E. 449; Nagle v. Conard, 80 N. J. Eq. 253, 86

Atl. 1103; Essex Co. v. Durant, 80 Mass. (14 Gray) 447; Appeal of Al-
sop, '9 Barr (9 Pa.) 374; In re Sheaffer's JEstate, 230, Pa. 426, 79 Atl. 651;
(SuphUl V. Isbell, 1 Bailey (S. C.) 230, 19 Am. Dec. 675; De GraflCenreid v!
Green, 1 Cold. (Tenn.) 109 ; Beach v. Beach, 14 Vt. 28, 39 Am. Dec. 204.
 '

294 THE POWERS OF THE TRUSTEE (Ch. 11

'titled was the cestui que trust of a

to the possession,^* as in one case
trust of a farm and the stock and utensils.^*
It is, elementary that the settlor may expressly provide that the
cestui shall have the custody of the trust property.""
The power of the trustee to take and retain possession of the
trust property includes the authority to receive the rents and prof-
its of such property."^

REPAIRS AND IMPROVEMENTS

85. Where repairs and improvements are reasonably necessary for
the maintenance and profitable conduct of the trust estate,
the trustee vdll be regarded as having implied power to
make them.

A trustee has implied or general authority to make reasonable,

necessary repairs to the trust property. "A trustee cannot ordi-
narily make improvements, and charge the cost thereof to the ben-
eficiary, unless clearly authorized by the instrument creating the
trust. * * * He will, however, be allowed for repairs, when
such repairs are necessary to the preservation of the estate." "-
The trustee should consider the value of the trust property, the
probable length of the trust, and the effect of the repairs upon the
income of the trust property. If, in view of these considerations,
a reasonable man in the conduct of his own business would repair
the property, the trustee has implied power so to do.^' "Regard
should be had to the probable duration of the trust in determining
whether temporary and slight, or more permanent and thorough
repairs, should be made." "* Occasionally the trustee is given ex-
press authority to make repairs."'
A trustee also Has implied power to make permanent improve-

18 Cook v. Kennerly, 12 Ala. 42. See Ames, Cases on Trusts (2d Ed.) p.
467.
19 In re Washbon, 60 Hun, 576, 14 N. Y. Supp. 672.
20 Freeman v. Bristol Sav. Bank, 76 Conn. 212, 56 Atl. 527.
21 Bell's Adm'r v. Humphrey, 8 W. Va. 1.
22 Booth V. Bradford, 114 Iowa, 562, 570, 87 N. W. 685, 688.
23Veazie v. Forsalth, 76 Me. 172; Sohier v. Eldrpdge, lt)3 Mass. 345;
Rathbun v. Colton, 15 Pick. (Mass.) 471; Kearney v. Kearney, 17 N. J. Bq.
/59; Disbrow v. Disbrow, 46 App. Div. Ill, 61 N. T. Supp. 614, affirmed 167
N. Y. 606, 60 N. E. 1110; In re Heroy's Estate, 102 Misc. Rep. 305, 169 N.
T. Supp. 807 In re Griffith's Estate, 4 Pa. DIst. R. 495.
;

24 Rathbun v. Colton, 15 Pick. (Mass.) 471, 484.

2 6 Stamford Trust Co. v. Mack, 91 Conn. 620, 101 Atl. 235; In re Rankin's

Estate, 5 Pa. Co. Ct R. 603.

§ 86) EEPAIES AND IMPROVEMENTS 295

ments on the trust property when such action is reasonable. Here

again the condition of the trust property, its productivity or non-
productivity, the duration of the trust, and other similar facts must
determine the reasonableness of improving the property.^" Thus,
in a case where -buildings are ancient, unsafe, and untenantable,
and the property is in an unproductive condition, the trustee will
be considered to have implied power to use a portion of the princi-
pal of the trust fund for the purpose of constructing new buildings
on the land.^'
/In other instances the peculiar conditions of the trust have made
the expenditure for improvements unreasonable and the trustee has
been held to have exceeded his powers in making improvements.^*
Thus, the expenditure of $850,000 in erecting a new building upon
land when the value of the entire trust property was only $920,000,
has been held to be unreasonable and not within the authority of
the trustee.'* The Massachusetts court stated its position regard-
ing improvements in general in these words: "We have no doubt
that a trustee under a Massachusetts trust would be justified in
tearing down an old building owned by the trust and erecting a
new one in its place, when a prudent business man would do so to
secure a fair return by way of income, and at the same time to
maintain the corpus of the portion of the principal so invested in-
tact, having regard to the relation which such an investment, when
made, would have to the amount of the principal of the trust furid
as a whole." ^^
In some states statutes expressly authorize chancery to empower
a trustee to sell or mortgage the trust property for the purpose of
making repairs or improvements.^^

26 Patterson v. Johnson, 113 111. 559; Myers v. Myers, 2 McCord, Eq.

(S. C.) 214, 16 Am. Dec. 648 ;Franks v. Williams, 37 Tex. 24 Meld v. Wil-
;

bur, 49 Vt. 157; White v. Hall, 113 Va. 427, 74 S. E. 212; In re Cole's Ks-
tate, 102 Wis. 1, 78 N. W. 402, 72 Am. St. Rep. 854.
2 7 Smith V. Keteltas, 62 App. Div. 174, 70 N. Y. Supp. 1065. But in In re
Cole's Estate, 102 Wis. 1, 78 N.,W. 402, 72 Am. St. Rep. 854, it -svas held
that, even though the eestuis que trust and remainderman consented, the
trustee had no power to employ a part of the principal in making improve-
ments.
28 Pope's Ex'r v. Weber, 1 Ky. Law Rep. 329; Green v. Winter, 1 Johns.
Ch. (N. Y.) 26, 7 Am. Dec. 475; Herbert v. Herbert, 57 How. Prac. (N. Y.)
333; Killebrew v. Murphy, 3 Helsk. (Tenn.) 546; Hughes v. Williams, 99
Va. 312, 38 S. E. 138.
2 8 Warren v. Pazolt, 203 Mass. 328, 89 N. E. 381.
8 203 Mass. 328, 345, 89 N. E. 381, 387.
812 Comp. St. N. J. 1910, p. 2269; New York Real Property Law (Consol.
Laws, c. 50) § i05.
296 THE POWERS OF THE TRUSTEE ' (Ch. 11

POWER TO BIND ESTATE IN CONTRACT OR TORT

87. The on all contracts made by him in
trustee is personally liable
the administration of the trust, unless the contract express-
ly excludes individual liability, and except in extraordinary
cases such contracts do not bind the trust estate.
The trustee is also personally liable for the torts of himself or his
employees in the trust administration and the trust proper-
ty may not be taken to satisfy claims; for damages for such
torts.
The trustee is money spent or lia-
entitled to be indemnified for
bility incurred in the proper conduct of the trust affairs;
and also for tort liabilities sustained in the reasonably pru-
dent and skillful administration of the trust. In some in-
stances where the trustee had no funds of his own or was
r empowered to carry on a business, the courts have allowed
him to charge the trust estate by his contracts. A
creditor
of the trustee upon a contract which the trustee was au-
thorized to make in the course of the' trust, or upon a tort
claim, where the trustee himself would be entitled to be in-
demnified from the trust estate if he paid the claim, may
aveiilhimself of the trustee's right of reimbursement, if in
the case of a contract claim the estate has had the benefit of
the contract, and if the trustee is insolvent or a nonresi-
dent, so that action agEiinst the trustee is useless or incon-
venient. If the trustee is in default or arrears, he himself
would have no right of indemnity and the creditor can re-
ceive none through him. When this right of reimburse-
'
ment is open to the creditor, he may proceed directly
against the trust estate in equity. Statutes regulate the
effect of the contracts of trustees in Alabama, California,
Connecticut, Georgia, Montana, North Dakota, and South
Dakota.

The powers of the trustee do not ordinarily incljade the authority

to bind the trust e,state or the beneficiaries by
his contracts. Even
though the contracts be executed "as trustee," and be impliedly
or expressly authorized" by the trust instrument and for the benefit
of the cestuis que trust, as a general rule the trustee alone will be
liable to an action upon the contracts.^^ "The general rule is well

asDuvall V. Craig, 2 Wheat. 45, 4 L. Ed. 180; Taylor v. Davis, 110 U.

S. 330,4 Sup. Ot. 147, 28 L. Ed. 163; In re Hunter (D. O.) 151 Fei 904; Zehn-
bar V. Spillman, 25 Fla. 591, 6 South. 214 Bradner Smith & Co. v. Williams,
;
 ;

§ 81) POWEit TO BIND ESTATE IN CONTRACT OB TORT 297

settled in this state that executors or trustees cannot, by their ex-

ecutory contracts, although made in the interest and for the benefit
of the estate they represent, if made upon a new and_ independent
consideration, bind the estate, and thus create a liability not found-
ed upon the -contract or obligation of the testators * * *
While, as between the executor and the person with whom he con-
tracts, the latter may rely on the Contract, the beneficiaries are not
concluded by the executor's act, but thp propriety of the charge and
the liability of the estate therefor must be determined in thd^ ac-
counting of the executor. In an action at law against the executor,
the legatees and persons interested in the estate have no opportuni-
ty to be heard." ^^
The reason for this rule is well explained by a Mississippi court.
It states that "while the trustees have a lien on the trust estate for
all costs and expenses legitimately incurred by them in its adminis-
tration, this privilege does not extend to agents employed by them,
but such agents must look alone to the trustee for reimbursement.
* * * If the trust estate was liable to be attacked and implead-
ed by every person who had dealt with the trustee, and forced to lit-
igate with them the nature, value and beneficial character to the es-
tate of the services alleged by them to have been rendered, it would
be involved in endless complications, and be perhaps siyallowed up
or seriously injured by the accumulations of costs. The law, there-
fore, compels such persons to look to the trustee with whom they
dealt, and against whom alone they have a legal demand. If their

178 420, 53 N. E. 358; Bloom v. Wolfe, 50 Iowa, 286; Graves v. Mat-

111.
tingly, 6 Bush (Ky.) 361 ; Schriver v. Frommel, 183 Ky. 597, 210 S. W. 165
Knipp V. Bagby, '126 Md. 461, 95 Atl. 60, L. E. A. 1915F, 1072; Carr v.
Leahy, 217 Mass. 438, 105 N. iE. 445 Philip Carey Co. v. Pingree, 223 Mass.
;

352,' 111 N. E. 857; McGovern v. Bennett, 146 Mich. 558, 109 N. W. 1055;
Koken Iron Works v. Klnealy, 86 Mo. App. 199; United States Trust Co.
V. Stanton, 139 N. X. 531, 34 N. E. 1098; Whalen v. Ruegamer, 123 App.
Div. 585, 108 N. Y. Supp. 38; Blewltt v. Olin, 14 Daly (N. Y.) 351; Dunlevie
V. Spangenberg, 66 Misc. Kep. 354, 121 N. Y. Supp. 299; Mitchell v. Whitlock,
121 N. C. 166, 28 S. E. 292; Anderson v. Robinson, 57 Or. 172, 109 Pac. 1118,
110 Pac. 975 ; Roger Williams Nat. Bank v. Groton Mfg. Co., 16 R. I. 504, 17
Atl. 170; Kain v. Hiimes, 5 Sneed (Tenn.) 610; Connally v. Lyons & Co^.,
82 Tex. 664, 18 S. W. 799, 27 Am. St. Rep. 935; Mclntyre v. Williamson,
72 Vt. 183, 47 Atl. 786, 82 Am. St. Rep. 929 ; Gates v. Avery, 112 Wis. 271^
87 N. W. 1091. A fortiori if the contract is executed by the trustee without
reference to the trust, although for trust purposes, it will bind the trustee
individually. Frost v. Schackleford, 57 Ga. 260. On the subjects consid-
ered in this section, see Scott, Liabilities Incurred in the Administration
of Trusts, 28 Harv. La^*- "Rev. 725; Brandeis, Liability of Trust Estates on
Contracts Made for Their Benefit, 15 American Law Rev. 449 ; Sweet Trus-
teeship and Agency, 8 Law Quart. Rev. 220.
3 3 O'Brien v. Jackson, 167 N. Y. 31, 33, 60 N. E. 238, 239.
 298 THE POWERS OF THE TEUSTEB (Ch. 11

claim is recognized and enforced against him, he presents it to the

proper tribunal, and with him the beneficiaries of the estate will lit-
igate the question of the propriety of its allowance against them-
selves." '*
"A trustee is not an agent. An agent represents and acts for his
principal, who may be either a natural or artificial person. A trus-
tee may bedefined generally as a person in whom some estate, in-
'
terest, or power in or affecting property is vested for the benefit of
another. When an agent contracts 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 estate cannot promise ; the contract
is therefore the personal undertaking of the tri^stee. As a trustee •

holds the estate, although only with the power and for the purpose
of managing it, he is personally bound by the contracts he makes
as trustee, even when designating himself as such." ^'
The trust €state may
not be rendered liable on Ihe trustee's prom-
ise by an action at law or
in equity against the trustee in his rep-
resentative capacity or against the cestuis que trust, with the ex-
ceptions hereinafter noted.'* Tfie remedy- of the promisee is an ac-
tion at law against the trustee as an individual.
Persons contracting with the trustee for the rendition of services
or the delivery of goods to him must, as a general rule, look solely
to his individual property for their reimbursement. The trustee, ^
after having been obliged to pay for such services or goods, may
then present a claim therefor upon his accounting, and, if the
claim is allowed as a fair and proper one, the trustee will be reim-
bursed from the trust estate. This procedure gives the cestui que
trust the right and opportunity to object to the expenditure as un-
reasonable or unnecessary.
If the contract was not authorized by the trust instrument, ex-

a* Clopton V. Gholson, 53 Miss. 466, 471.

S6 Mr. Justice Woods in Taylor v. Davis, 110 U. S. 330, 334r-335, 4 Sup.
Ct. 14T, 150, 28 L. Ed. 163.
86 Wade V. Pope, 44 Ala. 690; Blackshear v. Burke, 74 Ala. 239; Dantzler
V. Mclnnis, 151 Ala. 293, 44 South. 193, 13 L. E. A. (N. S.) 297, 125 Am. St.
Eep. 28; Johnson v. Leman, 131 111. 609, 23 N. E. 435, 7 L. E. A. §56, 19
Am. St. Eep. 63; Everett v. Drew, 129 Mass. 150; Feldman v. Preston, 194
Mich. 352, 160 N. W. 655; Truesdale v. Philadelphia Trust, Safe Deposit &
Insurance Co., 63 Minn. 49, 65 N. W. 133; Austin v. Munroe, 47 N. T. 360;
New V. NicoU, 73 N. Y. 127, 29 Am. Eep. Ill; O'Brien v. Jackson, 167 N.
X. 31, 60 N. E. 238 Le Baron v. Barker, 143 App. Div. 492, 127 N. Y. Supp.
;

979; Wells-Stone Mercantile Co. v. Grover, 7 N. D. 460, 75 N. W. 911, 41 L.

E. A. 252 ; Lucht v. Behrens, 28 Ohio St 231, 22 Am. Kep. 378 ; Arnold v.
Eandall, 121 Wis. 462, 98 N. W. 239. ,
§ 87) POWER TO BIND ESTATE IN CONTRACT OR TORT 299

pressly or impliedly, but was improper and beyond the powers of

the trustee, it is obvious that he and he alone will be bound.'' If
the trust estate receives the benefit of the unauthorized contract, it
might be held liable to the trustee for the reasonable value of the
benefits received oil quasi-contract principles but this right of the
;
'
trustee is doubtful.'*
Torts
The trustee is also personally liable for torts committed by him-
self or his agents or servants in the administration of the trust, and
he has no power to make the trust estate liiable for the damages oc-
casioned by such wrongful acts.^'^ Thus, if the trustee is guilty of
negligence in the maintenance of the trust premises,*" or of libel
while acting as trustee,*^ he will be liable but the trust estate will
;

not.
To cancel obligatibns incurred in the trust administration the
trustee may pay out the trust funds,*^ or he may employ his own
money to satisfy the creditors and then reimburse himself from tne
trust income.** Upon the accounting the trustee is entitled to be
indemnified for all moneys expended and all liabilities incurred
in the proper execution of the trust.** This right of indemnity en-

^37 Farmers' & Traders' Bank of Shelby ville v. Fidelity & Deposit Co. of

Maryland, 108 Ky. 384, 56 S. W. 671; Maynaid v. Columbus, 150 Ky. 817, 150
S. W. 1019; Dunham v. Blood, 207 Mass. 512, 93 N. B. 804; Gibney v. Allen,
156 Mich. 301, 120 N. W. 811 Appeal of Dougherty (Pa.) 9 Atl. 46 Fehlinger
; ;

V. Wood, 134 Pa. 517, 19 Atl. 746 Welsh v. Davis, 3 S. C; 110, 16 Am. Eep.
;

690.
ssTuttle V. First Nat. Bank of Greenfield, 187 Mass. 533, 73 N. B. 560,
105 Am. St. Rep. 420. '

8 8 Everett v. Foley, 132 111. App. 438; Louisville Trust Co. v. Morgan, 180

Ky. 609, 203 S. W. 555, 7 A. L. K. 396; Ballon v. Farnum, 9 Allen (Mass.)

47; Baker v. Tibbetts, 162 Mass. 468, 39 N. E. 350; Keating v. Stevenson,
21 App. Div. 604, 47 N. Y. Supp. 847; Trani v. Gerard, 181 App. Div. 387,
168 N. T, Supp. 808; Moniot v. J^ickson, 40 Misc. Rep. 197, 81 N. Y. Supp.
688; Gillick v. Jackson, 40 Misc. Rep. 627, 83 N. Y. Supp. 29; Norling v.
Allee (City Ct. Brook.) 13 N. Y. Supp. 791 ; Parmenter v. Barstow, 22 R. I. 245,
47 Atl. 365, 63 L. R. A. 227; Sprague v. Smith, 29 Vt. 421, 70 Am. Dec. 424;
O'Toole V. Faulkner, 29 Wash. 544, 70 Pac. 58. Contra: Ireland v. Bowman
& Cockrell, 130 Ky. 153, 113 S. W. 56, 17 Ann. Cas. 786 (nuisance) ; Wright
V. Caney River R. Co., 151 N. C. 529r 66 S. E. 588, 19 Ann. Cas. 384 (where
the negligent act occurred in the ordinary conduct of the trust business).
And the trust instrument may exclude personal liability of the trustee for
torts. Prinz v. Lucas, 210 Pa. 620, 60 Atl. 309.
40 O'Malley v. Gerth, 67 N. J. Law, Qld, 52 Atl. 563.
41 Thompson v. American Optical Co., 173 App. Div. 123, 159 N. Y. Supp.
412.
42 In re Blundell, 40 Oh. Div. 370.
43 Stott V. Milne, 25 Ch. -Div. 710. \

44 In re Bxhall Coal Co., 35 Beav. 449; Dowse Gorton, [1891] A. 0. 190;

v.
Jennings v. Mather, [1902] IK. B. 1; Matthews y. Ruggles-Brise, [1911]

\
 300 THE POWERS OP THE TRUSTEE ,
(Ch. 11

titles the trustee,the trust estate has been distributed, to hold the
if

cestuis que trust individually responsible.*' The trustee has also

been allowed the right of indemnity for liability sustained through
the commission of a tort, if he acted with reasonable prudence and
diligence.*' This right would doubtless not be extended to cases
of willful misconduct or gross negligence. In discussing it an
English court has said " "that if a trustee in the course of the
ordinary management of his testator's estate, either by himself or
his agent does sortie act whereby some third person is injured, and
that third person recovers damages against the trustee in an action
for tort, the trustee, if he has acted with due diligence and reason-
ably, is entitled to be indemnified out of his testator's estate."
*
Exclusion of Liability
If the person contracting with the trusteels willing to treat with
the trustee on such terms, the trustee may provide expressly
against any personal obligation' upon his part and the trustee can-
not be held individually liable for the performance of the con-
tract.** "It is equally clear, on the other hand, that although one
may covenant as trustee, he may limit and qualify the character
in which he ,is to be held answerable ; and where it plainly appears
from the face of the instrument that he did not mean to bind him-
self personally, courts will construe the covenant^ according to the
plainly expressed, intention of the parties, and this, too, in cases
where the covenantor had no right to bind himself in a fiduciary
character. If the plaintiff be without remedy in such cases, he has
no one to blame but himself, in accepting a covenant of such a
character. He certainly has no right t6 rely upon the individual
liability of the covenantor." *® Where personal liability is thus
excluded, it would seem that ,the only right of the promisee would
/

1 bh. D. 194; Woodard Wright, 82 Gal. 202, 22 Pae. 1118; Perrlne v.

v.
Mewell, 49 N. J. Eq. 57, 23 Atl. 492; In re Parry's Estate, 244 Pa. 93, 90
Atl. 443. ^

*5 Wells-Stone Mercantile Co. v. AuWman, Miller & Co., 9 N. D. 520, 84

N. W. 375.
46 In re Kaybould, [1900] 1 Ch. 199; In re Hunter (D. C.) 151 Fed. 904.
'47 In re Raybould, [1900] 1 Ch. 199, 201.
48 Thayer v. Wendell, 1 Gall. 37, Fed. Cas. No. 13,873; Glenn v. Allison, 58
Md. 527; Shoe & Leather Nat. Bank v. i)ix, 123 Mass. 148, 25 Am. Sep.
49; Rand v. Farquhar, 226 Mass. 91, 115 N. E. 286; Brackett v. Ostrand-
er, 126 App. Div. 529, 110 N. Y. Supp. 779 ;Crate v. Benzinger, 13 App. Div.
617, 43 JSr. Y. Supp. 824. In Watling v. Lewis, [1911] 1 Oh. 414, it was held
that where the trustees made a contract "as trustees, but not so as to cre-
ate any personal liability," they were nevertheless Jliable; the court con-
sidering the contract to have two repugnant terikis, and saying that the
trustees might limit, but could not destroy their personal liability.
49 Glenn v. Allison. 58 Md. 527, 529.
(
§ 87) POWEE TO BIND ESTATE IN CONTEACT OB TOET 301

be against the trust estate in equity."' "Where the parties ex-

pressly contract that ho personal liability shall attach to the trus-
tee, the creditor would necessarily depend upon such liability as
might lawfully be created against the estate, and it is possible that
his remedy might be limited to a suit in equity." "^
. In rare cases the. trustee has been allowed to obligate the trust
€State by his contracts ; that is, his promises have resulted in creat-
ing rights on behalf of the promisees to proceed directly against
the trust property. Thus, in jessup v. Smith "^ a trustee who^was
out of funds employed an attorney to perform services beneficial to
the estate and expressly stipulated that the estate alone should ,be
liable. It was held that the trust property could be subjected to
the t)ayment of the debt; the court saying "^ "A trustee, who
• :

pays his own money for services beneficial to the trust, has a lien
for reimbursement. But if he is unable or unwilling to incur lia-
bility himself, the law does not leave him helpless, In such circum-
i

stances, he 'has the power, if other funds fail, to create a charge,

equivalent to his own lien for reimbursement, in favor of another
ty whom the services are i'endered.* * * * " And in Rand v.
Farquhar "* the trust instrument provided that contracts of the
trustees should bind the trust estate alone. The trustees executed
a contract excluding personal responsibility and providing for lia-
bility by the trust estate only. It was held that the object desired
could be Accomplished under the' circumstances. And in some
cases where the settlor has directed the carrying on by the trustee
of a certain business, and the contract in question 'has been made
by the trustee in connection with such business, the trustee has
beenlield to have power to charge the trust estate by his contract.""
Subrogation of Creditor -
It is generally conceded that the creditor who has a claim against
the trustee because of his contract is entitled to the benefit of the
trustee's right of indemnity under some circumstances."* The

60-Hussey Arnold, 185 Mass. 202, 70 N. E. 87.

v.
Bi Packard Kingman, 109 Mich, 497, 507, 67 N. W. 551, 555.
v.
62 223 N. X. 203, 119 N. E. 403. ' See, also, in accord, Noyes v. Bla'keman,
•6 N. Y. 567, and Randall v. Dusenbury, 39 N. Y. Super. Ct. 174.
8 3 223 N. Y. 203, 207, 119 N, B. 403, 404.
64 226 Mass. 91, 115 N. E. 286.
6 5 Gisbom v. Charter Oak Life Ins. Co., 142 U. S. 326, 12 Sup. Ct.
277,
55 L.' Ed. 1029; Roberts v. Hale, 124 Iowa, 296, 99 N. W. 1075, 1 Ann.' Gas.
940; Cannon v. Robinson, 67 N. C. 53; Mathews v. Stephenson, 6 Pa. 496;
Woddrop V. "Weed, 154 Pa. 307, 26 Atl. 375, 35 Am. St. Rep. 832; Yerkes
V. Richards, 170 Pa. 346, 32 Atl. 1089.
66 In re Johnson, 15 Ch. Diy. 548; In re Richardson, [1911] 2 K. B.
705;
Paul V. Wilson, 79 N. J. Eq. 204, 81 Atl. 835. A creditor, who has the
personal obligation of three trustees, is entitled to be subrogated to the
 302 THE POWERS OF THE TRUSTEE (Ch. 11

courts have not clearly defined the circumstances, nor have they
been unanimous in their views. But the large majority of cases in
which the creditor has been allowed to step into the trustee's shoes
and claim part of the trust property have been cases in which (a)
the remedy against the trustee individually was worthless or diffi-
cult of enforcement; (b) the trust estate had had the benefit of
the creditor's services or property; afid (c) the trustee was not in
debt to the trust estate, and so would have been entitled to in-
demnity himself, had he paid the claim. ^^ "A trustee, express or
implied, cannot, in the absence of express power conferred upon
him, by his contracts or engagements impose a liability upon the
trust estate. If he make a contract which is beneficial to the estate,
the creditor, or person with whom he contracts, has no equity to
charge the estate unless he be insolvent, which mu§t be shown by
the exhaustion of legal remedies against him, and the estate is in-
debted to him. In that event, a court of equity may subrogate the
creditor to the right of the trustee to charge the trust estate." ^*
The above statement would seem to be erroneous in requiring
present indebtedness by the estate to the trustee. It would seem
sufficient that the estate would have been indebted to the trustee
if he had paid the creditor's claim.

In cases where the trustee has had a right of indemnity and he

has been without the jurisdiction, the difficulty of pursuing the
remedy against the trustee has induced some courts to allow the
creditor to avail himself of the trustee's right of indemnity and col-
lect from the trust estate. ^° In other cases the insolvency of tlTe
trustee has been the moving cause for allowing direct action in
equity by the creditor.*" In other cases the fact that the settlor

rights of two of the three to indemnity and recover the whole sum due
from the trust estate, even though the third trustee is in default. In re
Frith, [1902] 1 Ch. 342. But if the settlor devoted only part of the trust
funds to the business in which the debt was contracted, the trustee's right
and hence the creditor's right of indemnity relates to the property devoted
to the business only and not to the general trust assets. Cutbush v. Cutbush,
1 Beav. 184; Ex parte Garland, 10 Ves. 110; Ex parte Richardson, 3 Maa-
dock, 138; Fridenberg v, Wilson, 20 Fla. 359; Moore v. McFall, 263 111. 596,
105 N. E. 723, Ann. Cas. 19150, 364. If the trustee is in arrears in Ms
accounts, he has no right to reimbursement, which he can pass on to the
creditor. Wilson v. Fridenberg, 21 Fla. 386.
5 7 See, for example, Clop ton v. Gholson, 53 Miss. 466; Fowler v. Mutual
Life Ins. Co., 28 Hun (N. Y.) 195.'
6 8 Blaclishear v. Burke, 74 Ala. 239, 243.
'
59 Gates v.-McClenahan, 124 Iowa, 598, 100 N. W. 479; Norton v. Phelps,
54 Miss. 467 ; Field v. Wilbur, 49 Vt. 157.
80 Hewitt V. Phelps, 105 U. S. 393, 26 L. Ed. 1072;Wells-Stone Mercantile
Co. V. Aultman, Miller & Co., 9 N. D. 520, 84 N, W. 375; Henshaw v.
Freer's Adm'rs, 1 Bailey Eq. (S. G.) 311. i
 § 87) POWER TO BIND ESTATE IN CONTRACT OR TORT 303

directed the carrying on of the business in which the contract was-

made was emphasized as a reason allowing action against the
estate, when the trustee was irresponsible.*^ No necessity for such
e'mphasis is seen, since the question should be whether the contract
was within the powers of the trustee, and not whether it was in
the management of a continued business.
In Norton v. Phelps °^ the Mississippi court states the rule to be
that, "where expenditures have been made for the benefit of the
trust estate, and it has not paid for them, directly or indirectly,
and the estate is either indebted to the trustee, or would have been
if the trustee had paid, or would be if he "should pay, the demand,

and the trustee is insolvent or nonresident, so that the creditor

cannot recover his demand from him, or will be compelled to follow
him to a foreign jurisdiction, the trust estate may be reached di-
rectly by a proceeding in chancery. The principle is that, while
persons dealing as creditors with the trustee must look to him
personally, and not to the trust estate, yet where the estate has
received the benefit of expenditures procured to be made for it
by the trustee, and it has not in any way borne, the burden of these
expenditures properly chargeable td it, and to fasten the charge
upon it will do it no. wi"ong, but simply cause it to pay what it js
liable for to the trustee, or would be liable for if he had paid it, or
should pay it, and because of the insolvency or nonresidence of the
trustee, our tribunals cannot afford the creditor a remedy for his
demand, he may proceed directly against the trust estate, and as-
sert against it the demand the trustee could maintain if he had paid
or should pay the claim, and should himself proceed against the
trust estate." .>»

But some courts have not proceeded upon the notion that the
creditor was to be subrogated to the rights of the trustee, and that
therefore the creditor could have no rights if the trustee was in de-
fault to Jhe trust estate. These latter courts have allowed the
claimant to proceed against the trust estate upon njiere proof of the
insolvency of the trustee and the propriety of the claim.*^ They
have reasoned that the debt was a proper one, the trust estate had
had the benefit of the creditor's goods or services, and the remedy
against the trustee was useless. On equitable principles they have

81 Willis V. Sharp, 113 N. T. 586, 21 N. E. 705, 4 L. R. A. 493; Wadsworth,

Howland & Co. v. Arnold, 24 E. I. 32, 51 Atl. 1041.
6 2 54 Miss. 467, 471.

83Wylly V. Collins, 9 Ga. 223; Manderson's Appeal-, 113 Pa. 631, 6 Atl.
893. In Cater v. Eveleigh, 4 Desaus. (S. C.) 19, 6 Am. Dec. 596, recovery
from the trust property was allowed without any statement as to the con-
dition ol the trustee's accounts.
304 THE POWEES OP THE TRUSTEE (Ch. 11

allowed recovery from the trust property, and made the benefi-
ciaries stand the loss, rather than the creditor.
Yet other courts have held that, if the trust estate has had the
benefit of the 'creditor's services or property, it will be liable to the
claimant, regardless of the solvency of the trustee."* These de-
cisions seem to discard the indemnity theory entirely, and to rest
their results on principles of quasi contract and general equity.
The Massachusetts courts allow the creditor to reach the trust
property where the debt was authorized by the trust instrument
and the trustee is not in arrears, without proof of impossibility or
difficulty 6f collecting from the trustee, due to his absence or insol-
vency. °^ They give the claimant the trustee's right of indemnity
as an alternative to suit against the trustee individually.
In at least seven states the power of the trustee to bind the trust
estate by contracts is now covered by statute."
If the cestuis que trust authorize '^ of ratify '* the contract made
by the trustee, the trust estate will be liable therefor. The author-
ity of the trustee to make contracts and thereby bind the trust
estate may be questioned only by the cestui que trust.""

«*Deery v. Hamilton, 41 Iowa, 16; In re Estate ol Manning, 134 Iowa,

165, 111 N. W. 409'.
83 Mason v. Pomeroy, 151 Mass. 164, 24 N. E. 202, 7 I/. R. A. 771; King
V. Stowell, 211 Mass. 246, 98 N. E. 91.
88 In Alabama the statute seems to be similar to the generally prevailing
common law. Civ. Code, §§ 6085-6087. In California, Montana, North
Dakota, and South Dakota a statute in the following words is found: "A
trustee is a general agent for the trust property. His authority is such as
is conferred upon him by the declaration of tru?t and by this chapter, and
none other. His acts, within the scope of his authority, bind the trust
property to the same extent as the acts of an agent bind his principal."
Civ. Code Cal. § 2267; av. Code Mont. § 5399; Civ. Code N. D. § 6305;
Civ. Code S. D. § 1220. The Connecticut statute gives the creditor a right
to pursue the trust estate if the debt was properly contracted, or at hla
option to resort to the personal liability of the trustee in whole or in part.
Gen. St. 1918, § 5771. In Georgia the creditor may proceed against the
trust estate at law for^ services, money, or property furnished, where equity
would render the estate liable therefor. Parks' Ann. Code 1914, §§ 3786-3790.
For cases under tha statute, see Malone v. Buice, 60 Ga. 152; Greenfield v.
Vason, 74 Ga. 126; Miller v. Smythe, 92 Ga. 154, 18 S. E. 46; Sanders
v. Houston Guano Co., 107 Ga. 49, 32 S. E. 610; Cottingham v. Equitable
Building & Loan As's'n, 114 Ga. 940, 41 S. E. 72.
87 Robert V. Ttft, 60 Ga. 566; Poland v. Beal, 192 Mass. 559, 78 N. E.
728 Crate v. Benzinger, 13 App. Div. 617, 43 N. Y. gupp. 824.
;

6 8 Stevens v. Melcher, 80 Hun, 514, 30 N. T. Supp. 625, modified In 152 N.

Y. 551, 46 N. E. 965.
8» Moody V. Noyes, 15 Wash. 128, 45 Pae. 732.
 88) POWER TO SELIi 305

POWER TO SELL
88. A power of sale will be implied whenever it is necessary to en-
able the trustee to carry out the purposes of the trust.
K a power of sale expressly or impliedly exists, it should be exer-
cised by the trustee with the prudence of a reasonable man
in the conduct of his own affairs. A purchase by the trus-
tee at his own sale is voidable at the option of the benefi-
ciary.

The power to sell the trust property may be expressly given to

the trustee.'" No technical words are necessary to confer this au-
thority upon him, it being sufficient that the settlor's intent is
dear.'^
A power of sale in favor of the trustee is implied in equity when-
ever such powirer is necessary to carry out the trust.'* "While it is
true that under the original theory of a trust the powers and duties
of the trustee were confined substantially to holding and caring foi'
the property, it is equally true that the purposes of the modern
trust are of a much broader character, requiring ordinarily much
greater powers on the part of the trustee, including a power of
sale, which is generally expressly given. The power of sale, where
not expressly given, will be implied from th^ fact that the trustee
is charged with a duty which cannot be performed without a power
of sale." " '

But a ppwer of sale by the trustee is not to be presumed. "A '^

trustee ordinarily holds the property intrusted to his charge to

70 Blair v. Hazzard, 158 Cal. 721, 112 Pac. 298; Aldersley v. McCloud, 35
Cal. App. 17, 168 Pac. 1153; Salisbury v. Bigelow, 20" Pick. (Mass.) 174;
Penniman v. Howaijd, 71 Misc. Rep. 598, 128 N. T. Supp. 910; Shaw v,
Bridgers, 161 N. C. 246, 76 S. E. 827. If an express power is given no
application to the court is necessary. Livermore v. Livennore, 231 Mass. 293,
121 N. B. 27. /
'1 Holden v. Circleville Light & Power
216 Fed. 490, 132 C. O. A. 550,
do.,
Ann. Cas. 1916D, 443 Keeder v. Beeder, 184 Iowa, 1, 168 N. W. 122. Thus a
;

deed to the trustee, "his successors and assigns," implies a power of sale.
Crawford v. Bl Paso Land Imp. Co. (Tex. Ciy. App.) 201 S. W. 233.
72 Preston v. Safe Deposit & Trust Co., 116 Md. '211, 81 Atl. 523, Ann.
Cas. 1913C, 975; Garesche v. Levering Inv. Co., 146 Mo. 436, 48 S. W. 653,
46 L. R. A. 232; Clark v. Fleischmann, 81 Neb. 445, 116 N. W. 290; Crown
Co. y. Cohn, 88 Or. 642, 172 Pac. 804; In re JCaiser's Bstate, 2 Lane. Law
Rev. 362; Dorranee v. Greene, 41 R. I. 444, 104 Atl. 12; Wisdom v. Wil-
son, 59 Tex. Giv. App. 593, 127 S. W. 1128. A power to sell does not include
a power to exchange. Holsapple v. Schrontz, 65 Ind. App. 390, 117 N. E. 547.
73 Robinson v. Robinson, 105 Me. 68, 71, 72 Atl. 883, 32 L. R, A.
(N. S.)
675, 134 Anf. St. Rep. 537.
BOGERT Trusts —20
 306 THE POWERS OF THE TRUSTEE (Ch. 11

collect the rents, issues, dividends, or profits thereof,

and to apply
them to some Brokers, administrators, and executors
specified use. .

frequently have the power to dispose of the property intrusted to

their charge. Trustees commonly have no such power. Hence the
legal presumption is that a trustee has no power to sell or convey
the property which he holds in his fiduciary capacity, and the fact
that he holds it as trustee is a warning and a declaration to all the
world that he is without the power of disposition, unless that pow-
er is specifically given by the instrument creating the trust, or by
the assent of those whom he represents. The legal presumption is
that the trustee has no power of sale." '*
It is impossible to give details of the instances in which a power
of sale has been implied. In many cases where the question
of the
existence of such a power has arisen, the court has thought it
necessary to the proper execution of the trust and has held that it
existed,'* while in others the court has considered a sale unessen-
tial and unauthorized.'*
Whether the trustee of a charitable trust has an implied power
of sale depends upon whether the particular property is necessary
to the carrying oh of the trust and whether there is any necessity
for a sale of it. Where a settlor has dedicated particular land for
lodgeroom, church' and graveyard purposes, the trustees will not
be held to have an implied power of sale under ordinary, condi-
tions;" but where the land devised in trust for a cemetery be-
comes surrounded by blast furnaces and 'quarries, and all the bodies

7* Geyser-Marion Gold-Min. Co. v. Stark, 106 Fed. 558, 561, 562, 45 C. C.

A. 467, 53 L. E. A. 684.
. "McDonald v. Shaw, 81 Ark. 235, 98 S. W. 952; Giselman v. Starr, 106
Cal. 651, 40 Pac. 8j Green v. Bissell, 79 Conn. 547, 65 Atl. 1056, 8 L. R. A.
,'(N. S.) 1011, 118 Am. St. Rep. 156, 9 Ann. Cas. 287; Flinn v. Frank, 8 Del.
Ch. 186, 68 Atl. 196 Cherry v. Greene, 115 lU. 591, 4 N. E. 257
; Stelnke
;

V. Yetzer, 108 Iowa, 512, 79 N. W. 286 Morris v. WinderUn, 92 Kan. 935,

;

142 Pac. 944; First Nat. Bank of Carlisle v. Lee, 66 S. W. 413, 23, Ky.
Law Rep. 1897; Dodson v. Ashley, 101 Md. 513, 61 Atl. 299; Smith v.
Haynes, 202 Mass. 531, 89 N. E. 158; Mason v. Bank of Commerce,' 90 Mo.
452, 3 S. W. 206 Varick v. .Smith, 69 N. J. Eq. 505, 61 Atl. 151; Spencer
;

V. Weber, 163 N. Y. 493, 57 N. E. 753 Foil v. Newsome, 138 N. C. 115, 50

;

S. E. 597, 3 Ann. Cas. 417; Brown v. Brown, 7 Or. 285; In re Streater's Es-
tate, 250 Pa. 328, 95 Atl. 459. '

7 Goad V. Montgomery, 119 Cal. 552, 51 Pac. 681, 63 Am. St. Rep. 145;
Bremer v. Hadley, 196 Mass. 217, 81 N. E. 961 ; Potter v. Ranlett, 116 Mich.
4^4, 74 N. W. 661; Rolfe & Rumford Asylum v. Lefebre, 69 N. H. 238, 45
Atl. 1087; Alvord v. Sherwood, 21 Misc. Rep. 354, 47 N. T. ,
Supp. 749;
Robinson y. Ingram, 126 N. C. 327, 35 S. E. 612 Self V. Kreb's, 239 Pa. 423,
;

86 Atl. 872; Kennedy v. Pearson (Tex. Civ. App.) 109 S. W. 280; Mundy
V. Vawter, 3 Grat. (Va.) 518.
"Tate V. Woodyard, 145 Ky. 613, 140 S. W. 1044; and see Bridgeport
 ;

§ 88) POWER TO SELL 807

are removed from it, the court may order a sale of it, in order that
other land may be purchased to be held for burial purposes.*'
Equity' may order a sale of property held to charitable uses, even
though the trust instrument expressly forbids such .saleJ'
Authority of Chancery
Chancery has authority to direct the trustee to sell the trust
property whenever it appears to be necessary for the protection of
the interests of the beneficiaries.*" In many states there are stat-
utes regulating sales by trustees and providing when equity may
decree a sale of the trust property.*^ "Every trustee for sale is
bound by his office to bring the estate to a sale, under every pos-
sible advantage to the cestui que trust, * * * and when there
are several persons interested, with a fair and impartial attention to
the interest of all concerned. * * * He is bound to use, not
only good faith, but also every r'equisite degree of diligence and
prudence, in coijducting the sale." *^
If the trust instrument gives directions as to the manner of sale.

Public Library and Reading Room v. Burroughs Home, 85 Conn. 309, 82

AU. 582.
78 In re Funek's Estate, 16 Pit. Super. Ct. 434. And see Attorney Gen-
eral V. Wallace's Devisees, 7 B. Mon. (Ky.) 611; Lackland v. Walker, '151
Mo. 210, 52 S. W. 414; De Veaux College for Orphan & Destitute Children
V. Highlands Land Co., 63 App. Div. 461, 71 N. X. Supp. 857; Bellows
Free Academy v. Sowles, 76 Vt. 412, 57 Atl. 996 Beurhaus v. Cole, 94 Wis.
;

617, 69 N. W. 986.
ToAmory v. Attorney General, 179 Mass. 89, 60 N. E. 391.
soGunby v. Alverson, 146 Ga. 536, 91 S. E. 556; Hegan v. Netherland,
141 Ky. 686, 133 S. W. 546; Offutt v. Jones, 110 Md. 233, 73 Atl. 629; Price
V. Long, 87 N. J. Eq. 578, 101 Atl. 195; Weakley v. Barrow, 137 Tenn. 224,
192 S. W. 927; Kennedy v. Pearson (Tex. Civ. App.) 109 S. W. 280; Upham
V. Plankinton, 166 Wis. 271, 165 N. W. 18.
81 Park's Ann. Code Ga. 1914, § 3755 (trustee has no power
to sell unless
it is expressly given or the beneficiaries consent or the court orders
a sale)
Rev. Code Del. 191S, § 3879 (court may order a sale of the trust property
unless the trust instrument prohibits) ; Carroll's Kentucky St. 1915, §§ 2356,
4707 (sales of real projperty must be by order of court^ sales of stocks and
bonds allowed in the discretion of the trustee); Ann. Code Md. 1911, art. 16,
§ 232 et seq. (sales by trustees to be regulated by court of chancery) ; St!
Mass. 1917, c. 155 (probate court may authorize); Public St.
c, 198, § 10 (court may authorize sale) ; New York Real Prop. Law
X H. 1901^
(Consol!
Laws, c. 50) § 105 (Supreme Court may authorize sale. Matter of O'Donnell
221 N. T. 197, 116 N. E. 1001) ; Laws Or. 1917, p. 303, § 1 (Lee v. Albro'
91 Or. 211, 178 Pac. 784) ; 4 Purdon's Pa. Digest (13th Ed.) p. 4924 (sales
by trustees 'regulated); Pollard's Va. Pode 1904, § 2616 (court may author-
ize sale). Frequently the statutes provide that a sale in contrayention
of
the trust is void. Rev. Codes Mont. § 4549; 'hiorsky v. McKennan 53 Mont
50, 162 Pac. 376.
82 Johnston v. Eason, 38 N. C. 830, 334. See, also, Reader v. Lanahan
'
111 Md. 372, 74 Atl. 575. .
308 THE POWERS OP THE TRUSTEE (Ch. 11

naturaljy the trustee must follow such directions." If the instru-

njent is silent concerning the details of the sale, the trustee should
exercise his discretion.** The court may direct a private sale,*'
and, if such a sale will be advantageous to the cestuis que trust, the
trustee may
conduct such a sale without court sanction.*" If the
sale is made ior a
grossly inadequate price,*^ or the consideration
accepted is in^ proper as, for example, stock in a speculative com-
pany** or a bond and mortgage, when cash should have been in-
sisted upon,*" or the property is sold as a whole, when it would
have sold for a much greater sum if divided into lots," the court
of chancery will set aside the sale. If the trust estate has had
the benefit of the consideration paid by the purchaser, the sale will
be set aside only upon the repayment of such consideration.**
The cestui que trust may, of course, be estopped to question the
validity of a sale, as when he accepts the proceeds of the sale with
knowledge of the facts surrounding it.**

The
trustee should not purchase the trust property at the sale
conducted by himself or under his authority. If he does so, even
if the consideration, paid is adequate and the sale bona fide, equity
will set aside the sale upon the application of the cestui que trust.*'

saBeebe v. De Baim, 8 Ark. 510; Mansfield v. Wardlow .(Tex. Civ. App.)

91 S. W. 859.
In some cases statutes affect the metHod of exercise of the power of
sale. See, for example, Laws N. D. 1917, c. 239, which requires deeds to
and from trustees to describe the cestui aue trust and the ilature of the
'

trust.
Chambers v. Higgins' Ex'r, 49 S. W. 436, 20 Ky. Law Rep. 1425.
8^
McAfee V. Green, 143 N. C. 411, 65 S. E. 828.
SB
88 Burr V. McEwen, Fed. Cas. No. 2193- Shacklett v. Ransom, 54 Gav 350;
White V. Glover, 59 111. 459 Cox v. Shelby County Trrist Co., 80 S. W. 789,
;

26 Ky. Law Rep. 50; Tyson v. Mickle, 2 Gill (Md.) 376.

87 Dingman v. Beall, 213 111. 238, 72 N. E. 729; Wright v. Wilson, 2 Terg.
(Tenn.) 294; Norman v. Hill, 2 Pat. & H. (Va.) 676. But merely slight in-
adequacy of price is not sufficient to cause the court to overturn a sale.
Starkweather v. Jenner, 27 App. D. C. 348. Inadequacy of price and lack
of notice were deemed sufficient to cause the sale to be set aside in Fred-
rick V. Fredrick, 219 111. 568, 76 N. E. 856.
88 Randolph Bast Birmingham Land
v. Co., 104 Ala. 355, 16 South. 126,
53 Am. St. Kep. 64. ,

s^Durkinv. Connelly, 84 N. J. Bq. 66, 92 Atl. 906.

80 Hill V. Shoemaker, 1 McArthur (8 D. C.) 305; Goode v. Comfort, 39
Mo. 313.
»i Johnson v. Bennett, 39 Barb. (N. Y.) 237; Tiflcany
v. Clark, 1 Thomp.
& C. (N. Y.) 9; Suarez v. De Montigny, 1 App. Div. 494, 37 N. f. Supp. 503;
Abernathy v. Phillips, 82 Va. 769, 1 S. E. 113.
»2 Childs V. Childs, 150 App. Div. 656, 135 N. Y. Supp. 972.
3 Bank of Wetumpka v. Walkley, 169 Ala. 648, 53 South. 830; Haynes v.
 ;

§ 88) '
POWER TO SELL 309

This subject is more fully discussed in the sections dealing with

the duties of the trustee in carrying otit the trust.**
The cestui que trust alone can raise the question of the power
of the trustee to sell the trust property or the propriety of the sale
as conducted.*" The sale may be expressly required to be made
^

only when the cestuis que trust consent, in which case such consent
must be procured before a valid sale can be made.'*
It is generally held that the lack of power on the part of the
trustee to sell the trust property may be supplied by showing the
consent of the beneficiary^ in advance that the sale take place ; *' but
in some instances such consent has been held insufficient to render
the sale valid.'' After the sale has taken place, the cestui que- trust
may ratify " it, or estop himself to attack its validity.^ Thus,
acceptance of the proceeds of the s^le with fulT knowledge of the
facts shows an estoppel to assert that the sale was invalid.'' Where
the trustees are given power to sell land and distribute the proceeds
among the beneficiaries of the trust, the beneficiaries may elect to
revoke the power of sale and take the land, rather than the proceeds
thereof.*

Montgomery, 96 Ark. 573, 132 S. W. 651; Mettler v. Warner, 249 111. 341,
94 N. E. 522; Guy v. Mayes, 235 Mo. 390, 138 S. W. 510; TJngrich v. TJng-
rich, 141 App. Div. 485, 126 N. Y. Supp. 419; Lewis v. mil, 6^ Wash. 304,
112 Pac. 373. A cestui que trust may of course purchase. Walker v. Bruni-
gard, 13 Smed^s & M. (Miss.) 723; Wood v. Augustine, 61 Mo. 46.
• See § 89, post.
SB Herbert v. Hanrick, 16 Ala. 581; Prouty v. Edgar, 6 Iowa, 353; Norris
V. HaU, 124 Mich. 170, 82 N. W. 832; Schenck v. EUingwood, 3 Edw. Ch.
(N. X.) 175; Coxe v. Blandeh, 1 Watts (Pa.) 533, 26 Am. Dec. 83.
88 Berrien v. Thomas, 65 Ga. 61; Franklin Sav. Bank v. Taylor, 131 111.
376, 23 N. E. 397; Clemens v. Heckscher, 185 Pa. 476, 40 Atl. 80; Walke v.
Moore, 95 Va. 729, 30 S. E. 374 Norvell v. Hedrick, 21 W. Va. 523.
;

»' Dykes v. McVay, 67 Ga. 502; Rogers v. Tyley, 144 lU. 652, 32 N. B.
393 ; Turner v. Fryberger, 99 Minn. 236, '108 N. W. 1118, 109 N. W. 229
Cooper V. Harvey, 21 s; D. 471, 113 N. W. 717.
9 8 Walton V. FoUansbee, 165 111. 480, 46 N. E. 459; Mauldin v. Mauldin,
101 S. C. 1, 85 S. E. 60. .
9» Long V. Long, 62' Md. 33; Swartz v. Duncan, 38 Neb. 782, 57 N. W. 543;
Johnson v. Bennett, 39 Barb.. (N. Y.) 237 In re Post, 13 E. I. 495.
;

1 Mitchell V. Berry, 1 Mete. (Ky.) 602; Matthews v. Thompson, 186 Mass.

14, 71 N. E. 93, 66 L. B. A. 421, 104 Am. St. Rep. 550.
2 Shepherd v. Todd, 95 Ga. 19, 22 S. ai. 32 ; Lawson v. Cunningham, 275
Mo. 128, 204 S. W. 1100.
8 Craig V. Leslie, 3 Wheat. 563, 4 L. Ed. 460; Smith v. A. D. Farmer
Type Founding Co., 16 App. Div. 438, 45 N. Y. Supp. 192 ; Eraser v. Bower-
man, 104 Misc. Rep. 260,/ 171 N. Y. Supp. 8S|5,
310 THE POWERS OF THE TRUSTEE (Ch. 11

POWER TO MORTGAGE
89- The trustee will be allowed to exercise an implied power to
mortgage the trust property when the necessities of the
trust require such action.\

Frequently the trustee is given express authority to mortgage the

tryst property.* It is elementary that a mortgage executed under
such a power must, in order ta be valid, be given only for the pur-
pose named/ For instance, a power to mortgage for the benefit of
the trust estate, does not rentier valid a mortgage, the proceeds of
which were applied to the personal use of the trustee.®
The express grant of a power to sell is ordinarily held not to in-
clude the power to mortgage,^ nor does the power to change the
investments of the trust property permit the trustee to mort-
gage it.»

The trustee will be held to liave an implied power to mortgage

the trust property whenever the wording of the trust instrument
or the necessities of the trust indicate that the settlor meant that
such power should exist." A
"trlistee has 'authority to adopt meas-
ures and do acts which, though not specified in the instrument, are
implied in its general directions, and are reasonable and proper
means for making it effectual.' " ^° Thus, when a trustee is given
power to take charge of, manage, and control property for the ben-

*Baiik of Visalia v. Daionwood Lumber 148 Cal. 18, 82 Pac. 374;

Co.,
GuUmartin v. Stevens, 55 Ga. 203; WalterBrugger, 78 S. W. 419, 25
v.
Ky. Law Boskowitz v.
Rep. 1597 ; Held, 15 App. Div. 306, 44 J^. T, Supp.
136, affirmed 153 N. T. 666, 48 N. E. 1104.
6 Townsend v. Wilson, 77 Conn. 411, 59 Atl. 417 Galloway v. Gleason,
;

61 Mo. App. 21; Andrews v. Guayaquil & Q. Ry. Co., 75 N. J. Eg. 535, 72
Ati. 355; Williamson v. Field's Ex'rs, 2 Sandf. Ch. (N. T.) 533; Brewster
V. Galloway, 4 Lea (Tenn.) 558.
8 Union Mut. Life Ins. Co. v. Spaids, 99 111. 249.

7 Townsend v. ,Wilson, 77 Conn. 411, 59 Atl. 417 Hamilton v. Hamilton, 149

;

Iowa, 321, 128 N. W. 380 Walter v. Brugger, 78 S. W. 419, 25 Ky. Law Rep.
;

1597 Loring v. Brodie, 134 Mass. 453 Potter v. Hodgman, 178 N. Y. 580, 70
; ;

N. E. 1107 Kenworthy v, Levi, 214 Pa. 235, 63 Atl. 690 Greene v. Greene, 19
; ;

B. I. 619, 35 Atl. 1042, 35 L. R. A. 790 Mansfield v. Wardlow (Tex. Civ. App.)

;'

91 S. W. 859. A power to ""dispose of" does not include a power to mortgage.

Beakey v. Knutson, 90 Or. 574, 174 Pac. 1149.
8 Griswold v. Caldwell, 65 App. Div. 371, 73 N. Y. Supp. 2.

» Security Trust Co. v. Merchants' & Clerks' Sav. Bank, 26 Ohio Cir.
Ct R. 381; Harding v. St. Louis Life Ins. Co., 2 Tenn. Ch. 465. In In re
Billinger, [1898] 2 Ch. 534, a power to mortgage was implied from a power
to carry on a real estate business.
10 Gilbert v. Penfield, 124 Cal. 234, 238, 56 Pac. 1107, 1108, quoting 2.
Pomeroy's Eq. Jurisp. § 1062.
 .

§ 89) POWER TO MORTGAGE 311

efit of a beneficiary, he has implied power to mortgage. In such a

case a court has said that, "so long as it was deemed to the interest
of the beneficiaries that the trustee should manage and control the
property, the power to do so included the power to improve and re-
pair, ap4 if in the exercise of the discretion allowed him under
the deed appointing him, he deemed it to the advantage of the ben-
eficiaries that they procure the necessary funds by mortgaging the
land he had the power and authority to do so." ^^ The burden is
upon the person taking the mortgage to satisfy himself that the
trustee has power to mortgage. "Ordinarily the legal presump-
tion exists that a trustee ha^s no power to sell or mortgage the trust
estate. Prospective purchasers and mortgagees must therefore ex-
ercise reasonable diligence to ascertain whether the trustee has au-
thority to sell or incumber the real estate." ^^
If no power to mortgafge, express or implied, is vested in the
trustee, a rnortgage by him will, upon objection by the cestui que
trust, be held to be void.^° In some cases a purchase-money mort-
gage by the trustee has been held impliedly authorized.^*
Chancery has authority to permit the trustee to mortgage the
trust property when such action is necessary to preserve the prop-
erty or to enable the trustee to execute the trust as the settlor in-
tended he should.^"
An example of the cases in which the court authorizes a mort-
gage may be found in a recent case in which a testator left all his
property to his widow in trust for herself and her children. Debts
of the testator were a lien upon certainHand which he had devised
to the trustee, and the creditors were threatening suit. Equity au-
thorized the trustee to mortgage the trust property to raise the

11 Ely V. Pike, 115 111. App. 284, 287.

12 Snyder v. ColUer, 85 Neb. 552, 558, 123 N. W. 1023, 1025, 133 Am. St.
Kep. 682.
IS Williamson v. Grider, 97 Ark. 588, 135 S. W. 361; Taylor v. Clark,
56 Ga. 309; Tuttle v. First Nat. Bank of Greenfield, 187 Mass. 533, 73
N. E. 560, 105 Am. St. Bep. 420 Byron Reed Co. v. Klabunde, 76 Neb. 801,
;

108 N. W. 133.
1* Mavricli v. Grier, 3 Nev. 52, 93 Am. Dec. 373; Gernert v. Albert, 160
Pa. 95, 28 Atl. 576. Contra: Mathews v. Hey ward, 2 S. C. 239.
IB Townsend v. Wilson, 77 Conn. 411, 59 Atl. 417; Jamison v.
McWhorter,
7 Houst. (Del.) 242, 31 Atl. 517; Wagnon v. Pease, 104 Ga. 417, 30 S. e!
895; Long v. Simmons Female College, 218 Mass. 135, 105 N. E. 553; Butler
V. Badger, 128 Minn. 99, 150 N. W. 233; In re Windsor Trust Co., 142
App. Div. 772, 127 N. Y. Supp. 586 ;New York Real .Prop. Law (Consol.
Laws, c. 50) § 105; Shirkey v. Kirby, 110 Va. 455, 66 S. E. 40, 135 Am
St Rep. 949.
Statutes frequently authorize the court to sanction mortgages or leases
by a trustee. Laws N. H. 1915, c. 11; Laws R. I. 1917, c. 1501.
312 THE POWERS OF THE TEUSTEB (Ch. 11

money necessary to pay off the debts of the settlor and thus pre-
serve the trust property intact.*' The beneficiaries are necessary
parties to a proceeding to procure the consent of the court to a
mortgage of the tr^st property.*^
If the cestuis que trust join with the trustee in the mortgage, or
consent to it, or accept its benefits after it is executed, they will be
estopped to assert its invalidity.*"

POWER TO LEASE
90. The implied authority to lease the trust property exists in the
trustee whenever such a step is a reasonably necessary in-
cident of the trust management.

Power on the part of the trustee to lease the trust property is

frequently found in the trust instrmment in plain terms. In such
case there can be no doubt about his' authority.*" Even though the
authority to lease is express and the length of the lease limited by
the trust instrument, equity may direct that a longer lease be given
by the trustee, if it appears to be for the benefit of the trust es-
tate.''*
A
lease is not a "sale or disposal" of .the trust property within
the prohibition of a trust instrument.**
Implied power to lease the trust property exists wherever
it isnecessary to enable the trustee to perform his trust duties. "It
appears from these authorities that the law is that trustees possess
general power to lease trust property, and as they do possess this
power, their leases, if executed according to law, are valid unless
they exceed the quantity of the estate vested in the trustees, or the
leases are unreasonable." "* "The general doctrine, applicable to
the matter under discussion, is that an express poWer to lease giv-

loLyddane v. Lyddane, 144 Ky. 159, 137 S. W. 838.

"
Sampson v. Mitchell, 125 Mo. 217, 28 S. W. 768.
18 Boon V. HaU, 76 App. Div. 520, 78 N. Y. Supp. 557; Magraw v. Pen-
nock, 2 Grant Cas. (Pa.) 89; Hughes v. Farmers' Savings & Building &
Loan Ass'n (Tenn. Ch. App.) 46 S. W. 362.
"Denegre^v. Walker, 214 111. 113, 73 N. E. 409, 105 Am. St. Rep. 98, 2
Ann. Cas. 787; Ohio Oil Co. v. Daughetee, 240 111. 361, 88 N. B. 818, 36
Jj.R. A. (N. S.) 1108. On the matters discussed in this section, see Kales,
Powers in Trustees to Make Leases, 7 111. Law Rev. 427.
20 Marsh v. Reed, 184 111. 263, 56 xN. E. 306; In re City of Philadelphia,
2'Brewst. (Pa.) 462. •

21 In re Hubbell Trust, 135 Iowa, 637, 113 N. W. 512, 13 L. R. A. (N. S.)

496, 14 Ann. Cas. 640.
22 City of Richmond v. Davis, 103 Ind. 449, 452, 3 N. B. 130, 132.
§ 90) POWER TO LEASE 313

en to a trustee, confers authority to make a lease for any reasona-

ble period, considering the kind of property and the custom of the
country and all the circumstances bearing on the subject. An im-
plied power to lease growing out of the, creation of a trust in real
estate without poWer of §ale, but in contemplation of its being ad-
ministered to produce income, confers the same power to leasee as
in the first situation. 'Entire control, management, and charge'
conferred on trustees, as in this case, affords discretionary power
to lease within such reasonable boundaries as the trustor would
have done." ** The power to lease is frequently a necessary inci-
dent of the management of trust property.^*
It is often a difficult question to determine whether a trustee of a
charitable trust has implied power to lease the property which he
holds."' Thus, wher^ buildings held in trust for charity are dilap-
idated and the trustees have no funds for repairs or maintenance of
the charity, a lease of the property to persons who agree to erect
new buildings and use the property for the purposes of the trust
will be upheld ; ** but, in another case, it has been held that where
land was conveyed to trustees to provide a site for a schoolhouse to
educate children, a lease of the premises, in consideration of a nom-
inal rent and on the agreement of the lessee that a church should
be there erected to be used to educate colored youth, was void, as
not impliedly authorized by the deed of trust.''^ As with the pri-
vate trust, so with the charitable, the authority of the, trustee to
lease depends upon the necessity of the lease. If the execution of
the charity requires a lease to carry out the intent of the founder,
implied power to lease will be held to exist.
Courts of equity have power to authorize a trustee to lease and
frequently exercise such authority, upon proof of its necessity."'

28 Upham V.Plankinton, 152 Wis. 275, 291, 140 N. W. 5, 11, 48 L. E. A.

(N. S.) 1004, Ann. Cas..l914C, 3T6.
2* Davis V. Harrison, 240 Fed. 97, 153 C. 0. A. 133; Hutclieson v. Hod-
nett, 115 Ga. 990, 42 S. E. 422; Geer v. Traders' Bank of Canada, 132
Mich. 215, 93 N. W. 437; Betts v. Betts, 4 Abb. N. C. (N. Y.) 317. For
an instance of a case in which the trustee was held to have no implied
power to lease, see In re- Hoysradt, 20 Misc. Rep. 265, 45 N. Y, Supp. 841.
20 In the following cases the circumstances of tl^e charity were such
that a lease was held to be within the implied powers of the trustee:
Appeal of Trustees of Proprietors, .School Fund of Providence, 2 Walk.
(Pa.) 37; Black v. Ligon, 1 Harp. Eq. (S. O.) 205. But in Hendrix College
V. Arkansas Townsite Co., 85 Ark. 446, 108 S. W. 514, a lease was held in-
valid for lack of power on the part of the trustee.
,2 8 Trustees of Madison Academy v. Board of Education of Richmond (Ky.)
''
26 S. W. 187)
27 Thornton v. Harris, 140 N. C. 498, 53 S. E. 341.
2 8 Packard v. Illinois Trust & Savings Bank, 261 III. 450, 104 N. E. 275;
314 THE POWERS OF THE TEUSTEE (Ch. 11

Ordinarily the trustee has no power to lease the trust property

for a term extending beyond the life of the trust.^* Where he does
—
make such a lease, the excessive period that is, the period beyond
—
the end of the trust will be considered void and the remainder of
the lease will stand.^° But in a few cases it has 'been held that the
trustee may, in excep,tional instances, with judicial advice, create
a leasehold estate to extend beyond the termination of the trust.*^
An Iowa court has summed up the law as follows: "(1) The
trustees may lease for such reasonable terms as are customary and
essential to the proper care of and to procure a reasonable income
from the property. (2) Such terms should not, save on showing
of reasonable necessity to effectuate the purposes of the trust, ex-
tend beyond the period the trust is likely to continue. (3) Should
they extend unreasonably beyond such period^, the excess only will
be ^oid. (4) Only upon a showing of such reasonable necessity,
when not given such power by the instrument creating the trust,
will the trustees be authorized to bind the estate so as to effectual-
ly deprive those ultimately entitled thereto of the property it-
self." " ]

POWER TO REPRESENT BENEFICIARY r

91. The trustee has no implied power to bind the cestui que trust by
admissions, but notice to the trustee is ordinarily notice to
the beneficiary.
The trustee has implied authority to represent the cestui que trust
in all actions respecting the trust estate, unless the rights

Hitch V. Davis, 3 Md. Ch. 262. In New York the statute permits trustees
to lease real property for terms not exceeding five years, without application
to the court, if the trust is for the purpose of collecting rents during the
life of the beneficiary and applying them to his use. If a longer lease i^
desired, authority for it must be obtained from the Supreme Court. New
York Real Prop. Law (Consol. Laws, c. 50) § 106. Equity may also vali-
date an improper lease. Wilmer v. Philadelphia- & Reading Coal & Iron
Co., 130 Md. 666, 101 Atl. 588. The fact, that the interest oi aU cestuis que
trust will be promoted must be shown before equity will authorize a lease.
Schroeder v. Woodward, 116 Va. 506, 82 S. E. 192.
.20 South End Warehouse Co. v. La very, 12 Cal. App. 449, 107 Pac. lOQS-J

In re Opening of 110th St., 81 App. Div. 27, 81 N. Y. Supp. 32 ; TredweU v.

Tredwell, 86 Misc. Rep. 104, 148 N. *f^Supp. 391.
so In re Hubbell Trust, 135 Iowa, 637, 113 N. W. 512, 13^ L. R. A. (N. S.)
496, 14 Ann. Cas. 640; In re Opening of 110th St., 81 ApP. Div. 27, 81 N.
Y. Supp. 32.
3iUpham V. Plankinton, 152 Wis. 275, 140 ^N. W. 5, 48 L. R. A. (N. S.)
1004, Ann. Cas. 1914C, 376.
82 In re Hubbell Trust, 135 Iowa, 637, 664, 665, 113 N. W. 512, 522, 13 L. K.
A. (N. S.) 496, 14 Ann. Cas. 640.
§ 91) POWER TO KEPEESENT BENEPICIAET 315

of the cestuis que trust among themselves are involved, or

the interests of the trustee are adverse to those of the ces-
tui que trust, so that the trustee cannot properly act for
the beneficiary.

The power of the trustee to represent the cestui que trust is an

important power. It does not extend, however, to declarations
against interest or to admissions. The trustee is appointed for the
purpose of performing acts beneficial to the cestui que trust, and
not for the purpose of conceding away the beneficiary's rights by
loose talk. It is the general rule, therefore, that the trustee's ad-
missions do not bind the trust estate.^*
Generally the trustee has power to represent tjie cestui que trust,
so that notice to the former is effective against the latter.'* In ac-
cordance with this rule, if the trustee fails to claim the trust prop-
erty when it is held adversely, and the legal title is barred by the
statute of limitations, the right of the cestui que trust will be held
to be destroyed likewise. ''
The most difficult questions arise with respect to the power of
the trustee to represent the cestui que trust in actions. If suit is
brought by or against the trustee, is the cestui que trust a necessa-
ry party ? The earlier equity rule was that the beneficiary was al-~
ways a necessary party, but the present position of the courts is that
the trustee may 'represent the cestui que trust in all actions relating
to the trust, if rights of the cestui que trust as against the trustee,
or the rights of the cestuis que trust between themselves, are not
brought into question. In other words, in all cases where there is
no conflict of interest between cestui que trust and trustee, or be-

33 Graham v. Lockliart, 8 Ala. 9; Ludlow v. Flournoy, 34 Ark. 451; Thom-

as V. Bowman, 29 111. 426; First Nat. Bank of Peoria v. Farmers' & Mer-
chants' Nat. Bank of Wabash, 171 Ind. 323, 86 N. E. 417; Allen v. Everfett,
12 B. Mon. (Ky.) 371; Stratton v. Edwards, 174 Mass. 374, 54 N. B. 886;
Thompson v. Village of Mecosta, 141 Mich. 175, 104 N. W. 694; Eitelgeorge
V.' Mutual House Bldg. Ass'n, 69 Mo. 52; Walker v. Dunspaugh, 20 N. Y.
170; Calwell's Ex'r v. Prindle's Adm'r, 19 W. Va. 604. But in one case
an admission of the trustee was held to bind the bpneficiary because it was
a part of the res gestae. Ejiorr v. Raymond, 73 Ga. 749. i

34Brannon V. May, 42 Ind. 92. But see Chew v. Henrietta Min. & S. Co.
(O. C.) 2 Fed. 5, where the transaction in which the notice was received
had no relation to the trust business, and Henry's Lessee v. Morgan, 2
Bin. (Pa.) 497, where the trustee receiyed the notice before his appoint-
ment.
35 Mason v. Mason, 33 Ga. 435, 83 Am. Dec. 172 ; Young v. McNeill, 78
S. C. 143, 59 S. E. 986; Appel v. ChUdress, 53 Tex. Civ. App. 607, 116 S.' W.
129. Actions of the trustee may estop the cestui que trust to set up his
rights. Foster v. JefCers, 140 Tenn, 446, 205 S. W. 122.
316 THE POWERS OF THE TRUSTEE (Ch. 11

tween the several cestuis que trust, the trustee may sue and be
sued without joining the cestui que trust. "The general rule is,
that in suits respecting trust property, broilght either by or against
the trustees, the cestuis que trust as well as the trustees are nec-
essary parties. * * * To this rule there are several exceptions.
One of them is that, where the suit is brought by the trustee to re-
cover the trust property or to reduce it to possession, and in no
wise affects his relation with liis cestuis que trust, it is unnecessary
to make the latter parties." *"
Thus, in an action by trustees to reduce trust property to their
possession or to recover its value, the New York Court of Appeals
held that the cestuis que trust were not necessary parties, saying:
"Here these trustees, appointed to take the place of the trustees un-
der the will of Jacob Straut, had the legal title to, and were the le-
gal owners of, the personal property belonging to the trust estate ;
* * * and it has never been held that in an action by the trus-v
tees to reduce such property to possession, or to subject it to their
contrpl, it is necessary to make the bfeneficiaries parties. In such an
action they represent the wholei title and interest, and their action,
in the absence of fraud or collusion, is binding upon the benefici-
aries. In the action brought by these trustees there was no ques-
tion between them and the beneficiaries, and no question between
the beneficiaries themselves. The only question at issue was be-
tween the trustees and a stranger to the trust, who was alleged to
have in his possession^, or to be liable to account for, certain prop-
erty belonging to the trust, and in such an action it is well settled
now that the beneficiaries are not necessary parties. * * * If
the purpose of the action had been, among other things, to deter-
mine rights as between the beneficiaries themselves, or as between
the trustees and the beneficiaries, then it would have been necessary
to bring them in as parties." "
It is frequently a difficult question to determine whether the trus-
tee adequately represents the cestui que trust in the .action. The cases
in which the cestui que trust has been held to be a necessary party are
generally instances in which equity thought it desirable that the
cestui que trust be in court to look after his own interests.** Thus,

so Carey v. Brown, 92 U. S. 171, 172, 23 L. Ed. 469.

'

8' Matter of Straut, 126 N. Y. 201, 211, 212, 27 N. E. 259, 262.

8 8 Snelling v, American Freehold Land Mortgage Co., 107 Ga. 852, 33 S.
E. 634, 73 Am. St. Rep. 160; Cunningham v. Bank of Nampa, 13 Idaho, 167,
88 Pac. 975, 10 L. R. A. (N. S.) 706, 121 Am. St. Rep. 257 Dunn v. Seymour,
;

11 N. J. Eq. 220; Reed's Bx'rs v. Reed, 16 N. J. Eq. 248; Blake v. AUman,

58 N. C. 407; Cronin v. Watkins, 1 Tenn. Ch. 119; MUmo Nat, Bank v.
Cobbs, 53 Tex, Civ. App. 1, 115 S. W. 345 ; Collins Adm'r t. LofCtus, 10 Leigh
% 91)- POWER TO EEPRESENT BENEFICIAET 317

it hap been held that where the trustee has an interest adverse to

that of the beneficiary,*" or where the trustee is merely a passive

trustee,*" or where the bill is to~foreclose a mortgage held by the
trust estate,*' or to compel specific performance of a contract held
by the trust,** the cestuis que trust must be brought into the ac-
tion.
The modern tendency seems to be to extend the trustee's power
to represent the cestui que trust in actions.** Thus, in actions to
recover the trust property or its avails from a stranger,** or to re-
strain a tort to the trust realty,*^ or in an action to recover. the trust
I

(Va.) 5,34 Am. Dec. 719; Pyle v. Henderson, 55 W. Va. 122, 46 S. E. 791;
Day V. Wetherby, ,29 Wis. 363. In Primitive Methodist Church v. Homer,
S8 R. 530, 96 Atl. 818, the bill was against the trustee to declare the
I.
trust in operation and It was held, that the cestuis que trust were neces-
sary parties.
s»Nevitt V. Woodbum, 190 111. 283, 60 N. E. 500. In Barbee v. Penny,
172 N. C. 653, 90 S. E. 805, it was held that, where the litigation involved
the question whether the trustee had exceeded his- powers, the cestuis que
trust should be joined.
*o Covington ^ L. R. Co. v. Bowler's Heirs, 9 Bush (Ky.) 468; Malin v.
Malin, 2 Johns. Ch. (N. Y.) 238.
«i Plum V. Smith, 56 N. J. Eq. 468, 39 Atl. 1070. Contra: Girard Trust
Co. V. Paddock, 88 Neb. 359, 129 N. W. 550.
42Beckwith v. Laing, 66 W. Va. ^46, 66 S. E. 354. Contra: Simson v.
Klipstein, 88 N. J, Eq. 229, 102 Atl. 242.
* 8 Tompkins v. Tompkins (C. C.) 123 Fed. 207; Plumb v. Crane, 123 U.
S. 560, 8 Sup. Ct. 216, 31 L. Ed. 268; KeUogg v. King, 114 Cal. 378, 46 Pac.
166, 55 Am. St. Bep. 74; Allan v. Guaranty Oil Co., 176 Cal. 421, 168 Pac.
884; Tucker v. Zimmerman, 61 Ga. 599; Heinroth v. Griffin, 149 111. App.
103; Hord v. Bradbury, 156 Ind. 30, 59 N. E. 31; Zion Church of Evan-
gelical Ass'n of North America in Charles City v. Parker, 114 Iowa, 1, 86
N. W. 60; McDevitt v. Bryant, 104 Md. 187, 64 Atl. 931; Murphy Chair
Co. v. American Radiator Co., 172 Mich. 14, 137 N. W. 791; Grant v. Wi-
nona & S. W. Ry. Co., 85 Minn. 422, 89 N. W. 60; Pearce v. Twichell, 41
Miss. 344; Miles v, Davis, 19 Mo. 408; Stevens v. Bosch, 54 N. J. Eq. 59,
33 Atl. 293; Keneaster v. Erb, 83 N. J. Eq. 206, 89 Atl. 995 (suit to quiet
title); Noe v. Christie, 51 N. Y. 270; Mebane v. Mebane, 66 N. C. 334;
Wright V. Conservative Inv. Co., 49 Or. 177, 89 Pac. 387: Price v. Kras-
note, 60 S. C. 172, 38 S. E. 413 ; Hornbsy v. City Nat. Bank (Tenn. Ch.
App.) 60 S. W. 160; Jackson v. West, 22 Tex. Civ. App. 483, 54 S. W. 297;
Swift V. State Lumber Co., 71 Wis. 476, 37 S.-W. 441. The trust instrument
may authorize the trustee to represent the cestuis in all actions. Village
Mills Co. V Houston Oil Co. of Texas (Tex. Civ. App.) 186 S. W. 785.
**Ashton V. President, etc., of Atlantic Bank, 3 Allen (Mass.) 217; Acts
Va. 1918, c. 230. Contra: Schuster v. Crawford (Tex, Civ. App.) 199 S.
W. 327 (unless the trust instrument shows an intent to grant the power);
Smith V. Smith (Tex. Civ. App.) 200 S. W. 540.
«» Smith V. City of Portland (C. C.) 30 Fed. 734; Dalton v. Hazlet, 182
Fed. 561, 105 C. C. A. 99.
318 THE POWERS OP THE TRUSTEE (Ch. 11

res from the retiririg trustee,** it is now usual to allow the trustee
to'represent the cestui que trust and to hold that the cestui que
trust need not be a party to the action.

MISCELLANEOUS IMPLIED POWERS

92. The trustee has such miscellaneous implied powers as are req-
uisite to the fulfillment of the purposes of the trust.

Miscellaneous implied or general powers have often been held

to rest in the trustees. These are too numerous for complete enu-
meration, but examples may be given. Thus, it has been held that
a trustee may dedicate lands to a public use consistent with the
trust,*' and that a trustee has power to employ an attorney to en-
force a judgment belonging to the trugt estate,** to buy an out-
standing claim against the trust property as a cloud upon the ti-
tle,*" to settle a partnership when given power to carry it on,"" to
cultivate a farm conveyed in trust for the wife of the settlor,^^ to
impose building restrictions upon lots belonging to the trust es-
tate,°^ to vote stock of a corporatibn in an election for directors
when the stock is owned by the trust estate,'^ to select the bene-
ficiaries when the trust is a charitable trust,^* and to settle a
claim °° or arbitrate it '^ when such action is for the best interest
of the trust.
On the other hand, it has been denied that there is vested in a
trustee power to confess a judgment against the trust estate,"' or

*8In re Lane's Will (Del. Ch.) 97 Atl. 587; Winslow v. Minnesota & P.
R. Co., 4 Minn. (Gil. 23P) 313,- 77 Am. Dec. 519.
"
*T Prudden v. Lindsley, 29 N. J. Eq. 615.
*sBell V. Board of Com'rs of Lake County, 26 Colo. App. 192, 141 Pac.
861.
*8 Ohaffin V. Hull 49 F6d. 524.
(C. C.)
Jones v. Procter, 24 Ohio Cir. Ct. K. 80.
01 May field v. Kilgour, 31 Md. 240.
52 Pleasants v. Wilson, 125 Md. 237, 93 Atl. 441.
'5 3 In re Barker, 6 Wend. (N. Y.) 509.

6* Appeal of BUot, 74 Conn. 5^6, 51 Atl. 558; Grant v. Saunders, 121

Iowa, 80, 95 N. W. 411, 100 Am. St. Rep. 310 ; Trenton Society for Organiz-
ing Charity v. Howell (N. J. Ch.) 63 Atl. 1110; Dodge v Williams, 46 Wis.
70, 1 N. W. 92, 50 N. W. 1103.
55 Stitzer v. Whittaker, 3 Neb. Unof. 414, 91 N. W. 713.
6 6 Brower v. Osterhout, 7 Watts & S. (Pa.) 344.

5 7 Mallory v. Clark, 20 How. Prac. (N. T.) 418; Belcher v. Cobb, 169 N.
O. 689, 86 S. E. 600 Wllhelm v. Folmer, 6 Pa. 296 ; • Woddrop v. Weed, 154
;

Pa. 307, 26 Atl. 375, 35 Am. St. Rep. 832.

§ 93) MAINTENANCE OP ACTIONS 319

to give away the trust property,"* or devise the trust/* or to create

a homestead for his own benefit in the trust property,"" or to in-
corporate the trust estate,®^ or to enter into an extended practice
of discounting an^ indorsing bills with customers."^ These powers
are not essential to the proper administration of the ordinary trust
and are not impliedly granted to the ordinary trustee.

MAINTENANCE OF ACTIONS
93. The trustee has the power to maintain such actions as are
necessary to protect the rights of the trust estate and to
carry out the trust.

The powersof a trustee naturally include the authority to main-

tain such actions as are necessary to the execution of the trust
and incident to the powers expressly or impliedly granted. For
example, it is elementary law that the trustee may bring ejectment
for the trust property,"^ and this even against the cestui que trust,'*
except in unusual circumstances. So, too, the trustee may main-
tain trespass to try title,"" replevin to recover the possession of the
trust property when it is personal,"® trover for the conversion of
the trust property,"' actions for damages for injury to the trust

ssJuUan v. Reynolds, 8 Ala. 680; Rowland v. Maddock, 183 Mass. 360,

67 N. E. 347. The trustee, of course, has no power to change the terms of
the trust Burling v. Newlands, 112 Cal. 476, 44 Pac. 810; Vason v. Gil-
bert, 99 Ga. 220, 25 S. E. 409.
B9 Hinckley v. Hinckley, 79 Me. 320, 9 Atl. 897; Fonda v. Penfleld, 56 Barb.
(N. Y.) 503. But the cestui que trust may be estopped to deny the authority
of the devisee to act. Hughes v. Caldwell, 11 Leigh (Va.) 355.
sooree v. Gage, 38 Cal. App. 212, 175 J'ac. 799; Rice v. Rice, 108 111.
199; Keller v. KeUer (Tex. Civ. App.) 141 S. W. 581; Shepherd v. White,
11 Tex. 346.
61 Garesche v. Levering In v. Co., 146 Mo. 436, 48 S. W. 653, 46 L. R. A.
232,
02 Loud V. Winchester, 64 Mich. 23, 30 N. W. 896.
83 McCormick v. Provident Life & Trust Co. of Philadelphia, 249 Fed. 141,
161 C. C. A. 193 Anson v. Townsend, 73 Cal. 415, 15 Pac. 49 McLean v. Mac-
; ;

donald, 2 Barb. (N. Y.) 534; Phillpotts v. Blasdel, 8 Nev. 61; Bowen v.
Humphreys, 24 S. C. 452.
6* Mordecai v. Tankersly, 1 Ala. 100; Matthews v. Ward, 10 Gill & J. (Md.)
443; Baker v. Nail, 59 Mo. 265.
85 Lewis Brown, 39 Tex. Civ. App. 139, 87 S. W. 704.
V.
8 Gates Bennett, 33 Ark.475; Shipton v. Norrid, 1 Colo. 404; Jack-
v.
son V. Hubbard, 36 Conn. 10; Woodruff v. H. B. Claflin Co., 133 App. Div.
874, 118 N. Y. Supp. 48.
6 7 Ryan V. Bibb, 46 Ala. 323; Thompson v. Ford, 29 N. C. 418; Watson
V. Pitts, 2 McMul. (S. C.) 298; Coleson v. Blanton, 3 Hayw. (Tenn.) 152.
320 THE POWERS OP THE TRUSTEE (Ch. 11

property and actions to recover for rents and profits due upon
•'

it.°° The power to bring these and other similar actions neces-
^sarily follows froni the power of the trustee to ob,tain possession of
the trust property and usi such property without interference,

POWERS AS AFFECTED BY PECULIARITY OF

TRUSTEE'S STATUS
94. Where the trust is administered by two or more trustees, they
hold by a joint title and must act as a unit, if the trust be
private but a majority of the trustees of a charitable trust
;

may perform an act under the trust. However, even in

the case of private trusts, one of several trustees may per-
form merely ministerial duties requiring the exercise of no
discretion.
If powers are attached to a trusteeship, they pass to successors
of the original trustees and may also be exercised by sur-
viving trustees but if the powers are personal, and appear
;

to have been delegated to one or more trustees alone, suc-

cessors and surviving trustees are not entitled to exercise
such powers.
Where some trustees fail to qualify or disclaim, the trustees
who do qualify have all the powers granted in the trust
instrument to the entire set of trustees mentioned there.

The exercise of the powers of the trustee often affected by

is
peculiarities in the status of the trustees. Thepeculiarity to
first
be noticed is that of plural trustees. If the trust is vested in two
or more trustees, they are deemed to hold as a unit and by< joint
tenancy. There is only one title and that is vested in the entire
board of trustees rather than in the several trustees as tenants in
common.. From this joint tenancy arises the rule that in all mat-
must act as a unit. A
ters of discretion trustees of a private trust
majority may not bind the trust estate by any action. "As a gen-
eral rule, cotrustees cannot act separately; but they must all join
in receipts for money payable to them in respect to their office.
* * * But there is this distinction, that if an authority dele-
gated to several persons be a private confidence, all must join; but
if it was conferred for public purposes, it may be executed by a

majority only." '" The concurrence of all is necessary to any valid

eBMcRaeny v. Johnson, 2 Fla. 620; Alford's Adm'r v. City of Stanford,

13 Ky. Law Kep. 876; Mordecai v. Parker, 14 N. C. 425.
9 Ponder V. McGruder, 42 Ga. 242.
TO HiU T. Josselyn, 13 Smedes & M. (Miss.) 597, 598.
§ 94) AS AFFECTED BY PECULIARITIES OF TEUSTEE'S STATUS 321

action.''^Thus, the united action of all the trustees is necessary to

the making
of a binding contract for the repair of the trust prop-
erty/'' and to the voting of the trust stock/' the purchasing of
property for the trust/* or the leasing of the trust property/^
Charitable Trusts
But the trustees of a charitable'trust are nofboundby this rule
requiring unanimous action. A
majority of such trustees may act.
And so it has been held that a majority of the trustees appointed
by the will of Benjamin Franklin to expend money for the benefit
of the inhabitants of the city of Boston might decide how the funds
should be disposed ol the court saying "This board is similar to
; :

a board of public officers, or a committee appointed by a public

body to perform public duties. * * * It is a board appointed to
act in a fiduciary capacity in the administration of the affairs of a
public charity. A
distinction is made between private agents, or
agents or trustees of a private trust, and trustees managing busi-
ness of a public charity like that entrusted to this board. In the
performance of duties of this latter kind, a board may act by a
'"
majority." ^

In exceptional cases some courts have allowed one trustee to act

for the entire number. This power is usually based on urgent
necessity.^' Thus, it has been held that, where one trustee was re-
siding in England and the other in Georgia, the latter might act
with regard to pfpperty in Georgia without the concurrence of the
trustee in England.'* In New Hampshire a statute expressly al-

Tiliearned v. Welton, 40 Cal. 349; Page v. Gillett, 26 Colo. App. 204, 141
Pac. 866; Hosch Lumber Co. v. Weeks, 123 Ga. 336, 51 S. E. 439; Dingman
V. Boyle, 285 111. 144, 120 N. E. 487; Cox v. Walker, 26 Me. 504; Latrobe
V. Tieman, 2 Md. Ch. 474; City of Boston v. Kobbins, 126 Mass. 384; Shaw
V. Canfield, 86 Mich. 1, 48 N. W. 873 White v. Watklns, 23 Mo. 423 Ham
; ;

V. Ham, 58 N. H. TO; Carr v. Hertz, 54 N. J. Eq. 127, 33 Atl. 194; Eritz

V. City Trust Co., 72 App. Div 532, -76 N. T. Supp. 625, affirmed 173 N.
T. 622, 66 N. E. 1109; Andrews v. Kirk (Sup.) 160 N. Y. Supp. 434; In re
McDowell, 97 Misc. Eep. 306, 163 N. Y. Supp. 164; Id., 102 Misc. Hep. 275,
169 N. Y. Supp. 853 ; Morley v. jOarson, 240 Pa. 546, 87 Atl. 713 ; Franklin
Inst, for Savings v. People's Sav. Bank, 14 R. I. 632; North Troy Grade
Dist. V. Town of Troy, 80 Vt. 16, 66 Atl. 1033. Where one of two trustees
executes a note purporting to bind the trust estate he will be obliged to
repay the loan personally. Comett v. West, 102 Wash. 254, 173 Pac. 44.
T2 Busse V. Schenck, 12 Daly (N. Y.) 12.
13 Mannhardt v. Illinois Staats-Zeitung Co., 90 111. App. 315.
74Bagnell v. Ives (C. C.) 184 Fed. 466.
T6 Winslow V. Baltimore & O. R. Co., 188 U. S. 646, 23 Sup. Ct.
443, 47 L.
Ed. 635; Hoosier Mining Co. v. Union Trust Co., 173 Ky. 505, i91 S
305.
W
7« Boston V. Doyle, 184 Mass. 373, 385, 68 N. E. 851, 854.
T7 Appeal of Vandever, 8 Watts & S. (Pa.) 405, 42 Am. Dec. 305.
IS Duckworth v. Ocean S. S. Co., 98 Ga. 193, 26 S. B. 736.
—
BOGEET Tbusts 21
322 THE POWERS OP THE TEUSTEB (Ch. 11

lows a majority of a board of private trustees to act.''' Of course,

one trustee may be the agent of another for the performance of an
act under the trust.^"
Having appointed more than one trustee, the settlor is, in the
case of private trusts, entitled to have the benefit of their several
judgments when any act involving discretion is to be performed.
But if the act does not involve discretion and is merely ministerial,
action by one trustee alone will bind all, as where one trustee re-
ceived money due on a mortgage belonging to the trust estate and
gave a receipt therefor.*^
The settlor may expressly empower less than the entire number
of trustees to act, and his direction will be respected by the
courts.*'' And action taken by less than the entire board of trus-
tees may be ratified by the trustees who did not join ** or by the
cestui que trust.**
Where action is brought by or against the trust estate, all the.
trustees must be made parties plaintiff or defendant.*"
Successor Trustees ^ _ ^ ^^^

Questions relating to the powers of trustees may also arise be-

cause the trustees are not the original trustees, but are successors
appointed by the court or otherwise. Do successors have the same
powers expressly and impliedly given to their predecessors? Thty
do when these powers were not personal to the trustees, but were
attached to the office only. A
quotation from a recent Maryland
case states the attitude of the courts of equity clearly: "It is the
well-settled law of this state that 'if it appears that the power
lodged with the trustees in connection with the trust is a special
confidence in a particular trustee or set of trustees, or is to be ex-
ercised only upon his or their personal judgment and discretion,
such power can only be e^cercised by the designated donees, and
will not pass to a substituted trustee. On the other hand, if it
appears that the power is annexed to the office of trustee fof the

T» Ladd V. Ladd, 75 N. H. 371, 74 Atl. 1045.

soUbhofE V. Brandenburg, 26 App. D. C. 3.
81 Bowes V. Seeger, 8 Watts & S. (Pa.) 222.
82 Ratcliffe V. Sangston, 18 Md. 383 Heard v. March, 66 Mass. (12 Gush.)
;

580; Bascom v. Weed, 53 Misc. Rep. 496, 105 N. Y. Supp. 459; Draper v.
Montgomery, 108 App. Div. 63, 95 I«. Y. Supp. 904.
83 Hill V. Peoples, 80 Ark. 15, 95 S. W.
990. But see, contra, Fritz v.
City Trust Co., 72 App. Div. 532, 76 N. T. Supp. 625, affirmed 173 N. Y.
622, 66 N. E. 1109.
84 Appeal of Vanleer, 24 Pa. 224.
86 Hazard v. Durant (C. 0.) 19 Fed. 471; Caylor v.
Cooper (C. 0.) 165
Fed. 757; Sayre v. Sayre, 17 N. J. Eq. 349; Brinckerhoff v. Wemple, 1
Wend. (N. Y.) 47o; Thatcher v. Candee, 33 How. Prac. (N. Y.) 145; Jones
V. Maffet, 5 Serg. & E. (Pa.) 523.
 § 94) AS AFFECTED BY PECULIAEITIES OF TEUSTEE'S STATUS 323

purposes of the trust, and to promote its objects, then it will pass
with the trust to the successors of the original trustee, and can be
exercised by them.' " ""
It is "purely a matter of intention, to be gathered from a con-
sideration of the whole will and from the nature and objects of the
trust created thereby, as to whether a trust is personal in its char-
acter or is annexed to the office of trustee."*' It has been held
that, "in the absence of a clearly expressed intent to the contrary,
the power of sale conferred upon a trustee in a will is regarded as
a ministerial duty, annexed to the office, and passing to any person
lawfully substituted in the place of the original trustee." *'
Thus, the power conferred upon a trustee to collect the rents and
profits of property and use the income for the care and education
of a daughter until she was 30, and pay her such part of the prin-
cipal as he might think best after the daughter's marriage, is a
power annexed to the office of the trustee, and passes to a substi- n

tuted trustee °* while a trust empowering the trustee "and any

;

successor appointed by him" to sell the property confers on such

officer a personal trust, not capable of exercise by a successor ap-
pointed by the court.®* Whether any particular power is personal
or annexed to the office can only be told from a careful scrutiny of
the trust instrument and surrounding circumstances, for the pur-
pose of learning the settlor's intent."^

88 Maryland Casualty Co. t. Safe Deposit & Trust Co. of Baltimore, 115
Md. 339, 344, 80 Atl. 903, 905, Arm. Cas. 1913A, 1279.
'
87 Dodge V. Dodge, 109 Md. 164, 166, 71 Atl. 519, 521, 130 Am. St. Rep. 503.
Wliere a settlor gives trustees power to name a trust company as their suc-
cessor and gives it certain discretionary powers in case of such selection, and
the trustees vacate, but do not appoint a successor, if the court appoints the
trust company, it will have the discretionary powers named by the settlor.
Stein V. Safe Deposit & Trilst Co. of Baltimore, 127 Md. 206, 96 Atl. 349.
88 Dodge V. Dodge, 109 Md. 164, 71 Atl. 519, 130 Am. St. Rep. 503. See,
also, ShilUnglaw v. Peterson, vl84 Iowa, 276, 167 N. W. 709.
8 8 Jacobs V. Wilmington Trust Co., 9 Del. Ch. 400, 80 Atl. 346. And so a
power to inquire into the status of the beneficiary at a stated time and pay
him a portion of the corpus, if advisable, has been held to be an imperative
power which passed to a successor. Williams v. Gardner, 90 Conn. 461, 97
Atl. 854. See also Jackson v. Matthews, 133 Md. $82, 105 Atl. 146 Newport
;

Trust Co. V. Chappell, 40 R. I. 383, 101 Atl. 323. Contra: Singleton v.

Cuttino, 105 S. C. 44, 89 S. E. 385.
»o United States Trust Co. v. Poutch, 130 Ky. 241, 113 S. W.
107. See, also,
Chandler v. Chandler, 111 Miss. 525, 71 South. 811. Where the power of sale
is a mere incident for the convenient administration of the trust, and the
settlor does not expressly require the union of all trustees in the exercise of
the power, a remaining trustee may sell the property. Striker v. Daly 223
N. Y. 468, 119 N. E. 882.
»i In the following cases the power was held personal and not
capable of
exercise by a successor: Security Co. v. Snow, 70 Conn. 288, 39 Atl. 153, 66
 324 THE POWEES OF THE TRUSTEE (Ch. 11

That a trustee was only one of several named in the trust instru-
ment is an immaterial fact relating to his powers, if the others
do not qualify as trustees. The trustee or trustees qualifying have
all the powers given in the trust instrument to the entire set of
trustees named therein. The failure to qualify or the disclaimer of
certain trustees leaves the trust as if they had never been named
as trustees.**
Surviving Trustees \

Surviving trustees, after the death, resignation, or removal of

one or more trustees, are ordinarily vested with the same powers
as were possessed by the original set of trustees."^ If the change
in the trusteeship has occurred through death, as previously point-
ed out, the survivors take the entire property and trust powers by
survivorship, on account of the joint tenancy under which they
hold. In certain rare cases the powers of the trustees are purely
personal, and the death or removal of one member of the board
makes it impossible for the powers to be exercised, since the trust
instrument clearly shows that the powers were to be exercised by
the entire board or not at all."'
I

Am. St.Rep. lOT Wbitaker v. McDowell, 82 Conn. 195, 72 Atl. 938, 16 Ann.
;

Cas. 324; Luquire v. Lee, 121 Ga. 624, 49 S. B. 834; French V. Northern
Trust Co., 197 111. 30, 64 N. B. 105; Snyder v. Safe-Deposit & Trust Co., 93
Md. 225, 48 Atl. 719; De Lashmutt v. Teetor, 261 Mo. 412, 169 S. W. 34;
Dillingham v. Martin, 61 N. J. Eq. 276, 49 Atl. 143 Smith v. Floyd, 124 App.
;

Div. 277, 108 N. X. Supp. 775 Toung v. Young, 97 N. C. 132, 2 S. E. 78. But
;

in many other cases the power has been construed to be attached to the office
and, therefore, to be vested in a successor. Doe ex dem. Gosson v. Ladd, 77
Ala. 223; Wilmington Trust Co. v. Jacobs, 9 Del. Ch. 77, 77 Atl. 78; Ver-
noy V. Eobinson, 133 Ga. 653, 66 S. E. 928; Yates v. Yates, 255 111. 66, 99
N. B. 360, Ann. Cas. 1913D, 143 Moore v. Isbel, 40 Iowa, 883
; Cox v. Shelby
;

County Trust Co., 80 S. W. 789, 26 Ky. Law Rep. 50 Chase v. Davis, 65 Me.
;

102; Jencks v. Safe Deposit & Trust Co. of Baltimore, 120 Md. 626, 87 Atl.
1031; Parker v. Converse, 5 Gray (Mass.) 336; Hicks v. Hicks, 84 N. J. Bq.
515, 94 Atl. 409; Forman v. Young, 166 App. E(iT. 815, 152 N. Y. Supp. 417;
Kadis V. Weil, 164 N. C. 84, 80 S. B. 229 Wilson v. Pennock, 27 Pa. 238 In
; ;

re Blakely, 19 R. I. 324, 33 Atl. 518.

»2 Ratclifee v. Sangston, 18 Md. 383; King v. Donnelly, 5 Paige (N. Y.) 46;
Trask v. Donoghue, 1 Aikens (Vt.) 370.
8« Parsons v. Boyd, 20 Ala. 112 ;Haggart v. Eanney, 73 Ark. 344, 84 S. W.
703; La Forge v. Binns, 125 111. App. 527 Cooley v. Kelley, 52 Ind. App.
;

687, 98 N. B. 653; Stewart v. Pettus, 10 Mo. 755 Weeks v. Frankel, 197 N.

;

Y. 304, 90 N. B. 969; Striker v. Daly, 223 N. Y. 468, 119 N. B. 882 ; Shortz

V. Unangst, 3 Watts & S. (Pa.) 45; Hughes v. Williams, 99 Va. 312, 38 S. B.
138; Bell's Adm'r v. Humphrey, 8 W. Va. 1.
«* Boone v. Clarke, 3 Cranch, C. C. 389, Fed. Cas. No. 1,641; Dillard v.
Dlllard, 97 Va. 434, 34 S. B. 60.
 § 95 DISCBKTIONART POWERS MAT NOT BE DELEGATED 325

DISCRETIONARY POWERS MAY NOT BE DELEQATED

95. The trustee may not delegate to agents the exercise of powers
which involve the use of discretion and judgment; but he
may employ agents for the performance of merely min-
isterial and mechanical acts.

The trustee is an officer occupying a highly fiduciary relation-

ship. He
selected because of his good judgment, honesty, and
is
experience. The settlor has a right to rely upon the exercise of
those qualities in the administration of the trust. He has a right
to expect t'hat important acts regarding the trust will not be dele-
gated to agents and servants of the trustee. Accordingly equity
has established the rule that the trustee may not delegate the per-
formance of discretionary powers, and that, if he does so, acts
done by the agent in the execution of such discretionary powers
will be void.'"
But the acts to be performed are merely ministerial and me-
if

chanical acts, involving the exercise of no judgment or discretion,

then the trustee may appoint an agent or servant for the purpose.*"
For example, where trustees are authorized to sell real estate
whenever it is best, they may delegate to an agent the ministerial
duty of finding a purchaser, but may not delegate to him the power
to enter into a contract of sale, since that involves discretion.*'
Where the power is one of sale, the mechanical duties of posting
advertisements, proclaiming the sale at an auction, and receiving
bids may be performed by a servant; but the decisions as to the
manner of advertisement and sale are discretionary matters, and
must pass under the trustee's personal judgment.*'
A
trustee which is a corporation must necessarily act through
'
agents in the performance of all duties.** In one anomalous case,

8 6 North American Trust Co. v. Chappell, 70 Ark. 507, 69 S. W. 546; Chi-

cago Title & Trust Co. v. Zinser, 264 111. 31, 105 N. E. 718, Ann. Cas. 1915D,
931; Morville v. Fowle, 144 Mass. 109, 10 N. E. 766; Fowler v. Coates, 201
N. T. 257, 94 N. E. 997; In re Bohlen's Estate, 75 Pa. 304. In Stevens v.
Home Ins. Co., 199 Mo. App. 536, 204 S. W. 44, the power to indorse a draft
was held not to be capable of delegation.
86 Gillespie v. Smith, 29 111. 473, 81 Am. Dec. 328; Annis v. Annls, 61 Iowa,
220, 16 N. W. 97 TurnbuU v. Pomeroy, 140 Mass. 117, 3 N. E. 15 O'Pallon
; ;

V. Tucker, 13 Mo. 262 Keim v. Lindley (N. J. Ch.) 30 Atl. 1063 Sinclair v.
;
;

Jackson ex dem. Field, 8 Cow. (N. Y.) 543; Balding v. Archer, 131 N. C. 287,
42 S. E. 800; Olcott v. Gabert, 86 Tex. 121, 23 S. W. 985.
9T Coleman v. Connolly, 242 111. 574, 90 N. E.
278, 134 Am. St. Rep. 347.
8 8 Bales V. Perry, 51 Mo. 449.
89 Chicago Title & Trust Co. v. Zinser, 264 lU. 31, 105 JSI. E. 718, Ann
Cas
1915D, 931.
326 THE POWERS OP THE TRUSTEE (Ch. 11

where the trustee was infirm, the court; appointed an agent to assist
him.^ The proper
procfedure in such a case would seem to be the
removal of the trustee and the appointment of a new trustee, rather
than the conduct of the trust through a substitute, not having the
title or liabilities of- a trustee.
Unauthorized discretionary acts performed by, an agent may be
ratified by the trustees so as to be binding.^ And it has been held
that consent of all parties interested will enable a trustee to dele-
gate the performance of duties involving judgment and discre-
tion.'

THE COURT'S SUPERVISION OF POWERS

96. If the trustee is in real doubt as to the existence or method of
exercise of certain powers, he may apply to the court for
instructions.
Chancery will not ordinarily set aside the exercise of apower
by a trustee, unless there has been an abuse of authority,
bad faith, or a misimderstanding.

doubt as to whether he possesses cer-

If the trustee is justifiably in
tain powers, or concerning the method of exercising powers which
it is admitted are vested in him, he may apply to a court of chan-

cery, and that coUrt will instruct him. "He must be honestly in
doubt as to the proper construction of the instrument under which
he is acting, or as to the disposition of the funds in his hands, or
the course of action that he ought to take in any particular case, in
order to authorize his application to a court of equity for aid and
direction." * Hence it was held in the case just cited that equity
would not instruct the trustee whether he should pay an attorney's
bill for services rendered to the trust estate, there being no showing
that there was any dispute as to the validity of the claim. The
trustee should exercise his discretion regarding such matters. So,
also, where the trustee applies for instructions concerning the
method of exercising a power of sale, and no difficult questions are
involved, the court will put the bvrden of exercising the discretion
upon the trustee. "The questions relate to the administration of a
trust, in respect to matters which the testator has expressly con-
fided to the wise discretion of trustees selected by himself. There
is no suggestion, from any quarter, that they are likely to abuse
that trust, by an arbitrary or capricious exercise of authority. The

1 Franklinv. Hays, 2 Swan (Tenn.) 521.

2 Hill V. Peoples, 80 Ark. 15, 95 S. W. 990.
3 Seely v. Hills, 49 Wis. 4T3, 5 N. W. 940.
4 Warner v. Mettler, 260 111. 416, 421, 103 N. E. 259,
261.
§ 96) THE court's supervision op powers 327

judgment of this court cannot be substituted for the discretion of

the trustees, reasonably and fairly exercised." ° There must be
some question of doubt and some real necessity for advice concern-
ing the powers resting in the trustee." Where there is a question
of admitted difficulty/ equity will direct the trustee concerning his
powers, but, not if the question is prematurely presented, and re-
lates to what the trustee's powers in the future will be, rather than
to what they are now.'
May equity control the exercise of the trustee's powers upon
its own motion or at the petition of the cestui que trust? The trus-
tee is always subject to the orders of chancery." The court has
the power to supervise the exercise of the trustee's authority,^" and
will, when for the best interest of the trust, revise or overrule' the
decisions of the trustee regarding his powers and the method of
their exercise.*^
But, where the powers of the trustee are discretionary, chancery
will interfere with their execiition only whan the trustee is acting
in bad faith, or abusing his powers, or is under a misunderstanding

5 V. Heyer, 122 Mass. 525, 529.

Proctor
Morris v. Boyd, 110 Ark. 468, 162 S. W. 69, Ann. Cas. 1916A, 1004 Con-
« ;

nolly V. Leonard, 114 Me. 29, 95 Atl. 269 Bartlett v. Pickering, 113 Me. 96,
;

92 Atl. 1008. Thus advice as to tlie propriety of past action will not be given.
Stover V. Webb, 114 Me. 386, 96 Atl. 721 Hill v, Moors, 224 Mass. 163, 112
;

N. K. 641. Nor will an opinion be rendered on questions which may never

become of practical interest. Bridgeport Trust Co. v. Bartholomew, 90 Conn.
517, 97 Atl. 758 Passaic Trust & Safe Deposit Co. v. Bast Eidgelawn Ceme-
;

tery (N. J. Ch.) 101 Atl. 1026. If the question is not in controversy or is too
general, it wiU not be answered. Bailey v. Smith, 222 Mass. 600, 111 N. E.
684.
T Berger v. Butler, 159 Ala. 539, 48 South. 685 Stapyleton v. Neeley, 44
;

Fla. 212, 32 South. 868 Hills v. Putnam, 152 Mass. 123, 25 N. E. 40 ; Thorp
;

V. Lund, 227 Mass. 474, 116 N. E. 946, Ann. Gas. 1918B, 1204 Hayden's Ex'rs
;

V. Marmaduke, 19 Mo. 403 Trustees of Princeton University v. Wilson, 78

;

N. J. Bq. 1, 78 Atl. 393 Coe v. Beckwith, 31 Barb. (N. Y.) 339 Meadows v.
; ;

Marsh, 123 N. O. 189, 31 S. E. 476; Jones v. Creamer, 32 Ohio Cir. Ct. R.

223 Gamel v. Smith, 3 Tex. Civ. App. 22, 21 S. W. 628.
;

8 BuUard V. Chandler, 149 Mass. 532, 21 N. E.- 951, 5 L. R. A. 104 .Wheaton

;

v. Batcheller, 211 Mass. 223, 97 N. E. 924 Tibbetts v. Tomkinson, 217 Mass.

;

244, 104 N. B. 562; Hewitt v. Green, 77 N. J. Eiq. 345, 77 Atl. 25; Prichard
V. Prichard, 83 W. Va. 652, 98 S. B. 877.
Latimer v. Hanson, 1 Bland (Md.) 51 Jordan v. Jordan's Es'r, 4 N. C.
9 ;

292 Henderson v. Peck, 3 Humph. (Tenn.) 247.

;

10 Preston v. Safe Deposit & Trust Co., 116 Md. 211, 81 Atl. 523, Ann.
Cas.
1913C, 799; Sanderson v. White, 18 Pick. 328, 29 Am. Dec. 591; Angell v
Angell, 28 R. I. 592, 68 Atl. 583.
11 Russell V. Hartley, 83 Conn. 654, 78 Atl. 320; Whitelock v. Dorsey, 121
Md. 497, 88 Atl. 241 ; Manning v. Sheehan, 75 Misc. Rep. 374, 133 N. Y. s'upp
1006.
328 "THE POWERS OF THE TRUSTEE (Ch. 11

as to his powers.^^ If the trustee is proceeding honestly in the

exercise of his discretion, even though the court would act other-
wise if the discretion had been vested in it, the court will not over-
rule the trustee.^^ Thus, where trustees were given the power to
sell church property whenever the attendance upon the church
should fall off, so as to render the church of small usefulness, the
decision of the trustees concerning that question will not be re-
viewed by the court; being a matter of discretion.^* And equity
will not, at the request of the beneficiary, direct the trustee con-
cerning the investments which he should make, when he is pro-
ceeding in good faith.^*
Equity may enlarge the powers granted to the trustee, when this
is strictly necessary.^' If the court assumes control of the trust,
and directs the execution of the trust under its orders, the trustee must
secure the sanction or ratification of each act which he performs under
the trust."
Where the power held by the trustee is in trust for others and is
peremptory, and not a mere naked power, equity will on a proper
showing compel the trustee to exercise the power.^* Thus, where
the power is to sell for the benefit of the beneficiaries, and the trus-
when he might reasonably do so, equity will compel
tee fails to sell
the carrying out of the power of sale.^'

12 Brackett v. Middlesex Banking Co., 89 Conn. 645, 95 Atl. 12; Keeler v.

Lauer, 73 Kan. 388, 85 Pac. 541; McFerran v. Fidelity Trust Co., 140 Ky.
536, 131 S. W. 393 Woodward v. Dain, 109 Me. 581, 85 Atl. 660 Stein v.
; ;

Safe Deposit & Trust Co. of Baltimore, 127 Md. 206, 96 Atl. 349; Baer v.
Kahn, 131 Md. 17, 101 Atl. 596 Larkin v. WlkofE, 75 N. J. Eq. 462, 72 Atl.
;

98; In re Kohler, 96 Misc. Kep. 433, 160 N. Y. Supp: 669; Albright v. Al-
bright, 91 N. C. 220 Givens v. Clem, 107 Va. 435, 59 S. E. 413.
;

18 Hathaway v. New Baltimore, 48 Mich. 251, 12 N. W. 186; Ames v. Scud-

der, 83 Mo. 189 ; Gulick v. Gulick (N. J.) 3 Atl. 354 Tumurfi v. TurnurS, 89
;

N. J. Eq. 197, 104 Atl. 293 In re Hilton, 174 App. Div. 193, 160 N. T. Supp.
;

55; Cochran v. Paris, 11 Grat. (Va.) 348; Kester v. Alexander, 47 W. Va.

329, 34 S. B. 819.
li Larkin v. WikofC, 75 N. J. Eq. 462, 72 Atl. 98.
10 Caspari v. Cutcheon, 110. Mich. 86, 67 N. W. 1098.
16 Denegre y. Walker, 214' 111. 113, 73 N. E.
409, 105 Am. St. Rep. 98, 2
Ann. Cas. 787; Johns v. Johns, 172 111. 472, 50 N. E. 337; Pennington v.
Metropolitan Museum of Art, 65 N. J. Bq. 11, 55 Atl. 468.
17 Gottschalk v. Mercantile Trust & Deposit Co.,
102 Md. 521, 62 Atl. 810.
18 Saunders v. Schmaelzle, 49 Cal. 59; Walker
v. Smyser's Ex'rs, 80 Ky.
620; Campbell's Case, 2 Bland (Md.) 209, 20 Am. Dec. 360; Eldredge v.
Heard, 106 Mass. 579; Prewett v. Land, 36 Miss. 495; Hancox v. WaU, 28
Hun (N. T.) 214 In re Fargo's Estate, 20 Misc. Rep. 137, 45 N. Y. Supp. 732.
;

18 Kintner v. Jones, 122 Ind. 148, 23 N. E. 701.

§ 97) QENEBAL STANDARDS OP SKILL AND HONESTY 329

CHAPTER XII
THE DUTIES OF THE TRUSTEE
97. General Standards of Skill and Honesty.
98. Duty to Execute the Trust.
99. Duty to Act Solely in Interest of the Beneficiary.
100. Possession and Custody of Trust Property.
101. Investments.
102. Expenditures.
103. Payinents to Beneficiaries.
104. Duty to Account.
105. Duty to Account —Charges against Trustee.
106. Duty to Account —Credits to the Trustee.
107. Duty to Account —Compensation of Trustee.

GENERAL STANDARDS OF SKILL AND HONESTY

97. In the management of the trust the trustee is bound to display
the prudence, and diligence which an ordinary man
skill,
would use in the conduct of his own aifairs.
The highest degree of good faith, honesty, and fair dealing is re-
quired of the trtistee in the performance of the trust du-
ties.

The standards set for the trustee in the performance of his du-
ties relate to the degree of skill and care which he must exercise,
and also to the good faith which he must manifest toward the ben-
eficiary. Only ordinary care, skill, and prudence are required of
trustees. They are not expected to jnanifest unusual ability or ex-
traordinary care-^ The rule is "that trustees are bound in the man-
agement of all the matters of the trust to act in good faith and em-
ploy such vigilance, sagacity, diligence and prudence as in general
prudent men of discretion and intelligence in like matters employ
in their o-^n affairs. The law does not hold a trustee, acting in
accord with such rule, responsible for errors of judgment." ^ The
trustee is not liable for every error which occurs in the administra-

1 American Bonding Co. of Baltimore v. Richardson, 214 Fed. 897, 131 O. C.

A. 565; Bourquin Bourquin, 120 Ga. 115, 47 S. B. 639; Dillivan v. German
v.
Sav. Bank (Iowa) 124 N. W. 350 Litchfield v. White, 7 N. Y. 438, 57 Am. Dec.
;

534 Belding v. Archer, 131 N. C. 287, 42 S. E. 800; Gilbert v. Sutliff, 3 Ohio

;

St. 129 Appeal of Jones, 8 Watts & S. (Pa.) 143, 42 Am. Dec. 282; Cunning-
;

ham V. Cunningham, 81 S. C. 506, 62 S. E. 845; Davis v. Harman, 21 Grat.

(Va.) 194 Hutchinson v. Lord, 1 Wis. 286, 60 Am. Dec. 381.
;

2 Costello V. Costello, 209 N. Y. 252, 261, 103 N. E. 148. See, also, Ainsa v. Mer-
 °

330 THE DUTIES OF THE TRUSTEE (Ch. 12

tion of the trust. He is not required to be infallible.' "All that

equity requires from trustees is common skill, common prudence,
and common caution." * If the trustee has not used the skill of an
ordinary man in the conduct of his own affairs, it is of no avail to
him that his motives were good. Good intent will not relieve him
from liability for negligent or improvident conduct.
But the degree of good faith required of the trustee is not that
of ordinary men in ordinary affairs. He is obliged to show the high-
est amount of honesty and good faith in the performance of his
trust duties, and will be held liable for injuries occurring to the
trust estate from conduct which is tinged with the slightest degree
of mala fides. ^ "The highest degree of good faith is required of a
trustee in the execution of his trust." ' Thus, the trustee is under
a duty to disclose to the cestui que trust all matters pertaining to
the trust, without waiting for the beneficiary to question him, when
such disclosure would be of benefit to the cestui que trust.* The
trustee is presumed by equity to have acted in good faith, until a
positive abuse of the trust is shown.* That the trustee is serving
without compensation does not relieve him from manifesting the
usual amount of skill and honesty required of trustees. If he en-
ters upon a trust in which he is to act gratuitously, he must use
ordinary skill and prudence and the greatest good faith.^"

cantile Trust Co. of San Francisco, 174 Gal. 504, 163 Pac. 898; Wylie v. Bush-
nell, 277 111. 484, 115 N. B. 618 Shepherd v. Darling, 120 Va. 586, 91 S. B. 737.
;

s EUig V. Naglee, 9 Cal. 683 Pine v. White, 175 Mass. 585, 56 N. E. 967;
;

Myers' Ex'r v. Zetelle, 21 Grat. (Va.) 733.

* Appeal of Nefe, 57 Pa. 91, 96.
5 St. Paul Trust Co. v. Strong, 85 Minn. 1, 88 N. W. 256 ; Moeller v. Poland,

80 Ohio St. 418, 89 N. E. 100. But, in fixing the penalty to be placed upon thci
trustee, equity may consider the motives of the trustee and view with indul-
gence honest acts. EUig v. Naglee, 9 Cal. 683; DifCenderfEer v. Winder, 3 Gill
& J. (Md.) 311. So, too, bad health, while not an excuse for inefficient man-
agement of a trust, has been considered by the court in fixing the amount of
the liability of the trustee. Newman v. Shreve, 229 Pa. 200, 78 Atl. 79. The
advice of counsel is not an excuse. Freeman v. Cook, 41 N. C. (6 Ired. Eq.)
373. But In Miller v. Proctor, 20 Ohio St. 442, executors who took legal ad-
vice about an investment which later proved to be legally defective were held
to have used due care.
e Merchants' Loan & Trust Co. v. Northern Trust Co., 250 111. 86, 95 N. E. 59,

45 L. R. A. (N. S.) 411; Morrow v. Saline County Com'rs, 21 Kan. 484 In re

;

Randolph (Sur.) 134 N. Y. Supp. 1117, affirmed 150 App. Div. 902, 135 N. T.
Supp. 1138; Freeman v. Cook, 41 N. C. (6 Ired. Eq.) 373 Arnold v. Southern
;

Pine Lumber Co., 58 Tex. Civ. App. 186, 123 S. W. 1162.

7 Minneapolis Trust Co. v. Menage, 73 Minn. 441, 448, 76 N. W. 195.

8 Laun V. Kipp, 155 Wis. 347, 145 N. W. 183, 5 A. L. R. 655.

» Calvert v. Carter, 18 Md. 73.

10 Switzer v. Skiles, 3 Gilman (8 111.) 529, 44 Am. Dec. 723. But see, contra,
Clark V. Anderson, 10 Bush (Ky.) 99.
 § 98) DUTY TO EXECUTE THE TEUST • 331

DUTY TO EXECUTE THE TRUST

98. The primary duty of the trustee is to execute the trust accord-
ing to the terms of the trust instrument.

It is too obvious to require extended explanation that the prima-

ry duty of the trustee is to carry out the trust according to the ten-
or of the trust instrument. Whether the trust is to accumulate in-
come, or to pay it over to beneficiaries, or to partition, or what not,
the trustee should learn the settlor's intent and effectuate it.^^ The
discussion of the trust duties in detail, which appears later herein,
is merely a consideration of the means which are best adapted to
the execution of the trust. "The cardinal duties, and therefore lia-
bilities, of trustees, are these: (1) To carry out the trust; (2) to
use due care thereabout; and (3) to act in good faith there-
about." ^^ That the trustee has not been requested to perform the
trust, is no defense. He should proceed of his own initiative.^' Eq-
uity presumes that a trustee has carried out the trust in accord-
ance with its provisions", in the absence of evidence to the con-
trary.^*
The question of the method of forcing a trustee to carry out a
trust will be taken up at a later point. It will there be shown that
the right to have a private trust enforced is vested in the cestui que
trust, while the right to enforce a charitable trust lies in a public of-
ficer, as a representative of the indefinite beneficiaries. This pub-
lic officer is usually the Attorney General of the state. It will also
appear that specific execution of the trust may be compelled either
by a decree against the recalcitrant trustee or by repioving the dis-
obedient trustee and substituting a faithful trustee.^"

11 Morgan Clayton, 61 111. 35

v. ;Dunn v. Morse, 109 Me. 254, 83 Atl. 795;
Sears v. Gray (Mass.) 86; Steward v. Traverse City State Bank, 187
Russell, 8
. Mich. 387, 153 N. W. 793.
12 Klugli V. Seminole Securities Co., 103 S. O. 120, 87 S. E. 644, 646.
13 Cotton V. Rand (Tex. Civ. App.) 92 S. W. 266. '

1* Harton v. Little, 176 Ala. 267, 57 South. 851 ; Mackenzie v. Los Angeles
Trust & Savings Bank, 39 Cal. App. 247, 178 Pac. 557 Cecil's Committee v.
;

Cecil, 149 Ky. 605, 149 S. W. 965; Maccubbin v. Cromwell's Ex'rs, 7 Gill & J.
(Md.) 157 Pope v. Patterson, 78 S. O. 334, 58 S. B. 945 Cathcart v. Mat-
; ;

thews, 105 S. C. 32», 89 S. E. 1021 ; McCreery v. First Nat. Bank, 55 W. Va

663, 47 S. E. 890.
" See §§ 113, 125, post
332 THE DUTIES OP THE TRUSTEE (Ch. 12

DUTY TO ACT SOLELY IN THE INTEREST OF THE

BENEFICIARY
99. The trustee owes the beneficiary the duty of excluding all pri-
vate interest from his transactions and of conducting the
trust with the advantage of the cestui que trust solely in
mind.
The trustee estopped to deny the title of his settlor or cestui
is
que and may not purchase any title or interest in the
trust,
trust property adverse to that of the cestui que trust.
In the performance of this duty the trustee should rrfrain from
doing any act in the administration of the trust which will
or may result in a profit to himself, and he should not pur-
chase the trust property on a sale thereof conducted by
himself.
While the trustee is not under a duty to refrain from making con-
tracts with the cestui que trust, yet, if he enters into such
a contract, he should exercise the utmost good faith to-
ward the cestui que trust.

The trustee owes the cestui que trust the duty of acting solely
for the interest of the cestui que trust. In other words the trustee
should not, while administering the trust, take any step which may
or will result in his own enrichment. All his proceedings under
the trust should be with the aim of advancing the interests of the
cestui que trust, and with that aim alone.^° "It is a general prin-
ciple that a trustee must act with the most scrupulous good faith.
The one great duty arising from this fiduciary relation is to act in
all matters relating to the trust wholly for the benefit of the bene-
ficiary. A trustee will not be permitted to manage the affairs of
his trust, or to deal with the trust property, so as to gain any ad-
vantage, either directly or indirectly, for himself." "
The illustrations of this principle are numerous. Many of them
have been considered elsewhere under the heading of "Construc-
tive Trusts." ^* The discussion at that point was from the point of

loEnslen v. Allen, 160 Ala. 529, 49 South. 430; City of Chicago v. Tribune
Co., 248 111. 242, 93 N. E. 757; Teegarden v. Lewis, 145 Ind. 98, 40 N. E. 1047,
44 N. E. 9 ; In re Carmody's Estate, 163 Iowa, 463, 145 N. W. 16; Niblack v.
Knox, 101 Kan. 440, 167 Pac. 741 Richardson's Adm'rs v. Spencer, 18 B. Mon.
;

(Ky.) 450; Arnold v. Brown, 24 Pick. (Mass.) 89, 35 Am. Dec. 296; Patterson
V. Booth, 103 Mo. 402, 15 S. W. 543; Jeffray v. Towar (N. J. Ch.) 54 Atl. 817;
Davis V. Wright, 2 Hill (S. C.) 560; Newcomb v. Brooks, 16 W. Va. 32; Lii*
ington V. Patton, 111 Wis. 208, 86 N. W. 571.
17 Linsley v. Strang, 149 Iowa, 690, 126 N. W. 941, 942.
" See §§ 41, 42, ante.
 ;

§ 99) DUTY TO ACT SOLELY IN INTEREST OP BENEPIOLA.BY ,

333

view of the creation of trusts. It was there shown that the acts of a
trustee which result in his own benefit frequently give rise to con-
structive trusts. It may not be amiss here to review briefly certain
instances in which the trustee has been held to be guilty of a breach
of trust in acting for his private interest, rather than solely on be-
half of the cestui.
The trustee is violating his trust duty and may be held a con-
structive trustee for the beneficiary of all profits made in the fol-
lowing cases: Where he makes a profit for himself on the sale of
the trust property ; ^' where he takes a profit on the sale of prop-
erty to the trust estate ; ^^ where he secures an advantage for him-
self upon a lease of the trust property "^ where he uses the trust
;

funds to buy his. own property^^'or invests the trust funds in the
bonds of a corporation of which he is a stockholder and director "^ ;

where he purchases property for himself which he should have

bought for the trust ; ^* where he renews a lease in his own name
which he should have taken in his name as trustee ; " when he uses
knowledge obtained in the administration of the trust for his own
private benefit ; ^' where he receives a bonus for lending the trust
funds " where he receives a commission for taking out insurance
on the trust property; ^* where he accepts a gift from persons with
whom he deals on behalf of the trust estate ; '^ where he uses the
trust funds in his own business ^° or lends them to his wife.°^
The trustee may not buy up an outstanding title or claim to or
lien upon the triist property.^'' To do so would be to assume an
19 Frazier v. Jeaklns, 64 Kan. 615, 68 Pac. 24, 57 L. R. A. 575; Rouse v.
Rouse, 167 N. C. 208, 83 S. E. 305; Heekscher v. Blanton, 111 Va. 648, 69 S.
E. 1045, 37 L. R. A. (N. S.) 923.
20 Bay State Gas Co. of Delaware v. Rogers (C. C.) 147 Fed. 557; White v.
Sherman, 168 111. 589, 48 N. E. 128, 61 Am. St. Rep. 132.
21 Jarrett v. Johnson, 216 111. 212, 74 N. E. 756.
22 Prewitt V. Morgan's Heirs (Ky.) 119 S. W. 174; Old Dominion Copper
Mining & Smelting Co. v. Blgelow, 203 Mass. 159, 89 N. E. 193, 40 L. R. A.
(N. S.) 314.
23 Bermingham v. Wilcox, 120 Cal. 467, 52 Pac. 822.
24Zeckendorf v. Steinfeld, 12 Ariz. 245, 100 Pac. 784; Blauvelt v. Acker-
man, 20 N. J. Eq. 141.
2B Grumley v. Webb, 44 Mo. 444, 100 Am. Dec. 304.
2 6 Jarrett v. Johnson, 116 111. App. 592.
27 Sherman Lanier, 39 N. J. Eq. 249.
v.
28 Sherman White, 62 111. App. 271.
v.
2» Jacobus y. Munn, 37 N. J. Eq. 48.
30 In re Jones' Estate, 10 N. Y. St. Rep. 176 Campbell v. Campbell (C. C.)
;

8 Fed. 460.
=1 In re Randolph (Sur.) 134 N. Y. Supp. 1117, affirmed 150 App. Div. 902
135 N. Y. Supp. 1138.
32 Wiswall T. Stewart, 32 Ala. 433, 70 Am. Dec. 549; Cavagnaro v. Do;i, 63
 .

334 THE DUTIES OP THE TRUSTEE (Ch. 12

attitude hostile to the beneficiary and to abandon his trust. If the

trustee purchases any such outstanding, hostile interest in or claim
to the trust property, he will be deemed to hold it for the trust, sub-
ject to a right to be indemnified for his expenditure.
A further illustration of this principle is found in the rule that a
trustee is not permitted to deny the title of the cestuis que trust''
or of the settlor.'* Having entered into the possession of. the trust
property as trustee and accepted the propeity as subject to a trust,
the trustee will not be heard to raise objections to the validity of
the title under which he received possession. He will not be per-
mitted to allege a paramount title in himself or in some one else.
The trustee may, of course, repudiate the trust and begin an ad-
verse possession of the trust property.'" If this repudiation is
brought to the notice of the cestuis, their rights may be barred by
the statute of limitations. But no amount of possession by the trus-
tee as trustee will give him title to the property, for such posses-
sion is not adverse to the beneficiary, but is on behalf of the bene-
ficiary."
Contracts Between Trustee and Cestui
The trustee is not absolutely forbidden to make contracts with
the cestui que trust, but such contracts are viewed with great sus-

Cal. 227; Cushman v. Bonfield, 139 111. 219, 28 N. E. 937; Taylor v. Calvert,
138 Ind. 67, 37 N. E. 531; McClanahan's Heirs v. Henderson's Heirs, 2 A. K.
Marsli (Ky.) 388, 12 Am. Dec. 412; Mead v. McLaughlin, 42 Mo. 198; Njebraska
Power Co. v. Koenig, 93 Neb. 68, 139 N. W. 839 Hussong Dyeing Mach. Co. v.
;

Morris (N. J. Ch.) 89 AU. 249; Brantly v. Kee, 58 N. O. (5 Jones, Eq.) 382.
Purchase and collection of a claim against the trust estate to the profit of the
trustee is a ground for removal. Attorney General v. Armstrong, 231 Mass.
196, 120 N. E. 678.
33 Duncan v. Bryan, II Ga. 63 ; Green v. Otter, 3 B. Mon. (Ky.) 102 ; Ster-
ling V. Sterling, 77 Minn. 12, 79 N. W. 525 Von Hurter v. Spengeman, 17 N.
;

J. Eq. 185 ; Sweet v. Jacocks, 6 Paige (N. T.) 355, 31 Am. Dec. 252; PauU v.
Oliphant, 14 Pa. 342; Anderson v. Smoot, Speers, Eq. (S. C.) 312 ;Neyland v.
Bendy, 69 Tex. 711, 7 S. W. 497; Morris' Ex'r v. Morris' Devisees, 48 W. Va.
430, 37 S. E. 570.
84 Hunt V. Danforth, Fed. Cas. No. 6888 Guilfoil v. Arthur, 158 111. 600, 41
;

N. E. 1009; Associate Alumni, etc., v. General Theological Seminary, 163 N.

Y. 417, 57 N. E. 626; McLeran v. Melvin, 56 N. O. (3 Jones, Eq.) 195; State v.
Merrill, 1 Chand. (Wis.) 258. Nor can the trustee, after entering on the trtist,
attack its validity. Page v. Naglee, 6 Cal. 241 ; Saunders v. Richard, 35 Fla.
28, 16 South. 679 ; Tabernacle Baptist Church v. Fifth Ave. Bajtist Church, 60
App. Div. 327, 70 N. Y. gupp. 181; Id., 172 N. Y. 598, 64 N. E. 1126.
8 Blackett v. Ziegler, 147 Iowa, 167, 125 N. W. 874; Phillips v. Insley, 113
Md. 341, 77 Atl. 850, 140 Am. St. Rep. 408 Sommers v. Bennett, 68 "W. Va. 157,
;

69 S. E. 690.
3 Fleming v. Gilmer, 35 Ala. 62; Anderson v. Northrop, 30 Fla. 612, 12
South. 318 ; Zunkel v. Colson, 109 Iowa, 695, 81 N. W. 175 ; Green v. Otter, 3
B. Mon. (Ky.) 102; Dunn v. Wheeler, 86 Me. 238, 29 Atl. 895; McGuire v. Nu-
gent, 103 Mo. 161, 15 S. W. 551 ; Hopping v. Gray, 82 N. J. Eq. 502, 89 Atl.
§ 99) DUTY TO ACT SOLELY IN INTEREST OP BENEFICIARY 335

picion and jealousyby equity .^^ It cannot be said that the trustee
isunder a duty not to make a contract with his beneficiary, as, for
example, not to buy the cestui's interest; but, if the trustee does
enter into any agreements with the cestui, the trustee must make
a full disclosure of all the facts, treat the cestui with the utmost
fairness and openness and pay an adequate consideration for all
that he receives. There is a presumption against' the validity of
contracts between trustee and cestui and the burden is on the
trtjstee to prove the fairness of the transaction.^* If the trustee
cannot prove that the transaction was open and honest, equity will
declare the trustee a constructive trustee of all property which he
has received by virtue of his contract with the beneficiary.^' Thus,
a conveyance by the cestui que trust to the trustee of the property
owned by the cestui under the trust in consideration of the support
of the cestui by the trustee for life, where the cestui was of sound
mind and not influenced by fraud or undue influence, will be up-
held.*" But a purchase by a trustee from a cestui que trust will be

27; Levy v. Eyland, 32 Nev. 460, 109 Pac. 905; Dresser v. Travis, 39 Misc.
Eep. 358, 79 N. Y. Supp. 924; Krauczunas v. Hoban, 221 Pa. 213, 70 Atl. 740;
Khodes v. Maret (Tex. Civ. App.) 112 S. W. 433.
87 Sallee v. Chandler, 26 Mo. 124; Mnrry v. King, 153 Mo. App. 710, 135 S.
W. 107 Marshall v. Stephens, 8 Humph. (Tenn.) 159, 47 Am. Dec. 601.
;

8 8 Kennedy's Heirs v. Kennedy's Heirs, 2 Ala. 571; Iiathrop v. Pollard, 6

Colo. 424; Saunders v. Richard, 35 Fla. 28, 16 South. 679; Bryan v. Duncan,
11 Ga. 67; Buell v. Buckingham, 16 Iowa, 284, 85 Am. Dec. 516; Stewart v.
Harris, 69 Kan. 498, 77 Pac. 277, 66 L. R. A. 261, 105 Am. St. Rep. 178, 2 Ann.
Cas. 873 ; Narcissa's Ex'r v. Wathan, 2 B. Mon. (Ky.) 241 ; Brown v. Cowell,
116 Mass. 461; Schwarz v. Wendell, Walk. Ch. (Mich.) 267; Jones v. Smith, 33
Miss. 215; Newman v. Newman, 152 Mo. 398, 54 S. W. 19; Swift v. Craig-
head, 75 N. J. Eq. 102, 75 Atl. 974; Graves v. Waterman, 4 Hun (N. Y.) 687,
affirmed. 63 N. Y. 657; Cole v. Stokes, 113 N. O. 270, 18 S. E. 321; Appeal of
Miggett, 109 Pa. 520; Coffee v. Ruffin, 4 Cold. (Tenn.) 487; Ludington v. Pat-
ton, 111 Wis. 208, 86 N. W. 571.
8 9 Byrne v. Jones, 159 Fed. 321, 90 C. C. A. 101; Yonge v. Hooper, 73 Ala.

119; Flowers v. Flowers, 84 Ark. 557, 106 S. W. 949, 120 Am. St. Rep. 84;
Bronson v. Thompson, 77 Conn. 214, 58 Atl. 692 Saunders v. Richard, 35 Fla.
;

28, 16 South. 679 ; Fish v. Fish, 235 111. -896, 85 N. E. 662; Copeland v. Brun-
ing, 44 Ind. App. 405, 87 N. E. 1000; Avery's Trustee v. Avery, 90 Ky. 613, 14
S. W. 593 ; Brown v. Cowell, 116 Mass. 461 ; Schwarz v. Wendell, Walk. Ch.
(Mich.) 267 ; Tatum v. McLellan, 50 Miss. 1 ; Davidson v. I. M. Davidson Real
Estate & Investment Co., 249 Mo. 474, 155 S. W. 1; Gassert,v. Strong, 38
Mont. 18, 98 Pac. 497; karr v. Marr, 73 N. J. Eq. 643, 70 Atl. 375, 183 Am.
St. Eep. 742; In re Ledrich, 68 Hun, 396, 22 N. Y. Supp. 978; Appeal of
Costen, 13 Pa. 292; Waldrop v. Leaman, 30 S. C. 428, 9 S. E. 466; Cogbill v.
Boyd, 77 Va. 450; Ludington v. Patton, 111 Wis. 2'08, 86 N. W. 571. In
a few cases it seems to have been held that a transfer from cestui to trustee
is absolutely void. McKnatt v. McKnatt, 10 Del. Ch. 392, 93 Atl. 367 ; Butman
V. Whipple, 25 R. I. 578, 57 Atl. 379.
io Barnard v. Stone, 159 Mass. 224, 34 N. E. 272.
336 THE DUTIES OF THE TRUSTEE (Ch. 12

set aside and a constructive trust declared where it appears that

the cestui was ignorant of his rights and received an inadequate
consideration.*^ The presumption of fraud applies as well to a sale
by a trustee to his beneficiary as to a conveyance from cestui que
trust to trustee.*^ If the cestui has the transaction with the trus-
tee set aside, of course he must return any consideration paid by
the trustee to him.*'
Trustee Buying at Own Sale
The last application of the general rule under discussion is found
in the case of a purchase by a trustee at his own sale. If a trustee
were allowed to buy in the trust property on a sale thereof con-
ducted by himself, there would be a temptation tO defraud the ben-
eficiary. The trustee would be disposed to sell the property to
himself at an unduly low price, in order that he might reap a profit.
His individual interest would conflict with his representative in-
terest. For this reason equity has established the rule that a pur-
chase by a trustee at his own sale is absolutely voidable at the
option of the cestui que trust, regardless of the adequacy of the
consideration paid or the fayrness of the transaction.** This rule
shows that a trustee is under a duty not to bid in property at a sale
conducted by himself. If the sale was not caused by the trustee,
and is not under his control, but under the control of the court,
the rule does not apply, and the trustee may bid in the property.*'
*i Pugh's Heirs v. Bell's Heirs, 1 J. J. Marsh (Ey.) 398.
42 McCants Bee, 1 McCord Eq. (S. C.) 383, 16 Am. Dec. 610.
v.
43 Saunders v. Richard, 35 Fla. 28, 16 South. 679; Connecticut Mut. Life
Ins. Co. V. Stinson, 62 111. App. 319.
*4 Charles v. Dubose, 29 Ala. 367 ; Haynes v. Montgomery, 96 Ark. 573, 132
S. W. 651; Bellamy v. Bellamy's Adm'r, 6 Fla. 62; Worthy v. Johnson, 8 Ga.
236, 52 Am. Dec. 399; Mettler v. "Warner, 249 111. 341, 94 N. E. 522; Bank of
Old Dominion v. Dubuque & P. R. Co., 8 Iowa, 277, 74 Am. Dec. 302; .BaSer
V. Lane (Ky.) 118 S. W. 963 ; Clute v. Barron, 2 Mich. 192 St. Paul Trust Co.
;

V. Strong, 85 Minn. 1, 88 N. W. 256 ; Shelby v. Creighton, 65 Neb. 485, 91 N. W.

369, 101 Am. St. Rep. 630 ; Carson v. Marshall, 37 N. J. Eq. 213 Jackson v.
;

Walsh, 14 Johns. (N. Y.) 407; Brothers v. Brothers, 42 N. C. (7 Ired. Eq.) 150;
McGinn v. ShaefCer, 7 Watts (Pa.) 412; Clarke v. Deveaux, 1 S. O. 172; Arm-
strong's Heirs v. Campbell, 3 Terg. (Tenn.) 201, 24 Am. Dec. 556; Hamilton v.
Dooly, 15 Utah, 280, 49 Pac. 769; Smith v. Miller, 98 Va. 535, 37 S. E. 10;
Reilly v. Oglebay, 25 W. Va. 36 ; Harrigan v. Gilchrist, 121 Wis. 127, 99 N.
W. 909. Atransfer to a corporation in which the trustee owns the majority
of the stock is equivalent to a sale by the trustee to himself. Otier v. Neiman,
96 Misc. Rep. 481, 160 N. Y. Supp. 610. And Investment in a mortgage on
property of a corporation of which the trustee is president is likewise objec-
tionable. Strong V. Dutcher, 186 App. Div. 307, 174 N. Y. Supp. 352.
40 Steinbeck v. Bon Homme Min. Co., 152 Fed. 333, 81 C. C. A. 441 ; Plant
V. Plant, 171 Cal. 765, 154 Pac. 1058 ; Sykes v. Kruse, 49 Colo. 560, 113 Pac.
1013; Starkweather v. Jenner, 27 App. D. C. 348; Chapin v. Weed, Clarke, Ch.
(N. Y.) 464; Appeal of Lusk, 108 Pa. 152 ; Calvert v. Woods, 246 Pa. 325, 92
Atl. 301.
§ 99) DUTY TO ACT SOLELY IN INTEREST OF BENEFICIARY 337

T'Als rule,above stated, applies to a sale by a trustee to a cotrustee,

as well as to a sale by a trustee to himself as an individual.*"
Where the tr'cist^e violates his duty not to purchase the trust
property at a sale thereof conducted by himself, the remedy of the
cestui que trust is usually stated to be that he may avoid the^ sale.*^
Perhaps a more accurate statement of the remedy open to the
beneficiary would be that he may have the trustee declared a con-
structive trustee of the property. The result is the same and the
difference only one of theory. Of course, the beneficiary may hold
the trustee to his purchase and compel hi'm to pay the price.*' / If
the trustee has sold the property at an advanced price, the cestui
may compel the trustee to aqcount for the profit he has made.*'
If the trustee has transferred the property to a bona fide purchaser
for value, naturally the cestui que trust may not recover the prop-
erty f^^om such bona fide purchaser, but will be confined to his
remedy against the trustee."" As a condition of avoiding the sale
the cestui que trust must return to the trustee the consideration
received.'^ ^
'

The conduct of the cestui que trust may be such as to prevent

hirii from insisting upon the enforcement of the rule that the trus-
tee shall not act for his own benefit. The beneficiary may exn
pfessly waive the riile."^ He may consent that the^ trustee may buy
at his own sale, and if this consent is given by a person of full
capacity and with a full knowledge of the facts, the purchase by

*8 Ringgold V. Ringgold, 1 H^ar. & G. (Md.) 11, 18 Am. Dec. 250; Beeson v.
'

Beeson, 9 Pa. 279.

*7 Andrews v. Hobson's Adm'r, 23 Ala. 219 In re Wheeler's Estate (Del.
;

Orph.) 101^ Atl. 865 Thorp v. MeOjiUum, 1 Oilman (6 111.) 614 Higgins v.)
; ;

Curtiss, 82 lU. 28 Mason y. Martin, 4 Md. 124 Jenison v. Hapgood, 7 Pick.

; ;

(Mass.) 1,19 Am. Dec. 258; Obert v. Hammel, 18 N. J.' Law, 73; Davoue v.
Fanning, 2 Johns. Ch. (N. T.) 252 Campbell v. Pennsylvania Life Ins. Co., 2
;

Whart. (Pa.) 53; SoUee v. Croft, 7 Rich. Eq. (S. C.) 34; Hamilton v. Dooly, 15
Utah, 280, 49 Pac. 769.
4 8 Thorp V. McCullum, 1 Oilman (6 111.) 614; HufC v.' Earl, 3 Ind. 306; Scott

V. Freeland, 7 Smedes & M. (15 Miss.) 409, 45 Am. Dec. 310 ;Pitt v. Petway,
34 N. C. (12 Ired.) 69; Moore v. Hilton, 12 Leigh (Va.) 1.
*»Eberhardt v. Christiana Window Glass Co., 9 Del. Ch. 284, 81 Atl. 774;
Wasson v. English, 13 Mo. 176; Romaine v. Hendrickson's Ex'rg; 27 N. J. Eq.
16^; Appeal of Baker, 120 Pa. 33, 13 Atl. 487; Zimmerman v. Harmon, 4 Rich
Eq. (S. O.) 165.
BO Farrar v. Payne, 73 111. 82; Mason v. Martin, 4 Md. 124; Morse v. Hill,
136 Mass. 60 Hawley v. Cramer, 4 Cow. (N. T.) 717 Barksdale v. Finney, 14
; ;

Grat (Vat) 338 Newcomb v. Brooks, l6 W. Va. 32.

;

SI Ounn V. Brantley, 21 Ala. 633; Mason v. Martin, 4 Md. 124; Lass v.

Sternberg, 50 Mo. 124; Mulford v. Minch, 11 N. J. Eq. 16, 64 Am. Dee. 472
Smith V. Miller, 98 Va. 535, 37 S. E. 10.
•2 Miller v. Dodge, 28 Misc. Rep. 640, 59 N. Y. Supp. 1070.

BOGEET Teusts —22

 ;

'
338 THE DUTIES OP THE TRUSTEE (Ch. 12

the trustee will not be voidable.^' So, too, after the transaction
has taken plaee the acts or failure to act on the part of the cestui
que trust may bar his right to object. By laches or acts of ratifica-
tion the beneficiary may lose his right to attack a contract made
between trustee and beneficiary.^* By failure to object within a
reasonable time, after full knowledge of the facts, the cestui may
affirm the purchase by the trustee of' the trust property. °° ^
Thus, where the parties capable of avoiding a purchase by a trus-
tee on his own sale stand by and permit the trustee to improve the
property as his own, they cannot afterwards set aside the sale or
have a constructive trust declared.''
The court of chancery may, for sufficient reason and under such
restrictions, as it may impose, permit the trustee to bid at his own
sale."'

POSSESSION AND CUSTODY O'F TRUST PROPERTY

100. The trustee should take the trust property into his possession
and protect it against trespass, waste, and conversion. He

shoidd reduce choses in action to money as soon as pos-

sible. Except in extraordinary cases, where possession
will be highly advantageous to him, the cestui que trust is
not entitled to demand from the trustee the possession of
the trust property.
The trustee is ordinarily vested with the legal title to the trust
res and shoxild take all steps necessary to protect such title.

OS Faucett Faucett, 1 Bush (Ky.) 511, 89 Am. Dec. 639; De Oaters v. Le

v.
Ray De Chaumont, 3 Paige (N. Y.) 178; TJngrich v. TJngrich, 131 Ap'p. Div. 24,
115 N. Y. Supp. 413; Roberts v. Roberts, 65 N. C. 27; Field v. Arrowsmith, 3
Humph. (Tenn.) 442, 39 Am. Dec. 185. But see Munro t. Allaire, 2 Caines' Cas.
(N. X.) 183, 2 Am. Dec. 330.
04 Stewart's Adm'r v. Carneal, 51 S. W. 800, 21 Ky. Law Rep. 497; Prince
de Beam v. Winans, 111 Md. 434, 74 Atl. 626; Bushe v. Wright, 118 App.Div.
368, 103 N. Y. Supp. 403; Boyd v. Hawkins, 17 N. C. (2 Dev. Eq.) 195; Inlow
V. Christy, 187 Pa. 186, 40 Atl. 823.
.0 6 Hammon^ v. Hopkins, 143 TJ. S. 224, 12 Sup. Ct. 418, 36 L. Ed. 134 ;James
V. James, 55 Ala. 525; Hay ward v. Ellis, 13 Pick. (Mass.) 272; Jones v. Smith,
33 Miss. 215; Scott v. Freeland, 7 Sm^des & M. (15 Miss.) 409, 45 Am. Dec.
310; Mulford v. Minch, 11 N. J. Eq. 16, 64 Am. Dec. 472; Greagan v. Buchan-
an, 15 Misc. Rep. 580, 37 N. Y. Supp. 83; Boerum v.' Schenck, 41 N. Y. 182;
Villines v. Norfleet, 17 N. C. (2 Dev. Eq.) 167 ; Beeson v. Beesqn, 9 Pa. 279
Price V. Nesblt, 1 Hill Eq. (S. C.) 445; Connolly v. Hammond, 51»Tex. 635;
Lewis V. Hill, 61 Wash. 304, 112 Pac. 373.
08 Davis V. Simpson, 5 Har. & J. (Md.) 147, 9 Am. Dec. 500.
07 Hayes v. Hall, 188 Mass. 510, 74 N. E. 935; Gallatian v. Cunningham, 8
Cow. (N. Y.) 361; SchoUe v. SchoUe, 101 N. Y. 167, 4 N. E. 334. But see, con-
tra, Linsley v. Strang, 149 Iowa, 690, 126 N. W. 941,
§ 100) POSSESSION AN1> CUSTODY OF TRUST PEOPEETY 339

Whether the cestui que trust is entitled to demand a conveyance

of the trust property from the trustee is a question upon
whichi the courts are in conflict.
The trustee is under no duty to reconvey to the settlor, unless
the settlor has reserved a power of revocation.

The duty of the trustee, after acceptance of the trust and

first
qualification, is to take possession of the trust property. The very
definition of a trust indicates that the trustee is an officer who is to
have possession and title to property for the benefit of another.
So that, whether the property subject to the trust be real or per^
sonal, lands or money, bonds, stocks, or negotiable paper, the trus-
tee should take, such steps as are necessary to place such property
under his controlor in his custody.'^* If the trust property consists
of choses in action, such as promissory notes or book accounts, the
^trustee should proceed with due diligence to their collection."* If
he is negligent in reducing them to money, and loss results to the
trust estatg, he will be liable for such loss.*" Thus, if he waits so
long after the obligation becomes due that the' obligor becomes in-
solvent, and he could have collected the debt by promptly bringing
suit, the trustee will be obliged to make good the loss to the cestui.
However, the trustee need not siie upon a chose in action the
instant it becomes due. "There is no peremptory obligation im-
posed upon a trustee (especially when acting with the knowledge
and approbation of much the largest portion of those interested) to
sue upon a bond passed to him as trustee, the moment or the month
or the year it becomes due. A due regard to the ultimate security
i

of the debt may require him to indulge the debtor, and if, contrary
to a reasonable expectation, any portion of the debt be lost, in the
exercise of a fair discretion, regulated solely by an anxious effort
to increase the ultimate security of the debt, the chancery court will
not visit him with the penalty of miking good the loss." °* If the

58 Oonnolly v. Leonard, 114 Me. 29, 95 Atl. 269; Nagle v. Conard, 80 N. J.

Eq. 252, 87 Atl. 1119 ; In re Harbster's Estate, 133 Pa. 351, 19 Atl. 558. A
succeeding trustee should Investigate the acts of his predecessor and recover
from him whatever belongs to the trust estate. In re Lane's Will (Del. Ch.)
97 Atl. 587.
5 8 Waterman V. Alden, 144 111. 90, 32 N. E..972; Cross v. Petree, 10 B. Mon.

(Ky.) 413 ; Hunt v. Gontrum, 80 Md. 64, 30 Atl. 620 ; Speakman v. Tatem, 48
N. J. Eq. 136, 21 Atl. 466 Vilas v. Bundy, 106 Wis. 168, 81 N. W. 812.
;

60 Lowson V. CopelE^pd, 2 Brown Ch. Cas. (Eng.) 156; Purdy v. Johnson, 174
Cal. 521, 163 Pae. 893. And a trustee who falls to collect a dividend from an
Insolvent estate in which he has wrongfully invested trust moneys is liable for
the amount of the dividend. Backes v. Crane, 87 'n. J. Eq. 229, 100 Atl. 900.
01 Waring v. Darnall, 10 Gill & J. (Md.) 126, 142.
340 THE DUTIES OP THE TRUSTEE (Ch. 12

best interests of the trust dictate a compromise of the 'debt due the
trust, the trustee is under a duty to make such a compromise, and
equity will uphold^ his action upon the accounting.'^ Correspond-
ing to the duty of the trustee to reduce the principal' of the trust
property to possession is the obligation on his part to collect the
income and profits of the trust estate and retain control of them.'^
Having obtained possession of the trust property, it is the duty
of the trustee to protect that possession. If there be tr^espass upon
or waste of the trust property, he should bring the appropriate ac-
tion.** If the trust goods are converted, he should sue in trover."'
If real property of the trust is wrongfully occupied, he should eject
the trespasser, lest his own title and the right of the cestui que
trust be lost by adverse possession.*' In keeping the property the
trustee should use the same care which he would bestow on his
individual property. The degree of diligence required depends up-
on the nature of the trust res. Thus, a trustee who places negoti-
able bonds in a safety deposit box will ndt be responsible for their
loss, if they Are stolen; "'' whereas, of course, he would be respon-
sibleif he left them in an unprotected situation. Greater attention
is due from the trustee in the case of negotiable securities than
wquld be expected where ordinary chattels are involved.
How Property Must be Kept
It goes almost without saying that the 'trustee nee'd not retain
the trust property in his personal possession constantly. He may
intrust the property to agents and employees. It has previously
been shown that he may lease real property,, when the purposes of
the trust require such action.'*
The trustee should keep the trust property separate from his
private property and also from other trust funds." In order that
he may be able to account accurately, ^nd in order that the cestui

82 Brackett v. Middlesex Banking Co., 89 Conn. 645,. 95 Atl. 12; Pool v.

Dial, 10 S. C. 440. /

es Windsor Trust Co.

v. Waterbury, 160 App. Div. 571, 145 N. Y. Supp. 794.
Harvey, 112 Va. 816, 72 S. E. 701. If a cotrustee has taken steps
8* Stull v.
to misappropriate trust funds, the trustee should enjoin his fellow trustee.
Crane v. Hearn, 26 N. J. Eq. 378. (

8s Poage V. Bell, 8 Leigh (Va!) 604.

66 Schifeman v. Schmidt, 154 Mo. 204, 55 S. W. 451; Cameron v. Hicks, 141
N. O. 21, 53 S. B. 728, 7 L. R. A. (N. S.) 407; Hunter v. Hunter, 63 S. C. 78,
41 S. E. 33, 90 Am. St. Rep. 663.
6T Carpenter v. Carpenter, 12 R. I. 544, 34 Am. Rep. 716.
»" See § 90, ante.
69 Moore v. McKenzie, 112 Me. 356, 92 Atl. 296; In re Union Trust Co. of
New York, 86 Misc. Rep. 392, 149 N. Y. Supp. 324 Wagner v. Coen, 41 W. Va.
;

351, 23 S. E. 735. See, also, the discussion under the subject of investments,
post, i 101. ,
'
§ 100) POSSESSION AND CUSTODY OF TRUST PROPERTY 341

que trust may be able to trace his property with ease, the trustee
should not mingle t^e trust property with ,other property. If he
does so mingle it, and loss results, the trustee will be personally
liable. . ,
Ordinarily the trustee is entitled to the possession of the trust
property as against all the world, including the cestui que trust."
While the cestui is the beneficial owner of th^ trust property in \
certain sense, for a longer or shorter time, still he. is expected to
obtain the benefit of the property through the trustee, and not
directly, except in unusual cases. In applying the general rule an
English Court of Chancery has stated the possible exceptions as
follows "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 firom the personal 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 cestlii que trust for life, although the testator's
ihtention appeared that it should remain with the trustees, as where
the personal occupation of the trust property was beneficial to the
cestui que trust, there the court taking means to securp the due
protection of the property 'for the benefit of those in remainder,
.

would, in 'substance, be performing the trust according to the in-

tention of the testator." '^
The general rule is illustrated' by a case in/ which a trust was
created for the support and education of a son, to last during his
life, with remainder to others. In such case the son is not, on
reaching his majority, entitled to the possession of the trust prop-
erty, a farm.'^ But it has been held that the beneficiary was en-
titled to the possession of such trust property as slaves, where the
only benefit to be had from them would necessarily come from
personal use." And an equitable life tenant of stocks has been
given by chancery the power to collect the dividends upon the
stocks, to the exclusion of the trustee, when 'the only effect of
allowing the trustee to collect and pay over the dividends would be
to burden the trust estate with the payment of commissions. In

7 In re Harbster's Estate, 133 Pa. 351, 19 Atl. 558; Barkley v. Dosser, 15

Lea (Tenn.) 529.
71 Tidd V. Lister, 5 Madd. 429, 432; 433. The English situation has been af-
fected considerably by legislation since the decision of Tidd v. Lister, Ames'
Cases on Trusts (2d Ed.) 467. Possession by the beneficiary is now more gen-
erally allowed.
72 Witkham v. Berry, 55 Pa. 70.
73 Wade V. PoweU, 20 Ga. 645; McKnight v. McKnight, 10 Eich. Eq. (S. C.)
157.
 342 THE DUTIES OF THE TRUSTEE (Ch. 12

this case the trust property remained in the- possession of the trus-
tee, but the right to receive its income directly was granted to the
cestui.'*
Except in the rare cases where the trust res consists ^of an
equitable interest in property, the trustee has the legal title to the
trust property and is under a duty to protect that title." All ac-
tions based upon the* legal title should be brought by the trustee.
"The trustees .are the parties in whom the fund is vested, and
whose duty it is to maintain and defend it against wrongful attack
or injury tending to impair its safety or amount. The title to the
fund being in them, neither the cestuis que trust nor the benefi-
ciaries can maintain an action in relation to it, as against third par-
ties, except in case the trustees refuse to perform their duty in that
respect, and then the trustees should be brou^h^ before the court as
''"
parties defendant."
Cestui's Right to Conveyance '

An important question- which has given the courts some trouble

is whether a cestui que trust possessing the entire beneficial inter-

est in the trust res may demand of the trustee a conveyance of the
trust property and thus destroy the trust. If a settlor creates a
trust for the collection and accumulation of the income of property
until the beneficiary reaches twenty-five years o^ age, and directs
the trustee to deliver to the. cestui the principal and accumulated
income at that time, may the cestui, upon reaching his majority,
demand that the trustee deliver to him at once the trust property?
Upon these facts the English courts have held that the cestui was
entitled to a conveyance that he and he alone had "an absolute in-
;

defeasible interest in the legacy"; that he was capable of giving a

, valid discharge after reaching twenty-one, and, being the real own-
er of the property in equity, he ought to be allowed to enjoy it as he
liked, either through the trust or directly.'^' ,

This view has- met with some support in America. Thus, in a

New Jersey caseit was held that, where a trust to last for ten years
was created for the benefit of a widow and children, the benefi-
ciaries to receive the principal at the
end of the trust, the cestuis
might demand the conveyance of the propertyto them, prior to the
expiration of the trust. '''
But the oppositp view has found strong support. In a leading

'* Williamson v. Wilkins, 14 Ga. 416.

75 Parsons v. Boyd, 20 Ala. 112. See § 84, ante,
7 6 Western R. Co. v. Nolan, 48 N. Y. 513, 518.

7 7 Saunders V. Vautier, 4 Beav. 115. For a further discussion of this sub-

ject from the point of view of the power of the cestui que trust to end the
trust, see § 128, post,
78 Huber v. Donoghue, 49 N. J. Eq. 125, 23 Atl. 495.
§ 100) POSSESSION AND CUSTODY OP TRUST PEOPEliTT 343

Massachusetts case the court declined to qrder a conveyance under

similar circumstances and said: "This coui't has ordered trust
property to be conveyed by the trustee to the beneficiary Ai^rhen
there was a dry trust, or when the purposes of the trust had been
accompHshed, or when no good reason was shown why the trust
should continue, and all the persons interested in it were sui juris
and desired that it be terminated; but we have found no expres-
sion of any opinioiji in, our reports that provisions requiring a
trustee to hold and manage the trust property until the beneficiary
reached an age beyond that of twenty-one years are necessarily
void if the interest of the beneficiary is vested and absolute." ''^
This view has also been supported in New York, where, however,
the situation is somewhat complicated by statutes forbidding both
trustee and cestui from aliening their interests.*" Doubtless the
cestui could accomplish the result desired, namely, the obtaining
of money immediately, where the alienation of the cestui's
in states
by borrowing and pledging his interest
interest is not prohibited,
under the trust instrument as security, or by selling his interest.
Where the trust is passive, the court may, upon the application
of the cestui, decree a conveyance to him.*^ In such cases the trus-
tee is a mere receptacle of the title and no useful end can be accom-
plished by continuing the trust. The Statute 'of Uses would vest
the legal title in the cestui without a conveyance, it would seem.*^
If the trustees voluntarily convey the trust property to cestuis who
possess an absolute and indefeasible interest in the property, the
title thus obtained will be a valid title. '^ Tuere is no one who can
object to such an act. The cestuis might not, in some jurisdictions,
have been able to force a conveyance, but, having obtained it, their
title is not subject to attack.

In many case^ the trustee isexpressly given authority to 'Convey

the principal to the cestuis. In such cases there can be no doubt

7 9 Claflin V. Claflin, 149 Mass. 19, 22, 20- N. E. 454, 3 L. R. A. 370, 14 Am.
St. Rep. 393. •
'so Lent v. Howard, 89 N. Y. 169; Cuthbert v. Chauvet, 136 N. Y. 826, 32 N.
E3. 1088, 18 L. R. A. 745. See, also, Rhoads v. Rhoads, 43 III. 239. But in New
York by Laws 1909, c. 247 (now Personal Property Law [Consol. Laws, c. 41]
§ 23), trusts of personal property may be revoked in whole or in part by the
settlor upon the written consent of all the persons interested in the trust.
61 New England Lodge No. 4, F. & A. M. v. Weaver, 76 Ohio St. 628, 81 N.
E. 1192; Inches v. Hill, 106 Mass. 575; Rothscliild v. Dickinson, 169 Mich. 200,
134 N. W. 1035.
82 See ante, § 45. ,

83 Obermiller v. Wylie 36 Fed. 641; Taft v. Decker, 182 Mass. 106,

(O. C.)
65 N. E. 507 ; Storrs v. Flint, 46 N. Y. Super. Ct. 498; Smith v. Moore, 142 N.
C. 277, 55 S. E. 275, 7 L. R. A. (N. S.) 684.
3,44 THE DUTIES OF THE TRUSTEE > (Ch. 12

about the validity of the transfer.** Where it is the duty of the

trustee to convey to the cestui the trust res, it will be presumed that
such duty has been performed and that a conveyance has been ex-
ecuted '° but where a conveyance would be a breach of duty, pos-
;

session by the beneficiary will be presumed not to be under a con-

veyance from the trustee.*' These cases are, of course, following-
the general rule that a trustee is presumed to have performed his
duty.*^ Where a trusj:ee is required to execute a conveyance to a
cestui que trust, he should not be required to warrant the title ex-
cept as against his own acts.**
Settlor's Rights.
Ordinarily the settlor of a trust has no right to demand a recon-
veyance of the trust property to him, in the absence of a pbwer of
revocation expressly reserved.*' It is not the duty of the trustee
to convey to the settlor upon demand, unless such a power of revo-
cation exists, and a conveyance to the settlor and consequent at-
tempt to destroy the trust is a breach of the trustee's duty to the
cestui.""
Where the instrument creating the trust disposes of the property
conveyance by the trustee to the
after the expiration' of the trust, a
persons entitled to the property at the end of the trust is not neces-
sary."* The legal title to the property vests in the remaindermen
who follow the trust without any further action. But if the trust
instrument makes no provision concerning the disposition of the
property in a contingency which has happened, and the court de-
crees that certain parties are entitled to the property after the end
of the trust, a conveyance by the trustees to such parties is neces-
sary."^

s* Halper v. Wolff, 82 Conn. 552, 74 Atl. 8^0

Jartoe v. Grifflth, 150 Ky^ 549,
;

150 S. W. 839; Lord

Comstock, 240 111. 492, 88 N. E. 1012-; Mt. Morris Co-
v.
op. Building & Loan Ass'n v. Smith (Sup.) 120 N. Y. Supp. 676; Paine v. Sack-
ett 27 R. I. 300, 61 Atl. 753.
*» Reilly v. Conrad, 9 Del. Ch. 154, 78 Atl. 1080 Harp's Heirs v. GUliam, 1
;

Cold. (Tenn.) 488. • '

88 Brewster v. Striker, 2 N. Y. 19.

f
" See § 98, ante.
»» Hoare v. Harris, 11 lU. 24; Dwinel v. Veazie, 36 Me. 609.
»» See i 72, ante.
so Henderson v. Sherman, 47 Mich. 267, 11 N. W. 153 ; Diefendorf v.
Spraker, 10 N. Y. 246.
81 Toms V. Williams, 41 Mich. 552, 2 N. W. 814; Mitchell v. Mitchell, 35
Miss. 108 ; Watkins v. Reynolds, 123' N. Y. 211, 25 N. B. 322 ; Alexander v.
Springs, 27 N. C. (5 Ired.) 475 Westcott v. Edmvmds, 68 Pa. 34; In re Sheaff'a
;

Estate, 231 Pa. 251, 80 Atl. 361.

»2 Sanger v. Bourke, 209 Mass. 481, 95 N. E. 894.
 ;

§ 101) INVESTMENTS 345

INVESTMENTS
101. In making investments the trustee is bound to use the highest
degree of good faith and the discretion of a reasonably
prudent man. He should seek to obtain the highest in-
come return which is consistent with the safety of the
principal.
The settlor may direct the trustee concerning his investments.
Such instructions should be followed, but in obeying them
the trustee is not relieved from the duty of exercising good
faith and reasonable care.
Chancery may instruct the trustee concerning his investments.
Frequently the proper trust investments are prescribed
by statute.
The trustee may deposit the trust funds in a bank of good repu-
tation for a reasonable time, while seeking an investment,
but should not place the funds on time deposit.
The following forms of investment are generally disapproved as
trust investments:
(1) Investments on personal security alone;
(2) Investments in trade, business or speculation, by way of
stocks or otherwise;
(3) Real estate;
(4) Investments in foreign jurisdictions.
Equity generally sanctions investments in —
(1) Notes or bonds secured by mortgages on real estate,
where the margin of security is ample
(2) Government bonds;
(3) An approved list of railroad bonds in many states.
Whether it is the duty of a trustee to change an improper in-
vestment, which he receives from the settlor, is a disputed
question.
A cestui que trust, of full age and sound mind, and acting with
fullknowledge of the circumstances, may consent to or
acquiesce in an improper investment in such a way as to
prevent him from holding the trustee liable therefor.

It has been previously shown *' that, in ^the performance of his

trust duties, the trustee is under an obligation to exercise the high-
est degree of gbod faith and the care and skill of an ordinary man
in the conduct of his own affairs. This rule applies to the invest-
'

»'' See ante. ^

§ 97,
346 THE DUTIES OP THE TRUSTEE ,
(Ch. 12

ment of the trust funds, as well as to the Other functions of the

trustee. "It has long been the rule in this commonwealth that in
making investments, as well as in the general management of the
trust, a trustee is held only to good faith and sound discretion, and
hence that he cannot be held for the consequences of an error in
judgment, unless the error is such as to show either that he acted
in bad faith or failed to exercise sound discretion.""* In deciding
whether the investments of the settlor shall be continued, and in
making new investments, the trustee should be strictly honest and
fair toward the cestui que trust, and h^ should use the diligence
and prudence which an ordinary business man would use in in-
vesting his own funds for like objects. ®° In determining what is
ordinary skill and diligence, the court will consider extraordinary
.conditions such as the existence of war.®' /

In making investments the trustee should be guided by thQ inter-

ests, of both present cestuis que trust and the remaindermen or fu-
ture cestuis que trust. The trustee should look to the security of
the fund, to the production of a reasonable income, and to the
obtaining of an investment which is readily salable."' Thu§, where
a trust fuild wa« for the support and education of infants, the New
York court has said that "the first and obvious duty was to place
that fifteen thousand dollars in a state of security; second, to se^
to it that it was productive of interest and, third, so to keep the
;

fund, that it should always be subject to future recall for the ben-
°^
efit of the cestui que trust."
The authority of the trustee to invest the trust funds, and his cor-
responding duty, may be expressly set forth in the trust instru-
ment, or it may be inferred. If the proper administration of the
trust requires investment, of course, the duty to invest will be im-
plie;d.°° So, too, the power and duty to change investments is one
frequently implied. Where the, trust administration is to last for
some time, the production of a suitable income will frequently re-

- Taft V. Smith, 186 Mass. 31, 32, 70 N. B. 1031.

94
»s
Eichardson v. Morey, 18 Pick. (Mass.) 181; Thayer v. Dewey, 185 Mass.
68, 69 N. E. 1074; Roosevelt v. Roosevelt, 6 Abb. N. C. (N. Y.) 447 King v. ;

Talbot, 40 N. Y. 76 Nance v. Nance, 1 S. C. 209

; Watkins v. Stewart, 78 Va.
;

111.
98 Foscue V. Lyon, 55 Ala. 440; Campbell v. Miller, 38 Ga. 304, 95 Am. Dec.
389.
97 Tarbox v. Tarbox, 111 Me. 374, 89 Atl. 194; Appeal of Pray, 34 Pa. 100.
98 King V. Talbot, 40 N. Y. 76, 88.
9 9 In re Kaiser's Estate, 2 Lane. Law Rev. (Pa.) 362; Appeal of Grothe,
135 Pa. 585, 19 Atl. 1058.
 § 101) '
INVESTMENTS 347

quire the trustee to shift his investments. A power and duty to do

this in liberally implied.^
The trustee should invest the funds of the estate within a reason-
able time. What is a reasonable time is a question of fact, which
will be solved by a consideration of the amount of the fund and the
state of the investment market in the community. Two months
,
has been held to be a reasonable time within which the trustee
might search for an investment/ but more than two years delay in
investing the trust funds has been held unreasonable.*
The propriety of an investment will, of course, be determined as
of the time when it was made by the trustee.* It is elementary
that the trustee should invest the. trust funds separately from his
own funds and from other trust funds," that he should not invest the
trust money in his own name but rather in the name of the trust ; *
that the trustee should not make the investment in such a way as
to result in his private gain and that as far as possible the trust
;
'

funds should bd invested within the jurisdiction where the trust is /

1 Luxon V. WUgus, 7 Bush (Ky.) 205 ; Citizens' Nat. Bank v. JefCerson, 88

Ky. 651, 11 S. "W. 767; Spencer v. Weber, 163 N. Y. 493, 57 N. B. 753. See
St. Mass. 1918, c. 68, by whicli the power to change trust investments is
granted, in the absence of contrary directions in tlje trust instrument
2 Appeal of Witmer, 87 Pa. 120.
s Cavender v. Cavender (C. C.) 8 Fed. 641.
* Taft V. Smith, 186 Mass. 31, 70 N. E. 1081. If the trust investments de-
preciate in value, due to causes not involving the negligence of the trustee,
he is not liable. In re Blauvelt's Estate (Sur.) 20 N. Y. Supp. 119; In re
Menzie's Estate, 54 Misc. Eep. 188, 105 N. Y. Supp. 925; In re Bartol's Es-
tate, 182 Pa. 407, 38 Atl. 527 ;In re Gouldey's Estate, 201 Pa. 491, 51 Atl. 315.
5 McOullough's Ex'rs v. McOullough, 44 N. J. Eq. 313, 14 Atl. 642. But
in a recent New York Case (In re Union Trust Co. of New York, 219 N. Y.
514, 114 N. E. 1057) the mingling of several trust funds in a single Investment
has been approved and later statutes allow trust companies which are trus-
;

tees to mix trust investments and to hold money for investment in their own
names, upon the making of appropriate records. Laws N. Y. 1917, c. 385.
And by Laws N. Y. 1918, c. 544, mixture of trust and private funds in the
same bond and mortgage is allowed under certain conditions. The trustee
should not buy a mortgage on property in which a corporation of which he
is president is interested. Strong v. Butcher, 186 App. Div. 307, 174 N. Y.
Supp. 352.
8 Morris v. Wallace, 3 Pa. 319, 45 Am. Dec. 642. By Laws N. Y. 1916, c.
588, it is made a misdemeanor and ground for removal to invest trust funds
in the trustee's name individually. "One of these rules is that the trustee
who invests such funds in his own name becomes personally responsible.
* * * Were he permitted to do otherwise, it would place before him the
constant temptation to make the trust fund a dumping ground for his own
unsatisfactory ventures." Cornet v. ,Cornet, 269 Mo. 298, 190 S. W. 333, 341.
1 1n re Carr's Estate, 24 Pa. Super. Ct. 369.
348 THK DUTIES OF THE TEUSTEE (Ch. 12

being administered.* That an investment was made by the advice

of counsel is no excuse, if it was improperly made.' The trustee
must shoulder the responsibility himself.
The trustee should obtain as high a rate of interest on the^ trust
fund as is consistent with safety. There is no absolute standard.
Each case must be solved upon its own facts, and depends upon the
investment market in the community and the nature of the trust.
It has been held that 41/^ per cent, was "a proper/ amount of interest
to receive," while in other cases the rates of 2.8 per cent.^^ and
from 3 to 4 per cent.^^ have been held unreasonably low.
I A direction to invest the "estate" will be consti'ued to imply the
duty to invest the accumulated income, which is to be paid over to
the beneficiaries on their majorities." If interest is accumulating,
and will be necessarily held for some time in the hands of the trus-
tee, he should invest it.^*
Settlor's Directions
In considering the duties of a trustee regarding the investment of
trust funds, it should be remembered that those duties may be

seriously affected or wholly controlled by the directions of the set-

tlor in the trust instrument. The settlor may expressly name the
investments which the trustee is under a duty to make, or the set-
tlor may direct the trustee to retain the investments which the
settlor had made, or the settlor may give the trustee discretion to
invest as he sees fit. "It is fundamental law that a testator or the
creator of a trust has unliipited authority to direct how his money
may be invested by his trustees, or may leave the manner of such
investment completely .in the discretion of such trustees." ^°
If the settlor selects a particular investment as one in which he
desires the trust funds to be placed, it is the duty of the trustee
to retain t^e trust funds in such investment, if they are already

McCullougli's Ex'rs y. McCuUough, 44 N. J. Eq. 313, 14 Atl. 642.

8
In re Westerfield, 32 App. Div. 324, 53 N. Y. Supp. 25.
»
10 Appeal of Graver, 50 Pa. 189.
11 In re Shields' Estate, 14 Phila. (Pa.) 307.
12 In re Whitecar's Estate, 147 Pa. 368, 23 Atl. 575.
13 In re Stewart, 30 App. Div. 368, 51 N. Y.^Supp. 1050; affirmed 163 N. Y.
593, 57 N. E. 1125. '
'

14 Fowler v. Colt, 22 N. J. Eq. 44. •

IB In re Eeid, 170 App. Div. 631, 634, 156 N. Y. Supp. 500. See, also, Mer-
chants' Loan & Trust Co. v. Northern Trust Co., 250 111. 86, 91, 95 N. E. 59,
45 L. R. A. (N. S.) 411, where the court said: "The creator of a trust may
designate how the investments may be made and what security may be taken,
or that security may be dispensed with, and the trustees' will be bound by the
directions." The settlor may reserve the right to direct the investments after
the commencement of the trust. Eice v» Halsey, 156 App. Div. 802, 142 N. Y-
Supp. 58.
I 101) INVESTMENTS 349

there, or otherwise to place them in such investjnent.^* Thus, a di-

rection of a creator of a trust to invest the shares of the cestuis que
trust separately,^^ or to retain certain bonds as the subject-matter
of the trust,^* or to invest in secure stocks or oth^r securities,^'
should be followed implicitly by the trustee.
The settlor may, by express direction, give the trustee authority
to invest in ways which would ordinarily be unlawful. Thus, a pro-
vision for the lending of the trust fund on pei'sonal security to a
certai,n business firm',^" or a. clause allowing the purchase of rail-
road bonds,*^ is valid, and the trustee will be protected in making
such investments. But directions by a settlor, allowing a de-
parture from ordinary trust investments, will be strictly construed,
and no investment under such authority permitted which is not
expressly provided for therein."^
It has been held that equity has no power to direct the trustee to
disregard the instruct;ions of the settlor regarding investments, un-
less all persons interested in the trust consent to such change.'''
But, in other cases, where obedience to the settlor's directions
would result in loss or disadvantage to the cestuis and all the adult

isMacGregor v. MacGregor, 9 Iowa, 65; Gray v. Lynch, 8 Gill (Md.) 403;

Worcester City Missionary See. v. Memorial Church, 186 Mass. 531, 72 N. B.
71 Vernon v. Marsh's Ex'rs, 3 N. J. Eq. 502
; ; Jn re Watson, 81 Misc. Eep.
89, 142 N. Y. Supp. 1058; Seligman v. Sellgman, 89 Misc. Rep. 194, 151 N. Y.
Supp. 889; Appeal of Ihmsen, 43 Pa. 431. A direction to "preserve" present
investments warrants subscribing to additional shares of stock, where such
right is given to stockholders, even though the trust instrument also prohibits
investments in stock. In re Tower's Estate, 253 Pa. 396, 98 Atl. 576. If the
failure to follow the directions of the settlor results in no loss, the trustee
will not be penaUzed. In re McKinney's Estate, 260 Pa. 123, 103 Atl. 590.
Although the settlor directs investment in railroad bonds, an investmenlf in
Liberty Bonds in time of war will be approved. In re London's Estate, 104
Misc. Rep. 372, 171 N. T. Supp. 981.
17 In re Watson, 81 Misc. Rep. 89, 142 N. Y. Supp. 1058.
' 18 Seligman v. Seligman, 89 Misc. Rep. 194, 151 N. Y. Supp. 889.
IB Appeal of Ihmsen, 43 Pa. 431.
20 In re Reid, 170 App. Div. 631, 156 N. Y. Supp. 500.
'21 In re Bartol's Estate, 182 Pa. 407, 38 Atl. 527.
22 In re Franklin Trust Co., 84 Misc. Rep. 686, 147 N. Y. Supp. 885. Thus,
a direction to invest in "flrst-class interest-bearing real estate mortgage secu-
rities" does not authorize the purdhase of bonds secured by a blanket mort-
gage protecting the whole issue. The trustee should obtain a mortgage for
his benefit alone. In re Mendel's WUl, 164 Wis. 136, 159 N. W. 806.
28 Clark V. St. Louis a/& T. H. R. Co., 58 How. Prac. (N. Y.) 21; Burrill
V. SheU, 2 Barb. (N. Y.) 457 ; Shelling v. McCreary,' 14 Rich. Bq. (S. C.) 291j
Thus, in International Trust Co. v. Preston, 24 Wyo. 163, 156 Pac. 1128, it
was held that a court had no power to sanction an investment in Mexican
bonds when the will directed investment in bonds of the United States or a
state or municipality thereof.

I
350 THE DUTIES OF THE TRUSTEE (Ch. 12

cestuis consent, the court has decreed that the trustee might be
relieved from the duty of following the direction of the settlor and
might make a more advantageous investment.^* Thus, where a
trust fund amounts to but $2,000, and the trust instrument directs
that be invested in Florida real estate upon which houses are to
it

be built for winter tourists, and it is desirable to make an invest-

ment which will yield some income at once for the beneficiaries, a
New York court of equity felt justified in directing the trustee to
disregard the settlor's direction and, make a productive iny^est-
ment.2°
If the settlor authorizes the trustee to invest the trust funds as
may seem best to the trustee or according to his discretion, he has a
wide margin for action. He is not required to make his, selection
from the securities and investments declared by equity or by stat-
ute to be legal investments for trust funds. He may choose rea-
sonable investments outside such approved lists.''" Thus, where
the trustee has discretion with respect to the investments, he may
lawfully invest in railway and street railway bonds " and in real
estate outside the state,''* if such investments are reasonably pru-
dent. -
But the grant of discretion in the making of investments does
not protect the trustee in any investment which he may make. He
must use good faith and reasonable prudence in exercising his dis-
cretion.""Just because he may go outside the selected list of trust
investments approved by the court or the Legislature does not
mean that he may invest the trust funds in any wildcat venture.
Wood V. Wood, 5 Paige (N. Y.) 596, 28 Am. Dec. 451 Mcln tire's Adm'rs
24 ;

V. City of Zanesville, 17 Ohio St. 352; Perronneau v. Perronneau's Ex'rs, 1

Desaus. (S. C.) 521. In Hackett's Ex'rs v. Hackett's Devisees, 180 Ky. 406,
202 S. W. 864, the court says that the testator's direction must be followed
unless no such investment as is directed can be made' or the safety of the
investment directed has become doubtful by supervening circumstances. As
showing the recent tendency of the English courts on this subject, see In re
D-Epinoix's Settlement, [1914] 1 Ch. 890.
26 In re Snyder's Will (Sup.) 136 N. Y. Supp. 670.
28Cromey v. Bull, 4 Ky. Law Eep. 787; Lawton v. Lawton, 35 App. Dlv.
389, 54 N. Y. Supp. 760; In re Vom^Saal's Will, 82 Misc. Rep. 531, 145 N. Y.
Supp. 307; Willis v. Braucher, 79 Ohio St. 290, 87 N. E. 185, 44 L. E. A.
CN. S.) 873, 16 Ann. Gas. 66. In Lawson v. Cunningham, 275 Mo. 128, 204
S. W. 1100, under such a grant of discretion, an investment in land was sanc-
tioned.
27 In re AUis' Estate, 123 Wis. 223, 101 N. W. 365.
28 Merchants' Loan & Trust Co. v. Northern Trust Co., 250 111. 86, 95 N.
E. 59.
,
2 9 Appeal of Davis, 183 Mass. 499, 67 N. E. 604. Thus, a loan to himself is
not warranted by the grant of such discretion. Carrier v. Carrier, 226 N. Y.
114, 123 N. E. 1^5.
 § 101) INVESTMENTS 351

He must select an investment which he honestly believes will be

safe and productive/" and he must act with reasonable prudence
and diligence.^ ^ The fact that the trustee has authority to exercise
his discretion regarding investrrients does not make it proper for
him to invest in a manufacturing plant in another state, when he
has 'little or no knowledge concerning the business/'' nor to invest
in stocks/* nor to speculate in Western lands °* with' the trust
funds. In an opinion in which it disapproved of an investment in
the stock of an umbrella manufacturing company by a trustee hav-
ing discretion concerning investments, the New York Court of
Appeals has said '^ "We concede that under the terms of the will
:

the trustees were given a discretion as to the character of the in-

vestments they might make, and that they were not limited to the
investments required by a court of equity in the absence of any
directions from a testator. * * * But such a discretion, in
the absence of words in the will giving greater authority, should
not be held to authorize investment of the trust fund in new specu-
lative or hazardous ventures. If the trustees had invested in the
stock of a railroad, manufacturing, banking, or even business cor-
poration, which, by its successful con<^uct for a long period of time,
had achieved a standing in commercial circles and acquired the
confidence of investors, their conduct would have been justified, al-
though the investment proved unfortunate. But the distinction
between such an investment and the one before us is very marked.
Surely there is a mean between a government bond and the stock
of an Alaska gold mine, and the fact that a trustee is not limited
to the one does not authorize him to invest in the other."
Court Control <
>

Not only may the duty of the trustee regarding investmelits be

controlled by fhe settlor, but also by chancery. If the trustee is
in doubt concerning the investments which he should make, he
may apply to the court, and it will give hiin direction.^* These de-
80 In re Smith, [1896] 1 Ch. 71.
81 Kimball v. Eeding, 31 N. H. 352, 64 Am. Dec. 833 Clark v. Clark, 23
;

Misc. Rep. 272, 50 N. Y. Supp. 1041 ;In re Vom Saal's "W:*!!, 82 Misc. Kep.
531, 145 N. Y. Supp. 307. The court wUl review the exercise of the discretion
and wUl disapprove such investments as loans to a corporatibn in which the
trustees are individually interested. In re Keane, 95 Misc. Rep. 25, 160 N.
^
Y, Supp. 200.
8^ In re Hart's Estate, 203 Pa. 480, 53 Atl. 364.
88 In re Hirsch's Estate, 116 App. Div. 367, 101 N. Y. Supp. 893, affirmed
188 N. Y. 584, 81 N. B. 1165.
34 In re Reed, 45 App. Div. 196, 61 N. Y. Supp. 50*
86 In re Hall, 164 N. Y. 196, 199, 200, 58 N. E. 11.
3 8 Drake v. Crane, 127 Mo. 85, 29 S. W. 990, 27 L. R. A. 653; Tilllnghast

v. CoggeshaU, 7 R. I. 383; Whitehead y. Whitehead, 85 Va, 870, 9 S. E. 10.

 ;

352 THE DUTIES OP THE TRUSTEE (Ch. 12

crees should be implicitly obeyed, and the trustee will be protected,

no matter what the result of the investment, if it was made in strict
accordance with a court order.'^ Likewise, disobedience to the
court order will fender the trustee personally liable for losses.
Thus, where a trustee submitted the trust to the jurisdiction of the
court and was ordered to invest the funds in government bonds,
but instead left the money in a bank in which he was interested,
and the bank failed, the trustee was charged with the loss ensuing
to the trust estate.^'
The trustee's duty in the selection of investments mdy be ex-
pressly set forth in the statutes of the state concerned. Legisla-
ifcures have, in a large number of states, approved of certain invest-

ments and required trustees to place trust funds in those invest-

ments only.*" It is impossible here to give the details of all these
acts.*" Typical provisions are referred to below.*^' No trustee
should make an investment without a careful examination of the
statutes of the state within which the trust is being administered.
Having considered the general standards of care and honesty
applicable to trustees in making investments, and the ways in
which the duties of trustees regarding investments may be con-
trolled by the action of the settlor or of the court, as well as by
statute, it remains to discuss specifically the legality of various in-
vestments in cases where no statute, no term in the trust instru-
ment, and no decree of court controls the trustee. What are the
rules of equity concerning investments? In what ways may the '

trustee make the trust funds productive with the assurance that
chancery will approve?

87 Wheeler v. Perry, 18 N. H. 307; Wood v. Wood, 5 Paige (N. Y.) 596, 28

Am. Dec. 451; In re Old's Estate, 176 Pa. 150, 34 Atl. 1022.
83 Whitehead v. Whitehead, 85 Va. 870, 9 S. E. 10.
8 9 For a collection of the authorities upon trust investments in the several

states, see McKinney, Liabilities of Trustees for Investments. This hook pur-
ports to set forth the statutes of all th^ states.
*o Statutory provisions regulating trust investments are
construed in the
following decisions: Clark v. Beers, 61 Conn. 87, 23 Atl. 7i7; Stone v. Clay,
103 Ky. 314, 45 S. W. SO ; Aydelott v. Breeding, 111 Ky. 847, 64 S. W. 916
Robertson v. Robertson's Ti-ustee,- 130 Ky. 293, 113 S. W. 138, 132 Am. St.
Rep. 368 ; Ridley v. Dedman, 134 Ky. 146, 119 S. W. 756 ; Smith v. Robinson,
S3-N. J. Eq. 384, 90 ^tl. 1063;-' In re Randolph (Sur.) 134 N. Y. Supp. 1117,
affirmed 150 App. Div. 902, 185 N. Y. Supp. 1138; In re Derr's Estate, 203
Pa. 96, 52 Atl. 27; Bagnell v. Ives (C. O.) 184 Fed. 466; Branch v. De Wolf,
28 R. I. 542, 68 Atl. 543; Crickard's Ex'r v. Crickard's Legatees, 25 Grat
<Va.) 410 ; In re AUis' Estate, 123 Wis. 223, 101 N. W. 365.
*iThe following are statutes winch illustrate the methods In which the
Legislatures have regulated the duties of trustees regarding investments:
"A trustee must invest money received by him under the trust, as fast as
§ 101) INVESTMENTS 353

Bank Deposits
Naturally some time will be necessary to enable the trustee to
find a proper investment. What shall he do with the funds -vyhile
searching for such investment? It would be unreasonable to re-
quire that he keep the money of the trust in his actual posses-
sion at his house or place of business, or that he be required to
rent a safety deposit box in which to place the funds. An ordi-
narily prudent business man places funds on deposit in a bank
while searching for an investment. It is unquestioned law that
a trustee may deposit the funds in a bank for a reasonable time
after their receipt. What is a reasonable time is a question of
fact, to be determined upon the circumstances of each case. De-

he collects a sufficient amount, In such manner as to aflford reasonable secu-

rity and interest for the same." Civ. Code Cal. § 2261.
"Investments of trust funds by trustees may, when not otherwise provided
by the will, deed, decree, gift, grant or other instrument creating or fixing
the respective trust, be in the bonds of the United States or of any of the
states of the United States, or in first mortgages upon real estate in any
state or in the bonds of any county, city or municipality in any state, or in
the first mft-tgage bonds of any corporation of any state upon which no de-
fault in payment of interest shall have occurred, for a period of five years,
but no trustee shall be authorized by this act to invest trust funds in any
bonds in which cautious and intelligent persons do not invest their' own
money and any trustee may continue to hold any investment received by hiro
under the trust or any Increase thereof." 1 Jones & A. Ann. St. 111. 1913, par.
188.
"A trustee or other person holding trust funds for investment may invest
the same in the same kind of securities as those in which 'savings banks of
this state are by law authorized to invest the money deposited therein, and
the income derived therefrom, and in bonds and mortgages on unincumbered
real property in this state worth fifty per centum more than the amount .

loaned thereon. A trustee or other person holding trust funds may require
such personal bonds or guaranties of payment to accompany investments as
may seem prudent, and all premiums paid on such guaranties may be charged
to or paid out of income, providing that such charge or payment be not more
than at the rate of one-half of one per centum per annum on the par value
of such investments. But no trustee shall purchase securities hereunder
from himself." New York Personal Property Law (Consol. Laws, c. 41) § 21;
The investments legal for savings banks in New York, and therefore also
legal for trustees under the above statute, are set forth in section 239 of the
Banking Law (Consol. Laws, c. 2). The savings bank list includes United
States bonds, New York state bonds, bonds of other states which have had
a satisfactory record for ten years, bonds of municipalities within New York
state, bonds of cities in other states, where the financial record of the city
and its size are satisfactory, mortgages on real property located in New York,
and certain selected raUroad bonds. By subdivisions 8 and 10 notes secured
by approved stocks and bonds, notes of certain savings and loan associations,
and bonds of the state land bank are added.
"Executors, administrators, trustees and other fiduciaries may invest the
funds held by them in a fiduciary capacity in the following securities, which
are and shall be considered lawful investments: (1) In the bonds issued un-
BogBet Teusts —23
 ;

354 THE DUTIES OP THE TRUSTEE (Ch. 12

posits for three years,*^ two years,*' fourteen months,** and ten
months have been held to be unreasonably long, and therefore to
*°

render the trustee liable when the bank failed during the period
of deposit. The Supreme Court of the United States has expressed
the view that three months is ordinarily a reasonable time of de-
posit.*" In many cases a temporary deposit in a bank of good
repute, selected with due care, has been considered a proper act
by the trustee, and the failure of such bank has not rendered the
trustee liable for the amount of the loss to the trust fund.*^ "So,
also, executors, trustees, or guardians will not be liable if, in the
ordinary discharge of their duty, they deposit the assets tempo-
rarily in a bank, although the bank may fail. * * * trusteeA
der the act approved February fourteenth, eighteen hundred and eighty-two,
commonly known as the Riddleberger bonds. (2) In the stock or bonds or
interest-bearing notes or obligations of the United States or those for which
the faith of the United States is pledged to provide for the payment of the
principal and interest, including any bonds of the District of Columbia. (3)
In the bonds of any county, city or town in Virginia, provided the amount
of bonds of such county, city or town, including the issue in which such in-
vestment is made does not exceed eighteen per centum of the assagsed valua-
tion of the real estate in the county, city or town subject to taxation as shown
by the last preceding assessment for taxes, and provided the said bonds are
the direct obligation of the county, city or town issuing the same, and for
which the faith and credit of the issuing county, city or town is pledged.
(4) In bonds and negotiable notes secured by first mortgage or first deed of
trust on unencumbered real estate in the state of Virginia, not to exceed
eighty per centum of the assessed value of said real estate and improvements.
Before any loan is made upon real estate the lender shall be furnished with
a satisfactory abstract of title, certificate of title or title insurance policy
and a ^re insurance policy in an old line company with loss if any payable
to the trustee as his interest may appear." Laws Va. 1916, c. 479, in effect
June 17, 1916.
See, also. Laws Wis. 1919, ce. 215, 469, 630, and Ky. St. 1915, § 4706, as
amended by Laws 1918, c. 141. Farm loan bonds under Federal Farm Loan
Act (U. S. Comp. St. §§ 9835a-9835z) have been made proper trust investments
by several recent statutes. St. Cal. 1919, p. 270 Pub. Acts Mich. 1919, No. 94
;

Act Pa. April 5, 1917 (P. L. 47). The investment of trust funds held by towns
and cities is regulated by St. Mass. 1916, e. 101, and Laws N. H. 1919, c. 96.
42 Woodley v. Holley, 111 N. C. 380, 16 S. E. 419.
43 In re Knight's Estate (Sup.) 4 N. Y. Supp. 412. In re Donohue, 88 Misc.
Rep. 359, 151 N. Y. Supp. 1094, a deposit for ten years was held to render the
trustee liable.
44 Cann v. Cann, 33 Wkly. Rep. 40.
4B Barney v. Saunders, 16 How. 535, 14 L. Ed. 1047.
48 Barney v. Saunders, 16 How. 535, 14 L. Ed. 1047., i

4 7 Norwood V. Harness, 98 Ind. 134, 49 Am. Rep. 739 ;McCoUister v. Bishop,

78 Minn. 228, 80 N. W. 1118 (affected by a local statute)
>

Jacobus v. Jacobus,
;

37 N. J. Eq. 17 Odd Fellows' Beneficial Ass'n of Columbus v. Ferson, 3 Ohio

;

Cir. Ct. 84; In re Law's Estate, 144 Pa. 499, 22 Atl. 831, 14 L. B. A. 108;
Crane v. Moses, 13 S. C. 561. '
§ 101) INVESTMENTS 355

who would continuously keep for any considerable length of time

a large of money about his person or in his house, rather thap
sum
deposit it for safe-keeping in a solvent and reputable bank or trust
company, where all the precautions may be exercised for its safety,
might justly be regarded as derelict in duty." ** A New York
court, in speaking of the duty of the trustee, has said that "the de-
posit may -be continued for so long a period as will enable the
trustee, in the use of ordinary diligence, to obtain its secure and
proper investment, or the exigencies of the estate may require.
But where he fails by his neglect within a reasonable time to se-
cure investments, and allows the money still to remain on' de-
posit, and it is thereby lost, the law charges the trustee with the
loss." "
If the trustee can obtain interest on a call deposit, there is no
objection to his so doing; but he should not place the funds of the
estate on a time deposit. Such a deposit is a loan to the bank with-
out security, and is not allowable. The fund should be subject to
immediate call by the trustee. °°
The trust fund should always be kept by the trustee so as to
be capable of being easily followed by the cestui que trust. Any
assumption of private ownership over the trust property, or mix-
ture of the trust property with his own goods, by the trustee, makes
the trust property difficult to trace, and is frowned upon by equity.
The deposit of the trust moneys pending investment should, un-
der this general rule, be made in the name of the trustee as trus-
tee, and not on his behalf individually. If the trustee has the ac-
count entitled with his own name, without mention of the trust,^^'
or places the trust moneys in a pre-existing private account,^^ the
beneficiary may hold the trustee liable for all losses occurring to

In re Law's Estate, 144 Pa. 499, 506, 22 Atl. 831, 14 L. R. A. 103.

48
«9
In re Knight's Estate (Sup.) 4 N. Y. Supp. 412, 413.
5 Basliin v. Baskin, 4 Lans. (N. Y.) 90; Frankenfield's Appeal, 127 Pa. 369
note B'aer's Appeal, 127 Pa. 360, 18 Atl. 1, A L. R. A. 609.
; But see Smith
V. Fuller, 86 Ohio St. 57, 99 N. B. 214, L. R. A. 19160, 6, Ann. Gas. 1913I>,
387.
Bi Chancellor v. Chancellor, 177 Ala. 44, 58 South. 423, 45 L. R. A. (N. S.)
1, Ann. Cas. 1915C, 47; Gilbert v. Welsch, 75 Ind. 557; Jenkins v. Walter,
8 GiU & J. (Md.) 218, 29 Am. Dec. 539 ; Coffin v. Bramlitt, 42 Miss. 194, 97
Am. Dec. 449 Knowlton v. Bradley, 17 N. H. 458, 43 Am. Dec. 609 Baskin
; ;

V. Baskin,, 4 Lans. (N. Y.) 90; Booth v. Wilkinson, 78 Wis. 652, 47 N. W. 3128,
23 Am. St. Rep. 443.
5 2 Henderson's Adm'r v. Henderson's Heirs, 58 Ala. 582; Webster v. Pierce,

35 111. 158; Cartmell v. Allard, 7 Bush (Ky.) 482; In re Stafford, 11 Barb.

CN. Y.) 353; McAllister v. Commonwealth, 30 Pa. 536; Mason v. Whitthorne,
2 Cold. (Tenn.) 242 ; Vaiden v. Stubblefield's Ex'r, 28 Grat. (Va.) 153.
 356 THE DUTIES OF THE TRUSTEE (Ch. 12

the trust fund while it is so deposited. Equity places this penalty

upon the trustee for his mingling of private and trust affairs.

Personal Security
It is a fundamental rule that investment of trust funds upon per-
sonal security is a violation of the trust. The trustee should not
lend the trust moneys to an individual or a corporation and take in
return only the bond or note of the borrower. If he cannot obtain
security of an approved nature, he should not makp the loan. A
trustee making a loan upon personal security only will be liable
for any losses which occur, due to the failure of the debtor to
repay.^^ "However conflicting in some respects the decisions may
appear to be, in one respect they are reasonably uniform. It. is
a generally accepted rule that it is not prudent to invest trust funds
in unsecured notes of an individual or of a partnership. have We
found no decision which announces a contrary rule where the trust
contemplated an investment of a permanent nature." °* An Eng-
lish judge has said that this "is a rule that should be rung in the
ears of every person who acts in the character of trustee." '°
The sale of trust property and acceptance in return of the notes
of the buyer is not allowed by equity, and the trustee will be liable
for a loss resulting from the failure of the maker of the notes."'
In a few cases the taking of certificates of deposit, which amount
to nothing more than loans to a bank without security, has been
held a proper procedure for a trustee in the investment of the
trust funds. "^ But these holdings are out of line with the ma-
jority of the authorities.
The reason for prohibiting investment of trust moneys on per-
58 Cornet Cornet, 269 Mo. 298, 190 S. W. 333; Gray v. Fox, 1 N. J. Eq.
v.
259, 22 Am.
Dec. 508; Brewstjer v. Demarest, 48 N. J. Eq. 559, 23 Atl. 271;
Dufford's Ex'r v. Smith, 46 N. J. Eq. 216, 18 Atl. 1052 Backee v. Crane, 87
;

N. J. Eq. 229, 100 Atl. 900 In re Poster's Will, 15 Hun (N. T.) 387 In re
; ;

Petrie, 5 Dem. Sur. (N. Y.) 352; In re Randolph (Sur.) 134 N. X. Supp. 1117,
affirmed 150 App. Div. 902, 135 N. Y. Supp. 1138 Wiknerding v. McKesson,
;

103 N. T. 329, 8 N. E. 665; Deobold v. Oppermann, 111 N. X. 631, 19 N.

E. 94, 2 L. R. A. 644, 7 Am. St. Rep. 760 Collins v. Gooch, 97 N. C. 186, 1
;

S. E. 653, 2 Am. St. Rep. 284; Roach's Estate, 50 Or. 179, 92 Pac. 118; No-
bles V. Hogg, 36 S. C. 322, 15 S. E. 359 Rowe v. Bentley, 29 Grat (Va.) 756.
;

In a few cases it has been held that trustees or persons in similar situations
might invest upon personal security in extraordinary cases. Knowlton v.
Bradley, 17 N. H. 458, 43 Am. Dec. 609 ; Scott v. Trustees of Marion Tp., 39
Ohio St. 153 Singleton v. Lowndes, 9 S. C. 465 ; Barney v. Parsons' Guard-
;

ian, 54 Vt. 623, 41 Am. Rep. 858.

64 Michigan Home Missionary Soc. v. Coming, 164 Mich. 395, 402, 129 N.
W. 686.
06 Holmes V. Dring, 2 Cox, Eq. Cas. 1.
66 Miller v. Holcombe's Ex'r, 9 Grat. (Va.) 665.,
67 Hunt, Appellant, 141 Mass. 515, 6 N. E. 554; St. Paul Trust Co. v. Kitt-
son, 62 Minn. 408, 65 N. W. 74.
 ;

§ 101) INVESTMENTS 357

sonal security is obvious. The borrower may die, or fail in busi-

ness, or suffer financial reverses. The value of the investment de-
pends partly on the business ability of the borrower and the gen-
eral financial prosperity of the community. Such an investment is
too uncertain for a trustee. He should place the funds so that there
will be reasonable assurance of a steady income and ultimate return
of the principal. No matter how prosperous the borrower may be
at the time of the loan, the payment of principal and interest de-
pends upon the multitude of uncertainties incident to human af-
fairs. The trustee should obtain a lien upon or interest in some
property of reasonable permanence as security for the safety of
his investment.
Trade and Business
With but few exceptions, the courts do not sanction the use of
trust funds in trade or business. °' The hazards of buying and sell-
ing, manufacturing, and transporting goods are too great to render
such operations proper for trustees. The trustee may invest the
trust moneys in business in any one of several ways. He may, for
example, purchase land and engage in coal mining " or buy a
farm and pursue agriculture."" Neither one of these steps would
be a proper one for the trustee to take. They involve too much
speculation and risk. The greatest possible assurance that a
steady income will be produced and that the principal will be re-
turned is required. Or, although not buying directly the property
necessary to engage in trade, the trustee may purchase with the
trust funds a share in a partnership which is operating a busi-
ness. This transaction is likewise a breach of duty on the part of
the trustee and renders him liable for losses.®^' Perhaps the most
common method adopted by trustees for embarking the trust funds
in business that of the purchase of the stock of corporations en-
is
gaged in business. A
great majority of the American courts con-
demn such an investrnent by a trustee as too hazardous and spec-
ulative.*^

5s Adams v. Nelson, 31 Wkly. Law Bui. (Ohio) 46; City of Bangor v. Beal,
85 Me. 129, 26 Atl. 1112; WindmuUer v. Spirits Distributing Co., 83 N„J.
Eq. 6, 90 Atl. 249; Nagle v. Von Rosenberg, 55 Tex. Civ. App. 354, 119 S.
W. 706.
BO Butler v. Butler, 164 111. 171, 45 N. E. 426.
«o Wieters v. Hart, 68 N. J. Eq. 796, 64 Atl. 1135.
81 Penn v. Fogler, 182 111. 76, .55 N. E. 192 Trull v. Trull, 13 Allen (Mass.)
;

407 In re Bannin, 142 App. Div. 436, 127 N. Y. Supp. 92L

;

82 Williams v. Cobb, 219 Fed. 663, 134 C. C. A. 217 White v. Sherman,

;

168 lU. 589, 48 N. E. 128, 61 Am. St. Hep. 132 Tucker v. State, 72 Ind. 242
;

Gilbert v. Welsch, 75 Ind. 557 Cropsey v. Johnston, 137 Mich. 16, 100 N. W.
;

182 Kimball v. Reding, 31 N. H. 352, 64 Am. Dec. 333 King v. Talbot, 40

; ;

N. T. 76; Adair v. Brimmer, 74 N. X. 539; In re Hall, 164 N. Y. 196, 58 N.

 358 THE DUTIES OF THE TRUSTEE (Ch. 12

The prevailing view regarding stocks is set forth in the opinion

^ of the New York court in King v. Talbot, where the propriety of
investments in railroad, canal company, and bank stocks was un-
der consideration. The court said: °' "It is not denied that the em-
ployment of the fund as capital in trade would be a clear departure
from the duty of trustees. If it cannot be so employed under the
management of a copartnership, I see no reason for saying that the
incorporation of the partners tends, in any degree, to justify it.
The moment the fund is invested in bank, -fer insurance, or railroad
stock, it has left the control of the trustees; its safety, and the
hazard or risk of loss, is no longer dependent upon their skill, care,
or discretion, in its custody or management, and the terms of the
investment do not contemplate that it will ever be returned to the
trustees. If it be said that, at any time, the trustees may sell the
stock (which is but another name for their interest in the property
and business of the corporation), and so repossess themselves of
the original capital, I reply that is necessarily contingent and
uncertain and so the fund has been voluntarily placed in a condi-
;

dition of uncertainty, dependent upon two contingencies First, :

the practicability of making the business profitable; and, second,

the judgment, skill, and fidelity of those who have the manage-
ment of it for that purpose."
The courts of a few states, however, have taken the position
that investments in corporate stock are not necessarily improper;
that their propriety is to be determined from the nature of the stock
and the amount of the investment. If the stock is one of a repu-
table company, of strong financial position, and the amount in-
vested therein is not an unduly large proportion of the trust funds,
the investment will be approved.'** Thus, in Dickinson, Appel-
lant,"^ the Massachusetts court held that an investment of more
than $3,500 out of a trust fund of $16,200 in the stock of the Union

E. 11; English v. Melntyre, 29 App. Div. 439, 51 N. Y. Supp. 697; Appeal of

Worrell, 23 Pa. 44; Appeal of Pi-ay, 34 Pa. 100; Appeal of Ihmsen, 43 Pa.
431. See, however, Costello v. Costello, 209 N. X. 252, 103 N. E. 148, in which
it was held that the statutory and court rules in force in New York, while
gd»-ally denying the trustee the right to invest in stock, do not invariably
make such an investment illegal and that the trustees were in that case au-
thorized to accept corporate stock in exchange for an interest in a part-
nership.
83 40 N. Y. 76, 88, 89.
6* Gray v. Lynch, 8 Gill (Md.) 403; McCoy v. Horwitz, 62 Md.
183; Dick-
Inspn, Appella:nt, 152 Mass. 184, 25 N. E. 99, 9 L. R. A. 79 ; Appeal of Davis,
183 Mass. 499, 67 N. E. 604 ; Smyth v. Burns' Adm'rs, 25 Miss. 422 Peckham
;

V. Newton, 15 R. I. 321, 4 Atl. 758; Scoville v. Brock, 81 Vt. 405, 70 Atl 1014.
06 152 Mass. 184, 25 N. E. 99, 9 L. R. A. 279.
 ;

§ 101) INVESTMENTS 359

Pacific Railroad Company was improper, on account of the fact that

it placed too great a proportion of the funds in the stock of one
corporation. The court said:*" "Our cases, however, show that
trustees in this commonwealth are permitted to invest portions of
trust funds in dividend-paying stocks and interest-bearing bonds
of private business corporations, when the corporations have ac-
quired, by reason of the amount of their property, and the pru-
dent management of their affairs, such a reputation that cautious
an.d intelligent persons commonly invest their own money in such
stocks and bonds as permanent investijients."
Corporate bonds are of two general classes, those secured by
mortgages on the property of the corporation, and those which
have no basis except the promise of the corporation to pay. The
latter are investments on personal security alone, and are not per-
mitted any more than are investments on the credit of private in-
dividuals."^ In the absence of statute, corporate bonds secured by
mortgages on the property of business corporations are not allow-
able trust investments."* The value of the security is too uncer-
tain. It is dependent on the chances of business. The statutes of
many states now allow trustees to invest in railroad bonds of cer-
tain approved companies, which have a satisfactory record for a
considerable length of time.""
Real Estate
Ordinarily a trustee should not invest the trust moneys in real
estate.^" The same rule is applied to quasi trustees, as, for example,
guardians.'^^ Real property may be productive or unproductive,
dependent on many circumstances. Farm land will be productive,
if the weather is good, the rainfall proper, and the farmer indus-

trious and skillful. Business and residential property will be pro-

se 152Mass. 184, 187, 188, 25 N. E. 99, 9 L. R. A. 279.

67Allen V. Gaillard, 1 S. C. 279.
68 Judd V. Warner, 2 Dem. Sur. (N. Y.) 104 ; In re Keteltas' Estate (Sur.)
6 N. Y. Supp. 668 ; In re McDowell, 97 Misc. Rep. 306, 163 N. Y. Supp. 164
Id., 102 Misc. Rep. 275, 169 N. Y. Supp. 853; In re Hart's Estate, 203 Pa.
480, 53 Atl. 364.
6 9 For example, see New York Personal Property Law (Consol.. Laws, c. 41)

I 21,and Banking Law (Oonspl. Laws, c. 2) § 239.

70 Bowman
v. Pinkham, 71 Me. 295; West v. Robertson, 67 Miss. 213, 7
South. 224; Williams v. Williams, 35 N. J. Eq. 100; Baker v. Disbrow, 18
Hun (N. Y.) 29; Morton's Ex'rs v. Adams, 1 Strob. Eq. (S. O.) 72; sione v.
Kahle, Tex. Civ. App. 185, 54 S. W. 375. Where the trust funds are par-
22'
tially invested In realty and there is a shortage of income, the court will
order a sale of realty and an investment of the proceeds in productive securi-
ties. Lesesne v. Cheves, 105 S. C.v432, 90 S. B. 37.
Ti Eckford v. De Kay, 8 Paige (N. Y.) 89; Fourth Nat. Bank v. Hopple, 6
Ohio Dec. 482 Scheib v. Thompson, 23 Utah, 564, 65 Pac. 499 Boisseau v.
; ;

Boisseau, 79 Va. 73, 52 Am. Rep. 616.

360 THE DUTIES OP THE TRUSTEE (Ch. 12

ductive, if the buildings are kept in good repair, are not destroyed

by and the trustee is diligent and skillful in the management

fire,

of the property. But there are too many contingencies regarding

the productivity of real property to make it a safe investment for
a trustee. In addition to the above objection, real property is often
difficult to sell. The trustee may find great trouble in converting
the investment into cash when he is required to distribute the trust
funds. Nor should a trustee place the. trust funds in a leasehold
estate in real property.'"' But a loan of the trust funds secured by a
mortgage upon real property is not, of course, an investment in
lands.'^ The latter investment is approved, providing the margin
of security is ample.^*
In some instances, however, courts have sanctioned a trust in-
vestment in real estate, even though such property was without
the state in which, the trust was to be. administered.'^" If the trust
instrument expressly authorizes an investment in land, it is obvious
that there is sound basis for an approval of the real estate invest-
ment.'^" If unusual conditions render desirable an investment in
land, the court may grant permission to use the trust funds for such
purpose,'^' or the trustee may, in rare cases, so apply the trust
funds without express court direction.'* Thus, where slaves and
other property were given to a mother as trustee for her children,
for the purpose of supporting the children, and the children had no
land upon which the slaves could work, the mother was held enti^
tied to invest in land in order to render the trust property useful
and productive.''"
Foreign Investments
As a general rule a trustee should not make an investment out-
side the jurisdiction in which he is acting. Thus, if he is appointed
tru,stee by a will admitted to probate in New Jersey, and is thus
liable to account to the courts of New Jersey for the faithful ad-
ministration of his trust, he should seek investments within the
state of New Jersey. He should not, unless authorized by stat-
'

ic In re Anderson, 211 N. T. 136, 105 N. E. 79.

fSMUhous V. Dunham, 78 Ala. 48; Zimmerman v. Fraley, 70 Md. 561 17
Atl. 560.
74 See page 362, post.,
75 Merchants' Loan & Trust Co. v. Northern Trust Co., 250 111. 86, 95 N. E,
59, 45 L. R. A. (N. S.) 411 ; Thayer v. Dewey, 185 Mass. 68, 69 N. E. 1074.
ToAmory v. Green, 13 Allen (Mass.) 413; Schaffer v. Wadsworth, 106
Mass. 19.
" In re Bellah, 8 Del. Ch. 59, 67 Atl. 973; Ex parte Jordan, 4 Del. Ch. 615;
Ridley v. Dedman, 134 Ky. 146, 119 S. W. 756.
7 8 Bethea v. McOoU, 5 Ala. 308; Troy Iron & NaU Factory v. Corning, 45
Barb. (N. Y.) 231.
7 8 Bethea v. McCoU, 5 Ala. 308.
§ 101) INVESTMENTS 361

ute pr by the court, invest, for instance, in bonds secured by mort-

gages on real estate in Kansas. This general principle is recog-
nized in a number of decisions.*"
In considering the validity of an investment in a bond and mort-
gage on Ohio real estate, a New York court has well stated the
rule *^" "While, therefore, we are not disposed to say that an in-
:

vestment by a trustee in another state can never be consistent with

the prudence and diligence required of him by the law, we still feel
bound to say that such an investment, which takes the trust fund
beyond our own jurisdiction, subjects it to other laws and the risk
and inconvenience of distance and of foreign tribunals, will not be
upheld by us as a general rule, and never unless in the presence of
a clear and strong necessity, or a very pressing emergency." In
that case, however, the court held that a trustee, who was seeking
to recover lost trust moneys from the representatives of a default-
ing, deceased trustee, was justified in taking a bond secured by a
mortgage on foreign real estate as the best satisfaction which he
could obtain.
In numerous cases exceptions to this general rule have been
made. In some instances the court has allowed foreign invest-
ments without any special reason; '" in other decisions there have
been unusual circumstances, as, for example, that the trust instru-
ment gave express authority for the foreign investment,*' or that
the amount invested in foreign real estate was very small in com-
parison to the size of the whole estate,** or that the property taken
as security was just across the state boundary and thus within easy
reach of the trustee,*" or that the trustee necessarily took foreign
real estate security in order to effect a sale of foreign real estate
which the settlor had placed in his hands.** The court may per-
mit an investment in foreign real property.*^ In allowing a $200,-
000 investment in lands located in Illinois, that sum being but a
small part of the total trust funds, a Massachusetts court has thus

80 McCuUough's Ex'rs v. McCuUough, 44 N. J. Eq. 313, 14 Atl. 642; In re

Keed, 45 App. Dlv. 196, 61 N. Y. Supp. 50 ; Collins v. Gooch, 97 N. C. 186, 1
S. E. 653, 2 Am. St. Eep. 284 ; Pabst v. Goodrich, 133 Wis. 43, 113 N. "W. 398,
14 Ann. Gas. 824.
81 Fiftch, J., in Ormiston v. Olcott, 84 N. T. 339, 343.
82 Merchants' Loan & Trust Co. v. Northern Trust Co., 250 111. 86, 95 N. B.
59, 45 L. R. A. (N. S.) 411; Stevens v. Meserve, 73 N. H. 293, 61 Atl. 420, 111
Am. St. Rep. 612.
83 Amory v. Green, 13 Allen (Mass.) 413.
84 Thayer v. Dewey, 185 Mass. 68, 69 N. E. 1074.
85 In re Gouldey's Estate, 201 Pa. 491, 51 Atl. 315.
86 Denton v. Sanford, 103 N. Y. 607, 9 N. E. 490. '

87 Ridley v. Dedman, 134 Ky. 146, 119 S. W. 756.

362 THE DUTIES OP THE TRUSTEE (Ch. 12

Stated the rule '' "There is grave objection to the investment of

:

a trust fund in the purchase of real estate in a foreign state, where

the property is beyond the jurisdiction of our courts and is subject
to laws different from our own. On this account it would not be
within the exercise of a sound discretion to make such an invest-
ment without some good reason to justify the choice of it. Ordi-
narily it is very desirable that investments which have a local char-
acter, like the ownership of real estate, should be within the juris-
diction of the court that controls the trust. But in this common-
wealth there is no arbitrary, universal rule that an investment will
not be approved if it consists of fixed property in another state."
Mortgages
First mortgages on real property within the jurisdicfibn, where
the margin of security is ample, are universally approved as trust
investments. The permanence and indestructibility of the property
taken as security render them very safe investments. Under the
English common-law rule only real property security and govern-
ment stocks and bonds were regarded as proper investments for a
trustee.*" The field of investment has now been much broadened
by legislation and action of the courts, but naturally the old, con-
servative real estate and government securities remain lawful and,
indeed, preferred forms of investment. Very generally statutes an-
nounce the legality of trust investments secured by mortgages upon
real estate.""
Trustees are restricted to lending only a reasonable proportion
of the value of the real property taken as security. The proportion
has been fixed variously in different jurisdictions at amounts rang-
ing from 50 per cent, to two-thirds of the value."^ The statutes also
frequently make distinctions 'between loans secured by mortgage
upon improved, productive real property and loans secured by
mortgage on unimproved, unproductive property.""

88Thayer v. Dewey, 185 Mass. 68, 70, 69 N. E. 1074.

89Lathrop v. Smalley's Ex'rs, 23 N. J. Eq. 192 King v. Talbot, 40 N. Y.
;

76; Nance v. Nance, 1 S. C. 209; Simmons v. Oliver, 74 Wis. 633, 43 N.

W. 561.
00 Mills' Ann. St. Colo. 1912, § 7946; Gen. St. Conn. 1918, § 4903; Rev.
Code Del. 1915, § 3875
; X Jones' & A. Ann. St. 111. 1913, par. 188 Code Iowa,
;

1897, § 364; Ky. St. 1915, § 4706; Pub. St. N. H. 1901, c. 178, § 9; 2 Comp.
St. N. J. 1910, p. 2271, § 35
; New York Personal Property liaw (Consol. Laws,
c. 41) § 21 New York Banking Law (Consol. Laws, c. 2) § 239 4 Purd. Dig.
; ;

Pa. (IStb Ed.) p. 4925; Nance v. Nance, 1 S. C. 209.

81 In Alabama a trustee may lend up to two-thirds of the value of the real
estate. Foscue v. Lyon, 55 Ala. 440. In a number of states the statutes fix
the margin as 50 per cent. Gen. St. Conn. 1918, § 4903, Code Iowa, 1897, §
364 2 Comp. St. N. J. 1910, p. 2271, § 35
; ;New York Personal Property Law
(Consol. Laws, c. 41) § 21. See, also, Clark v. Anderson, 13 Bush (Ky.) 111.
82 See New York Banliing Law (Consol. Laws, c. 2) § 239; by subdivision 6
a building in course of construction makes realty "improved."
§ 101) INVESTMENTS 363

While loans secured by second mortgages on land are sometimes

allowed, they are generally disapproved by courts of equity."' The
trustee should not place the trust funds in a position where they
may be endangered by the foreclosure of a prior lien. If he holds
a junior mortgage, he may be obliged to pay off the senior en-
cumbrance in order to protect his investment. Such action might
involve the investment of too great a proportion of the trust funds
in one piece of property. In rare cases equity will sanction an in-
vestment secured by a second mortgage, but only when the security
is adequate and unusual circumstances justify the trustee in taking
this form of investment."*
In some states the statutes approve investments in the bonds of
certain specified railroads."^ These bonds are of course generally
secured by mortgages upon the property of the railroads.
Government Bonds
Government securities are everywhere regarded as safe trust in-
vestments. Probably, in all jurisdictions the bonds of the United
States government and of the governments of those states which
have not recently repudiated their debts would he held to be proper
trust investments, without statutory authorization. The statutes
of many states authorize investment in United States, state, and mu-
nicipal bonds. F'requently a selected list of state and municipal
bonds is given. "" The public credit is pledged for the payment
of such bonds. There is not apt to be a default in their payment,
unless the whole country is involved in general ruin.

93 New Haven Trust Co. v. Doherty, 75 Conn. 555, 54 ^tl. 209, 96 Am. St.
Hep. 239 Shuey v. Latta, 90 Ind. 136 Mattocks v. Moulton, 84 Me. 545, 24
; ;

Atl. 1004; GUbert v. Kolb, 85 Md. 627, 37 Atl. 423; Gilmore v. Tuttle, 32
N. J. Eq. 611; In re Petrie, 5 Dem. Sur. (N. Y.) 352; Savage v. Gould, 60
How. Prac. (N. Y.) 234 Whitney v. Martinfe, 88 N. Y. 535 King v. Mackel-
; ;

lar, 109 N. Y. 215, 16 N. E. 201 National Surety Co. v.- Manhattan Mortg.
;

Co., 185 App. Div. 733, 174 N. Y. Supp. 9 In re Makin's Estate, 20 Pa. Co.
;

Ct. R. 587.
04 Taft V. Smith, 186 Mass. 31, 70 N. E. 1031 ; Sherman v. Lanier, 39 N. J.
Eq. 249; In re Blauvelt's Estate (Sur.) 20 N. Y. Supp. 119, semble; In re Bar-
tol's Estate, 182 Pa. 407, 38 Atl. 527.
96 Gen. St. Conn. 1918, § 4903; Laws Conn. 1913, c. 127; New York Per-
sonal Property Law (Consol. Laws, c. 41) § 21 New York Banking Law (Con-
;

sol. Laws, c. 2) § 239.

96 Code Ala. 1907, § 6076; Mills' Ann. St. Colo. 1912, § 7946; Gen. St. Conn.
1918, § 4903 ; Eev. Code Del. 1915, § 3875 1 Jones' & A. Ann. St. 111. 1913,
;

par. 188; Code Iowa, -1897, § 364; Laws N. H. 1895, c. 71, § 1; 2 Comp. St.
TSr. J. 1910, p. 2271, § 35; New York B&nking Law (Consol. Laws, e. 2) § 239;
Pell's Revisal N. C. 1908, § 1792; Page & A. Gen. Code Ohio, § 11214; 4
Purd. Dig. Pa. (13th Ed.) p. 4925 Nance v. Nance, 1 S. C. 209
; ;Shannon's
Code Tenn. 1896, §| 5433, 5434; St. Wis. 1913, § 2100b. Bonds of a Mexican
state were not a proper investment between 1900 and 1906. Cornet v. Cornet,
269 Mo. 298, 190 S. W. 333.
364 THE DUTIES OP THE TRUSTEE (Ch. 12

Changing Investments
If the settlor invests his iunds in securities which would not be
legal investments for a trustee, and then transfers these securities to
a trustee, is it the duty of the trustee to sell the unauthorized se-
curities and invest the proceeds in approved trust investments?
Thus, if the settlor transfers to a trustee corporate stock, should
the trustee sell this stock and place the funds in government bonds,
or approved mortgage bonds, or may the trustee rely upon the
judgment of the settlor and continue the investment in stocks?
This question has caused the courts some difficulty. The courts
of New York have imposed upon the trustee the duty of changing
an unauthorized trust investment as soon as possible, and have held
him liable for losses occurring from the continuance of an invest-
ment which the law did not approve."' "When a trustee finds the
estate committed to him already invested in interest-bearing se-
curities, weare Jiot inclined to say that it is his absolute duty at
once to dispose of them, without regard to the market, or the de-
mand for them, or the ruling price, or the probability of an advance
in their value. It is sufficient to say, however, that, ordinarily, if a
trustee sees fit to continue such investments after he shall have had
a reasonable opportunity to sell them without loss and to invest
them in those securities which by law he is authorized to hold,
it must be an exceptional case which will justify him in his failure
°*
to do so, where as a result of that failure there has been a loss."
On the other hand, other courts have been more liberal, and have
absolved the trustee from liability when he has used reasonable
prudence and good faith in retaining the investment."' Doubtless
the court may authorize the retention of the questioned investment
and thus relieve the trustee from responsibility.^'
In Delaware and New Hampshire the statutes provide that the
trustee may obtain the consent of the court of chancery to his re-
tention of the unauthorized investment and thus free himself from

07 In re Myers, 131 N. Y. 409, 30 N. E. 135 ; In re Hirsch's Estate, 116 App.

Dlv. 367, 101 N. Y. Supp. 893, affirmed 188 N. Y. 584, 81 N. E. 1165 ; In re
New York Life Ins. & Trast Co., 86 App. Div. 247, 83 N. Y. Supp. 883. In
Villard v. Villard, 219 N. Y. 482, 114 N. E. 789, tlie trustee was exempted
by the settlor from liability for losses occasioned by holding securities pur-
chased by the settlor, but not legal trust investments. The trustee received
from the executor stocks bought by the executor. He was held to be under a
duty to learn whether the settlor or the executor had purchased the stocks
and to change the unauthorized investjnent. See, also. In re Bernheimer's
Estate, 106 Misc. Rep. 719, 175 N. Y. Supp. 594.
»8 In re Wotton, 59 App. Div. 584, 587, 69 N. Y. Supp. 753.
8 9 Fowler v. Gowing (C. C.) 152 Fed. 801; Harvard College v. Amory, 9
Pick. (Mass.) 446; Bowker v. Pierce, 130 Mass. 262; Green v. Crapo, 181
Mass. 55-, 62 N. E. 956 ; Watkins v. Stewart, 78 Va. 111.
1 Fidelity Trust & Safety Vault Co. v. Glover, 90 Ky. 355, 14 S. W. 343.
 ;

§ 101) INVESTMENTS 365

further responsibility.* In Connecticut and New Jersey also trus-

tees have statutory authorization for the retention of the invest-
ments of the settlor, under certain restrictions.*
If the settlor expressly directed the trustee to sell the unauthoriz-
ed securities and invest the proceeds in authorized securities, ob-
viously it is the duty of the trustee to obey instructions and he may
be held liable for retention of the improper securities for too long
a period.* And, vice versa, if the settlor has expressly authorized
the trustee to retain the investment in the form in which he re-
<;eives it, there will be no obligation on the part of the trustee to
change the investment."
Consent by Cestui .

If the trustee makes an improper investment at the direction or

with the consent of the cestui que trust, the trustee will not be li-
able for losses ensuing as a result of such improper investment.®
And so, too, if the beneficiary acquiesces in or ratifies the unlawful
investment, he will not be heard to complain of losses occurring

2 Eev. Code Del. 1915, § 3393 Laws N. H. 1907, c. 16.

;

8 "Trust funds received by executors, trustees, guardians, or conservators

may be kept invested in the securities received by them, unless it be other-
wise ordered by the court of probate, or unless the instrument under which
said trust was created shall direct that a change of investments shall be
made, and they shall not be liable for any loss that may occur by depreciation
of such securities." Gen. St. Conn. 1918, § 4904; Beardsley v. Bridgeport
Protestant Orphan Asylum, 76 Conn. 560, 57 Atl. 165.
"Whenever any testator shall have made, in his lifetime, any Investment
of money in municipal bonds or on bond secured by mortgage, or in the bonds
or stock shares of any corporation, and the same bonds, mortgages or stock
«hares shall come or shall have come into the hands of the executor of or
trustee under the will of such testator or of the administrator with the will
annexed, to be administered, and such executor, administrator or trustee may,
in the exercise of good faith and reasonable discretion, have continued such
investment, or may hereafter continue the same, he shall not be accountable
(or any loss by reason of such continuance." 2 Comp. St. N. J. 1910, p. 2271,
§ 34; Brown v. Brown, 72 N. J. Eq. 667, 65 Atl. 739; Beam v. Patterson Safe
Deposit & Trust Co., 82 N. J. Eq. 518, 91 Atl. 734, reversed, 83 N. J. Eq. 628,
92 Atl. 351.
* Curtis V. Osborn, 79 Conn. 555, 65 Atl. 968.
5 In re Wolfe's Estate (Sur.) 2 N. Y. Supp. 494 ; In re Bartol's Estate, 182
Pa. 407, 38 Atl. 527.
8 Campbell v. Miller, 38 Ga. 304, 95 Am. Dee. 389 ; Follansbe v. Kilbreth,
17 111. 522, 65 Am. Dec. 691 ; Phillips v. Burton, 107 Ky. 88, 52 S. W. 1064
Contee v. Dawson, 2 Bland (Md.) 264; Appeal of Fidelity & Deposit Co. of
Maryland, 172vMich. 600, 138 N. W. 205; In re HofCman's Estate, 183 Mich.
•67, 148 N. W. 268, 152 N. W. 952 Furniss v. Zimmerman, 90 Misc. Rep. 138,
;

154 N. Y. Supp. 272 ; In re Westerfield, 48 App. Div. 542, 63 N. Y. Supp. 10,

appeal dismissed, 163 N. Y. 209, 57 N. E. 403 ; In re Hall, 164 N. Y. 196, 58
N. E. 11; Hester v. Hester, 16 N. C. (1 Dev. Eq.) 328; Dennis v. Dennis, 3
Ohio Dec. 12 In re Olermontel's Estate, 12 Phila. (Pa.) 139 Arthur v.- Mas-
; ;

ter in Equity, Harp. Eq. (S. C.) 47; Mills v. Swearingen, 67 Tex 269, 3 S. W.
366 THE DUTIES OP THE TRUSTEE (Ch. 12

therefrom.^ But the consent or ratification must be with full

knowledge of the facts, in order that it may relieve the trustee from
liability.' And the cestui must be of full age and sound mind, and
labor under no other disability when he gives his consent or ac-
quiescence, in order that the trustee may
be protected.* Natural-
ly also a consent or acquiescence obtained by fraud ^° or undue in-
fluence ^^ will have no effect upon the cestui's rights. Obviously
the beneficiaries who are in existence cannot consent or acquiesce
in such a way as to affect the rights of cestuis not yet born.'^^
The law respecting the approval by the beneficiary of improper
investments is well set forth in an Illinois decision. ^^ "In order to
bind a cestui que trust by acquiescence in a breach of trust by the
trustee, it must appear that the cestui que trust knew all the facts,
and was apprised of his legal rights, and was under no disability to
assert them. Such proof must be full and satisfactory. The ces-
tui que trust must be shown, in such case to have acted freely, delib-
erately, and advisedly, with the intention of confirming a trans-
action which he knew, or might or ought, with reasonable or prop-
er diligence, to have known to be impeachable. His acquiescence

268; Pownal V. Myers, 16 Vt. 408; Watson v. Conrad, 38 W. Va. 536, 18

S. B. 744. Contra, Aydelott v. Breeding, 111 Ky. 847, 64 S. W. 916. Thus,
where a portion of the trust assets Is a claim against a mining company and
the beneficiaries consent to the lending of more money to such company in an
attempt to recover the sum already invested, they cannot afterward object
to the investment. Mann v. Day, 199 Mich. 88, 165 N. W. 643. And accept-
ance by a cestui que trust of securities on a distribution bars objection to
them as improper investments. In re Kent, 173 App. Div. 563, 159/ N. Y.
Supp. 627.
7 See cases cited in note 6, p. 365. Failure to object for twenty-seven years

was held to bar the cestui que trust from complaint in Backes v. Crane, 87
N. J. Eq. 229, 100 Atl. 900. See, also, In re Union Trust Co. of New York,
219 N. Y. 514, 114 N. E. 1057 In re Keane, 95 Misc. Eep. 25, 160 N. Y. Supp.
;

200.
8 White V. Sherman, 168 111. 589, 48 N. E. 128, 61 Am. St. Rep. 132 Appeal ;

of Nichols, 157 Mass. 20, 31 N. E. 683 McKim v. Glover, 161 Mass. 418, 37
;

N. E. 443 In re Reed, 45 App. Div. 196, 61 N. Y. Supp. 50 Adair v. Brim-

; ;

mer, 74 N. Y. 539; Appeal of Pray, 34 Pa. 100.

« Murray v. Feinour, 2 Md. Oh. 418. A
guardian of a minor cestui que
trust cannot acquiesce in a wrongful investment and bind the minor. Inter-
national Trust Co. V. Preston, 24 Wyo. 163, 156 Pac. 1128.
10 Zimmerman v. Fraley, 70 Md. 561, 17 Atl.
560 Appeal of Nichols, 157
;

Mass. 20, 31 N. B. 683.

11 Wieters v. Hart, 68 N. J. Eq. 796, 64 Atl. 1135.
12 Wood v. Wood, 5 Paige (N. Y.) 596, 28 Am.
Dee. 451. And life tenants
cannot affect the rights of remaindermen. International Trust Co. v. Pres-
ton, 24 Wyo. 163, 156 Pac. 1128.
13 White T. Sherman, 168 111. 589, 605, 606, 48 N. E. 128, 61 Am. St
Rep. 132.
 ; ;

§ 102) EXPENDITURES 367

amounts to nothing if his right to impeach is concealed from him,

or a free disclosure is not made to him of every circumstance

if

which it is material for him to know. He cannot be held to have

recognized the validity of a particular investment, unless the ques-
tion as to such validity appears to have come before him. The
trustee setting up the acquiescence of the cestui que trust must
prove such acquiescence. The trustee must also see tdit that all
the cestuis que trust concur, in order to protect him from a breach
of trust. If any of the beneficiaries are not sui juris, they will not
be bound by acts charged against them as acts of acquiescence.
The trustee cannot escape liability merely by informing the cestuis
que trust that he has committed a breach of trust. The trustee is
bound to know what his own duty is, and cannot throw upon the
cestuis que trust the obligation of telling what such duty is. Mere
knowledge and noninterference by the cestui que trust before- his
interest has come into possession do not always bind him as ac-
quiescing in the breach of trust. As a general rule, acquiescence by
a tenant for life, or by a cestui que trust for life, will not bind the
person entitled to the remainder."

EXPENDITURES
102. Theexpenditures which it is the duty of a trustee to make,
and for which he will be reimbursed, depend upon the pur-
poses of the trust and the express provisions of the trust
instrument.
Ordinarily it is the duty of the trustee to expend the trust funds
for the following purposes, when occasion arises:
(1) Collecting and obtaining possession of the trust property;
(2) Discharging the interest and principal of debts of the trust
estate and removing encumbrances upon the trust prop-
erty;
(3) Defraying the expenses of necessary repairs, improvements,
and insurance, and paying taxes
(4) Buying property necessary to carry on the trust business^
when the carrying on of a business is authorized;
(5) Employing necessary agents and servants
(6) Employing attorneys, when litigation or legal advice is neces-
sary, and paying the costs of necessary actions and pro-
ceedings which are conducted in good faith.
The trustee should pay the current expenses of the trust from the
income, in the absence of express direction to the contrary
in the trust instnunent. Payments for the benefit of re-
maindermen, or which will result in the increase of the
capital, should be borne wholly or partly by the capital.
368 THE DUTIES OF THE TRUSTEE (Ch^l2

In considering the duties of the trustee it is important to deter-

mine what expenditures he should incur in the administration of his
trust. For what purposes should he expend the trust funds, ei-
ther income or principal? In what cases, if he advances his own
moneys for expenditures, will he be indemnified out of the trust
property?
In general, it may be said that it is the duty of the trustee to
make whatever expenditures are necessary for the proper admin-
istration of the trust and the protection and preservation of the
trust property. If the outlay is necessary for one of these purpos-
es, the trustee will be protected in making it.^* Of course, the
trustee is protected in making any expenditure which equity orders
him to make.^^ It is frequently said by chancery that it will ap-
prove any disbursement made by the trustee, if the expense is one
which the court would have sanctioned, if application had been
made, to it for instruction prior to the expenditure.^"
It is self-evident that expenses incurred in collecting and reduc-
ing to possession the trust property, are proper. Thus, if the trus-
tee is obliged to bring an action in order to collect the trust prop-
erty,^' or has to foreclose a mortgage which belongs to the trust,^*
the expense thus incurred is justifiable.
If the trust estate has properly incurred a debt, the trustee is
under a duty to pay the interest on such debt ^' and to discharge
the principal.^" He should remove an incumbrance upon the trust
property,^^ but it has been held not to be his duty to purchase an
outstanding claim against the trust property.^^

14 Miles V. Bacon, 4 J. J. Marsh. (Ky.) 457; In re Walker's Estate, 150

Iowa, 284, 128 N. W. 376, 129 N. W. 952 Hatton v. Weems,. 12 GUI & J. (Md.)
;

83 Innls v. Flint, 106 Minn. 343, 119 N. W. 48 In re Brooklyn Trust Co., 92

; ;

Misc. Rep. 674, 157 N. Y. Supp. 547, affirmed in 178 App. Div. 948, 158 N. T.
Supp. 1109.
10 In re Weed's Estate, 163 Pa. 595, 30 Atl. 272.
16 Brandon v. Brandon, 50 How. Prac. (N. Y.) 328; Petition of Potts, 1
Aslim. (Pa.) 340; Williams v. Smith, 10 E. I. 2$0.
17 Rains V. Rainey, 11 Humph. (Tenn.) 261.
18 Nevitt V. Woodburn, 190 111. 283, 60 N. E. 500; Jones v. Jones, 50 Hun,
603, 2 N. T. Supp. 844 ; In re Olmstead, 52 App. Div. 515, 66 N. Y. Supp. 212,
affirmed 164 N. Y. 571, 58 N. E. 1090.
15 Flschbeck v. Gross, 112 111. 208. But where the settlor directed payment
of the debt at once, there is no duty upon the trustee's part to allow the debt
to run and to pay interest on it. Janeway's Ex'r v. Green, 2 Sandf. Ch. (N.
Y.) 415.
20 Burroughs v. Bunnell, 70 Md. 18, 16 Atl.
447; Loud v. Winchester, 64
Mich. 23, 30 N. W. 896.
21 Freeman v. Tompkins, 1 Strob. Eq. (S. C.) 53.
22 Shaw v. Devecmon, 81 Md. 215, 31 Atl. 709. But see Mann v. Day, 199
§ 102) EXPENDITURES . 369

It is the duty of the trustee to expend such sums as are necessa-

ry for the upkeep and protection of the trust- property. Thus, if
the income of the property will materially decrease, unless the ,

buildings upon it are repaired, expenditures for that purpose are

propeh^^ More infrequently the exigencies of the trust will justi-
fy the replacement of the trust buildings or permanent improve-
ments thereto.'* This subject of repairs and improvements has
been discussed elsewhere under the heading of the trustee's pow-
ers.'" Insurance premiums are also allowable expenses for the
trustee, if the nature of the trust and the trust property justify in-
surance.*'
Taxes
Under the heading of upkeep and maintenance may also be plac-
ed taxes. All taxes and assessments against the trust property
should be discharged by the trustee." It would be gross negli-
gence on his part to allow the trust estate to be sold on account of
the nonpayment of the taxes. Being the owner of the legal estate,
the trust property is assessed against the trustee."' In the absence
/

Mich. 88, 165 N. W. 643, in which the settlement of claims against the trust
estate was sanctlonefl.
2 8 Fischbeck v. Gross, 112 111. 208; Parsonsi v. Wlnslow, 16 Mass. 361;
Berry v. Stigall, 125 Mo. App. 264, 102 S. W. 585; Barnes v. Taylor, 30 N. J.
Eq. 7 Herbert v. Herbert, 57 How. Prac. (N. T.) 333 Cheatham v. Rowland,
; ;

S2 N. C. 340.
2* Root V. Teomans, 15, Pick. (Mass.) 488; Ldttle v. Little, 161 Mass. 188, 36
N. E. 795 Dickel v. Smith, 42 W. Va. 126, 24 S. E. 564. Where the object of
;

the trust is to furnish a home,f6r the beneficiary, money paid for the repair,
improvement, and reipodeling of a house is a proper expenditure. Welder-
hold Y. Mathis, 204 111. App. 3.
2 5 See ante, § 86.

2 8 Howard Fire Ins. Co. v. Chase, 5 Wall. 509, 18 L. Ed. 524; Lerow-v.
Wilmarth, 9 Allen (Mass.) 382 Goodall v. New England Mut. Fire Ins. Co., 25
;

N. H. 186 ;Disbrow v. Disbrow,' 167 N. Y. 606, 60 N. E. 1110 Garvey v.

;

Owens, 58 Hun,~609, 12 N. Y. Supp. 349; Swift v. Vermont Mut. Fire Ins.

Co., 18 Vt. 305.
2 7 Burr V. McEwen, Fed. Cas. No. 2,193; Cagwin v. Buerkle, 55 Ark. 5, 17

S. W. 266; Merritt v. Jenkins, 17 Fla. 593; Fischbeck v. Gross, 112 111. 208;
City of Detroit v. Lewis, 109 Mich. 155, 6erN. W. 958, 32 L. R. A. 439 Berry ;
'

T. Stigall, 125 Mo. App. 264, 102 S. W. 585; Wiegand v. Woerner, 155 Mo.
App. 227, 134 S. W. 596; McKiernan v. McKiernan (N. J. Ch.) 74 Atl. 289;
Jones V. Jones, 50 Hun, 603, 2 N. Y. Supp. 844 Disbrow v. Disbrow, 46 App.
;

Div. Ill, 61 N. Y. Supp. 614, affirmed 167 N. Y. 606, 60 N. E. 1110 Taylor

;

V. Taylor, 76 W. Va. 469, 85 S. E. 652.

2 s Hawaii Laws 1917, Act 223 Ellsworth College of Iowa Falls v. Emmet
;

County, 156 Iowa, 52, 135 N. W. 594, 42 L. R. A. (N;,S.) 530; Latrobe v.

Mayor, etc., of Baltimore, 19 Md. 13 Miner v. PIngree, 110 Mass. 47 Dun-
; ;

ham V. City of Lowell, 200 Mass. 468, 86 N. E. 951; People v. Coleman, 119 '

N. Y. 137, 23 N. E. 488, 7 L. R. A. 407;, People v. Feitner, 168 N. Y. 360, 61

N. E. 280 People v. Barker, 18 Misc. Rep. 712, 43 N. Y. Supp. 713. See sec-
;

tion 33 of the New York Tax Law (COnsol. Laws, c. 60) as a sample statute
BOGERT 'rBUSTS ^24 '
 370 ' THE DUTIES OP THE TRUSTEE (Ch. 12

of statute,'"it is improper to assess the trust property for taxation

as the property of tlie beneficiary.^" Real property held in trust is,

of course, assessed against the trustee in the district where the real
property is located, while ^personal property taxes are assessed ac-
cording to the residence of the trustee.*^

on the subject. It reads as follows: "If a person holds taxable property as

agent, trustee, guardian, executor or administrator, he shall be assessed
therefor as such, with the addition to his name of his representative char-
acter, and such assessment shall be carried out in a separate line from his
individual assessment." ^

2»In some states statutes authorize the levying of the assessment against
the cestui que trust under some circumstances. City of Iiexington v. Fish-
back's Trustee, 109 Ky. 770, 60 S. W. 727 ; City of Baltimore v. Safe Deposit
& Trust Co., 97 Md. 659, 55 Atl. 316. Bev. Laws Mass. c. 12, § 23, reads in
part as follows: "Personal property held in trust by an executor, administra-
tor or trustee, the income of which is payable to another person, shall be
assessed to the executor, administrator or trustee in the x;ity or town in
which such other person resides, if within the commonwealth and if he re-
;

sides out of the commonwealth it shall be assessed in the place where the
executor, administrator or trustee resides. * * * If the executor, admin-
istrator or trustee is not an inhabitant of the commonwealth, it shall be
assessed to the person to whom the income is payable, in the place where he
resides, if It Is not legally taxed to an executor, administrator or trustee
under a testamentary trust in any other state." Under this statute in Welch
V. City of Boston, 221 Mass. 155, 109 N. E. 174, Ann. Cas. 1917D, 946, a trus-
tee residing In Massachusetts was held liable to assessment in Massachusetts,
although the trust property was located In Maine a.nd the cestuls que trust
were in California. In Newcomb v. Paige, 224 Mass. 516, 113 N. E. 458, the
trustees were appointed by a New York court and only one of the three lived
in Massachusetts. The property was in New York and the admmistration
carried on there, though the cestui que trust resided tn Massachusetts. It '

was held that the trust property was not taxable in Massachusetts. See also,
for construction of this statute, Williams v. Inhabitants of MUton, 215 Mass.
1, 102 N, E. 355. As to Income taxes the law is regulated by St. Mass. 1918,
c. 257, § 66, which provides as follows: "The income received by estates held
in trust by trustees, any one of whom Is an inhabitant of this commonwealth
or has derived his appointment from a court of this commonwealth, shall be
subject to the taxes assessed by this act to the extent that the persons to
whom the income from the trust Is payable, or for whose benefit It is accu-
mulated, are inhabitants of this commonwealth."
30 Dorr v. City of Boston, 6 Gray (Mass.) 131.
31 Mackay v. City and County of San Francisco,
128 Oal. 678, 61 Pac. 382;
Trustees of Academy of Richmond County v. City Council of Augusta, 90 Ga.
634, 17 S. E. 61, 20 L. R. A. 151 ; McClellan v. Board of Review of Jo Daviesa
. County, 200 111. 116, 65 N. E. 711 Commonwealth v. Sunpson's Trustee (Ky.)
;

104 S. W. 274 ; Mayor, etc., of Baltimore v. Stirling, 29 Md. 48 Hardy v.

;

Inhabitants of Yarmouth, 6 Allen (Mass.) 277; Hills v. City of Muskegon,

158 Mich. 551, 128 N. W. 21; State v.Willard, 77 Minn. 190, 79 N. W. 829;
Board of Sup'rs of Aaams County v. Dale, 110 Miss. 671, 70 South. 828; Laws
N. H. 1915, c. 172; People ex rel. Brewster v. Barker, 8. Misc. Rep. 32, 28
N. Y. Supp. 651 ; Greene v. Mumford, 4 R. I. 313.
 § 102) EXPENDITURES 371

The trustees are authorized and under an obligation to expend

such sums as are necessary for the carrying on and. execution of
t}ie trust. Thus, where the trust property consists of a hotel, the
trustees may spend such amounts as are necessary for the opera-
tion of the establishment.^^ And expenditures for the employment
of necessary agents and servants are proper.^' If litigation be-
comes necessary for the execution of the trust or the protection of
the trust property, it is the duty of^ the trustee, to employ compe-
tent legal assistance. He will be indemnified for all attorney's fees
which he necessarily incursi^* "It is a cardinal principle in the dis-
position of trust estates that the trust fund shall bear the expenses
of its administration, and that one who successfully conducts a lit-
igation in autre droit, for the benefit of a fund, shall be protected
in the distribution of such fund for the expenses necessarily incur-
red by him in the performance of his duty." *^
Legal Ad-vice ,

•
It is usually stated by the courts that the trustee is justified in
expending the trust moneys for the employment of counsel when
the litigation is "proper". or "necessary."*' Thus, if a suit in eq-

S2Ashley v. Winkley, 209 Mass. 509, 95 N. E. 932.

33Wilder v. Hast, 96 S. W. 1106, 29 Ky. Law Rep. 1181; Babbitt v. Fidel-
ity Trust Co., 72 N. J. Eq. 745, 66 Atl. 1076. Wben the trust res is a farm,
expenditures for its cultivation are proper. Banzau v. Davis, 85 Or. 26, 165
Pac. 1180. Trustees to sell real estate and distribute its proceeds may employ
brokers. Rutherford v. Ott, 37 Cal. App. 47, 173 Pac. 490.
s* Mitau V. Roddan, 149 Oal. 1, 84 Pac. 145, 6 L. R. A. (N: S.) 2T5 Stahl
;

V. Stahl, 166 111. App. 236; Dolph v. Cincinnati, B. & C. R. Co., 56 Ind. App.
137, 103 N. E. 13 ; Clark v. Anderson, 13 Bush (Ky.) Ill Taylor v. Denny,
;

118 Md. 124, 84 Atl. 369 Rice v. Merrill, 215 Mass. 419, 102 N. E. 414 Den-
; ;

vir V. Park, 169 Mo. App. 335, 152 S. W. 604 Babbitt v. Fidelity Trust Co.,
;

72 N. J. Eq. 745, 66 Atl. 1076; Downing v. Marshall, 37 N. Y. 380; In re

Brennan's Estate, 215 Pa. 272, 64 Atl. 537; In re Waller's Estate, 62 Pa.
Super. Ct. 332; Burney v. Atkinson (Tenn. Ch. App.) 54 S. W. 998; West
Texas Ba.nk & Trust Co. v. Matlock (Tex. Civ. App.) 172 S. W. 162 Cochran ;

v. Richmond & A. R. Co., 91 Va. 339, 21 S. E. 664; In re Rice's WUl, 150

Wis. 401, 136 N. W. 956, 137 N. W. 778. Where the attorney's fees and costs
are occasioned by the lltigiousness of one of the beneficiaries, the trustee wUl
be indemnified from such beneficiary's share alone. Patterson v. Northern
Trust Co., 286 111. 564, 122 N. E. 55.
3 5 Woodruff V. New York, L. E. & W. E. Co., 129 N. Y. 27, 30, 29 N. E. 251.
36 Burr V. McEwen, Fed. Cas. No. 2,193 In re Hanson's Estate, 159 Cal.
;

401, 114 Pac. 810; Macdonald v. Mtnn Indemnity Co., 93 Conn. 140, 105 Atl.
331; Fox V. Fox, 250 111. 384, 95 N. E. 498; Wiegand v. Woemer, 155 Mo.
App. 227, 134 S. W. 596 Rahway Sav. Inst. v. Drake, .25 N. J. Eq. 220
;
; m
l-e Jones, 143 App. Div 692, 128 N. Y. Supp. 215. On an accounting, where
diflScult questions are involved, the trustee may charge the estate with attor-
ney's fees. In re Starr (N. J. Prerog.) 103 Atl. 392. See, also, Mann v. Day,
199 Mich. 88, 165 N. W. 643. Resistance of an unauthorized removal of a
trustee and the procuring of the appointment of a new trustee are proper
 '

372 THE DUTIES OP THE TRUSTEE (Ch. 12

uity to obtain advice is necessary,*' or proceedings are brought for

the sale of the trust property,^ or a bill is brought against the
trustee to determijie claims to the trust estate/" or the validity of
the will which creates the trust is attacked,*" the trustee will be
justified in employing counsel and will be indemnified from the
trust funds.
But equity will not allow the trustee attorney's fees where the
action or proceeding was useless or the result of the trustee's own
fault.*^ For example, if the suit is against the trustee for an ac-
counting on account of his own mismanagement and misconduct,*^
or if the action is one in which the trustee is repudiating or resist-
ing the trust,*^ he will not be allowed payment of his counsel fees
from the trust funds.
If the trustee is a lawyer, and litigation is necessary, or for other
reasons the employment of an attorney becomes imperative,- the
trustee may, according to the ^prevailing view, perform the legal
services himself, and receive compensation therefor upon his ac-/
counting.** "It cannot be doubted that for services of an extraor-
dinary character, rendered by a trustee, he is entitled to extra com-
pensation beyond the usual allowance for receiving and disbursing
trust funds. If professional services, necessary to the proper ad-
ministration of the trust, have been rendered by a trustee in person,
he is clearly entitled to such reasonable compensation as he would
have paid, had he been obliged to employ counsel." *'
A Tennessee court of chancery has said that "the rule is now es-
tablished in this state that while a trustee cannot arbitrarily charge
the estate he represented for legal services, and that he ^annot
make a valid, legal, binding contract with himself about the mat-
reasons for the employment of counsel. Jessup v. Smith, 223 N. Y. 203, 119
N. E. 403.
37 Grimball v. Cruse, 70 Ala. 534.
ssAlemany v. Wenslnger, 40 Cal. 288.
8 8 Morton v. Barrett, 22 Me. 2tj7, 39 Am. Dee. 575.
40 In re Hoffman's Estate, 19 Pa. Super. Ct. 70.
41 Page V. Boynton, 63 N. H. 190; Holcombe v. Holcombe's Ex'rS, 13 N. J.
Eq. 415 In re Reich's Estate, 230 Pa. 55, 79 Atl. 151; Vaccaro v. Cicalla, 89
;

Tenn. 63, 14 S. W. 43 Ohamberlin v. Estey, 55 Vt. 378.

;

42 Melson v. Travis, 133 Ga. 710, 66 S. E. 936.

48 Appeal of Stark, 128 Pa. 545, 18 Atl. 426; Hanna v. Clark, 204 Pa. 145,
53 Atl. 757; Towle v. Mack, i Vt. 19.
44 Taylor v. Denny, 118 Md. 124, 84 Atl. 369; Shirley v. Shattuck, 28
Miss. 13 Willis v. Clymer, 66 N. J. Eq. 284, 57 Atl. 803
; Appeal of Perkins,
;

108 Pa. 314, 56 Am. Kep. 208; Morris v. Ellis (Tenn. Ch. App.) 62 S. W.
250. This rule was applied to services in the care and rental of apartments
in Cornett v. West, 102 Wash. 254, 173 Pac. fi.
46 Appeal of Perkins, 108 Pa. 314, 318, 319, 56 Am. Rep. 208.
§ 102) EXPENDITURES 373

ter, so as to fix the amount to be paid, yet that the trustee may, in
addition to his ordinary duties as such, render services as a lawyer,
and that in a settlement of his accounts the chancery court, under ,

its broad powers, may inquire into the matter, and, if it be found
that the services were proper and necessary, they may be allowed,
and, 'within its discretion, fix reasonable compensation to be
'

paid."" '>
I

The New York courts have taken the view that trustees can ma;ke
no contracts with themselves for the rendition of legal services,
that the occupation of a double capacity by the trustee is not con-
sistent with the proper administration of the trust, and that the
only compensation^ or advantage which a trustee may get from the
performance of his trust is the compensation allowed him by law
in the form of commissions.*^ "An executor, or trustee, empower-
ed to manage an estate, may eiriploy a clerk or agent, and charge
the estate with the expense, when, from the peculiar nature and
situation of the property, the services of a clerk or agent are neces-
sary, and he will be allowed expenses of keeping up the estate, and
for taxes, repairs, etc. But executors cannot employ one of their
-number as clerk and allow him a salary, nor will an executor be-
allowed compensation for his own services as attorney in the af-
fairs of the estate," ** ,

Costs of Litigation ^

The costs of proceedings or actions are proper expenditures for

the trustee, if they have been necessarily conducted by him and he
has acted with diligence and good faitli.*° "He [the trustee] is
required to protect diligently aild faithfully the interest of the ben-
eficiaries,and all of them, and he is entitled to be reimbursed for
expenses honestly incurred in-the administration of the trust. He
is not called upon to assume any personal risk, and is entitled to
the judgment of the court upon the demands of rival claimants to
the fund. So long as he acts, with prudence, discretion, and econo-
my in the management of the estate and in the examination and as- v

*6 Morris (Tenn. Ch. App.) 62 S.' W. 250, 259.

v. Ellis
" Green Winter, 1 Johns. Ch. (N. T.) 26, 7 Am. Dec. 475; Manning v.
v.
Manning's Ex'rs, 1 Johns. Ch. (N. T.) ^27; Binsse v. Paige, 1 Abb. Dee. 138;
Collier v. Munn, 41 N. Y. Ii3; Lent v. Howard, 89 N. Y. 169; Parker v.
Day, 155 N. Y. 383, 49 N. E. 1046 In re Wallach, 164 App. Div. 600, 150 N.
;

X. iSnpp. 302. Accord: Mayer v. Galluchat, 6 Rich. Eq. (S. C.) 1. A Ken-
tucky court has taken the stand that, while a trustee may not be paid a
separate bill for his legal services, the court may consider such services
when awarding him compensation, and increase his allowance on that ac-
count. Kentucky Nat. Baqk v. Stone, 11 Ky. Law Eep. 948.
*8 Lent V. Howard, 89 N. Y. 169, 178, 179.
48 Olcott V. Maclean, 11 Hun (N. Y.) 394 ; Ingram v. Kirkpatrick, 43 N.
C. (8 Ired. Eq.) 62; Darby v, Gilligan, 37 W. Va. 59, 16 S. E. 507.
374 THE DUTIES OF THE TEUSTEE (Ch. 12

certainment of claims, his expenses should be paid fiom the gen-

eral fund. Where he has invoked the sanction of the court before
paying over the fund, in the case of contesting claimants, no au-
thority has been cited for the proposition that the costs and expens-
es of the proceeding should be saddled upon the trustee or the un-
successful claimant, unless they have been guilty of vexatious con-
duct or bad faith." "
In numerous cases, where the trustee has acted in good faith and
with reasonable skill, he has been allowed td charge against the
trust fund the costs taxed in the litigation.'^^ Thus, where the suit
was fpr the determination of the rights of conflicting claimants to
the trust fund and to obtain directions concerning distribution, the
estate has been held properly charged with the costs of the suit.°^
But, if the trustee has been guilty of misconduct which has caused
the action, or has exhibited bad faith in the conduct of the suit, or
has otherwise taken an improper position, chancery may charge
him personally with the costs of the litigation.''^ If, for example,
the trustee has kept improper accounts of the trust funds a*id has
misapplied them, and the beneficiary has, therefore, been obliged to
bring suit, the trustee will not be allowed to charge the costs of
the suit against the trust estate.'* In many jurisdictions there are
now statutes which are declaratory of the rules which equity has
established respecting the question of costs. ^'

so Western Union Tel. Co. v. Boston Safe-Deposit & Trust Co. (C. C.) 104
Fed. 580, 581.
61 Sterling v. Gregory, 149 Cal. 117, 85 Pac. 305; Keys v. Wohlgemuth,
240 111. Wedekind v. Hallenberg, 12 Ky. Law Rep. 46;
586, 88 N. E. 1041;
Amory v. Lowell, 1 Allen (Mass.) 504; Loud v. Winchester, 64 Mich. 23, 30 N.
W. 896; Babbitt v. Fidelity Trust Co., 72 N. J. Eq. 745, 66 Atl. 1076; Del-
afield V. Colden, 1 Paige (N. Y.) 139; In re Hunt, 121 App. Div. 96, 105 N.
Y. Supp. 696; In re McCormick, 40 App. Div, 73, 57 N. Y. Supp. 548, af-
firmed 163 N. T. 551, 57 N. B. 1116.
5 2 Cotten V. Tyson, 121 Md. 597, 89 Atl. 113.

6 s Currier v. Johnson, 19 Colo. App. 453, 75 Pac. 1079; Haines v. Hay,

169 111. 93, 48 N. E. 218; Knowles v. Knowles, 86 111. 1; Guyton v. Shane,
7 Dana (Ky.) 498; Wiegand v. Woerner, 155 Mo. App. 227, 134 S. W. 596;
Butler V. Boston & A. K. Co., 24 Hun (N. Y.) 99; American l^ife Ins. Co.
V. Van Epps, 14 Abb. Prac. N. S. (N. Y.) 253; Duffy v. Duncan, 32 Barb.
(N. Y.) 587; In re Abbot, 39 Misc. Rep. 760, 80 N. Y. Supp. 1117; Jewett
V. Schmidt, 45 Misc. Rep. 471, 92 N.'Y. Supp. 737.
«* Spencer v. Spencer, 11 Paige (N. Y.) 299.
55 The New York statute is tji)ical. "In an action, brought by or against
an executor or administrator, in his representative capacity, or the trustee
of an express trust, or a person expressly authorized by statute to sue or
to be sued, costs must be awarded, as in an action by or against a person,
prosecuting or defending in his own right, except as otherwise prescribed
by sections 1835 and 1836 of this act; but they are exclusively chargeable
§ 102) EXPENDITURES 375

Source of Payment
Assuming that the trustee is justified in niaking a given expendi-
ture, from what source should he take the funds to cover such ex-
penditure? Isthe trustee's duty to apply income or principal to
it
the payment which necessarily arise in the administration
of claims
of the tritst? The answer dej5ends upon the purpose for which the
payment is to be made. The current, running expenses of the trust
should be paid from income; the payments for extraordinary ob-
jects, where there is a benefit to or betterment of the capital of the
trust estate, should either be paid wholly from the capital, or should
be apportioned between income and capital, where there are tem-
porary beneficiaries and remaindermen who are entitled to the prin-
cipal ultimately. Thus, premiums on the trustee's bond,°° payments
for ordinai'y repairs to the trust property j""" for insurance, taxes,^'
the employment of agents and servants, interest on mortgiges,^*

upon, and collectible from the estate, fund, or person represented, unless
the court directs them to be paid, by the party personally, for mismanage-
ment or bad faith in the prosecution or defense of the action." Code Oiv.
Proc. N. Y. § 8246. See, also, Code Giv. Proc. Cal. § 1031; Pell's Revisal
N. C. 1908, § 1277.
6 Parkhurst v. Ginn, 228 Mass. 159, 117 N. E. 202, Ann. Oas. 1918E, 982;

In re Crawford's 1/State, 62 Pa. Super. Ct. 329. Contra, Wethered v. Safe

Deposit & Trust Co., 79 Md. 153, 28 Atl. 812. The rent of a safety deposit
box is also payable out of income. In re Boyle, 99 Misc. Rep. 418^ 163 N. Y.
supp. 1095. J

B7 Whittingham v. Schofield's Trustee (Ky.) 67 S. W. 846; Veazie v. For-

saith, 76 Me. 172; Little v. Little, 161 Mass. 188, 36 N. E. 795; Dickinson
V. Henderson, 122 Mich. 583, 122 N. W. 583; Smith v. Gibson, 15 Minn. 89
(Gil. 66) In re Heaton, 21 N. J. Ecu 221 Herbert v. Herbert, 57 How. Prac.
; ;

(N. Y.) 333; Hancox v. Meeker, 95 N. T. 528; Cheatham v. Rowland, 92

N. C. 340; Greene v. Greene, 19 E. I. 619, 35 Atl. 1042, 35 L. R. A. 790.
Grading and flagging sidewalks, grading and paving streets, fencing, new
roofing, and plumbing were. In Stephens' Ex'rs v. Milnor, 24 N. J. Eq. 358, held
to be "expenses incidental to the estate" and chargeable to income.
ssMcCook V. Harp, 81 Ga. 229, 7 S. E. 174; Wal!ts v. Howard, 7 Mete.
(Mass.) 478; Parkhurst v. Ginn, 228 ^Vlass. 159, 117 N. E. 202, Ann. Cas.
191gE, 982; Goodwin v. McGaughey, 108 Minn. 248, 122 N. W. 6; DufCord's
Ex'r V. Smith, 46 N. J. Eq. 216, 18 Atl. 1052 Whitson v. Whitson, 53^ N. Y.
;

479; Spangler.v. York Co., 13 Pa. 322; Fitzgerald v. Rhode Island Hospi-
tal Trust Co., 24 R. I. 59, 52 Atl. 814. Under- a statute inheritance taxes
were charged to principal in Parkhurst y. Ginn, 228 Mass. 159, 117 N. E. 202,
Ann. Cas. 1918B, 982.
69 In re Albertson, 113 N, Y. 434, 21 N. E. 117; In re- Sheer's Estate, 262
Pa. 15, 104 Atl. 853. But, if the property is unproductive, taxes, interest,
and general running expenses must by necessity be charged "to capital.
^

Ogden V. Allen, 225 Mass. 595, 114 Ni E. 862; Poole v. Union Trust Co.,
191 Mich. 162, 157 N. W. 430, Ann. Cas. 1918B, 622; Spencer v. Spencer',
219 N. Y. 459, 114 N. E. 849, Ann. Cas. 1918E, 943; -In re Montgomery, 99
Misc. Rep. 473, 165 N. Y. Supp. lu69.
376 THE DUTIES OF THE TRUSTEE (Ch. 12

for the trustee's compensation,'" and the expenses of administration

before the property reaches the trustee's hands,°^ should come
from the income of the trust estate. But payments made for put-
ting the trust real estate in a tenantable condition when it is unfit
for occupation at the beginning of the trust,"^ the costs of litiga-
tion,"^ and the expense necessary for the reconstruction of wharves
which are the trust subject-matter,®* -should be charged to the cap-
ital fund. "The plaintiff claims that the defendants are not enti-
tled to have the taxes, the repairs, and the expenses of managing
the estate, de'ducted from the income. It is conceded that in ordi-
nary trusts such expenses must be paid from the income of the trust
fund. * * * It jg difficult to make any legal distinction between
ordinary and extraordinary repairs. If they are necessary in order
to preserve the property and make it productive, they should be paid
for from the income." "" "All trustees are entitled to a reasonable
compensation for their services as they are rendered, and, unless a
contrary intention appear, the compensation must come out of the
income of the fund with' which they 'are intrusted." ""
The questions whether a certain expenditure by a trustee may
properly be made by him and whether he will be reimbursed there-
for upon his accounting are the same in legal effect. If a payment
was properly made by a trustee, he will be entitled to be credited
therewith upon his account; and if, on the other hand, the expen-
diture is such that chancery will iiot reimburse the trustee therefor
upon the accounting, it is obvious that the disbursement was an
improper one for the trustee to make. Hence the subjeqt of the re-

60 Parker v. Ames, 121 Mass. 220 In re Spangler's Estate, 21 Pa. 335.

;
'

81 Held V. Keller, 135 Minn. 192, 160 N. W. 487; In re Frost, 184 App. Div.
7Q2, 172 N. Y. Supp. 442.
62 In re Heroy's Estate, 102 Misc. Kep. 305, 169 N. t. Supp. 807;, In re
Deckelmann, 84 Hun, 476, 32 N. Y. Supp. 404. And see In re Young, 17
Misc. Rep. 680. 41 N. Y. Supp. 539. Where trustees hold land in trust
for A., subject to an executory limitation, the expense of grading, curbing,
and sewers may be paid from the proceeds of unproductive realty. Sheffield
V. Cooke, 39 E. I. 217, 98 Atl. 161, Ann. Cas. 1918E, 961.
6 3 But if the litigation has resulted from the negligence of the life bene-

ficiary who is also a trustee, the expense may be charged to income. Cogs-
well v. Weston, 228 Mass. 219, 117 N. E. 37.
61 Sohier v. Eldredge, 103 Mass. 345-. And see, Hart v. Allen, 166 Mass.
78, 44 N. E. 116; Abell v. Abell, 75 Md. 44, 23 Atl. 71, 25 Atl. 389; Brown
V. Berry, 71 N. H. 241, 52 Atl. 870 ; Smith v. Keteltas, 62 App. Div. 174, 70
N. Y. Supp. 1065. The expense of buiflding a bathroom in a house should
be borne by the capital. Hooker v. Goodwin, 91 Conn. 463, 99 Atl. 1059,
Ann. Cas. 1918D, 1159.
60 Guthrie v. Wheeler, 51 Conn. 203, 212, 213.
6 6 In re Spangler's Estate, 21 Pa. 335, 337.
§ 103) PAYMENTS TO BENEFICIAEIES 377

imbufsement of the trustee for expenditures has been inferentially

covered in the previous discussion regarding the propriety of the
trustee's expenditures. Some further development of the rights of
the trustee to be reimbursed upon his accounting will be undertak-
en at a later point.*'

PAYMENTS TO BENEFICIARIES
103. Theduties of the trustee in making payments to the benefici-
ary are usually governed by the terms of the trust instru-
ment.
Under the Massachusetts rule, adopted in a few American states,
stock dividends are regarded as capital, while cash divi-
dends are treated as income but the later tendency of the
;

courts following this rule is to inquire into the source, as

well as the form, of the dividend. According to the Penn-
sylvania and prevailing American rlile dividends on cor-
porate stock held in trust are income if tKey were earned
during the existence of the trust, but are capital if they
were declared from earnings which accrued prior to the
beginning of the trust. The form of the dividend, wheth-
er stock or cash, is not important.
Profits accruing from the sale or exchange of trust property are
'
ordinarily treated as capital.
Rents, annuities, and interest received by a trustee and partly
earned during a period prior to the existence of the trust
are, under modern statutes, usually apportioned ; but divi-
dends declared during the existence of a trust are not or-
dinarily divided, even though a portion of the earnings
from which they were declared was accumulated before
the trust began. ^

According to the weight of authority a trustee who buys securi-

ties at a premium should deduct from the income of such
securities a stun sufficient to make up the premium at the
maturity of the secturity.
Ordinarily the trustee should not, in the absence of express au-
thorization, expend the capital of the trust fund for cur-
rent expenses or in the administration of the trust; but
upon extraordinary occasions the trustee may, upon his
own initiative or by court order, pay out a part of the cap-
ital fund.

«' See § 106, post

378 THE DUTIES OF THE TRUSTEE (Ch. 12

The duties of the trustee regarding the payment of the income of

the trust property to the beneficiaries are not ordinarily difficult to
ascertain. The trust instrument either prescribes that definite
sums shall be paid at definite times to the cestui, or it leaves the
amounts and times to the discretion of the trustee. If the settlor
has determined the amount of property to be delivered to the cestui
and the time of such delivery, there will not ordinarily arise any
question of difficulty: for the trustee. If the amount and time are
left to the discretion of the trustee, he may exercise his discretion,
and, if he uses good faith, equity will not ordinarily interfere with
his acts."' Thus, where^a testator authorized his trustees to pay
over to the cestui que trust a certain sum whenever in their opin-
ion his mental and physical condition was such that he was compe-
tent to attend to his affairs, and the trustees did not pay over the
sum to the beneficiary during his life, this exercise of discretion
was not interfered with by the court."" But a direction to the trus-
tees to pay the dividends of certain stock to the beneficiaries "at
their discretion" does not authorize the trustees to decline to pay
any dividends to the cestuis que trust. It merely gives the trustees
'discretion as to the time and manner of payment.'^"
The rules regarding the trustee's duties concerning payments va-
ry so much with the terms of different trust instruments that but
little profitable general discussion can be given. However, a few
principles are worth noting. Money paid by a trustee to a cestui
que trust is presumed to be on account of the profits of the trust
estate.'^ If the beneficiary is inc6mpetent, the payments should
be made by the trustee to the guardian of the incompetent.''^ A
trustee may make payments by check.''^ If the trust instrument
states the times of payment, such directions should be obeyed.^*
Where the trustee has notice that the cestui que trust has assigned
his interest, the trustee should^ make payments to the assignee.'^
A trustee who makes improper payments will, of course, be respon-

68 Kimball Blanchard, 101 Me. 383, 64 Ati. 645; Kimball v. Reding,

v.
31 N. H. 352, 64 Am. Dec. 333
In re Wilkin, 183 N. T. 104, 75 N. E. 1105.
;

6 9 O'Gorman v. Crowley, 81 N. J. Eq. 520, 86 Atl. 442.

70 Lembeck v. Lembeck, 73 N. J. Eq. 427, 68 Atl. 337. i

71 "Woodard v. Wright, 82 Cal. 202, 22 Pac. 1118. '

72 In re Fisk, 45 Misc. Rep. 298, 92 N. Y. Supp. 394. When the beneficiary
has been judicially declared insane in another state, it is the trustee's duty-
to inquire into his mental condition before making payments. In re Thaw's
Estate, 252 Pa. 99, 97 Atl. 108.
7 3 In re Jones' Bstaite, 199 Pa. 143, 48 Atl. 865.

7* Brown v. Berry, 71 N. H. 241, 52 Atl. 870.

7 5 Seger v. Farmers' Loan & Trust Co.. 73 App. Div. 293, 76 N. Y. Supp.

721, reversed, 176 N. ^Y. 589, 68 N. E. 1124.

^ 103) , PAYMENTS TO BENEFICIAEIES 379

sible to the cestuis.'^® If the amounts of the payments to be made

are not fixed by the trust instrument and the trustee has no right
to fix them, the court of chancery will determine the amountsj^
If a trustee is directed to divide the settlor's property equally be-
tween certain beneficiaries, he is not obliged to give each an equal
share of the real property and each an equal amount of the per-
sonalty, but must merely give each property equal in- value to the
shares of the others.''* A
trustee charged with the duty of support-
ing the cestui que trust may perform that duty without making
any money payments to the cestui/" If the trustee is charged with
the support of a cestui, he must honestly exercise his discretion as
to the amount needed for that purpose."" Where the trust instru-
ment provides for the investment of money in land and the con-
veyance of such land to the cestuis que trust, the latter may elect to
take the money instead of the land."^ If the trustee is ordered to
pay money to the beneficiaries, he should not, obviously, oflfer them
stock of a corporation instead.'^ If the beneficiary has disappear-
ed, and an administrator of his estate has been appointed on the
theory that he is dead, the trustee may require the administrator 19
give a bond before he pays money to the administrator.*^
Dividends
In disposing of money or othei: property which comes into his
hands as trustee it is often important for him to know whether the
property is to be treated as "income" or as "capital." He will usu-
ally be under an obligation to pay, the income to the cestui que
trust or apply it to his use, but it will ordinarily be his duty to re-
tain the capital in the same way in which he retains the original
principal fund. This question concerning the distinction between
capital and income arises in a variety of ways,** but perhaps the

76 O wings V. Rhodes, 65 Md. 408, 9 Atl. 903.

77 In re Riley's Estate, 4 Misc. Rep. 338, 24 N. Y. Supp. 309.
7 8 Richardson v. Moray, 18 Pick. (Mass.) 181.
79 Conover v. Fisher (N. J. Oh.) 36 -Atl. 948.
80 Collister v. Fassitt, 163 N. Y. 281, 57 N. E. 490, 79 Am. St. Rep. 586.
siAshby v. Smith, 1 Rob. (Va.) 55.
82 Mitchell V. CarroUton Nat. Bank, 97 S. W. 45, 29 Ky. Law Rep. 1228.
83 Donovan v. Major, 253 111. 179, 97 N. E. 231.
84 Where principal and interest are due to the trust estate,, and a lump
sum is received by the foreclosure of a mortgage given as security for the
payment of the debt, or by a settlement or dividend in bankruptcy, the sum
so received should be apportioned between capital and income on the basis
of tfe amount of principal and interest due. Veazie v. Forsaith, 76 Me.
172; Trenton Trust & Safe Deposit Co. v. Donnelly, 65 N. J. Eq. 119, 55
Atl. 92; Meldon v. Devlin, 31 App. Div. 146, 53 N. Y. Supp. 172, affirmed
167 N. Y. 573, 60 N. E. 1116; In re Myers' Estate (Sur.) 161 N. Y. Supp.
1111; Greene v. Greehe, 19 R. I. 619, 35 Atl. 1042, 35 L. R. A. 790. If a
dividend is declared before the commencement of the trust, but by its
580 THE DUTIES OF THE TRUSTEE ( Ch. 12

most common occasion is that where the trustee holds stock in a

corporation as trust prpperty and dividends are declared upon such
stock. ,The trustee is then faced with the problem whether he
should deliver these dividends to the person entitled to the income
of the trust funds, or whether he should retain sUch dividends as
an addition to the principal fund.
The dividend may be a cash dividend or a stock dividend. A
sharp division of the authorities exists upon this question. All are
agreed, however, that the expressed intent of the settlor will con-
trol. If the settlor has in so many words stated in the trust instru-
ment that all dividends, cash or stock, no matter when earned or
from what source declared, shall go to the life beneficiary of the
tru^t, there can be no doubt that it will be the duty of the trustee
to pay to such life beneficiary all dividends declared.^° In this
case, as in all others, the intent of a testator or grantor, when not
in contravention of some rule of law, will control the court.
Massachusetts Rule
If the settlor has expressed no intent regarding the disposition
of dividends from trust stock, the courts seek to make an equitable
distribution of them. In arriving at what is equitable in the situa-
tion, two rules, originally widely divergent, but now more nearly
identical, have sprung up. The courts of Massachusetts established
y«ars ago the rule that stock dividends should be held as capital,
while castt dividends should be paid to the beneficiaries as income.
This rule made the criterion the form of the dividend, rather than the
source of the dividend. In a recent case '° the Supreme Judicial
^ourt stated the rule as follbws: "The rule for determining the

terms isnot to be paid until after the trust has begun, the dividend belongs
to capital. In re Kernochan, 104 N. X. 618, 11 N. E. 149. Where an execu-
tor holds the trust fund before turning it over to the trustee, the sum re-
ceived is divided between life cestui que trust and remainderman by de-
termining what sum, if invested at the testator's death at 4% per cent,
interest, would at the time the trustee received the money, together with
interest, amount to the sum rece'ived. Bradford v. Fidelity Trust Co. (Del.
Ch.) 104 Atl. 777. A deferred or special dividend, paid by an insurance
company twenty years after the Issuance of a policy, is capital. In re
Schley (Sup.) 173 N. Y. Supp. 317. The proceeds 'of the sale of a right to
subscribe to stock are principal. Baker v. Thompson, 181 App. Dlv. 469,
168 N. Y. Supp. 871. On a sale of trust stock the difference in value be-
tween the date of the commencement of the trust and the date of sale is
part of the corpus. In re Butler's Estate, 106 Misc. Rep. 375, 174 N. Y. Supp.
880. But where the price of stock sold represents in part income accumulated
since the trust began, it should be apportioned. In re Schaefer, 178 App.
Div. 117, 165 N. Y. Supp. 19.
85 in re Robinson's Trust, 218 Pa. 481, 67 At^. 775. And see, also, dicta
to the same effect in Thomas v. Gregg, 78 Md. 545, 549, 28 Atl. 565, 44 Am.
St. Rep. 810 ; In re Tod, 85 Misc. Rep. 298, 147 N. Y. Supp. 161.
8s Talbot V. Milliken, 221 Mass. 367, 368, 108 N. E. 1060.
 "

103) PAYMENTS TO BENEFICIARIES 381

respective rights of those entitled to the income and to the prin-

cipal of trust funds established long, ago in this commonwealth,
and constantly followed, 'is to regard cash dividends, however
large, as income, and stock dividends, however made, as' capital.'
The leading Massachusetts case is Minot v. Paine," where the
reason for the establishment of the rule is thus set forth "A trus- :

tee needs one plain principle to guide him; and the cestuis que
trust ought not to be subjected to the expense of going behind the
action of the directors, and investigating the concerns of the corpo-
ration, especially if it is out of our jurisdiction."
This rule has been followed by the United States Supreme Court
and by the courts of Connecticut, Georgia, Illinois, Maine, Rhode
Island, apd West Virginia.'* The courts which have followed this
Massachusetts rule have admitted that it is not logically perfect.
"It was not pretended that this rule, which has been commonly
known as the Massachusetts rule, was the ideal rule of reason;
nor have the courts of high authority which have given their ap-
proval of it ever claimed it to be such, or one which would accom-
plish justice under all circumstances. What has been claimed for
it is that its general application, at least if due regard be had for the

substance and intent of the transaction, would prove more benefi-

cent in its consequences, and on the whole lead to results more
closely approximating to wljat was just and equitable, than would
the application of any other rule or any attempt to go behind the
declaration of the dividend to search out and discover the equities
*°
of each case according to some theoretical ideal."

8T 99 Mass. 101, 108, 96 Am. Dec. 705.

88 Gibbons v. Mahon, 136 V. S. 549, 10 Sup. Ct. 1057, 34 L. Ed. 525; Second
TJniversalist Church of Stamford v. Colegrove, J4 Conn. 79, 49 Atl. 902; Smith
V. Dana, 77 Conn. 543, 60 Atl. 117, 69 L. E. A. 76, 107 Am. St. Kep. 51; Jack-
son V. Maddox, 136 Ga. 31, 70 S. E. 865, Ann. Cas. 1912B, 1216 (controlled by
statute) ; De Koven v. Alsop, 205 lU. 309, 68 N. E. 930, 63 L. R. A. 587; Bil-
lings V. Warren, 216 111. 281, 74 N. E. 1050; Thatcher v. Thatcher, 117
Me. 331, 104 Atl. 515; Harris v. Moses, 117 Me. 391, 104 Atl. 703; Greene
V. Smith, 17 E. I. 28, 19 Atl. 1081; In re Brown, 14 E. I. 371, 51 Am. Eep.
397; Newport Trust Co. v. Van Eensselaer, 32 E. I. '231, 78 Atl. 1009,
35 L. E. A. (N. S.) 563. And see Wilberding v. Miller, 88 Ohio St. 609, 106 N.
E. 665, L. E. A. 1916A, 718, discussed in Farmers' Loan & Trufst Co. v.
Whiton (Sup.) 173 N. T. Supp. 890. But the Rhode Island court, in Ehode
Island Hospital Trust Co. v. Peckham, 107 Atl. 209, abandons the Massa-
chusetts rule and awards an extraordinary cash dividend to capital, where
It represented surplus accumulated before the trust. The West Virginia
court has recently fpllowed Massachusetts. Security Trust Co. v. Eammels-
burg, 82 W. Va. 701, 97 S. E. 122. Bonds issued by a corporation to its

89 Smith V. Dana, 77 Conn. 543, 548, 549, 60 Atl. 117, 69' L. R. A. 76, lOt
Am. St. Eep. 51.
382 THE DUTIES OF THE TRUSTEE (Ch. 12

The original effect of the Massachusetts rule has been some-

what altered by a liberal construction given to it by the courts.
They have, although stating that the form of the dividend was all-
important, actually gone behind the forpi and declared the dividend
to be income if it came from profits, but capital if it was a portion
of the principal fund distributed ^o the stockholders.'" Thus, in a
late case °^' the dividend consisted in the shares of stock of another
corporation. This was a "stock dividend," and it migh;t have been
expected that the. trustee would be directed to apply it as capital;
but the court declared it to be income, saying: "The answer fun-
damentally depends upon whether the dividend in question /was
paid from the accumulated surplus earnings, or out of capital of
the corporation. If it was a payment of earnings, it must be con-
sidered as income for the purposes of the tryst, although the
amount distributed was unusually large, and consisted partly of
shares in another corporation." The court has thus practically
shifted its position, so that it regards the source of the dividend as
the criterion, and not its mere form.*^
Pennsylvania Rule
The second rule is the so-called Pennsylvania rule, which has
been declared to be that, "when the stock of a corporation is by the
will of a decedent given in trust, the income thereof for the use of
a beneficiary for life, with remainder over; the surplus profits,
which have accumulated in the lifetime of the testator, but jvhich
are not divided until after his death, belong to the corpus of his
estate ; whilst the dividends of earnings made after his death are'
income, and are payable to the life tenant, no matter whether the
dividend be in cash, scrip, or stock." °^ Under this rule the source
of the dividend is the important element. If the dividend, whether
cash or stock, came from the capital as it existed prior to the cre-
ation of the trust, or from the earnings which had accrued prior to

stockholders are to be added to the corpus. Bishop v. Bishop, 81 Conn?

509, 71 Atl. 583.
90 For other Massachusetts cases applying the rule, see Atkins v. Albree,
12 Allen, 359; Daland v. Williams, 101 Mass. 571; Leland v. Hayden, 102
Mass. 542; Heard v. Eldredge, 109 Mass. 258, 12 Am. Eep. 687; D'Ooge
V. Leeds, 176 Mass. 558, 57 N. E. 1025; Byde v. Holmes, 198 Mass. 287,
84 N. E. 318 Gardiner v. Gardiner, 212 Mass. 508, 99 N. E. 171.
;

»i Gray v. Hemenway, 223 Mass. 293-295, 111 N. E. 713. See, also, to

the same effect Smith v. Cotting, 231 Mass. 42, 120 N. B. 177. /
92 The modern English rule is similar to the Massachusetts rule in theory
and effect of application. Bouch v. Sproule, 12 App. Gas. 385; In re Ejv-
ans, [1913] 1 Oh. 23. See Strachan, Economic and Legal Differentiation
of Capital and Income, 26 Law Quart. Rev. 40; Capital and Income (Life
Owner and Remainderman), 28 Law Quart. Rev. 175.
9 3 In re Smith's Estate, 140 Pa. 344, 352, 21 Atl. 438, 23 Am. St. Eep.

237. '
 ;

§ 103 PAYMENTS TO BENEFICIAEIES 383

that date, the dividend must be treated by the trustee as an addi-

ction to the capital fund of the trust.. But earnings which have
accrued subsequent to the beginning of the trust and are later
distributed in the form of dividends are to be classed as income.
An application of this rule may be found in the leading case of
Appeal of Earp.»* There the testator left to the trustee"'540 shares
of the stock of the Lehigh Crane Iron Works. At the time of the
death of the testator and the beginning of the trust a 'large sur-
plus fund had been accumulated by the corporation from- its earn-
ings, so that the shares had increased from a par value of $50 to
a value of $125. The surplus fund continued to increase for a
period of six years after the death of the testator, when the cor-
poration canceled the old stock certificates and issued, in place of
the original 540 shares, certificates for 1,350 shares that is, prac-
;

'tically declared a stock dividend of 810 shares of stock. These 1,350

shares were of the value of $80 a share at the time of their issuance.
The court reasoned that the 540 shares were worth $67,500 at the
time of the settlor's death; that the 1,350 shares at the time qi
their issuance were worth $108,000; and that the difference, or
$40,500, represented the profits accumulated during the continuance
of the trust. The court, therefore, directed that an amount of the
stock equal in value to $40,500 be distribtited to the life beneficiary
as income, and that the balance be retained by the trustee as cap-
ital, to be delivered over to the remainderman.
"
The Pennsylvania rule has found favor with a majority of the
American courts which have considered the question. °° In a recent
9* 28 Pa. 368. For other Pennsylvania eases construing this rule, see Ap-
peal of Wiltbank, 64 Pa. 256, 3 Am. Rep. 585; Appeal of Merchants' Fund
Ass'n, 136 Pa. 43, 20 Atl.,527, 9 li. R. A. 421, 20 Am. St. Rep. 894; In re
Thomson's Estate, 153 Pa. 332, 26 Atl. 652, 653; In re Sloan's Estate, 258
Pa. 368, 102 Atl. 31; In re Thompson's Estate, 262 Pa. 278, 105 Atl. 273 ; In
re McKeown's Estate, 263 Pa. 78, 106 Atl. 189; Mercer v. Buchanan (C.
C.) 132 Fed. 501; Appeal of Philadelphia Trust, Safe-Deposit & Ins. Co.,
16 Atl. 734 ; In. re Eastwick's Estate, 15 Phila. 569 In re Wright's Estate,
;

5 Pa. Dist. Ct. R. 345.

9 5 In re DufflU's Estate, 180 Cal. 748, 183 Pac. 337; Bryan v. Aikin, 10
Del. Ch. 446, 86 Atl. 674, 45 L. R. A. (N. S.) 477; Kalbach v. aark, 133
Iowa, 215, 110 N. W. 599, 12 L. R. A. (N. S.) 801, 12 Ann. Cas. 647 ; Gilkey
v. Paine, 80 Me. 319, 14 Atl. 205 (semble), overruled in Harris v. Moses, 117 Me.
391, 104 Atl. 703; Thomas v. Gregg, 78 Md. 545; 28 Atl. 565, 44 Am. St. Rep.
310; Safe Deposit & Trust Co. v. White, 102 Md. 73, 61 Atl. 295, 296; Coudon
V. Updegraf,'ll7 Md. 71, 83 Atl. 145; In re Northern Cent. Dividend Cases,
126 Md. 16, 94 Atl. 33,8; Miller v. Safe Deposit & Trust Co. of Baltimore, 127
Md. 610, 96 Atl. 766; Goodwin v. McGaughey, 108 Minn. 248, 122 N. W.
6; Holorook v. Holbrook, 74 N. H. 201, 66 Atl. 124, 12 L. R. A. (N. S.) 768
Van Dcfren v. Olden, 19 N. J. Eq. 176, 97 Am. Dec. 650; Pritchitt v. Nash-
ville Trust Co.,' 96 Tenn. 472, 36 S. W. 1064, 33 L. R. A. 856; In re Beaton's
 '

384 THE DUTIES OP THE TRUSTEE (Ch. 12

case the New York Court of Appeals has reviewed the decisions
in that stateand declared the rule there prevailing. It is in effect
the Pennsylvania rule. It is stated as follows °' "1. Ordinarydiv-
:

idends, regardless of the time when the surplus out of which they
are payable was accumulated, should be paid to the life beneficiary
of the trust. 2. Extraordinary dividends, payable from the accumu-
lated earnings of the company, whether payable in cash or stock,
belong to the life beneficiary, unless they entrench in whole or in
part upon the capital of the trust fund as received from the testa-
tor or maker of the trust or invested in the stock, in which case such
extraordinary dividends should be returned to the trust fund or
apportioned between the trusi fund and the life beneficiary in such
a way as to preserve the integrity of the trus,t fund."

Estate, 89 Vt. 550, 96 Atl. 21, L. R. A. 1916D, 201; Soehnlein v. Soehnlein,

146 Wis. 330, 13l N. W.' 789; Miller v. Payne, 150 Wis. 354, 136 N. W. 811;
In re Barron's Will, 163 Wis. 275, 155 N. W. 1087. Rhode Island has
recently shifted to the Pennsylvania rule in Rhode Island Hdspital Trust
C6. V. Peckham, 107 Atl. 209. In Washington County Hospital Ass'n v.
Hagerstown Trust Co., 124 Md. 1, 91 Atl. 787, L. R. A. 1915A, 738, cash
dividends arising from the sale of a part of the property in which the-
capital of the corporation was invested, namely, tiiaber, were distributed
as income, since it was the business of the corporation to sell timber. Ac-
cord, in principle: JCrug v. Mercantile Trust & Deposit Co. of Baltimore
City, 133 Md. 110, 104 Atl. 414; Poole v. Union Trust Co., 191 Mich. 162,
157 N. W. 430, Ann. Cas. 1918E, 622. But in other cases where the distri-
bution of the proceeds of sales of land or ore was deemed to represent h
gradual liquidation of the capital of the corporation, the mongy was award-
ed to capital (Ex parte Humbird, 114 Md. 627, 80 Atl. 209 Rhode Island
;

Hospital Trust Co. v. Bradley, 41 Ri I. 174, 103 Atl. 486), ,or was apportion-
ed (In re Wells' Estate, 156 Wis. 294, 144 N. W. 174). Stock, distributed
by a corporation and representing an increase in the value of capital due
to good management and the growth of trade, not accumulated earnings, is
capital. Poole v. Union Trust Co., 191 Mich. 162, 157 N. W. 430, Ann. Cas.
1918E, 622. The accumulation of .earnings does not entitle the life cestui
que trust to any income until the declaration of a dividend. Hence an in-
crease in the value of shares of stock occurring since the foundatioii of the
trust, due to undistributed earnings, does not benefit the life cestui que
trust, even if such increase is realized by a sale of the stock. Guthrie's
Trustee v. Akers, 157 Ky. 649, 163 S. W. 1117. And see Wallace v. Wallace,
90 S.C. 61, 72 S. E. 553.
96 In re Osborne, 209 N. Y. 450, 477, 103 N. E. 723, 823, 50 L. R. A. (N. S.)
.510, Ann. Cas. 1915A, 298. For recent decisions applying this rule, see In re
Affleck, 83 Misc. Rep. 659, 146 N. Y. Supp. 835; In re Tod, 85 Misc. Kep.
298, 147 N. Y. Supp. 161; In re Columbia Trust Co., 97 Misc. Rep. 566,
163 N. Y. Supp. 536; Hazzard v. Philips, 173 App. Div. 425, 159 N. Y. Supp.
264; In rey Baldwin,- 209 N. Y. 601, 103 N. E. 734. Mere increase in' the
value of the corporate assets does not entitle the beneficiary to anything
as income. There must be a distribution of earnings. United States Trust
Co. of New York v. Heye, 224 N. Y. 242, 120 N. E. 645. The distribution
 § 103) PAYMENTS TO BENEFICIAEIES 385

AKentucky court has stated the rule in that state to ht as fol-

*' "It is the rule as settled by the current of authority that
lows :

dividends, whether of stock or payable in money, are non-appor-

tionable, and must be considered as accruing in their entirety as of
the date when they are declared. If, for instance, the life tenan-
cy has begun when a cash dividend is declared, it belongs to the
life tenant, although it may Tcsult in part from profits previously
earned. It goes, to him irrespective of the time wTien it was earned.
No inquiry yvill in such a case be made as to what portion of the
profit upon which the dividend was based was earned before or after
the death of the testator for the purpose of apportioning it between
the tenant for life and the remainderman." Under this Kentucky
rule; the criterion seems to be the time of the declaration of the divi-
dend, rather the source of such dividend, or its form.
Profits on Sales
Frequently the trustee sells the trust property and makes a prof-
it thereon. Should the difference between the original valuation
or cost of the property and its ultimate valuation or saJe price be
added to the corpus of the trust, or should it be delivered to the
beneficiary as income? In general, such increased value is con-''
sidered a part of the capital, and is added to the body of the trust
estate."* Thus, where a testator gives to trustees a given sum to be
invested in securities, and certain securities are purchased and held
for a time, and then sold, producing more than the original sum in-
vested, due to a decrease in interest rates generally prevailing, the

of shares of stock in another corporation, when such stock represents cap-

- ital of the distributing corporation, is an addition to capital. In re Megrue,
224 N. iC. 284, 120 N. B. 651.
»T Kite's Devisees v. Kite's Ex'r, 93 Ky. 257, 265, 20 S. W.
778, 19 L. E. A.
173, 40 Am. St. Rep. 189. For a late case approving of this rule, see Cox
V. Gaulbert's Trustee, 148 Ky. 407, 147 S. W. 25.
• 98 Carpenter v. Perkins, 83 Conn. 11, 74 Jxtl. 1062; Whittingham v. Scho-
field's Trustee, 67 S. W. 846, 68 S. W. 116, 23 Ky. Law Kep. 2444 ; Smith v.
Hooper, 95 Md. 16, 51 Atl. 844, 54 Atl. 95 Jordan v. Jordan, 192 Mass. 337,
;

78 N. B. 459; Williams v. Inhabitants of Milton, 215 Mass. 1, 102' N. E. 35i5;

Parker v. Johnson, 37 N. J. Eq. 366; Townsend v. United States Trust Co.[
3 Kedf. Sur. (N. Y.) 220; Patterson v. Vivian, 63 Misc. Bep. 389, 117 N.
Y. Supp. 504; Whitney v. Phoenix, 4 Redf. Sur. (N. Y.) 180; Farmers'
Loan & Trust Co, v. Hall, 5 Dem. Sur. (N. Y.) 73; In re Lawrence, 7 N.
Y. Supp. 332, 2 Con. Sur. 53; In re Roberts' Will, 40 Misc. Rep. 512, 82
N. T. Supp. 805 ; In re Biting, 93 App. Div. t)16, 87 N. Y. Supp. 833 Stew-
;

art V. Phelps, 71 Atp. Div. 91, 75 N. Y. Supp. 526, affirmed 173 N. Y. 621,
66 N. E. 1117; Devenney v. Devenney, 74 Ohio St. 96, 77 N. B. 688; In re
Kemble's Estate, 201 Pa. 523, 51 Atl. 310; In re Neel's Estate, 207 Pa. 446 '

56 Atl. 950; Slocum v. Ames, 19 R, I. 401, 36 Atl. 1127; In re Barron's Will'

163 Wis. 275, 155 N. W. 1087. The difference between an appraised value
at the commencement of the trust and a later sale price is to be treated
as
capital. In re McKeown's Estate, 263 Pa. 78, 106 Atl. 189.
BOGEBI Teusts —^25
 ,

386 THE DUTIES OF THE TRUSTEE (Ch. 12

surplus over and above the original sum is a part of the trust fund,
and should not be paid out as income.*" And where the trust di-
rects the trustee to -invest the funds in productive property and
pay over the income to the beneficiary until he reaches 55, and the
trustee buys an unproductive far^ with the trust moneys and later
sells the farm at a profit, due to the natural growth of the timber
upon the farm, such profit should be considered as capital, and not
income.^
The beneficiary who is entitled to the income of the trust prop-
erty obtains part of the benefit of the increased value* of the trust
property, for he obtains a greater income from the new trust fund
than from the old. The corpus of the estate,, no matter what
changes of form it undergoes, should be regarded as the §ame
property. That the trust property is originally money, later be-
comes bonds, and still later real estate, ought not to aflfect the status
of the property as the capital fund. A Pennsylvania court well
points out that the capital fund bears losses which occur from in-
vestments, and should, therefore, be entitled to the benefit of giins
which accrue. "If, then, in case of a loss by reason of an unfor-
tunate investment, it falls on both the legatees for life and in re-
mainder, it seems but equitable that, if there be a profit arising
from the sale of a trust security, they should both participate in it in
the same manner they would bear a loss, the former receiving
more income from the increased corpus and the latter more cor-
^
pus."
But in certain, cases the general rule regarding the profits on the
sale of trust property does not apply. If, for example, the trustee
is the owner of a mortgage on real property, there are arrearages
of interest and principal, the mortgage is foreclosed, and the trus-
tee is obliged to buy in the property, and later the trustee sells
this property at a profit, it is obvious that the profit should be ap-
portioned between income and principal.^ The fund tied up in the
mortgaged property, and on account of which the mortgage was
foreclosed, was partly income and partly principal. The unpaid
interest represented income. The profit which this unpaid income
has earned as the result pf the entire transaction should go to the

on In re Gerry, 103 N. Y. 445, 9 N. B. 235. But when part of the profit

on the sale of securities represents accumulated income, .which should
Iiave been paid out as dividends, such portion will be distribu|;ed as in-
come. In re Schaefer, 222 N. Y. 533, 118 N. E. 1076.
Jordan v. Jordan's Trust Estate, 111 Me. 124, 88 Atl. 390.
•i

2 In re Graham's Estate, 198 Pa. 216, 219, 47 Atl. 1108.

s Parker v. Seeley, 56 N. J. Eq. 110, 38 Atl. 280. And see In re Marshall,
43 Misc. Kep. 238, 88 N. Y. Supp. 550, for a similar decision.
§ 103) PAYMENTS TO BENEPICIABIES 387

income account. Thus, the profits will be apportioned between in-

come and capital in proportion to the res^pective amounts of the
interest and capital which were due upon the mortgage. Occa-
sionally, also, the courts find an intent on the part of the settlor
that the profits from the sale of the trust property should be treated
as income. This intent must be r^pected.*
The necessity for making a distinction between capital and in-
come often arises in cases where dividends are not involved. Thus,
where a trustee was the owner of corporate stock and the corpo-
ration was dissolved, the value of the plant, equipment, materials,
good will, patents, trade-marks, and franchises was held to be treat-
ed as capital, while the value of the invested surplus, surplus cash
capital, and aiccumulated surplus earnings represented income.^ If
trust buildings ^re insured, and a loss occurs, the insurance mon-
eys represent capital." The rentals under a perpetual lease are to
be treated as income.'^ Payments on the principal of a debt due to
the trust estate,* the proceeds of the sale of trust property,® an
award made in proceedings where the trust property has been con-
demned,^" and interest on the sale price of the trust property where
credit is given,^^ have all been regarded by the courts as capital.
The income of the property after the termination of the trust fol-
lows the property itself.^^
Rents, Annuities, and Interest i
' /

A trustee frequently finds himself in possession of rents, dividends,

annuities, or interest moneys which have been earned or have ac-
crued partially before the beginning of the trust and partly after
the beginning. He is confronted with the question whether he ,

should treat such moneys as capital or income. Should siich pay-

ments be apportioned between capital and income, in proportion to

* Billings V. Warren, 216 111. 281, 74 N. E. 1050; In re Park's Estate, 173

Pa. 190, 33 Atl. 884. When the settlor directs the conversion of his Prop-
erty into cash at the commencement of the trust, and the trustees retain
certain stock, and later sell it at a profit, the profit will be regarded as
income. In re Quay's Estate, 253 Pa. 80, 97 Atl. 1029.
In re Stevens, 111 App. Div. 773, 98 N. T. Supp. 28, modified 187 N. Y.
471, 80 N. E. 358, 12 L. R. A. (N. S.) 814^ 10 Ann. Cas. 511.
6 Campbell v. Mausfield, 104 Miss. 533, 61 South'. 593, 45 L. R. A. (N. S.)

446; In re Barron's Will, 163 Wis. 275, 155 N. W. 1087. And so damages
collected by the trustees for injury to the corpus become substituted capital
Dickson v. Allen (Mo.) 195 S. W. 698.
'

7 Appeal of Eley, 103 Pa. 300.

8 In re Tietjen, 5 Dem. Sur. (N. Y.) 350.
» Doswell V. Anderson, 1 Pat. & H. (Va.) 185.
10 Gibson v. Cooke, 1 Mete. (Mass.) 75; Allen v. Stewart, 214
Mass. 109 '
100 N. E. 1092.
11 Stone V. Hlnton, 36 N. C. (1 Ired. Eq.) 15.
12 Barbour v. Gallagher, 2 Ohio Afyp. 205.
 "

388 THE DUTIES OP THE TRUSTEE (Ch. 12

the relative periods of time which elapsed before and after the trust
began, or upon some oth-er basis? Or should the trustee refuse to
apportion such funds and apply them, entirely as income ?
The case of rents issuing from real' estate was well settled at
common law. "It is a general rule of the common law, followed
in chancery, that sums of money, payable periodically at fixed times,
are not apportionable during the intervening pefiods. It is accord-
ingly well settled, both at law and in equity, except when other-
wise provided by statute, that a contract for the payment of rent
at the end of each quarter or month is not apportionable in re-
spect of time." ^* But in England and practically all American
' '

states statute^ have been passed allowing the apportionment of

rent." Under these acts it would seem that a trustee should hold
as capital the amount which had accrued at the time of the creation
of the trust, and apply as income the proportion which, considering
the rent as accruing from day to day, had been earned since the
trust took effect.
Annuities were not at common law apportioned, in the absence of
intent to that effect shown, to have been entertained by the settlor.^^

^3 Dexter v.. Phillips, 121 Mass. 178, 180, 23 Am. Eep. 261. See, also, So-
hler V. Eldredge, 103 Mass. 345.
i*Kirby & Castle's Dig. Ark. 1916, § 5491; Rev. Code "Del. 1915,. § 4548;
Jones & A. Ann. St. 111. 1913, par. 7(JT5; Code Iowa 1897, § 2988; Ky. St.
1915, § 3865; Kev. Laws Mass. 1902, c. 141, §§ 24, 25; Stone v. Bradlee,
183 Mass. 165, 66 N. E. 708; McElwain v. Hildretli, 203 Mass. 376, 89 N.
E. 567; Rev. St. Mo. 1909, § 7871; 3 Comp. St. N. J. 1910, p. 3065; Code
Civ. Proc. N. T. § 2674; Revisal N. C. 1908, § 1988; Gen. Laws R. L 1909,
c. 254, §§ 38, 39; Civ. Code S. C. 1912, § 3495; Code Va. 1904, §§ 2809, 2810;
Code W. Va. 1913, c. 94, § 1 (sec. 4152); Id., c. 95, § 1 (sec. 4155); St. Wis.
1913, § 2193.
The New York statute is typical of the others: "All rents reserved on
any lekse made after June 7, 1875, and all annuities^ dividends and other
payments of every description made payable or becoming due at fixed pe-
riods under any instrument executed after such date, or, being a last will
and testament that takes effect after such date, shall be apportioned so
that on the death of any person interested in such rents, annuities, divi-
dends or other such payments, or in the estate or fund from or in re-
spect to which the same issues or is derived, or on the determination by
any other means of the interest 6f such person, he, or his executors, ad-
miijistrators or assigns, shall be entitled to a proportion of such rents, an-
nuities, dividends and other payments, according to the time which shall
have elapsed from the commencement or last period of payment thereof,
as the case may be, including the day of the death of subh person, or of
the determination of his or her interest, after making allowance and def-
ductions on account of charges on such rents, annuities, dividends and
other payments. * * *
16 Tracy v. Strong, 2 Conn. 659; Nehls v. Sauei', 119 Iowa, 440, 93 N. W.
346; Chase. V. .Darby, 110 Mich. 314, 68 N. W. 159, 64 Am. St. Rep. 347.
§ 103) PAYMENTS TO BENEPICIARIES 389

'In many states the statutes authorize the apportionment of annu-

ities,as well as rents.^'* The common-law theory, however, was
that they. accrued at one time and not gradually, day by day, arid
hence that the representatives of the beneficiary of the annuity
were not entitled to a sum which accrued after the beneficiary's
death. v

Dividends upon stocks are regarded like rents and annuities, as

accruing in a lump sum when declared.^ There is, therefore, in
^'

the absence of statute, no duty on the part ,of a trustee to apportion

dividends between principal and income. They pass as income as
of the date of their declaration. Some of the statutes providing for
apportionment apply to dividends.^*
But the rule with respect to interest was different from that
above stated regarding rents, annuities, and dividends. "The rule
'

at common law was that the interest on money loans was appor-
tioiiable, and in this respect it differed from other periodical pay-
ments like dividends, rent, pensions and annuities. The reason for
^

the distinction is that in the* case of money at interest, the interest

accrues de die in diem, which cannot be said of some at least of
the other payments mentioned." ^° Thus, i^ interest upon a bond
or note becomes payable after the beginning of the trust, but has
been partly earned before the trust took effect, the sum will be
apportioned between capital and income.^" It has been earned day
by day, and a certain portion was, therefore, due at the time the
trust began, and was hence a part of the capital at that time.

Where the annuity was for the benefit of a widow and in lieu of dower, it
has been held that it would be apportioned. Gheen v. Osborn, 17 Serg. &
R. (Pa.) 171.
10 Rev. Laws Mass. 1902, c. 141, § 25; Code Civ. Proc. N. T. § 2674 ; Re-
visal N. C. 1908, § 1988; Gen. Laws R. I. 1909, c. 254, § 39; Code Va. 1904,
§ 2810; Code W. Va. 1913, c.^ 95, § 1 (sec. 4155).
17 Greene v. Huntington, 73 Conn. 106, 46 Atl. 883; Mann v. Anderson,
106 Ga. 818, 32 S. E. 870; Union Safe Deposit & Trust Co. v. Dudley, 104
Me. 297, 72 Atl. 166; Hyatt v. Allen, 56 N. Y. 553, 15 Am. Rep. 449; In re
Kernochan, 104 N. Y. 618, 11 N. B. 149; Rhode Island Hospital Trust Co.
V. Noyes, 26 R. L 1323, 58 Atl. .999.
18 Code Git. Proc. N. Y. § 2674; Revisal N. C. 1908, § 1988.
19 Appeal of Wilson, 108 Pa. 344, 346, 56 A>m. Rep. 214.
2 Bridgeport Trust Co. v. Marsh, 87 Conn. 384, 87 Atl. 865; Riggs v
Cragg, 26 Hun (N. Y.) 89; In re Fithlan, 103 Misc. Rep. 568, 170 N. Y.
Supp. 750; United States Trust Co. v. Tobias, 21 Abb. N. C. 393, 4 n! Y.
Supp. 211;. Smith v. Lansing, 24 Misc. Rep. 566, 53 N. Y. Supp. 633; Swei-
gart V. Frey, 8 Serg. & R. (Pa.) 299; Rhode, Island Hospital Trust' Co. v.
Noyes, 26 R. I. 323, 58 Atl.' 999. But an intent to give a life cestui the
whole of such income may exist and will be efCectual. Held v. Keller 135
Minn. 192, 160 N. W. 487.
390 THE DUTIES OP THE TRUSTEE ( Ch. 12

The statutes of many states now make provision to this efifect.^^'

In Maine and Massachusetts the view has been taken that coupons
on bonds are separate promises to pay money, maturing at a given
date and not capable of apportionment.^^ Naturally interest which
has become due and payable before the beginning of the trust
constitutes a part of the capital of the trust estate.^^
Securities Bought at Premium
In cases where a trus'tee holds securities which hive been pur-
chased at a premium or at a discount, he may find it difficult to de-
termine what is his duty regarding the payment of income. If, for
example, the trustee has purchased a bond at 105, is it his duty to
pay to the person entitled to the income the entire interest received
by the payment of coupons, or should the trustee retain a portion
of the coupon in order thati, he may replace the deficiency in the
capital fund which will occur when the bond matures? At ma-
turity the bond will produce only $1,000, whereas the original in-
vestment of capital in the bond was $1,050. There will thus be a
loss of $50 to the principal fund, unless the trustee retains enough
of the interest to make up that $50.
Divergent views have been entertained by the American courts
upon this question. The majority of courts which have passed
upon the question have held it to be the trustee's duty to create an
amortization fund for the purpose of caring for the premium."*
The theory of these courts is well explained by CuUen, C. J., in Re
Stevens, "° the New York case which fixed the rule where there had
previously been some doubt and confu'sion. This judge said in
part: "The justification for the rule is very apparent. The income
on a bond having a term of years to run and purchased at a pre-
mium is not the sum paid annually on its interest coupons. The
interest on a $1,000 ten-year 5 per cent, bond, bought at 120 per cent.,

2iReY. Laws (Mass.) 1902, c. 141, §§ 24, 25; Code Civ. Proc. N. T. § 2674;
Gen. St. K. I. 1909, c. 254, § 39; Code Va. 1904, § 2810; Code W. Va. 1913,
c. 95, § 1 (sec. 4155).
22 Union Safe Deposit & Trust Co. v. Dudley, 104 Me. 297, 72 Atl. 166;
Sargent v. Sargent, 103 Mass. 297.
2 3 Union Safe Deposit & Trust Co. v. Dudley, 104 Me. 297, 72 Atl. 166.
2* Curtis V. Osborn, 79 Conn. 555, 65 Atl. 968; New England Trust Co. v.
Eaton, 140 Mass. 532, 4 N. E. 69, 54 Am. Rep. 493 ; Ballantlne v. Young, 74
N. J. Eq. 572, 70 Atl. 668; In re Stevens, 187 N. Y. 471, 80 N. E. 358, 12
L. R. A. (N. S.) 814, 10 Ann. Cas. 511; In re Allis' Estate, 123 Wis. 223, 101
N. W. 365 ; In re Wells' Estate, 156 Wis. 294, 144 N. W. 174. The amorti-
zation fund should be accumulated gradually, and not deducted from a single
installment of income. In re Schaefer, 178 App. Div. 117, 165 N. Y. Supp.
19. See Edgerton, Premiums and Discounts in Trust Accounts, 31 Harv.
Law Rev. 447.
2 5 187 N. Y. 471, 476, 477, 80 N. E. 358, 12 L. R. A. (N. S.) 814, 10 Ann.

Cas. 511.
 § 103) PAYMENTS TO BENEFICIAEIES 391

is not $50, but a part thereof only, and the remaindei is a return
_ of the principal. All large investors in bonds, such as banks, trust
companies, and insurance companies, purchase bonds on the basis
of thq interest the bonds actually return, not the amount they nomi-
nally return. Nor is the premium paid on the bond an outlay for
the security of the principal. All government bonds have the sajpe
security, the faith of the government; yet they vary in price, a
variation caused by the difference in the rate of interest and the
time they have to run. It is urged that there is often a speculative
change in the market value of a bond, and a bond may be worth
more at the termination of the trust than at the time of its pur-
chase. This has no bearing on the case. The life tenant should
neither be credited with an appreciation nor charged with a loss in
the mere market value of the bond. But, apart from any specula-
tive change in the market value,' there is from lapse of time an in-
herent and intrinsic change in the value tof the security itself as it
approaches maturity. It is this, and this only, with which the life
tenant is to be charged. We, therefore, adhere to the rule declared
in the Baker case [New York Life Ins. & Trust Co. v. Baker, 165
N. Y. 484, 59 N. E. 257, 53 L. R. A. 544], that in the absence of a
clear direction in the will to the contrary, where investments are
made by the trustee, the principal must be maintained intact from
loss by payment of premium on securities having a definite term to
run, while if the bonds are received from the estate of the testator,
then the rule in the McLouth case [McLouth v. Hunt, 154 N. Y.
179, 48 N. E. 548, 39 L. R. A. 230] prevails, and the whole interest
should be treated as income."
The amortization rule does not apply where the settlor purchased
the securities at a premium, ^° or where he expressly directed the
trustee to buy the securities ih question,^^ or when the settlor in-
dicates in any way an intent J;hat the gross income shall be paid to
the life beneficiary.^^ In these instances the trustee may tre^t as
income all the interest received upon the securities. In such cases

2Hemenway v. Hemenway, 134 Mass. 446; Ballantine v. Young, 74 N.

J. Eq. 572, 70 Atl. 668; McLoutli v. Hunt, 154 N. Y. 179, 48 N. E. 548; 39
L. K. A. 230 ; In re Fanonl, 88 Misc. Eep. 442, 152 N. Y. Supp. 218 Robert-
;

son V. De Brulatour, 188 N. Y. 301, 80 N. E. 938. Where securities were

bouglit at a premium by the settlor, the trustee is not chargeable for the
loss due to the depreciation of the securities as they approach maturity.
In re Hunt, 121 App. Div. 96, 105 N. Y. Supp. 696. Contra: In re Wells'
Estate, 156 Wis. 294, 144 N. W. 174.
2 7 Shaw V. Cordis, 143 Mass. 443, 9 N. B. 794.
2 8 In Higgins v; Beck, 116 Me. 127, 100 Atl. 553, 4 A. T,. R. 1245, the

bonds had (been bought by the settlor and the court held the life beneficiaries
entitled to the whole income. See, also, In re Hawk's Estate, 54 Misc.
''
392 THE DUTIES OP THE TRUSTEE ( Ch. 12

the settlor must be deemed to have intended that the income from
the securities should be the actual coupons or interest received.
The minority view is that the trustee is under no duty to ac-
cumulate a f uud to care for the premium, but that the entire inter-
est upon the security should be paid to the bene^ciary, and the
loss due to the payment of the premium should fall on the capital
fund.^° The arguments which appeal to the courts taking this
minority view are well expressed by the Pennsylvania court in one
of its latest discussions of the subject:"* "If the whole premium. is
at once charged to income, or if a part of tlie income is withheld
each year, so that the, successive deductions will cover the whole
time the security has to run, the Hfe tenant, who is the primary and
immediate object of the testator's bounty, will be deprived of the
income provided. In one case he may be wholly deprived of the
means of support for a considerable period, and receive no benefit
whatever from the provision made "for him; in the other, he will
suffer a diminution of what is really income, it may be for the
whole period of the trust. * * * The remainder has the ad-
vantage of any increase resulting from profits made oh invest-
ments, and it bears the losses resulting from depreciation in value
of ordinary securities. There is no substantial reason why an ex-
ception should be made in its favor, where losses result from the
payment of premiums ma^e in order to obtain safe and permanent
investments. If premiums were paid to secure greater income,
they should be charged, of course, to the life tenant, because he
tould be the only party benefited by the payment. But this is not
the case. Securities that command a premium do- not bear a pro-
portionately high interest. Premiums do not represent higher in-r
teregt, but safety and permanency of the investment and facility of
transfer and use. These are matter's in which the life tenant has
less interest than the remainderman, because he has less at stake.
And he pays in part for safety and permanency whenever securities
are bought at a price above par.",
Securities Bought at Discount
Uponthe duty of the trustee where he buys securities at a dis-
,count there is but little authority.*^ If he buys a bond at 90, should

Rep. 187, 105 N. Y. Supp. 856 Lynde v. Lynde, 113 App. Div. 411, 99 N. T.
;

Supp. 283; Kemp v. Macready, 165 App. Div. 124, 150' N. Y. Supp. 618.
2 8 American Security & Trust Co. v. Payne, 33 App. D. C. 178; Kite's
Devisees v. Kite's Ex'r, 93 Ky. 257, 20 S. W. 778, 19 L. R. A. 173, 40 Am.
St. Rep. 189 ; In re Penn-Gaskell's Estate, 208 Pa. 346, 57 Atl. 715.
3 In re Penn-Gaskell's Estate, 208 Pa. 346, 348, 349, 67 Atl. 715.
31 In Townsend v. United States Trust Co., 3 Eedf. Sur. (N. Y.) 220, the
surrogate of New York county declined to allow the beneficiary' o:^ the in-
come any sum on account of an appreciation of securities purchased at a
discount.' Dicta to the same efCect appear in other cases. Kite's Devisees
 '

§ 103) PAYMENTS TO BllNEPICIAEIES 393

he annually pay to the beneficiary to whom the income goes a

small sum in addition to the interest actually earned, in order that
the beneficiary may have the benefit of this discount? Is the re-
mainderman or the capital fund entitled only to the sum actually
invested in the bond, or should the face value of the bond, when
paid at maturity, be treated as capital? It would seem that 'the
courts which have adopted the amortization rules regarding pre-
miums should also give the income the benefit of discounts. If the
income must contribute to paying off premiums, why should it not
profit from discounts? If the converse of the amortization rule
were applied to discounts, the capital fund would have returned to
it exactly the amount which originally went into the investment.
Is entitled to more?
it It is true that the trustee might perhaps' be
justified in awaiting the maturity of the bond before paying to the
life beneficiary anything on account of a discount, because the
benefit of the discount may never come to the trust estate. If the
trustee sells the bond before its maturity and at a sum merely
equal to or less than the original cost, there will be no discount to
be distributed. It would hardly be fair to the parties interested in
the corpus of the estate to allow the trustee to apply capital an-
nually to payirtg the life beneficiary a bonus on account of the dis-
count, when such discount is only contingently a benefit to the
trust.
Wasting Secwiiies _ '

rules for amortization established by many courts with re-

The
spect to securities purchased by a trustee at a premium merely
afford one example of the attitude of chancery towards "wasting"
property in the hands of a trustee. If a trustee receives property
which is bound to depreciate with the lapse of time, he should sell
it and invest the proceeds in property having a steady and perma-
nent value.'^ If he is obliged to retain the "wasting" property, he
should provide a sinking fund out of income, so that the remainder-
man will receive capital equal to the original property in value. ^*
Thus, where the trust property consists of household furniture
which is leased by the trustee with a house, and there is naturally
a rapid deterioration in the furniture, the trustee should set aside
from th6 income of the furniture a sufficient sum to replace it when
it is worn out, or to make good the depreciation if it is later sold.'*

V. Hite's Bx'r, 93 Ky. 257, 269, 20 S. W. 778, 19 L. R. A. 173, 40 Am. St.

Rep. 189; Hemenway v. Hemenway, 134 Mass. 446; I^ew England Trust
Co. v. Eaton, 140 Mass. 532, 547, 4 N. E. 69, 54 Am, Rep. 493, in the dis-
senting opinion of Holmes, J. '

32 Howe V. Earl of Dartmouth, 7 Ves. 137.

83 Kinmonth v. Brigham, 5 Allen (Mass.) 270. /

8* In re Housman, 4 Dem.Sur. (N. Y.) 404.

394 THE DUTIES OF THE TRUSTEE (Ch. 12

"It is no doubt a general rule that, where trustees or executors find

a portion of the estate invested in what are termed 'wasting^ se-

curities, they should pay to the life tenant only so much of the
income as represents a fair 'return upon the capital value, accumu-
lating and retaining the residue for the benefit of the remainder-
man. * * * This rule is not rigid, however, and yields readily
when it can be seen from the will itself, read in the light of the sur-
rounding circumstances, that the testator entertained a different
intention. * * * " *^ Thus, where the settlor has provided that
the "whole of the net income" from certain leasehold estates shall
be paid to a certain beneficiary, it would evidently be contrary to
his intent to retain a portion of such income as an amortization
furid, even though the leasehold estates are gradually decreasing \

in value and will eventually become worthless.'*

Use of Capital
Frequently the income of a trust fund is insufficient to meet the
expenses of the trust and to make the payments required under
the trust instrument. The trustee is then faced with the problem
as to whether he may use a portion of the principal fund to' meet
the emergency. Occasionally the trust instrument expressly pro-
vides the trustee with authority for the use of th5 principal.' In
such a case there can be no doubt about the duty of the trustee.'^
And' an express prohibition of the use of the capital will of course
be effective.'* Where there is no express authority for the use of
the principal the question is largely one of construction. The
terms of the trust instrument and the circumstances of the in-
dividual case are examined for the purpose of ascertaining the
actual or probable intent of the settlor. Usually it has been held
that a court of chancery has authority to authorize a trustee to

8 Frankel v. Fanners' Loan & Trust Co., 152 App. Div. 58, 61, 136 N. 1.
Supp. 703..
»» Frankel v. Farmers' Loan & Trust Co., 152 App. Div. 58, 136 N. T.
Supp. 703.
37 Sterling v. Ives, 78 Conn. 498, 62 Atl. 948; Jackson v. Matthews, 133
Md. 282, 105 Atl. 146; CoatesLunt, 210 Mass. 314, 96 N. E. 685; Plum-
v.
mer V. Gibson, 59 N. J. Eq. 68,^ 45 Atl. 284; Wallace v. Wallace (N. J. Ch.)
75 Atl. 770 ;In re Blanck, 5 Dem. Sur. (N. T.) 301 In re Stevens' Estate,
;

20 Misc. Rep. 157, 45 N. Y. Supp. 908 Erisman v. Directors of Poor of Lan-

;

caster County, 47 Pa. 509; TifCany v. Munroe, 19 E. I. 584, 35 Atl. 302.

The same rule applies to a charitable trust. Stearns v. Newport Hospital,
27 R. I. 309, 62 Atl. 132, 8 Ann. Cas. 1176. Discretion to determine the
amount and time of payments from the principal may be vested in the
cestui que trust. / Hooker v. Goodwin, 91 Conn. 463, 99 Atl. 1059, Ann. Cas.
1918D, 1159. So long as the trustee does not exercise his discretion to pay
the principal arbitrarily or capriciously, the court will not interfere. Wright
V. Bllnn, 225 Mass. 146, 114 N. E. 79.
88 OfCutt V. Divine's Ex'r (Ky.) 53 S. W. 816.
§ 103) PAYMENTS TO BENEFICIARIES 395

make use of the principal fund in extraordinary cases," or to make

advances from the income even though an accumulation was di-
rected.*" "The settled law in this state is that encroachment upon
the principal of the estate of infant legatees, in advance of the
period of distribution, is not absolutely nor under all circumstances
forbidden, and that a trustee may, in a proper case, apply for and
obtain the protection of an order to make such encroachment on
behalf of a ward. And it appears, too, that what may be done in
advance may be ratified afterwards." *^ And in a number of cases
the trustee has been held warranted in expending portions of the
capital for temporary purposes, as, for example, in the support
and maintenance of the beneficiary, even though he did not obtain
court authority therefor.*^ The trust instrument was deemed im-
pliedly to authorize such expenditure.
Where, for example, the will of the settlor manifests an intent
that his children and grandchildren shall be maintained and edu-
cated from the trust property,' and the income is insufficient for
that purpose, it has been held that the trustee may properly resort
to the corpus of the estate.*^ In other cases of temporary emer-
gencies the courts have held the trustee justified in borrowing from
the principal fund sufficient funds to defray the expenses, but have

so Dongwith-v. Kiggs, 123 111. 258, 14 N. E. 840; Elder v. Elder, 50 Me. 535;
Hatton V. Weems, 12 Gill & J. (Md.) 83; In re Bostwick, 4 Johns. Ch. (N.
Y.) 100; In re Fero, 9 How. Prac. (N. Y.) 85; In re MuUer, 29 Hun (N. Y.)
418; Carter v. KoUand, 11 Humph. (Tenn.) 333. But see Hester v. Wilkin-
son, 6 Humph. (Tenn.) 215, 44 Am. Dec. 303. The court may also authorize
the payment of Income in advance of the due date. Rhoads v. Jlhoads, 43
111. 239; Knorr v. Millard, 52 Mich. 542, 18 N. W. 349.
40 In re Fritts' Estate, 19 Misc. Rep. 402, 44 N. Y. Supp. 344; In re Wag-
ner, 81 App. Div. 163, 80 N. Y. Supp. 785; N. Y. Real Property Law (Consol.
Laws, c. 50) § 62; New York Personal Property Law (Consol. Laws, c.
41) § 17. By Laws Tenn. 1919, c. 148, chancery is aufjhorized to approve the
use of the corpus for the support, education, and maintenance of the behefi-
ciary, where the trust estate does not exceed ?1,000 in value,
ii^inith V. Robinson, 83 N. J. Eq. 384, 90 Atl. 1063, 1064.
*2 In re Simons' Will, 55 Conn. 239, 11 Atl. 36 ; Shepard v. Shepard, 57
Conn. 24, 17 Atl. 173; Cornwise v. Bourgum, Ga. Dec. 15, pt. 2; Dockins v.
Vass (Ky.) 124 S. W. 290; Mills v. Michigan Trust Co., 124 Mich. 244, 82
N. W. 1046; Eggleston v. Merriam, 86 Minn. 88, 90 N. W. 118; McGill v.
Young, 75 N. H. 133, 71 Atl. 637; Potts' Petition, 1 Ashm. (Pa.) 340; In re
Martin's Estate, 160 Pa. 32, 28 Atl. 575; Haigood v. Wells, 1 Hill. Eq. (S.
C.) 59; Sedgwick's Curator v. Taylor, 84 Va. 820, 6 S. E. 226. A devise
oyer of "any balance that may remain" indicates power to use the princi-
pal. GosSom's Adm'r v. Gossom, 142 Ky. 118, 133 S. M. 1162; Trustees
of Elizabeth Speers' Memorial Hospital v. Makibben's Guardian, 126 Ky.
17, 102 S. W. 820.
*3 Brown v. Berry, 71 N. H. 241, 52 Atl. 870.
 — ;

396 THE DUTIES OF THE TRUSTEE tCh. 12

required him to restore the sum thus taken by making reservations

from laterpayments into the income fund.** But where the in-
tent of the settlor is clearly expressed that the capital shall remain
untouched, the trustee will be without power to use it. This is apt
to be the case where remairidermen are entitled to a specific fund
at the expiration of the trust.*"

DUTY TO ACCOUNT
104. The trustee is under a duty to the cestui que trust
(a) To keep accurate and complete records of the trust business
(b) To furnish the beneficiary with all, necessary information re-
garding the trust;
(c) To rendfer in a coxurt of competent jurisdiction a full account
of the administration of the trust.

Ordinarily the management and control of the trust property is

solely in the hands of the trustee. The cestui que trust knows
nothing of the trust business directly. The nature of the trust in-
vestments, the condition of the trust. property, the income actually
—
received these are all matters of which the beneficiary is usually
ignorant, except as he obtains information regarding them from the
trustee. And yet it is highly proper that the beneficiary shoufd
'

have knowledge of these matters, in order that he may know

whether the trust is being properly administered. From this situa-
tion arises the duty of the trustee to keep accurate accounts of his
transactions, to supply full information to the cestui que trust, and
to render a full account of his proceedings in the proper court.
The trustee should keep books which will accurately show his
disposition of the trust funds, and he should obtain vouchers for
fill payments.*" "He is bound to keep clear and accurate accounts,
and if he does not the presumptions are all against him, obscurities
and. doubts being resolved adversely to him." *^,

44 In re Hurlbut's Estate, 51 Misc. Rep. 263, lOO N. Y. Supp. 1098 Down- ;

ey V. Bullock, 42 N. C. (7 Ired. Bq.) 102; Morton's Bx'rs v. Adams, 1 Strob.

Eq, (S. C.) 72. N

Elnbecker v. Einbecker, 162 111. 267, 44 N. E. 426; Newton v. Eebenack,

*5
90 Mo. App. 650 Cass v. Cass, 15 App. L)iy. 235, 44 N. T. Supp. 186 Been
; ;

V. Cozzens, 30 N. Y. Super. Ot. 178 In re Fero, 9 How. Prac. (N. Y.) 85.
;

46 Williamson v. Grider, 97 Ark. 588, 135 S. W. 361 Richardson y. Van

;

Auken, 5 App. D. 0. 209; Potter v. Porter, 109 S. W. 344, 33 Ky. Law Rep.
129; Small wood v. Lawson, 183 Ky. 189, 208 S. "W. 808; Ithell v. Malone
(Sup.) 154 N. Y. fcSupp. 275; Raski v. Wise, 56 Or. 72, 107 Pac. 984; Stock-
well V. Stockwell's Estate, 92 Vt. 489, 105 Atl. 30.
,
47 White V. Rankin, 18 App.' Div. 293, 295, 46 N. Y. Supp. 228, affirmed
162 N. Y. 622, 57 N. E. 1128.
§ 104) DUTY TO ACCOUNT 397

It is not necessary that the cestui que trust bring a bill for an
accounting in order to obtain information about the trust business.
The trustee is under the duty ot furnishing all pertinent informa-
tion upon demand.*' Thus, in a leading English case it was held
that a beneficiary, was entitled to an order from the trustee which
would enablc/him to learn whether any of the trust property was
incumbered or any interest in it had been assigned. The court
said: "The general rule, then, is what I have stated, that the
trustee must give information to his cestui que trust as to the in-
vestment of the trust estate. Where a portion of the trust estate
is invested in consols, it is not sufficient for the trustee merely to
say that it is so invested, but his cestui que trust is entitled to an
authority from the trustee to enable him to make proper applica-
tion to the bank, as has been done in this case, in order that he,
may verify the trustee's own statement. * * * » 49
The same rule was well framed in a statement of a Michigan
court: "The beneficiaries of a trust have the right to be kept ih-
formed at all times concerning the management of the trust, and
it is the duty of the trustees to so inform them. It is not generally
presumable that the beneficiaries have such information from inde-
pendent sources." '"' An illustration of the enforcement of this
same rule is found in the cases holding that a be;ieficiary is entitled
to examine legal opinions which the trustee obtains for the purpose
of guiding him in carrying out the trust. The trustee is not, how-
ever, under the same obligation regarding opinions which he ob-
tains for the purpose of defending himself from charges of miscon- ,

duct."
Duty to Account
It is elementary that a trustee is under the obligation of ren-
dering an account of his dealings as trustee in a court haying juris-
diction of the trust, under the rules laid down by that court or by
the legislature."* The details of such accountings will be taken up

48 -^y lie V. Bushnell, 277 111. 484, 115 N. E. 618; PerEih v. Lepper, 72
Mich. 454, 40 N. W. 859; Woolf v. Bames, 46 Misc. Kep. 169, 93 N. Y.
Supp! 219; Jay v. Squire, 7 OMo N. P. 345; In re Scott's Estate, 202 Pa.
389, 51 Atl. 1023. The cestui que trust is entitled to be informed in what
securities the trust funds are invested. Baer v. Kahn, 131 Md. 17, 101 Atl.
596. \

49 In re 1 Ch. 86, 88, 89.

Tillott, [1892]
60 Loud V. Winchester, 52 Mich. 174, 183, 17 N. W. 784.
"1 Wynne v. Humberston, 27 Beav. 421.
B 2 Silver King Consol. Min. Co. of Utah v. Silver King Coalition Mines'

Co. of Nevada, 204 Fed. 166, 122 C' C. A. 402, Ann. Cas. 1918B, 571; Bone
V. Hayes, 154 Cal. 759, 99 Pac. 172; Purdy t. Johnson, 174 Cal. 521, 163
Pac. 893'; Bames v. Century Sav. Bank, 165 Iowa, 141, 144 N. W. 367;,
Dillivan v. German Sav. Bank (Iowa) 124 N. W. 350; Barnes v. Gardiner,
140 App. Div. 395, 125 N. Y. Supp. 433 ; Gray v. Heinze, 82 Misc. Rep. 618,
398 THE DUTIES OF THE TRUSTEE (Ch. l^

at a later time. It is sufficient here to state the broad, general

duty. This obligation is placed upon the trustee in order that the
cestui que trust may learn what property has been received by
the trustee and what funds paid out, and may then object to the
account, if he desires, and have the propriety of the trustee's actions
passed upon. "It is well settled that, when a fiduciary relation is
shown to exist, and property or property interests have been in-
trusted to an agent or trustee, the burden is thrown upon such
agent intrusted to render an account and to show that all his trust
duties have been fully performed, and the manner in which- they
have been performed. It is assumed that the agent or trustee has
means of knowing and does know what the principal or cestui que
trust cannot know, and is bound to reveal the entire truth."**
* * * It is not necessary in such a case as this that the plaintiff
should show that there will be something found due to her on the-
accounting. That fact can never be known with certainty until
the account has been taken. The right to this accounting results
from the facts that the fiduciary relation has been created and as-
sumed by the agent or trustee, and that the principal or cestui que
trust is not informed and does not know what has been done with
reference to the property or property interests confided to the
"*
agent or trustee." s

The forum which th6 trustee may voluntarily account, or in

in
which he may be compelled to account, is usually the forum having
general equitable jurisdiption. It is impossible here to enumerate
the courts of the various jurisdictions which possess the power to-
receive and compel accountings by a trustee.'" Quite frequently

144 N. Y. Supp. 1045; Arnold v. Southern Pine Lumber Co., 58 Tex. Civ.
App. 186, 123 S. W. 1162; Geisse v. Beall, 3 Wis. 367. An impUed as well
as an express trustee may be compelled to account. Tucker v. Weeks, 177
App. Div. 158, 163 N. y. Supp. 595. Since the account need not be per-
sonally prepared, illness ot the trustee is not an excuse for failure to file
an account. In re Buchanan's Estate (Sur.) 171 N. Y. Supp. 953.
63 Citing Marvin v. Brooks, 94 N. T. 71.
64Frethey v. Durant, 24 App. Div. 58, 61, 62, 48 N. T. Supp. 839. See,
also, Staie v. Illinois Cent. E. Co., 246 111. 188, 92 N. E. 814.
6 6 For cases discussing the jurisdiction of various courts, see McAdoo v.

Sayre, 145 Cal. 344, 78 Pae. 874; Prindle v. Holcomb, 45 Conn. Ill; Jonea
V. Do-wns, 82 Conn. 33, 72 Atl. 589; McHardy v. McHardy's Bx'r, 7 Fla.
301; Cheney v. Langley, 56 111. App. 86; Weaver v. Fisher, 110 111. 146;
Waterman v. Alden, 144 111. 90, 32 N. E. 972; .Cunningham v. Fraize, 85
Ky. 35, 2 S. W. 551 ; Boreing v. Faris, 127 Ky. 67, 104 S. W. 1022 Page v.
;

Marston, 94 Me. 342, 47 Atl. 529; Nelson v. Howard, 5 Md. 327; Hobart
V. Andrews, 21 Pick. (Mass.) 526; Green v. Gasklll, 175 Mass. 265, 56 N.
E. 560; Hayes v. Hall, 188 Mass. 510, 74 N. H. 935 ; McBride v. Mclntyre, 91
Mich. 406, 51 N. W. 1113; Sullivan v. Koss' Estate, 113 Mich. 311, 71 N.
 ;

§ 104) DUTY TO .ACCOUNT / 399

statutes give to the probate courts concurrent or exclusive jurisdic-

tion over accountings by testamentary trustees.""
Practice on Accounting
The practice upon trustees' accountings Ts usually governed by
statute or court rules' to such an extent that any statement of gen-
erally applicable principles is difficult." The necessary parties are
all those interested in the trust. Thps, all the trustees should be
made parties,"* unless the account is demanded of one trustee
alone;"" and the representatives of a deceased trustee should be
joined.*" Naturally all~beneficiaries should be made parties/^'

W. 634, 76 N. W. 309; Evans v. Evans (N. J. Oh.) 5T Atl. 872; Marsh v.

Marsh's Ex'rs, 73 N. J. Eq. 99, 67 Atl. 706; Jones v. Jones, 8 Misc. Rep.
660, 30 k Y. Supp. 177; In re Widmayer, 28 Misc. Rep. 362, 59 N. Y.
Supp. 980; Meeks v.'Meeks, 51 Misc. Rep. 538, 100 N. Y. Supp. 667; In
re Clyne, 72 Misc. Rep. 593, 131 N. Y. Supp. 1090; Van Sinderen v. Lawrence,
50 Hun, 272, 3 N. Y. Supp. 25; Cass v. Cass, 61 Hun, 460, 16 N. Y. Supp. '

229; Rutherfurd v. Myers, 50 App. Div. 298, 63 N. Y. Supp. 939; In re

Fogarty's Estate, 117 App. Div. 583, 102 N. Y. Supp. 776; Post v. Ingraham,
122 App. Div. 738, 107 N. Y. Supp. 737; Mildeberger v. Franklin, 130 App.
Div. 860, 115 N. Y. Supp. 903; Runk v. Thomas, 138 App. Div. 789, 123 N.
Y. Supp. 523 ; Ungrich v. Ungrieh, 141 App. Div. 485, 126 N. Y. Supp. 419
Furniss v. Furniss, 148 App. Div. 211, 133 N. Y. Supp. 535; Deering v.
Pierce, 149 App. Div. 10, 133 N. Y. Supp. 582; Conant v. Wright, 22 App.
Div. 216, 48 N. Y. Supp. 422, affirmed 162 N. Y. 635, 57 N. E. 1107; Code
Civ. Proc. N. Y. § 2723 et seq.; Herron v. Comstock, 139 Fed. 370, 71
C. C. A. 466j In re Roach's Estate, 50 Or. 179, 92 Pac. 118; B^nk of
United States v. Riddle, 2 Pars. Eq. Cas. (Pa.) 31; Appeal of Simpson, 9
Pa. 416; Appeal of Jones, 3 Grant, Cas. (Pa.) 169; In re Apple, 2 Phila.
(Pa.) 171; Appeal of Raskin^ M Pa. 272; Appeal of Paisley, 70 Pa. 153;
In re Walton's Estate, 174 Pa. 195, 34 Atl. 558; Meurer v.~St;okfis, 246 Pa.
393, 92 Atl. 506; Poole v. Brown, 12 S. 0. 556; Leach v. Cowan, 125 Tenn.
182, 140 S. W. 1070, Ann. Cas. 1913C, 188; Downer v. Downer, 9 Vt. 231;
Bailey v. Bailey, 67 Vt. 494, 32 Atl. 470, 48 Am. St. Rep. 826; In re Gary's
Estate, 81 Vt. 112, 69 Atl. 736; Wilson v. Kennedy, 63 W. Va. 1, 59 S. E.
736.
B 6 Hooker v. Goodwin, 91 Conn. 463, 99 Atl. 1059, Ann. Cas. 1918D,
1159;
Appeal of Morse, 92 Conn. 286, 102 Atl. 586; People ex rel. SafCord v.
Washburn, 105 Misc. Rep. 415, 173 N. Y. Supp. 157, affirmed 188 App. Div.
951, 176 N. Y. Supp. 838.
»' See, for, example, the New York statute having to do with the accountings
of testamentary trustees, found in Code Civ. Prod. §§ 2719-2742, and Laws Vt.
1919, No. 88. ,

BsMcKinley v. Irvine, 13 Ala. 681; People v. Equitable Life Assur. Soc. of

United Spates, 124 App. Div. 714, 109 N. Y. Supp. 453; German-American Cof-
fee Co. v. Diehl, 86 Misc. Rep. 547, 149 N. Y. Supp. 413.
8 Fleming v. Gilmer, 35 Ala. 62.
60 Evans v. Evans (N. J. Ch.) 57 Atl. 872.
61 Parsons, v. Lyman, Fed. Cas. No. 10780; Newman v. Schwerin, 61 Fed.
865, 10 C. C. A. 129.; Dill v. McGehee, 34 Ga. 438; Speakman v. Tatem, 45 N.
J. Eq. 388, 17 Atl. 818
; Brewster v. Brewster, 4 Sandf. Ch. (N. Y.) 22; Adams
V. Purser, 126 App. Div. 20, 110 N. Y. Supp. 167.
 400 THE DUTIES OP THE TRUSTEE (Ch. 12

as well as the representatives of a deceased cestui.'" Persons in

possession of the trust res may properly be joined,"' but it is not
necessary to give notice to transferees from the trustee.** Re-
maindermen are, of course, interested in the property and should be
joined when their rights may be affected.*"
After the trustee has presented, his account the cestuis que trust
should be allowed an opportunity of objecting to any item.** The
'
trustee should present vouchers for all payments which he claims he
has made,*' but if satisfactory proof of the payinent is made other-
wise than by the presentation of a voucher, the claim will be al-
lowed.** Where no voucher is presented and the charge seems
questionable, the trustee will not be allowed the amount.** While
th^ legal presumption is that a trustee has done his duty and per-
formed the trust,"* the burden is upon the accounting trustee to
show satisfactorily the disposition of all property received by him
as trustee, and to prove the necessity and propriety of all ex-
, penditures for which he claims credit.'^ He cannot throw upon the
cestui que trust the burden of proving the opposite.'" All presump-
tions are against the trustee upon the accounting, and obscurities
and doubts in the account will be resolved against him.''

82 Cogan V. McOabe, 23 Misc. Eep. 739, 52 N. Y. Supp. 48.

83 McBride v. Mclntyre, 91 Mich. 406, 51 N. W. 1113.
8* Pondir V. New York, L. E. & W. R. Co., 72 Hun, 384, 2^ N. Y. Supp. 560;
Felton y. Long, 43 N. C. (8 Ired. Eq.) 224.
6B Leonard v. Barnum, 94 App. Div.
266, 87 N. Y. Supp. 978, affirmed Same v.
Pierce, 182 N. Y. 431, 75 N. B. 313, 1 L. R. A. (N. S.) 161. But see Mount v.
Mount, 68 App. Div. 144, 74 N. Y. Supp. 148. .
86 Lycan v. Miller, 56 Mo. App. 79.
87 Willis V. Olymer, 66 N. J. Eq. 284, 57 Atl. 803 Smith v. Robinson, 83 N.
;
'

J. Eq. 384, 90 Atl. 1063. i

88 Groom v. Thompson (Ky.) 16 S.

369; W. v. Banta, 26
Brinkerhoff's Ex'rs
N. Eq. 157; In re United States Mortgage & Trust Co., 114 App. Div. 532,
J.
100 N. Y. Supp. 12; In re Froelich's Estate, 50 Misc. Rep. 103, 100 N. Y. Supp.
436; In re Davis' Estate, 43 App. Div. 331, 60 N. Y. Supp. 315.
"60 In re Quinn's Estate, 16 Misc. Rep. 651, 40 N. Y. Supp. 732.
"Aldridge v. Aldridge (Ky.) 109 S. W. 873. i

71 Chirurg v. Ames, 138 Iowa, 697, 116 N. W. 865; Fidelity & Deposit Co. of
Maryland v. Husbands, 174 Ky. 200, 192 S. W. 51 ; Ashley v. "Winkley, 209
;'
Mass. 509, 95 N. E. 932; Parker's Adm'r v. Parker (N. J. Ch.) 5 Atl. 586
McCuUoch v. Tomkins, 62 N. J. Eq. 262, 49 Atl. 474 ; Ithell v. Malone (Sup.)
154 N. Y. Supp. 275 Biddle Purchasing Co. v. Snyder, 109 App. Div. 679, 96
;

N. Y. Supp. 356; Choctaw, O. & G. R. Co. v. Sittel, 21 Okl. 695, 97 ,Pac. 363;
Mintz V. Brock, 193 Pa. 294,- 44 Atl. 417; Hey ward v. Glover, 2 Hill, Eq. (S.
C.) 515; Montgomery v. Coldwell, 14 Lea (Tenn.) 29 Stockwell v. Stockwell's
;

Estate, 92 Vt. 489, 105 Atl. 30.

,
72 Red Bud Realty Co. v. South, 96 Ark. 281, 131 S. W. 340; Purdy v.
Johnson, 174 Cal. 521, 163 Pac. 893.
73 Bone V. Hayes, 154 Cal. 759, 99 Pac. 172 Smith v. Robinson, 83 N. J. Eq.
;
 ,

§ 105) DUTY TO ACCOXra* —CHARGES AGAINST THE TRUSTEE 401

DUTY TO ACCOUNT—CHARGES AGAINST THE

TRUSTEE
105. The trustee will be charged on the accounting with all the
principal and income which he has actually received, and
in some cases of breach of trust with such further amounts
as he would have received if he had performed his duty.

Upon the accounting there are two elements to be considered:

The sums with which the trustee is to be charged, and the amounts
with which he is to be credited. The charges against the trustee
include, broadly speaking, all the trust property which he has re-
ceived during the continuance of the trust. In the absence of willful
wrongdoing or bad faith, the trustee will be charged only with the
property which he has actually received.''* But if the trustee has
been guilty of a breach of the trust, he may be held liable for what
hp ought to have received." Thus, where the trustee refuses to
render an account, he will be charged with what he ought to have
received.'* In another case, where there was a refusal or failure
to account, the trustee was held liable for the original fund and such
profits thereon as the most successful of business men would have
made.''
If the trustee appropriates the trust funds to his own use, he
will be charged with the value of the trust property as of the date
of the misappropriation.'* It is obvious that the trustee must be
debited on the accounting with the income of the trust property,
as well as with the original value of the trusf res. Thus, he must
account for the rents of lands held in trust, or for their reasonable
rental value, where he uses them for his own benefit.'* Where
the negligence of the trustee causes expense, as. where a second ac-

384, 90 Atl. 1063; DufCord's Ex'r v^ Smith, 46 N. 3. Eq. 216, 18 Atl. 1052 ; In
re Gaston Trust, 35 N. J. Eq. 60 White v. Eankin, 18 App. Div. 293, 46 N.
;

Y. Supp. 228, affirmed 162 N. Y. 622, 57 N. B. 1128; Landis 7. Scott, 32 Pa.

495.
T4 Gray v. Lynch, 8 Gill (Md.) 403; Farmers' Loan & Trust Oo. v. Pendle-
ton, 179 N. Y. 486, 72 N. E. 508 Appeal of Greenwood, fl2 Pa. 181; In re Pat-
;

rick's Estate, 162 Pa. 175, 29 Atl. 639.

7B Bridgeford v. Owen, 10 Ky. Law Hep. 116.
76 Green v. Winter, 1 Johns. Ch. (N. Y.) 27, 7 Am. Dec. 475.
T7 Perrln v. Lepper, 72 Mich. 454, 40 N. W. 859.
7 8 In re Hart's Estate, 203 Pa. 488, 53 Atl. 367.
79 Cunningham v. Cunningham, 81 S. C. 506, 62 S. E. 845. In Van'Orden
V. Pitts (Tex. Com. App.) 206 S. W. 830, one who appropriated property and
was made a constructive trustee thereof was charged with interest at the high-
est rate allowed by law, lOper cent. And in Campbell v. Napier, 182 Ky. 182,
BOGEET Teusts —26
402 THE DUTIES OF THE TMJSTEE (Ch. 12

count has to be rendered, due to the inaccuracy of the first, the

trustee will be charged with this expense.^"
Under what circumstances/the trustee will be obliged to pay sim-
ple or compound interest on an accounting or in a suit for breach
of trust is a question which will receive consideration at a later
point, in connection with the rights and remedies of the cestui que
trust.* ^

DUTY TO ACCOUNT— CREDITS TO THE TRUSTEE

106. The trustee will be credited on the accounting with all trust
moneys necessarily expended for the expenses of admin-
istration and for all trust property rightly delivered to
the cestui que trust. If trust funds are lacking to pay
necessary expenses or to make proper payments to the
beneficiaries, the trustee may advance his own funds for
such purposes and will be reimbiursed therefor upon the
accounting.

Upon the accounting the trustee is entitled to receive credit for

all expenditures which he has necessarily and properly made in the
administration of the trust. The powers and duties of the trustee
regarding expenditures have previously been considered.'^ To
state in detail here the payments for which a trustee is entitled to
credit upon the accounting would be but repetition. If a trustee
has power to make a payment; or if it is his duty to make such
payment, the expenditure will be one for which he is entitled to
credit when he accounts to the court. The discussion elsewhere
has shown that necessary and reasonable expenditures for the fol-
lowing purposes were allowable Collecting an(l obtaining posses-
:

sion of the trust property; discharging the interest and princi-

pal of debts of the trust estate and removing incumbrances upon *

the trust property; defraying the expenses of necessary repairs,

improvements, insurance, and taxes buying property necessary to
;

the carrying on of authorized trust business; employing neces-

sary agents and servants; and employing attorneys, when liti-
gation or legal advice is necessary. "Trustees thus invested with
the general power to manage and control the property of the ces-
tui qu'e trust are justified in laying out money for the repair and

206 S. W. 271, a trustee who repudiated his trust was charged with iaterest
from the date of repudiation.
80 Clark v. Anderson, 13 Bush (Ky.) 111.
"^ See § 120, post.
«2 See §§ 87, 102, ante.
§ 106) DUTY TO ACCOUNT —CEEDITS TO THE TBUSTEB 403

ordinary improvement of-property, such as draining, fencing, nec-

essary farm buildings, etc., and they are allowed to hold the estate
until the moneys thus expended are repaid." "*
It is an application of the elementary principles of the law of
trusts that a trustee who has paid out money for insurance pre-
miums,** or repairs upon the trust property,'" or taxes,** or law-
yer's fees,*^ or the costs of an action,** or to discharge a claim
against the trust estate,*' or for improvements of the trust prop-
erty,"" or for office rent and office expenses,"^ should be credited in
his account with such payments. The payments were for the bene-
fit of the cestuis que trust. They should come out of the trust
funds, and not out of the private moneys of the trustee. If a trus-
tee neglects to keep proper accounts of his expenditures, the low-
est possible estimate w-ill be put upon them in allowing him re-
muneration.'^
Trustee's Lien
For the purpose of projecting the trustee's right to reimburse-
ment for expenditures of the kinds named above the trustee is giv-
en a lien on the trust property.'* "The expenses of a trustee in the
execution of the trust, are a Ken upon the estate and he will not
;

be compelled to part with the property, until his disbursements are

paid. * * * If the trust fund is insufficient for such reim-
bursement, he may call on the cestui que trust, in ^hose behalf and
at whose request he acted, and recover of him personally reason-

83 Woodard v. Wright, 82 Cal. 202, 206, 22 Pac. 1118.

84 Fisher v. Fisher, 170 N. O. 378, 87 S. E. 113.
85 In re Parry's Estate, 244 Pa. 93, 90 Atl. 443.
86 Tarbox v. Tarbox, 111 Me. 374, 89 Atl. 194. •

87 Locke T. Cope, 94 Kan. 137, 146 Pac. 416; In re Dreier's Estate, 83 N. J. ,

Eq. 618, 92 Atl. 51 In re Mylin's Estate, 32 Pa. Super. Ot. 504.

;

8 8 Ralston V. Easter, 43 Appi D. C. 513.

89 Curlett v., Emmons, 9 Del. Ch. 62, 85 Atl. 1079.
90 Woodard v. Wright, 82 Cal. 202, 22 Pac. 1118 ; Condit v. Maxwell, 142
Mo. 266, 44 S. W. 467; Wiley v. Morris, 39 N. J. Eq. 97 Dilworth's Lessee v.
;

Sinderling, 1 Bin. (Pa.) 488, 2 Am. Dec. 469. But where the trustee has had
personal use of the trust property, he may not be allowed for improvements
which he has put upon it. Bradford t. Clayton (Ky.) 39 S. W. 40. And if the
improvements are unnecessary, the trustee will not be reimbursed. Booth v.
Bradford, 114 Iowa, 562, 87 N. W. 685. Myers v. Myers, 2 McCord, Eq. (S.
C.) 214, 16 Am. Dec. 648.
81 In re Nesmith, 140 N. X. 609, 35 N. E. 942.
92 McDoweU V. Caldwell, 2 McCord, Eq. (S. C.) 43, 16 Am. Dec. 635.
93 Jones V. Dawson, 19 Ala. 672; King v. Oushman, 41 111. 31, 89 Am. Dec.
366 ; Smith v. Walker, 49 Iowa, 289; Feldman v. Preston, 194 Mich. 352, le'o
N. W. 655; Fearn v. Mayers, 53 Miss. 458; Matthews v. McPherson, 65 N. O.
189. In Bay Biscayne Qo. v. Baile, 73 Fla. 1120, 75 South. 860, the trustee
was accorded a lien on the trust property for costs, disbursements, and coun-
sel fees in litigation in defense of the trust.
 ;

404 THE DUTIES OF THE TBUSTEB (Ch. 12

able compensation for the time and trouble and money expended.
* * * Trustees have an inherent equitable right to be reim-
bursed all expenses which they reasonably incur in the execution
of the trust, and it is immaterial that there are no provisions for
such expenses in the instrument of trust. If a person undertakes an
office for another in relation to property, he has a natural right to
be reimbursed all the money necessarily expended in the perform-
ance of the duty." ®* "When a trustee is authorized to make an
expenditure and he has no trust funds, and the expenditure is nec-
essary for the protection, reparation, or safety of the trust estate,
and he is not willing to malfe himself personally liable, he may by
express agreement make the expenditure a charge upon the trust
estate. In such a case he could himself advance the money to make
the expenditure, and he would have a lien upon the trust estate, and
he can by express contract transfer this lien to any other party who
may upon the faith of the trust estate make the expenditure." *°

Thus, under certain circumstances, the trustee may grant to another

this right of lien which he himself has in the case of proper expend-
^
itures.
An obligation of the cestui que trust running to the trustee, but
which arose prior to the existence of the trust, is not ordinarily a
proper item of credit in behalf of the trustee in his account." The
trustee is entitled to credits which arise in the administration of
the trust, but to none other. However, if the triist is for the pur-*
pose" of paying the debts of the settlor, and the trustee is one of the
creditors, he may credit himself with, the amount of the debt due
him."
Whether the trustee may receive the costs of the accounting as
an item of credit is within the discretion of chancery."' Usually a
trustee who has been guilty of no bad faith or misconduct will be
allowed the costs of the accounting." ° But bad faith or malfeasance
by the trustee may cause equity to charge the costs to him person-
ally.^ In some cases chancery has exercised its discretion by divid-

0* Rensselaer & S. R. Co. v. Miller, 47 Vt. 146, 152.

85 New V. NicoU, 73 N. Y. 127, 131, 29 Am. Rep. ill.
»e AngeU v. Jewett, 58 111. App. 596 ; Knowles v. Goodrich, 60 111. App. 506
I

Willis V. Clymer, 66 N. J. Eg. 284, 57 Atl. 803.

»7 Smitli V. Miller, 98 Va. 535, 37 S. E. iO.
88 In re Selleck, 111 N. Y. 284, 19 N. E. 66. See, also, Code Civ..Proc. N. T.

§§ 2746, 2747.
89 Lape's Adm'r v.
Taylor's Trustee (Ky.) 23 S. W. 960; McCloskey v. Bow-
den, 82 N. J. Eq. 410, 89 Atl. 528 Appeal of Lowrie, 1 Grant, Gas. (Pa.) 373;
;

Appeal of Graver, 50 Pa. 189. In Re Starr (N. J. Prerog.) 103 Atl. 392, a trus-
tee whose account was unsuccessfully attacked was allowed a counsel fee.
1 In re Howell, 215 N. X. 466, 109 N. E. 572, Ann. Gas. 1917A, 527; Harris
§ 106) DUTY TO ACCOUNT —^^CREDITS TO THE TEUSTEB 405

ing the costs between the parties to the account.* Whether the^

costs of the accounting should be paid out of the income or out of

the capital of the estate, assuming that they are to be paid from the
trust funds, depends upon the obje^ct of the accounting. In the case
of an annual accounting,' primarily for the benefit of the immediate
•cestuis que trust, the income should bear the expense.* But where
both rights of life tenant and remainderman are involved, the costs
should be apportioned between capital and income.*
Where an expense actually incurred in the administration of the
trust has arisen because of the carelessness of the trustee, or was
unnecessary and extravagant, the trustee will not be allowed to
credit himself with the amount thus spent. Thus, where the trus-
tee unnecessarily keeps a vehicle for the administration of the trust
duties," or pays taxes which are not due,' or mingles the trust funds
with his own property so that no separate allowance for taxes can
be made,^ he will not be entitled to reimbursement.
Allowance for Necessary Expenses
When the trustee pays the necessary expenses of the trust from
the trust funds, he is entitled to credit therefor upon the account-
ing. "In such cases he is not asking for reimbursement, but merely
that his expenditure of the trust moneys in the ways named may
be allowed as proper. But in other cases there may be demands
upon the trustee which should be met, and yet there may not be
sufficient truit funds on hand to enable the trustee to make the re-
quired payments. Frequently upon an accounting the question
arises whether a trustee is entitled to be reimbursed fropi the trust
funds for advances which he has made during the ad;ninistration
of the trust. It is a rule of equity which is of obvious justice that a
trustee who has advanced his own moneys to discharge proper
claims upon the trust estate, or otherwise for the benefit of the
cestui que trust, will be entitled to be reimbursed from the trust
funds upon his accounting.^ .

r. Sheldon (Pa.) 16 Atl. 828; In re Carr's Estate, 24 Pa. Super. Ct. 369; In re
Brooke's Estate, 36 Pa. Super. Ct. 332. Thus, a trustee who is removed for
fraud is not entitled to charge the costs of the accounting to the trust fund.
Comet V. Cornet, 269 Mo. 298, 190 S. W. 333.
2 Lyon v. Foscue, 60 Ala. 468; In re Old's Estate, 150 Pa. 529, 24 Atl. 752.
8 In re Long Island Loan & Trust Co., 79 Misc. Rep. 176, 140 N. Y. Supp.

752.
In re Cooper, 82 Misc. Rep. 324, 144 N. Y. Supp. 189.
*
» Sysaman
v. Nelson, 79 Misc. Rep. 304, 140 N. Y. Supp. 183.
« Lorenz v. WeUer, 267 111. 230r 108 N. E. 306.
T Elmer v. Loper, 25 N. J. Eq. 475.
8 Morrison v. Bowman, 29 Cal. 337 ; Lowe v. Morris, 13 Ga. 165 ; Constant
V. Matteson, 22 111. 546; American Bonding Co. v. State, 40 Ind. App. ^59, 82
N. E. 548 Dennis v. Dennis, 15 Md. 73 Wilson v. Welles, 79 Minn. 53, 81 N, W.
; ;

549 Altimus t. Elliott, 2 Pa. 62; Boyd v. Myers, 12 Lea (Tenn.) 175.
;
 ;

'
406 -THE DUTIES OF THE TRUSTEE (Ch. 12

Examples of the application of this doctrine are found in the cases

where the trustee has advanced his own funds to a beneficiary,
pending the accrual of the income from the trust funds ' or where ;

the trustee has necessarily used his own funds to buy in an out-
standing claim against trust property or to remove an encum-
^'°

brance therefrom/^ or for the purpose of improving the trust prcp-

erty.^^ In these cases the trust estate has had the benefit of the
trustee's money, and it is equitable that the income accruing after
the advance should be used for the purpose of making the trustee
whole. But it has been held that a trustee has no lien upon the in-
come of a trust for reimbursement on account of a loan to the ces-
tui que trust,^^ or jp^cause of payments made to the beneficiary
when no income was due to the cestui que trust.^*
Whether a trustee who has advanced money for the benefit of the
cestui shall be entitled to interest upon the sum advanced,' as well,
as to reimbursement for the principal, is within the discretion of the
court of chancery.^ ^ The trust instrument may direct that the
trustee be paid interest on advances, in which case there will, of
course, be no doubt concerning his rights.^" Usually the courts
have allowed simple interest to trustees who have made advances
and have conducted the trust with prudence and honesty.^^ Occa-
sionally courts have taken the attitude that there should be no in-
terest allowed where the advancement was unnecessary because of
the existence of trust funds in the hands of the trustee,'-* or have
repudiated altogether the right of the trustee to receive interest on

» Foscue V. Lyon, 55 Ala. 440 ; Ellig v. Naglee, 9 Cal. 683; Mallory v. Clar)£,
9 Abb. Prac. (N. T.) 358; In re King's Estate, 9 Pa. Co. Ot. K. 74; In re
Crane's Estate, 1T4 Pa. 613, 34 Atl. 348.
10 Wiswall V. Stewart, 32 Ala. 433, 70 Am. Dec. 549 ; McClanahan's Heirs v.
Henderson's Heirs, 2 A. K. Marsh. (Ky.) 388, 12 Am. Dec. 412.
n Harrison t. Mock, 16 Ala. 616 Garvey v. New York Life Ins. & Trust Co.,
;

54 Hun, 637, 7 N. Y. Supp. 818.

12 Pratt V. Thornton, 28 Me. 355, 48 Am. Dec. 492. In Wright v. Ohilcott,
61 Or. 561, 122 Pac. 765,, one declared a resulting trustee was allowed the
amount expended for improvements, which added to the permanent value of
the land, and for taxes.
13 Abbott V. Foote, 146 Mass. 333, 15 N. E. 773, 4vAm. St. Rep. 314.
14 In re Jones' Estate, 10 N. Y. St. Rep. 176; In re Odell's Estate (Sur.) 2 N.
Y. Supp. 752.
15 Turner v. Turner, 44 Ark. 25.
18 Booth V. Bradford, 114 Iowa, 562, S7 N. W. 685.
17 Pettingill v. Pettingill, 60 Me. 411 ; Urann v. Coates, 117 Mass. 41; Cook
V. Lowry, 29 Hun (N. Y.) 20 ; Evertson v. Tappen, 5 Johns. Ch. (N. Y.) 497
Dilworth's, Lessee v. Slnderling, 1 Bin. (Pa.) 488, 2 Am. Dec. 469 Appeal of
;

Carpenter, 2 Grant, Cas. (Pa.) 381; Jenckes v. Cook, 10 R. I. 215; Yost v.

Critcher, 112 Va. 870, 72 S. B. 594 ;Fisk v. Brunette, 30 Wis. 102.
18 Cook V. Lowry, 95 N. Y. 103.
§ 107) DUTY TO ACCOUNT —COMPENSATION OP THE TRUSTEE 407

advances.^' A trustee guilty of misconduct may be denied interest

on money advanced during the conduct of the trust.^" In rare in-
stances has compound interest been allowed.^^
For the enforcement of his right to reimbursement the trustee is
granted a lien upon the trust property. He may hold it until the
advances lie has made have been returned to him.^^ Thus, a trus-
tee who has expended his own funds for needful repairs and im-
provements on the trust property,^^ or for the payment' of taxes on
the trust estate,^* or to purchase a title outstanding against tfie
trust,^° or to make proper payments directly to the cestui/" is en-
titled to hold the trust property as security for repayment and to
cause the property to be sold to satisfy his lien by bringing a bill
in equity. But where a trustee is directed by the trust instrument
to pay the income of the trust property to the cestui que trust only
as it accrues, the trustee has no lien upon the trust property iov
reimbursement as to advances made to the beneficiary prior to ac-
crual of such income.^'

DUTY TO ACCOUNT— COMPENSATION OF THE TRUS-

TEE
107. Under early English equity rules the trustee served without
compensation, but in America the trustee is now generally
allowed the reasonable value of his services.
The amount of compensation is in the discretion of chancery, in
the absence of statute. The compensation may be provide
ed for in the trust instrtunent or by contract between trus-
tee and cestui que trust.
The amount of property and work involved and the fidelity and
efficiency of the trustee will be considered in determining
the compensation to be awarded. Usually a percentage

19 Appeal of Dexter, 147 Pa. 410, 23 Atl. 604.

20 Adams v. Lambard, 80 Cal. 426, 22'Pac. 180.
21 Barrel! v. Joy, 16 Mass. 221.
22 Jones V. Dawson, 19 Ala. 672 ; Griffin v. Pringle, 56 Ala. 486; Perrine v.
Newell, 49 N. J. Eq. 57, 23 Atl. 492; Rensselaer & S. E. Co. v. ivliller, 47 Vt.
146.
2 3 Woodard v. Wright, 82 Cal. 202, 22 Pac. 1118; Turton v. Grant, 86 N. J.

Bq. 191, 96 Atl. 993.

24 Bourqnin v. Bourquin, 12b Ga. 115, 47 S. E. 639.
2" King V. Cushman, 41 111. 31, 89 Am, Dee. 366;- Bennett v. Chandler, 199
111. 97, 64 N. E. 1052.
2 8 Smith V. Greeley, 67 N. H. 377, 30 Atl. 413.
27 Loring v. Salisbury Mills, 125 Mass. 138.
408 THE DUTIES OP THE TRUSTEE (Ch. 12

upon the amount of property handled by the trustee is

aweirded, rather than a lump sum.
The trustee may waive his right to compensation or forfeit it by
committing a breach of trust.
Joint trvistees usually receive but a single commission, which is
divided bet^yeen them in proportion to the amount of work
done by each. The compensation due to a trusteeship is
divided between successive trustees in ptoportion to the
value of the services rendered by each. A
trustee who is
also an executor with respect to the same property will re-
ceive double compensation, if the offices are distinct, but
not if he performs but one fimction though under two ti-
tles.
A trustee may be relieved of his duty to accoimt by a private
settlement under some circumstances. The laches of the
cestui que trust in demanding an account may free the
trustee from this obligation also.
An account once settled may not be opened or attacked, except
for fraud or mistake.

Closely akin to the right of the trustee to be credited on the ac-

counting with the amount of the trust fijnds properly expended on
behalf of the trust, and to his corresponding, right to be reimbursed
for necessary advances, is the right of the trustee to be paid a rea-
sonable sum for his time and trouble. Is a trustee entitled to com-
pensation? Will chancery allow him pay for his services in ad-
ministering the trust? It was early established in England that a
trustee would be allowed no remuneration. In Robinson v. Pett "*
Lord Chancellor Talbot said: "It is an established rule that a
trustee, executor, or administrator, shall have no allowance for his
care and trouble; the reason of which seems to be, for that on these
pretences, if allowed, the trust estate might be loaded, and rendered
of little value. Besides, the great difficulty there might be in set-
tling and adjusting the quantum of such allowance, especially as
one 'man's time may be more valuable than that of another; and
there can be no hardship in this respect upon any trustee, who may
choose whether he will accept the trust, or not." And this is the
modern English rule."
Some American courts of chancery were inclined during the early
history of the country to refuse compensation to trustees,^" but the

28 3 p. Wms. 249, 251.

28 Lewin on Trusts (12th Ed.) p. 780.
so Brooks Egbert, 2 Del. Ch. 83; State v. Piatt, 4 Har. (Del.) 154; Con-
v.
stant V. Matteson, 22 111. 546; Huggins v. Rider, 77 111. 360 ; Cook v. Gilmore,
 § 107) DUTY TO ACCOUNT —COMPENSATION OF THE TKUSTEF 409

modern tendency in this country is to give the trustee a reasonable

remuneration for his skill and industry.'^ In all American states
the rule of compensation is now established, either by rule of equi-
ty or by statute. But a passive trustee is entitled to no compensa-
tion, since he is a mere dummy.'" It is not necessary, in order that
a trustee should have the right to remuneration for his labors, that
there should be any stipulation for remuneration in the trust in-
strument.** Compensation is provided by the rules of equity or by
statute rather than through a direction of the settlor. -

Compensation Fixed by Trust Deed

The matter of compensation may be settled h^ the express pro-
visions of the trust instrument. If the settlor states that the trus-
tee shall receive a certain amount for his services, the trustee will
'

be deemed to have acquiesced in such provision, if he accepts and

enters upon the trust.** The trust in,strument may prohibit any
Compensation.*" It may provide for a reasonable compensation, in

133 111. 139, 24 N. E. 524 Miles v. Bacon, 4 J. J. Marsh. (Ky.) 457; Warbass
;

T. Armstrong, 10 N. J. Eq. 263; Green v. Winter, 1 Johns. Ch. (N. Y.) 37, 7
Am. Dec. 475; Boyd v. Hawkins, 17 N. C. (2 Dev. Bq.) 195; Gilbert v. Sutliff,
3 Ohio St. 129. ,V

31 Clark V. Piatt, 30 Gonn. 282; Muscogee Lumber Co. v. Hyer, 18 Fla. 698,
43 Am. Eep. 332; Arnold v. Allen, 173 lU. 229, 50 N. B. 704; Jarrett v. John-
son, 116 111. App. 592; Compher v. Browning, 219 111. 429, 76 N. E. 678, 109
Am. St. Rep. 346; .Knight v. Knight, 142 111. App. 62; Hendrix's Bx'rs v. Har-
din, 5 Ky. Law Rep. 333; Cotton V. Graham, 10 Ky. Law Rep. 402; Patrick
V. Patrick, 135 Ky. 307, 122 S. W. 159; Devilbiss v. Bennett, 70 Md. 554, 17
Atl. 502; Eathbun v. Colton, 15 Pick. (Mass.) 471; Sthwarz v. Wendell, Walk.
Ch. (Mich.) 267; M^aginn v. Green, 67 Mo. App. 616 Olson v. Lamb, 56 Neb.
;

104, 76 N. W. 433, 71 Am. St. Rep. 670; Marston v. Marston, 21 N. H. 491;

Boyd V. Hawkins, 17 N. C. (2 Dev. Eq.) 329 Raiford v. Raiford, 41 N. O. (6
;

Ired. Eq.) 490; Appeal of Hecke^t, 24 Pa. 482; In re Rothschild's Assigned

Estate, 47 Pa. Super. Ct. 234 Sartor v. Newberry Land & Security Co., 104 S.
;

C. 184, 88 S. E. 467 Leacli v. Cowan, 125 Tenn. 182, 140 S. W. 1070, Ann. Cas.
;

19130, 188 Miller v. Beverleys, 4 Hen. & M. (Va.) 415. For a discussion of
;

the abolition of the common-law rule aild the reasons for such action, see
Schriver v. Frommel, 183 Ky. 597, 210 S. W. 165.
32 Wetmore v. Brown, 37 Barb. (N. Y.) 133.
33 Burr V. McEwen, Fed. Cas. No. 2193; Ringgold v. Ringgold, 1 Hiir. & G.
(Md.) 11, 18 Am. Dec. 250; Bentl^y v. Shreve, 2 Md., Ch. 215; WagstafCe t.
Lowerre, 23 Barb. (N. Y.) 209; Sherrill v. Shuford, 41 N. C. (6 Ired. Bq.) 228;
Fox V. Weckerly, 9 Leg. Int. (Pa.) 43.
34 Biscoe V. State, 23 Ark. 592 In re Hanson's Estate, 159 Cal. 401, 114
;

Pae. 810 ;Jarrett v. Johnson, 216 111. 212, 74 N. B. 756 Gossom's Adm'r v.
;

Gossom, 142 Ky. 118, .133 S. W. 1162; Schriver v. Frommel, 183 Ky. 597,
210 S. W. 165; Thomas v. Thomas, 97 Miss. 697, 53 South. 630; Opplger
V. Sutton, 50 Mo. App. 348; Bigelow v. Tilden, 52 App. Div. 390, 65 JJ.
Y. Supp. 140 In re Rowe, 42 Misc. Rep. 172, 86 N. Y. Supp. 253 Steinway
; ;

'
V. Steinway, 197 N. Y. 522, 90 N. E. 1166; College of Charleston v. Willing-

35 Wilson V. Biggama, 73 Wash. 444, 132 Pac. 43.

410 -THE DUTIES OF THE TRUSTEE (Ch. 12

which case the court is not confined by the statutory allowances.^'

A valid agreement inter vivos may, of course, be made between
settlor and trustee with respect to the latter's compensation.^'
The trustee's compensation may likewise be fixed by contract
between the trustee and the cestui que trust. An agreement upbn
that subject between those parties will, if fairly made, be enforced
"
by the courts.^' ,

In the absence of stipulation' in the trust instrument, or binding

contract between the parties,' or statutory regulation, the amount
of the remuneration is within the discretion of the court of equity.^'
The compensation must be allowed by chancery.*" The trustee
has no right to deduct from the trust funds such allowance as he
deems proper.*^ His right to receive compensation must be en-
forced in equity, and cannot be made the basis of an action of as-
sumpsit.*^
Controlling Statutes '

Frequently statutes control the courts in the award of compensa-

tion to trustees.*^ No attempt can be made here to give the details

bam, 13 Rich. Eq. (S. O.) 195; Southern Ry. Co. v. Glenn's Adm'r, 98 Va. 309,
36 S. E. 395. Where the settlor fixes the compensation, the court may in-
crease it, where it deems such action equitable. In re Battin's Estate, 89 N.
J. Eq. 144, 104 Atl. 484.
3 6 In re Schell, 53 N. Y. 263.

37 Louisville Trust Co. v. Warren, 66 S. W. 644, 23 Ky. Law Rep. 2118.

3 8 Bowker v. Pierce, 130 Mass. 262; Ladd v. Pigott, 215 Mo. 361, 114 S. W.
984 ; Green v. Jones, 78 N. C. 265 Henry v. Hilliard, 157 N. c' 572, 73 S. E.
;

98. Where for thirteen years the cestuts que trust have received statements
showing the deduction of 10 per cent, commissions and have raised no objec- '

tion, they will not be heard to object. American Colonization Soc. v. Latrobe,
132 Md. 524, 104 Atl. 120.
3 9 Magruder v. Drury, 37 App. D. O. 519; Weiderhold v. Mathis, 204 111.
App. 3 Jenkins v. Whyte, 62 Md. 427 Taylor v. Deniy, 118 Md. 124, 84 Atl.
; ;

369; White v. Ditson, 140 Mass. 351, 4 N. E. 606, 54 Am. Rep. 473; Rothschild
V. Dickinson, 169 Mich. 200, 134 N. W. 1035 Appeal of Fidelity & Deposit Co.
;

of Marylajid, 172 Mich. 600, 138 N. W. 205; Henderson v. Sherman, 47 Mich.

267, 11 N. W. 153 ; Marsh v. Marsh, 82 N. J. Eq. 176, 87 Atl. 91 ; Appeal of
Heckert, 24 Pa. 482.
*o Robinson v. Tower, 95 Neb. 198, 145 N. W. 348; Lathroip v. Smalley's
Ex'rs, 23 N. J. Eq. 192; Beard v. Beard, 140 N. Y. 260, 35 N. E. 488.
*i In re Mylin's Estate, 32 Pa. Super. Ct. 504. A withdrawal of compensa-
tion without order of court constitutes conversion. Robinson v. Tower, 95 Neb.
198, 145 N. W. 348.
*2 Hazard v. Coyle, 26 R. L 361, 58 Atl. 987.
*3 In re Prescott's Estate, 179 Cal. 192, 175 Pac. 895 Lowe v. Morris, 13
;

Ga. 165; Bumey v."Spear, 17 Ga. 223; Warbass v. Armstrong, 10 N. J. Eq.

263; In re New Jersey Title Guarantee & Trust Co., 76 N. J. Eq. 293, ,75 Atl.
232 In re Allen, 96 N. Y. 327; Disbrow v. Disbrow, 46 App. Div. Ill, 61 N. T.
;

Supp. 614, affirmed 167 N. Y. 606, 60 N. E. 1110 In re Johnson, 170 N. Y. 139,

;

63 N. B. 63 ; Conger v. Conger, 185 N. Y. 554, 77 N. E. 1184; Robertson v. De

 § 107) DUTY TO ACCOUNT —COJIPENSATION OF THE TRUSTEE 411

of the various provisions found in the statute books on this sub-

ject.**
Where the court is free to fix the compensation of the trustee, not
being bound by statute, it will consider a variety of facts. The

Brulatour, 188 N. T. 301, 80 N. E. 938 ; In re Todd, 64 App. Div. 435, 72 N. Y.

Supp. 277; Ohisolm v. Hamersley, 114 App. Div. 565, 100 N. Y. Supp. 38;
Whitehead v. Draper, 132 App. Div. 799, 117 N. Y. Supp. 539 In re Ziegler's
;

Estate, 85 Misc. Eep. 673, 148 N. Y. Supp. 1055; In re Dimond's Estate (Sur.)
156 N. Y. Supp. 268; MofCett v. Eames (Sup.) 143 N. Y. Supp. 357.
,
** One or two illustrations of the statutory provisions may be of value.
In California there are two sections of importance. Section 2274 of the Civil
'Code provides as follows: "Except as provided in section seventeen hundred
of the Code of Civil Procedure, when a declaration of trust is silent upon the
subject of compensation, the trustee is entitled to the same compensation as
an executor. If it specifies the amount of his compensation, he is entitled to
• the amount
thus specified and no more. If itidirects that he shall be allowed
a compensation, but does not specify the rate or amount, he is entitled to
such compensation as may be reasonable under the circumstances. If there
are two or more trustees the compensation shall be apportioned among the
trustees according to the services rendered by them respectively." Section
1618, Code Civ. Proc, makes the following statement of the law : "When no
compensation is provided by the will, or the executor renounces all claim
thereto, he must be allowed commissions upon the amount of estate accounted
for by him, as follows: For the first thousand dollars, at the rate of seven per
cedt. ; for the next nine thousand dollars, at the rate of four per cent. ; for
the next ten thousand dollars, at the rate of three per cent. ; for the next
thirty thousand dollars at the rate of two per cent.; for the next fifty thou-
sand dollars, at the rate of one half of one per cent.; and for 'all above one
hundred thousand dollars, at the rate of one half of one per cent. The same
commissions shall be allo^^ed to administrators. In all cases, such further al-
lowance may be made as the court may deem just and reasonable for any ex-
traordinary service, but the total amount of such extra, allowance must not ex-
ceed one half th6 amount of commissions allowed by this section. Where the
property of the estate is distributed in kind, and involves no labor beyond the
custody and distribution of the same, the commission shall be computed on all
the estate above the value of twenty thousand dollars, at one half of the rates
" n
fixed in this section. « * *
In New York testamentary trustees are provided for by section 2753, Code
Civ. Proc. The relevant portions are as follows : "For receiving and paying
out all sums of money not exceeding one thousand dollars, at the rate of five
per centum. For receiving and paying out any additional sums not amount-
ing to more than ten thousand dollars, at the rate of two and one-half per
centum. For all sums above eleven thousand dollars, at the rate of one per
centum." See In re Keane, 97 Misc. Rep. 213, 162 N. Y. Supp. 856; In re Pot-
ter, 106 Misc. Kep. 113, 175 N. Y. Supp. 598. There are also some further pro-
visions regarding plural trustees and other matters. By section 3320, Code
Civ. Proc, trustees appointed otherwise than by will are allowed commissions
as follows: "For receiving and paying out all sums of principal not exceed-
ing one thousand dollars, at the rate of five per centum. For receiving and
paying out any additional sums of principal not exceeding ten thousand dol-
lars at the rate of two and one-half per centum. For receiving and paying
412 THE DUTIES OF THE TRUSTEE. (Ch. 12

value of the trust estate,*' the responsibility involved and the

amount of work' done,*' the fidelity with which the trustee has act-
ed,*^ any unusual skill or training which he may possess,** ,the
'

success of his services,*® are all relevant matters. The court may
also consider the pay usually given to agents employed to do the
same work."" If the trust instrument gives the trustee power to
fix his own compensation, the court will nevertheless review the ^
exercise of such discretion."^ .Compensation is ordinarily awarded •

by way of commissions on the amount received and paid out,"

but may be made in a. gross or lump sum.°*
Basis of Computation
Commissions are usually computed upon the basis of the amount
of principal and income received and paid out by the trustee.^*"
If the trustee has merely received the property, he will be entitled
to one-half the usual commission."" The collection of interest^'
and other income "^ of trust property should be considered in reck-
oning the compensation of the trustee. Where the trust is one to
sell property and deliver the proceeds to the beneficiaries, the basis
for computing the commissions is the sale price which has been re-
ceived and disbursed."* The trustee will be compensated only for

out all sums of principal above eleven thousand dollars at the rate of one per
centum. And fot receiving and paying out income in each year, at the like
rates." Rules regarding plural trustees and other questions then follow. See
In re Bushe, 183 App. Div. 834, 171 N. Y. Supp. 406.
*6 Louisville, N. A. & C. Ey. Co. v. Hubbard, 116 Ind. 193, 18 N. E. 611.
*6 Appeal of Barclay, 2 Walk. (Pa.) 17 Appeal of Duval, 38 Pa. 112 ; In re
;

Tldball's Estate, 29 Pa. Super. Ot. 363; In re Harrison's Estate, 217 Pa. 207,
'
66 Atl. 354.
47 Barney v. Saunders, 16 How. 535, 14 L. Ed. 1047.
*8 Follansbee v. Outhet, 182 lU. App. 213.
*9 Fleming v. Wilson, 6 Bush (Ky.) 610; Appeal of Wagner, 3 Walk. (Pa.)
130. The, amount of interest earned is important. In re May's Estate, 197
Mo. App. 555, 196 S. W. 1039.
60 Barren v. Joy, 16 Mass. 221.
01 Ross V. Conwell, 7 Ind. App. 375, 34 N. E. 752.
\ 02 Hazard v. Coyle, 26 R. I. 361, 58 Atl. 987.
05 Appeal of Perkins, 108 Pa. 314, 56 Am. Rep. 208. ' '

04 Girard Trust Co. v. McKinley-Lannlng Loan & Trust Co. <C. C.) 143 Fed.
355 ; Woodrufe v. Snedecor, 68 Ala. 437 United States, Bank v. Huth, 4 B.
;

Mon. (Ky.) 423 Ames v. Scudder, 83 Mo. 189 Phoenix v. Livingston, 101 N.
; ;

Y. 451, 5 N. E. 70; In re Willets, 112 N. Y. 289, 19 N. E. 690; Weisel v. Cobb,

118 N. C. 11, 24 S. B. 782.
6 Palmer v. Dunham, 53 Hun, 637, 6 N. Y. Supp. 262; Foote v. Bruggerhof,
66 Hun, 406, 21 N. Y. Supp. 509.
06 Kennedy v. Diekey, 99 Md. 295, 57 Atl. 621.
Of Longley v. Hall, 11 Pick. (Mass.) 120; Appeal of McCauseland, 38 fa.
466.
08 Waring v. Darnall, 10 Gill & J. (Md.) 126; Dorsett v. Houlihan, 95 Ga.
550, 22 S. B. 290; McKee v. Weedeu, 1 App. Div. 583, 37 N. Y. Supp. 465; In-
 ;

§ 107) DUTY TO ACCOUNT —COMPENSATION OP THE TBUSTEE 413

the performance of his trust duties," and not for committing

wrongful acts *" or for performing merely ministerial or formal
functions.'^ Thus, the formal act of turning over the trust prop-
erty to a successor does not entitle the trustee to commissions.""
Where a trustee is obliged to account annually,*' or to make
payments to the cestui annually,** he is entitled to retain his com-
missions each year; but annual rests are not allowed in the com-
putation of commissions, where such annual payments or account-
ings are not required.*" When a commission is to be allowed,
equity exercises a large discretion as to the amount. An examina-
tion of a number of cases in which the matter was not controlled
by statute shows that the percentages allowed varied from one to
ten per cent, upon the amount received and disbursed.** The size
of the commission depended in these cases on the amount of prop-
erty handled, the difficulty of the execution of the trust, the efficien-
cy of the trustee, and many other matters. Naturally, the larger
the estate, the smaller the percentage which chancery would allow
by way of a commission. i

Compensation may, in the discretion of equity, be allowed be-

gram V. Kirkpatrick, 43 N. C. (8 Ired. Eq.) 62 In re Wistar's Estate, 125 Pa.

;

526, 17 Atl. 460 ; Appeal of Carrier, 79 Pa. 230 ; Appeal of Shunk, 2 Pa. 304.
s9 Tracy v. Gravois R. Co., 84 Mo. 210 Brown v. Silsby, 10 N. H. 521.
;

60 Appeal of Stearly, 38 Pa. 525; Harris v. Sheldon (Pa.) 16 Atl. 828T

«i Jenkins v. "Whyte, 62 Md. 427 ; Parker v. HUl, 185 Mass. 14, 69 N. E. 336
Appeal of Hemphill, 18 Pa. 303.
62 Whitehead v. Draper, 132 App. Div. 799, 117 N. Y. Supp. 539. '

63 In re Meseroie, 36 Hun (N. Y.) 298; Hancox v. Meeker, 95 N. Y. 528.

e* In re Roberts' Will, 40 Misc. Rep. 512, 82 N. Y. Supp. 805.
86 Hosack V. Rogers, 9 Paige (N. Y.) 461; Brush v. Smith, 1 Dem. Sur. (N.
^
Y.) 477.
66 Marks v. Semple, 111 Ala. 637, 20 South. 791 flump sum allowed) ; Wilder
V. Hast, 96 S. W. 1106, 29 Ky. Law Rep. 1181 (5 per cent allowed); Central
Trust Co. V. Johnson, 74 S. W. 663, 25 Ky. Law Rep. 55 (5 per cent, on income
and 1% per cent, on principal); Williams v. Mosher, 6 Gill (Md.) 454 (5 per cent.)
Abell V. Brady, 79 Md. 94, 28 Atl. 817 (5 per cent.) ; Jones v. Day, 102 Md. 99,
62 Atl. 364 (2% per cent.) ; Berry^v. Stigall, 125 Mo. App. 264, 102 S. W. 585 (5
per cent.); Ladd v. Pigott, 215 Mo. 361, 114 S. W. 984; Wiegand v. Wo.erner,
155 Mo. App. 227, 134 S. W. 596 flump sum); Babbitt v. Fidelity Trust Co., 72
N. J. Eq. 745, 66 Atl. 1076 (4 per cent.) ; Eisher v. Fisher, 170 N. C. 378, 87 S.
E. 113 (5 per cent.) ; Appeal of Marsteller, 4 Watts (Pa.) 267 (10 per cent'.); Ap-
peal of Lukens, 47 Pa. 356 (1% per cent.) ; In re Hemphill's Estate, 9 Phila.
(Pa.) 486 (1% per cent.) ; In re LafCerty's Estate,' 5 Pa. Dist. R. 75 (3% per
cent.) ; In re Bosler's Estate, 161 Pa. 457, 29 Atl. 57 (5 per cent.); In re Dor-
rance's Estate, 186 Pa. 64, 40 Atl. 149 (1 per cent.); In re McOallum's Estate,
211 Pa. 205, 60 Atl. 903 (5 per cent.); In re McKinney's Estate, 260 Pa. 123, 103
Atl. 590 (5 per cent.) ; Cobb v. Fant, 36 S. C. 1, 14 S. E. 959 (2% per cent, for
receiving and 2% per cent, for paying over) ; Wliitehead v. Whitehead, 85 Va.
414 THE DUTIES OF THE TRUSTEE (Ch. 12

fore the end of the trust."^ If a trustee dies prior to the termina-
tion of his duties, the court may make an allowance for the reason-
able value of his services.'* ^
If the work of the trustee has been unusually arduous, difficult,
or lengthy, chancery may make him an extra allowance;*' but
additional compensation will not be given for the performance of
the ordinary duties of the trustee.'"'
A
trustee has a lien on the trust property for the amount due
him for compensation for his services.'^
Source of Payment
Whether the compensation of the trustee should be paid out of
the capital of the trust fund or out of the income thereof depends
upon the nature of the trustee's duties, the character of the trust
fund, and the circumstances of the accounting at which the com-
pensation is allowed. Ordinarily the income bears the current
expenses of operation, which include the commissions of the trus-
tee ''" but in exceptional cases the corpus of the fund has been
;

obliged to bear the expense of compensating the trustee.^ ^ Un-

der no circumstances is there a duty upon the settlor to pay the
trustee's compensation,^* unless the settlor has expressly contract-
ed to do so. Where the remainder consists of two parts, one real
property to be conveyed to the heirs and the other perspnal prop-
erty to be delivered to the next of kin, and the commissions are to

870, 9 S. E. 10 (8 per cent.) ; Thorn's Ex'r v. Thorn, 95 Va. 413, 28 S. E. 583 (5

per cent, excessive); Darling's Ex'r v. Gumming, 111 Va. 637, 69 S. E. 940 (5
per cent.).
8 7 In re Thouron's Estate, 182 Pa. 126, 37 Atl. 861. -

68 Bentley v. Shreve, 2 Md. Ch. 215; Widener v. Fay, 51 Md. 273.

8»Grimball v. Cruse, 70 Ala. 534; Clark v. Anderson, 13 Bush (Ky.) Ill;
In re Holden, 58 Hun, 611, 12 N. Y. Supp. 842, reversed in 126 N. Y. 589, 27
N. E. 1063 In re Gill, 21 Misc. Rep. 281, 47 N. Y. Supp. 706; Appeal of Per-
;

kins, 108 Pa. 314, 56 Am. Rep. 208 ; In re Ashman's Estate, 218 Pa. 509, 67
Atl. 841.
' 70 Tanning v. Main, 77 Conn.
58 Atl. 472; Parkhill v. Doggett (Iowa) 136
94,
N. W. 665 ; Doom v. W. 469, 23 Ky. Law Rep. 884 Blake v.
HoWard, 64 S. ;

Pegram, 101 Mass. 592; In re Froelich, 122 App. Div. 440, 107 N. Y. Supp. 173;
li re Young, 15 App. Div. 285, 44 N. Y. Supp. 585; In re Brennan's Estate,
215 Pa. 272, 64 Atl. 537; Southern Ry. Co. v. Glenn's Adm'r, 98 Va. 309, 36 S.
E. 395.
71 Premier Steel Co. v. Yandes, 139 Ind. 307, 38 N. E. 849.
72 Morgan v. Shields, 4 Ky. Law Rep. 904; OfEutt v. Divine's Ex'r (Ky.) 53
S. W. 816 Parker v. Ames, 121 Mass. 220 In re Thompson's Estate (Sur.) 1
; ;

N. Y. Supp. 213; Spangler's Estate, 21 Pa. 335.

7 3 Woodruff V. Ngw York, L. E. & W. R. Co., 129 N. Y. 27, 29 N. B. 251; In

re Kelsey's Estate, 89 Misc. Rep. 701, 153 N. Y. Supp. 1095 ; Hubbard v. Fish-
er, 25 Vt.x 539.
'4 Patton V. Cone, 1 Lea (Tenn.) 14.
§ 107) DUTY TO ACCOUNT —COMPENSATION OP THE TRUSTEE 415

be charged against this corpus, they should be apportioned be-

tween the real and personal property.'^
The rules regarding the source from which the trustee's compeur
sation should be paid are well stated by a Pennsylvania court:'*
"In the case of a continuous trust, one duty of which is to preserve
the fund, as a source of periodic interest, dividends, rents, etc., the
authorities do not recognize a right in the trustee, except in ex-
traordinary circumstances, or when the instrument by which the
trust is created so indicates, to diminish the fund which is to create
the income during the life of the trust. For services rendered by
way of collecting and paying over the income, the compensation is
a fit charge upon the income and is properly deducted from it.
But the laborT-care and responsibility pertaining to the conserva-
tion of the capital itself are properly a charge on it, and are to be
deducted from it when the trust expires, or the particular trustee's
relation to it ends. 'The rule which may be safely deduced from
the cases' is 'that commissions upon the corpus of a trust estate
are never allowable except when the fund is in the course of- dis-
tribution. The reason "is inherent in the nature of a trust. Its
purpose is to preserve, and it may be of unlimited duration, while
that of administration is to divide, and implies dispatch. Hence, if
commissions upon the capital are awarded to the successive trus-
tees who may be called to its management, the fund, instead of
,being intact, may be absorbed in the payment of its custodians.'
* * * So far as we hav^ been able to discover, by a somewhat
extended examination of cases, the commission on the corpus is
never allowed until the trust has ended, or, at least, the particular
trustee has ceased to be such."
Exceptional cases may occur where it is impossible to pay the
commissions out of the income of the trust estate, or where such
action is inequitable. "If the commissions can be paid out of the
income or interest of the capital, they should be so paid. Cases
may occur, however, where this cannot be done, and then the com-
missions may be paid out of the body of the fund. Suppose a trus-
tee is appointed for one year to the management of a large and
troublesome property, occupying much, of his time and care, and
yet from some unavoidable cause (not arising from fault of his)
no income is produced by it during the period of his trust, and up
to the time of its termination? At his settlement with the cestui
que trust, he would certainly be allowed compensation out of the
corpus of the fund, or there would be no remedy for his right." ''

76 Grimball v. Cruse, 70 Ala. 534.

T8 In re Hosier's Estate, 161 Pa. 457, 462, 463, 29 Atl. 57.
TT Burney v. Spear, 17 Ga. 223, .225.
416 THE DUTIES OF THE TEUSTEB (Ch. 12

Waiver or Loss
The trustee's right to receive compensation may be lost, either
voluntarily or involuntarily. He may waive his claim to commis-
sions, or he may forfeit his right to be paid for his services.
The possibility of waiver is obvious. The trustee may expressly
agree to serve without compensation,''* or, having earned compen-
sation, he may forego it and decline to receive pay for his work."
"The statute allows commissions to executors and trustees ; but
they may waive them, if they wish, and, if there be any evidence of
a waiver, their legal representatives are in no position to dispute
*"
it "

An express waiver of commissions in the past is no bar to the

recovery of present commissions.*^ That a trustee declines to re-
ceive compensation at one time does not prevent him from demand-
ing it at another time. It would seem that the mere failure to ask
for commissions would not constitute a- waiver of them, in\the ab-
sence of action ori the part of the cestuis que trust sufKcient to
estop the trustee.*'' But the courts of New York have been in-
clined to regard the failure to claim commissions as evidence of a
waiver of them.*^ "Where, through a long series of years, trustees
voluntarily pay the net income from a trust fund to the beneficiary
as the full net income thereon, it is a waiver by such trustees of
their commissions." '*
It is vvell settled that chancery may deprive a trustee .of his comr
missions in cases where he has been guilty of neglect of duty or
positive wrongdoing in office.*" What conduct is sufficient war-
rant for refusing the trustee compensation rests within the discre-
tion of the court. There may be a reduction of compensation, as
well as a total deprivation.** The specific causes for'tht forfei-
1^
»s Ridgely v. Gittings, 2 Har. & G. (Md.) 58.
79 Barry v. Barry, 1 Md. Ch. 80; Ten Broeck
v. Fidelity Trust & Safety
Vault Co., 88 Ky. 242, 10, S. W. 798; Cook v. Stockwell, 206 N. Y. 481, 100 N.
E. 131, Ann. Cas. 1914B,'491; In re Wiener's Estate, 4 Pa. Dist. K. 422.
so Cook V. Stockwell, 206 N. Y. 481, 484, 100 N. E.
131, Ann. Cas. 19i4B,
491.
81 Denmead Denmead, 62 Md. 321.
v.
82 Phillips V.Burton, 107 Ky. 88, 52 S. W. 1084, 21 Ky. Law Rep. 720; Ap-
peal of Wister, 86 Pa. 160.
S3 In re Harper, 27 Misc. Rep. 471, 59 N. Y. Supp.
373; Spencer v. Spencer,
38 App. Div. 403, 56 N. Y. Supp. 460 In re Haskin, 49 Misc. Rep. 177, 98 N.
;

Y. Supp. 926 Olcott v. Baldwin, 190 N. Y. 99, 82 N. E. 748. The retentioH

;

of a part only of the commission earned is a waiver of the balance. In re

Schaefer, 178 App. Div. 117, 165 N. Y. Supp. 19, affirmed 222 N. Y. 533,'"118
N. E. 1076.
8 4 Olcott V. Baldwin, 190 N. Y. 99, 109, 82 N. E.
748.
8 5 Jarrett v. Johnson, 116 1^1. App. 592; Clark v. Clark,
87 N. J. Ear 504, 101
Atl. 300.
88 DifCenderffer v. Winder, 3 Gill & J. (Md.) 311..
 8 — ;

§ 107) DUTY TO, ACCOUNT —COMPENSATION OF THE TRUSTEE 417

'

ture of the right to compensation have been numerous, as, for ex-
ample, general cases of breach of trust,*^ ordinary negligence,*'
gross negligence,*' repudiation of the trust,"" misappropriation of
the trust funds,'^ failure to keep proper records,"" failure to ac-
count,"* the rendition of a false a^ccount,"* an improper invest-
ment,®-" failure to invest the trust funds,"^ refusal to obey the or-
ders of the court,"' mingling the trust property with private prop-
erty,"" removal from office for incompetence,"" in some instances
upon the resignation of ,the trustee,^ and cases wnere 'the trus-

87 v. LouisvUle Trust Co., 128 Ky. 697, 108 S. W. 950, 33 Ky.

Comingor
Law Rep. 53, 129 Am. St. Rep. 322; Newton v. Rebenack, 90 Mo. App. 650;
Judge of Probate v. Jackson, 58 N. H. 458 Moore v. Zabriskie, 18 N. J. Eq.
;

51; Dufford's Ex'r v. Smith, 46 N. J. Eq. 216, 18 Atl. 1052 In re Welling's

;

Estate, 51 App. Div. 355, 64 N. Y. Supp. 1025; In re Swartswalter's Account,

4 "Watts (Pa.) 77; Fellows v. Loomls, 204- Pa. 227, 53 Atl. 999; In re Reich's
Estate, 230 Pa. 55, 79 Atl. idl Singleton v. Lowndes, 9 S. C. 465.
;

8 In re Thompson's Estate, 101 Cal. 349, 35 Pac. 991, 36 Pac, 98, 508;
Ralston v. Easter, 43 App. D. O. 513 In re' Nagle's Estate, 12 Phila. (Pa.) 25.
;

8 9 Ward V. Shire, 65 S. W. 8, 23 Ky. Law Rep. 1279.

90 PoUard v. Lathrop, 12 Colo. 171, 20 Pac. 251 H. B. Cartwright & Bro. v.
;

United States Bank & Trust Co., 23 N. M. 82, 167 Pac. 436 In re Greenfield's
;

Estate, 24 Pa, 232 Whiteside v. Whiteside, 35 Pa. Super. Ct. 481; Hanna v.
;

Qark, 204 Pa. 145, 53 Atl. 757; Stone v. Farnham, 22 R. I. 227, 47 Atl. 211
Fuller V. Abbe, 105 Wis. 235, 81 N. W. 401.
91 Belknap v. Belknap, 5 Allen (Mass.) 468; Harvey v. Schwettman (Mo.
App.) 180 S. W. 413; McCulloch v. Tomkins, 62 N. J. Eq. 262, 49 Atl. 474; In
re LafEerty's Estate, 5 Pa. Dist. R. 75.
92 Welsh V. Brown, 50 N. J. Eq. 387, 26 Atl. 568.
93 Folk V. Wind, 124 Mo. App. 577, .102 S. W. 1 Gilbert v. SutlifC, 3 Ohio
;

St -129; Ward v. Funsten, 86 Va. 359, 10 S. E. 415; but see Muckenfuss v.

Heath, 1 Hill Eq. (S. C.) 182, contra.
94 Elmer v. Loper, 25 N. J. Eq. 475.
95 Aydelott v. Breeding, 111 Ky. 847, 64 S. W. 916, 23 Ky. Law Rep. Il46;
In re Hart's Estate, 203 Pa. 496, 53 Atl. 370. But see Babbitt v. Fidelity
Trust Co., 72 N. J. Eq. 745, 66 Atl. 1076, and In re Haskin, 111 App. Div. 754,
97 N. Y. Supp. 827, where it was held that there was no forfeiture if the bad
investments resulted in no loss, or the loss was made good by the trustee.
9 6 Warbass v. Armstrong, 10 N. J. Eq. 263; McKnight's Ex'rs v. Walsh, 23

N. J. Eq. 136.
97 French v. Commercial Nat, Bank, 199 111. 213, 65 N. E. 252.
9.8 Weakley v. Meriwether, 156 Ky. 304, 160 S. W. 1054 In re Hodges' Es-
;

tate, 66 Vt. 70, 28 Atl. 66^, 44 Am. St. Rep. 820; Beverley v. Miller, 6 Munf.
(Va.) 99. But see In re Patrick's Estate, 162 Pa. 175, 29 Atl. 639, and Appeal
of Biddle, 129 Pa. 26, 18 Atl. 474, in which mingling of the trust funds
with other funds was held not to be sufficient ground for the forfeiture of
commissions.
99 In re Williamsburgh Trust Co., 60 Misc. Rep. 296, 113 N. Y. Supp. 276.

1 In re Allen, 96 N. Y. 327. But see Linsly v. Bogert, 87 Hun, 137, 33 N. Y.

Supp. 975.
BoGEET TBrrsia 27
418 THE DUTIES OF THE TRUSTEE (Ch. 12

tee has acted for his private benefit in- administering the trust.''
Mere lack of skill in administering the trust affairs,^ or slight im-
proprieties of conduct,* will not. ordinarily bel regarded as ground
for refusal to allow the trustee his commissions.
'
Plural Trustees
Two or more trustees are, in the absence of statute, entitled to one
commission only. This commission should be divided between
them; in proportion to the amount of work done by each. The
trustees are regarded as a unit which has earned compensation.
The trusteeship is awarded one commission, and this is divided be-
tween the several trustees. "It 4s, however, said they are joint
trusteed. Grant it, and how does it change the attitude of the par-
ties? By becoming joint trustees, each, no doubt, became vested
with a legal right to perform one-half of the labor with his entire
skill, and, on performing one-half of the duties of the trust, as be-
tween him and his cotrustee, he would be entitled to one-half of
the compensation. But where he performs but one-third of the du-
ties, he can surely have no claim to more than one-third of the
emoluments, unless conceded by the beneficiary as a gratuity but ;

he can, in jiistice, have no claim to the earnings of his cotrustee

over and above the sum he has himself earned." ° In some states
provision is made for commissions to each of several trustees in
cases of large estates.*
Where two or more persons successively occupy the trusteeship,
they should be compensated on a quantum meruit basis ; that is,
each should be paid the reasonable value of his sei^vices during his
term of office. "The practice of allowing a reasonable compensa-
tion to the estate of a deceased trustee, who dies before the com-

But the discharge of the trustee by the court is not necessarily grotind for the
refusal of commissions. In re Welscher's Estate, 3 Walk. (Pa.) 241.
2 Gregg V. Gabbert, 62 Ark. 602, 37 S. W. 232; Loud v. Winchester, 52 Mich.

174, 17 N. W. 784; Royal v. Royal, 30 Or. 448, 47 Pac. 828, 48 Pac. 695.
8 Appeal of Kilgore (Pa.) 8 Atl. 441.
* Jacobus V. Munn, 37 N. J. Eq. 48.
Hugglns V. Rider, 77 111. 360, 364.
8 "If the gross value of the principal of the estate or fund accounted for

amounts to one hundred thousand dollars or more, each executor, administra-

tor, guardian, or testamentary trustee Is entitled to the full compensation on
principal and income allowed herein to a sole executor, administrator, guard-
ian or testamentary trustee, unless there are more than three, in which case
the compensation to which three would be entitled must be apportioned among
them according to the services rendered by them, respectively." Code Civ.
Proc. N. T. § 2753. For a similar provision applying to trustees appointed
otherwise than by will, see Id. § 3320. For cases construing these sections,
see In re Holbrook's Estate, 39 Misc. Rep. 139, 78 N. Y. Supp. 972; In re
Hunt's Estate, 41 Misc. Rep. 72, 83 N. Y. Supp. 652; In re Grossman's Estate,
92 Misc. Rep. 656, 156 N. Y. Supp. 268.
 ;

§ 107) DUTY TO ACCOUNT —'COMPENSATION OF THE TETJSTEE 419

^
pletion of the trust, well settled and sanctioned by authority."
is
The succeeding trustee receives compensation only for the work
which he actually does.* Ordinarily a trustee will not be compen-
sated for the merely formal act of paying over to a successor or
receiving from a predecessor the trust funds."
Executors and Trustees
Whether one occupying the office of executor and trustee with
respect to the same property shall receive two commissions de-
pends upon the nature of the duties he has performed. If his exec-
utorship is separate from his trusteeship, and there are two dis-
tinct sets of duties, he should be given double compensation ^" ;

but if he merely holds two offices and does the same work in both
offices, he should be compensated by single commissions only.^^
The rule has recently beeui stated by the New York Court of Ap-
peals to be as follows ^^ "Where by the terms of the will the two"
:

functions with their corresponding duties coexist and run from the
death of the testator to the final discharge, interwoven, inseparable,
and blended together so that no point of time is fixed or contem-
plated in the testamentary intention at which one function should
end and the other begin, double commissions or compensation in
both capacities cannot be properly allowed. But executors are en-
titled to commissions as executors and also as trustees where un-

7 Widener v. Fay, 51 Md. 273, 275. See, also, In re Barker, 186 App. Div.
817, 174 N. Y. Supp. 230. But awarding compensation
to the estate of tlie de-
ceased trustee is discretionary with the court. In re Bushe, 227 N. Y. 85, 124
N. E. 154, 7 A. L. R. 1590.
8 In re Leavitt, 8 Cal. App. 756, 97 Pac. 916 Gibson's Case, 1 Bland (Md.)
;

138, 17 Am. Dec. 257.

8 Jenkins v. Whyte, 62 Md. 427 ; In re Fisk, 45 Misc. Rep. 298, 92 N. Y.
Supp. 394; In re Ward's Estate (Sur.) 112 N. Y. Supp. 763; Young v. Barker,
141 App. Div. 801, 127 N. Y. Supp. 211. But see In re Baldwin, 209 N. Y. 601,
103 N. E. 734,; In re Affleck, 163 App. Div. 876, 147 N. Y. Supp. 573.
10 Arnold v. Alden, 1'73 111. 229, 50 N. E. 704; Dunne v. Cooke, 197 111. App.
422; In re Gloyd's Estate, 93 Iowa, 303, 61 N. W. 975; In re Gulick, 7 N. J.
Law J. 263 ; In re Jackson, 32 Hun (N. Y.) 200 ; Wildey v. Robinson, 85 ITun,
362, 32 N. Y. Supp. 1018 In re Curtiss, 15 Misc. Hep. 545, 37 N. Y. Supp. 386;
;

In re Garth, 10 App. Div. 100, 41 N. Y. Supp. 1022; In re Slocum, 60 App.

Div. 438, 69 N. Y. Supp. 1036 ; Olcott v. Baldwin, 190 N. Y. 99, 82 N. E. 748
In re Harteau, 125 App. Div. 710, 110 N. Y. Supp. 59. In Williams v. Bond,
120 Va. 678, 91 S. E. 627, a direction by the testator that the executor-trustee
receive $500 as executor was held not to exclude his righ^ to commissions as
trustee.
11 Clark V. Anderson, 10 Bush (Ky.), 99 Kennedy v. Dickey, 99 Md. 295, 57
;

Atl. 621; McKie'v. Clark, 3 Dem. Sur. (N. Y.) 380; Haglar v. McCombs, 66 N.
C. 345; In re Olds' Estate, 150 Pa. 529, 24 Atl. 752 Thom's Ex'r v. Thorn, 95
;

Va. 413, 28 S. E. 583.

12 Chase, J., in Olcott v. Baldwin, 190 N. Y. 99, 105, 106, 82 N. E. 748, quot-

ing 18 Cye. 1160.

 420 THE DUTIES OF THE TRUSTEE (Ch. 12

der the will their duties as executors and trustees are separable and
their duties as executors having ended thej^ take the estate as trus-
tees and afterward act solely in that capacity." Thus, where exec-
utors have had their accounts settled by the court and have been
ordered to pay over to themselves as trustees the trust funds, and
this act has been performed, there are two separate sets of duties
and a right to double commissions, the /COurt saying ^^ "We do :

not think that this is a case where the two functions of executors
and trustees coexist and run from the death of the testator to a
final discharge, inseparably blended together. But from the lan-
guage of the will we think the duties of the respondents, as ej^ecu-
tors, were to be first discharged," and that they wejre to assume the
duties of trustees, and as -such manage the trust funds, to the final
termination of the trusts." ' "

It iS' frequently a difficult matter to determine just when the du-

ties of_the executorship have ended and those of the trusteeship

J
begun. "In- the absence of any direction in the will, or any evidence
in relation thereto^ the duties of the trustee named in the will, even
though he be the person named therein as executor, would not be-
gin until after the duties of the executor have terminated, * * *
and until he commences to exercise his duties, as trustee he is not
entitled to compensation therefor." ^* The completion of the du-
ties of the executorship may be shown in a variety of ways. "An
accounting as executors^ and a transfer of the trust funds to the
- trustees pursuant to a decree of a court of competent jurisdiction
is the most satisfactory proof of the completion of their duties in
one capacity and the commencement of their duties in the other ca-
pacity; but such judicial decree is not the only means of proving
that the transfer has actually been made." ^°
The same rules would seem applicable to trustees who are also
guardians of the cestuis que trust. The combination trustee and
guardian should receive but one compensation for performing a
single set of duties, although during the performance he may hold

13 In re Willets, 112 N. Y. 289, 296, 19 N. E. 690.

14 Bemmerly v. Woodard, 136 Cal. 326, 331, 68 Pac. 1017.
16 Olcott V. Baldwin, 190 N. T. 99, 107, 82 N. E. 748. See, also, Wylie v.
Bushnell, 277 111. 484, 115 N. E. 618. See Code Civ. Proc. N. Y. § 2768, subd.
6, wliicli provides as follows: "The expression, 'testamentafy trustee' idcludes
every person, except an executor, an administrator with the wUl annexed, or a
guardian, who is designated by a will, or by any competent authority, to ex-
ecute a trust created by a will and it includes such an executor or adminis-
;,

trator, where he is acting in the execution of a trust created by the will,

which is separable from his functions as executor or, administrator." Trus-
tees may enter upon their duties before- their final accounting as executors.
In re McDowell, 178 App. Dlv. 243,' 164 N. Y. Supp. 1024.
§ 107) DUTY TO ACCOUNT —COMPENSATION OF THE TRUSTEE 421

two "When the same person is both guardian and trus-

titles.^'
tee, itwould be a reproach to the law, and to the courts charged
with the protection of such trusts, to allow him to charge full com-
pensation in both capacities for the s^me service." ^'
The trustee may be relieved from the duty of rendering an ac-
count in a variety of ways. If the remedy at law is adequate, an
account may be unnecessary.^' There may be private settlement
between cestuis que trust and trustee, which will excuse the trus-
tee from making a formal report in court.^* Laches on the part of
the beneficiary in demanding an account may relieve the trustee.""
Thus, in one case the lapse of twenty years was held to bar the
right to an account,^^ while in another the passing of eight years
was held not to prevent the cestui from demanding an account.^^
Action or failure to act on the part of the cestui may estop him
from later claiming an account.^*.
After the account of a trustee has once been filed and settled, it
is res adjudicata as to the matters involved in the accounting, and
may not ordinarily be attacked or opened.^* But for fraud or mis-
take equity may reopen an account.""

iffFoote V. Bruggerhof, 66 Hun, 406, 21 N. Y. Supp. 509.

17 Blake v. Pegram, 101 Mass. 592, 600.
18 Mersereau v. Bennet, 62 Misc. Rep. 356, 115 N. Y. Supp. 20.
i» Colton V. Stanford, 82 Oal. 351, 23 Pac. 16, 16 Am. St. Rep. 137 ; Scud-
der V. Burrows, 7 N. Y. St. Rep. 605 Appeal of Schoch, 33 Pa. 351 Britton
; ;

V. Lewis, 8 RlchrEq. (S. C.) 271; Maffltt v. Read, 11 Rich. Eq. (S. C.) 285.
20 McClane's Adm'x v. Shepherd's Ex'x, 21 N. J. Eq. 76; In re Engel's Es-
tate, 180 Pa. 215, 36 Atl. 727; In re Rist's Estate, 192 Pa. 24, 43 Atl. 407.
21 Snodgrass v. Snodgrass, 176 Ala. 276, 58 South. 201.
22 Horine v. Mengel, 30 Pa. Super. Ot. 67. See, also. Dyer v. Waters, 46 N.
J. Eq. 484, 19 Atl. 129; Felkner v. Dooly, 27 Utah, 350, 75 Pac. 854.
1

2 3 Wooden v. Kerr, 91 Mich. 188, 51 N. W. 937; Jones v. Jones, 50 Hun,

603, 2'N. Y. Supp. 844. Acceptance by the cestui que trust of a part of the.
property from the trustee does not estop him from requiring an account.
Schneider v. Hayward, 231 Mass. 352, 121 N. E. 76.
2 4 In re Pratt's Estate, 119 Cal. 156, 51 Pac. -47; In re Blake's Estate, 157

Cal. 448,^108 Pac. 287; Hord v. Bradbury, 156 Ind. 30,. 59 N>E. 31; Lindsay v.
Kirk, 95 Md. 50, 51 Atl. 960 Peake v. Jamison, 82 Mo. 552 ; In re Elting, 93
;

App. Dlv. 516, 87 N. Y. Supp. 833.

2 5 Aldrich v. Barton, 138 Cal. 220, tl Pac. 169, 94 Am. St. Rep. 43; Warren

v. Pazolt, 203 Mass. 328, 89 N. E. 381 ; In! re Baker's Estate, 61 N. J. Eq. 592,
47 Atl. 1046; Jnckson v. Reynolds, 39 N. J. Eq. 313.
422 THE INTEREST OP THE CESTUI QUE TRUST (Ch. 13

CHAPTER XIII
THE INTEREST OF THE CESTUI QUE TRUST—ITS NATURE AND ,

INCIDENTS
108. Necessity of Beneficiary.
109. Who may be a Cestui que Trust? ,
'

A Right in Personam or in Rem?

^

110.
111. Incidents of the Cestui que Trust's Right.
112. Liability for Debts.
113. The Right of Cestui que Trust against the Trustee.
114. The Rights of Cestui que Trust against Third Persons.

NECESSITY OF BENEFICIARY
108. No private trust can exist without a definite beneficiary. It
is essential to a charitable trust that a well-defined class
be described as the group from which the persons to be
benefited are to be selected by the trustee.

It is rudimentary that every trust must have a cestui que trust.'

One might as well speak of a contract with but one party as a trust
lacking a beneficiary. In the words of Fowlef, Surrogate, "to, con-
stitute a trust not charitable in nature there must always be a def-
power in trust in equity,
inite person, entitled to enforce the trust or
and must be ascertained or ascertainable. * * * " "
this beneficiary
The cestui que trust must be definite and certain.' If a trust in-
strument is vague or ambiguous in its naming or description of
the cestui, equity cannot enforce the trust, just as uncertainty in
any essential part of any legal instrument renders the courts pow-
erless to give it effect. Thus, a trust for certain persons or either oi
them is too indefinite.* But the cestuis que trust may be named as

1 Eldridge v. See Tup Co.,- 17 Cal. 44 ; Filkins v. Severn, 127 Iowa, 738,

104 N. W. 346 Read v. Williams, 54 Hun, 636, 8 N. Y. Supp. 24, judgment

;

modified 125 N. Y. 560, 2l6 N. E. 730, 21 Am. St. Rep. 748 Wilcox v. Gilchrist,
;

85 Hun, 1, 32 N. Y. Supp. 608 Boskowitz v. Continental Ins. Co., 175 App.

;

Div. 18, 161 N. Y. Supp. 680.

2 Matter of Catlin, 97 Misc. Rep. 223, 227, 160 N. Y. Supp. 1034.
8 U. S. V. Oregon & C. R. Co. (O. C.) 186 Fed. 861 Barkley v. Lane's Ex'r,
;

6 Bush. (Ky.) 587 ; Isaac v. Emory, 64 Md. 333, 1 Atl. 713

' German Land
;

Ass'n V. SchoUer, 10 Minn. 331 (Gil. 260) First Presbyterian Soc. of Town of
;

Chili V. Bowen, ^1 Hun, 389; Ludlam v. Holman, 6 Dem. Sur. (N. Y.) 194;
Jarvis v. Babcock, 5 Barb. (N. Y.) 139; Appeal of Dyer, 107 Pa. 446.
* Wright V. Pond.lO Conn. 255. But a trust for three named children "or
their heirs", is not in the alternative. O'Rourke v. Beard, 151 Mass. 9, 23 N.
E. 576. ,
 § 108) NECESSITY OP BENEFICIARY 423

a class, as, for example, the children of A. at a given time," and

the members of the class will be presumed to have equal interests
as cestuis.'
But the cestui que trust may be described otherwise than by
naming him.' "The conveyance in question was to Marvin Hol-
lister in trust for the use and benefit of heirs at law of Sen-
,

eca M. Conway, deceased, for whom the said Marvin Hollister^ is

legal guardian^ party of the second part. One of the principal
points in controversy, on the trial below, was as to the sufficiency
of this description of the persons beneficially interested, and wheth-
er the plaintiffs had shown themselves to be such persons. It is
well settled that any description of parties in an instrument of
this' kind is sufficient, from which the court and jury, aided by a
knowledge of surrounding facts and circumstances, are able to say
with, reasonable certainty that some arid what particular persons
were intended. It is not necessary that the parties should be de-
. scribed by their names. * * * " ^ It is sufficient that the ces-
tuis become ascertained and definite at the beginning of the trust,
and is not required that they be fixed from the date of the trust in-
strument.'
In the case of charitable trusts the requirement of a beneficiary
still prevails,^" but it is a class rather than definite individuals which
must be described as the cestui que trust in such trusts. The necesr
sity of a well-defined and certain class from which the trustee is to
select has-been previously discussed.^^' ,

That the cestui que trust must accept the trust before it can be
completed, but that acceptance of a trust purely beneficial is pre-
sumed, has been shown in preceding paragraphs. 12

sHeermans v. Schmaltz (0./0.) 7 Fed. 566.

8Loring vi Palmer, 118 U. S. 321, 6 Sup. Ct. 1073, 30 L. Ed. 211 ; Cowan v.
Henika, 19 Ind. App. 40, 48 N. E. 809.
7 Turner v. Barber, 131 Ga. 444, 62 S. E. 587.
s Sydnor v. Palmer, 29 Wis. 226, 241.
» Salem Capital Flour Mills Co. v. Stkyton Water-Ditch & Canal Co. (C. C.)

33 Fed. 146; Heyward- Williams Co. v. McCall, 140 Ga. 502, 79 S. E. 133;
Ludlow V. Kector, etc., of St. Johns Church, 144 App. Div. 207, 130 N. Y.
Supp. 679 ;Ashurst v. Given, 5 Watts & S. (Pa.) 323.
10 Ex parte Lindley, 32 Ind. 367; Chamberlain v. Stearns, 111 Mass. 267;
Bell County v. Alexander, 22 ^x. 350, 73 Am. Dec. 268; Heisf v. Murphey,
40 Wis. 276.
"Ante, § 55.
^ ^
" Ante, § 25.
 ;

424 THE INTEREST OF THE CESTUI QUE TRUST (Ch. 13

WHO MAY BE A CESTUI QUE TRUST?

109. Any person, natural orartificial, capable of taking and holding
property may
be a cestui que trust of a private trust.
Any well-defined class of the public may be the beneficiary of
'
a charitable trust.
/

Any one may be a cestui que trust who can take and hold the
title toproperty. Disabilities with respect to the management or
/ /
control of the' trust property do not affect the capacity to be a ces-
tui que trus^. "Equity subjects trusts to the same constriiction that
a court of law does legal estates. And^ a donee must have capacity
to take, whether it is attempted to' convey title directly to the party
himself, or to another in trust for him." ^* Thus, under the com-
mon law the disability of an alien to hold real property after office
found prevented his being the cestui que trust of a trust of realty."
But modern statutes have generally removed this disability to take,
at least with respect to friendly aliens.^" ^
i

Married women have always been valid cestuis que trust. Where
the Married Women's Acts are not in forcfe, a trust for a feme sole,
not in immediate contemplation of marriage, is void, and she takes
a legal estate.^* Minors ^' and lunatics may, of course, hold proper-
ty, and so may be beneficiaries of a trust. A
person yet unborn may
be described in a- trust instrument as the cestui que trust of a
trust to come into effect upon his birth.^^' It was held by some
courts that a slave, having no capacity to enforce a trust, could not
be a cestui ^'' but other judges exprefese'd the view that such trusts,
;

while not enforceable by the cestuis que trust, might be consid-

Trotter v. Blocker, 6 Port. (Ala.) 269, 305.

13
i^Hammekin v. Clayton, Fed. Oas. ^o. 5,996; Philips v. Crammond, Fed.
Cas. ISO. 11,092 ; Leggett v. Dubois, 5 Paige (N. Y.) 114,^ 28 Am. Dec. 413
Austice V. Brown, 6 Paige (N. Y.) 448; Hubbard v. Goodwin, 3 Leigh (Va.)
492.
15 As a sample statute, See New York Real Property Law (Oonsol. Laws,
c. 50) § 100. Even before the modern change ii^ New York it was held that,'
under the statute providing that a cestui que trust took no interest in the
lands, but merely a right against the trustee, an alien might be a cestui que
trust of land. Marx v. McGlynn, 88 N. Y. 357-
16 Wells V. McCall, 64 Pa. 207; Springer v. Arupdel, 64 Pa. 218; Appeal of
Ogden, 70 Pa. 501 Pickering v. Coates', 10 Phila. (Pa.) 65
; Appeal of Neale,
;

104 Pa. 214 ; Pittsburgh & L. E. R. Co., 131 Pa. 205, 18 Atl. 874.
Yard v.
17 Turner v. Barber, 131 Ga. 444, 62 S. E. 587.
isEaston v. Demuth, 179 Mo. App. 722, 162 S. W. 294; Folk v. Hughes,
100 S. C. 220, 84 S. E. 713.
isBynum v. Bostick, 4 Desaus. (S. C.) 266; Blakely v. Tisdale, 14 Rich.
Eq. (S. C.) 90.
§ 109) WHO MAT BE A CESTUI QUE TRUST? 425

—
ered honorary that is, sanctioned by equity as valid if the trustee
saw fit to carry them out.'*
It has been shown that trusts for the good of animals generally,
because probably of the indirect benefit to mankind, are regarded
as charitable.^^ But .trusts having particular animals as, cestuis
que trust cannot be regarded as valid and enforceable, except as
the honor of the trustee may lead him to obey the direction of the
settlor. An English court has held valid a trust for specified horses
and dogs on the theory of an honorary trust.^" A
trust to shut up
a house,^* or to keep a clock in repair,''* being for the bfenefit of
an inanimate object, lacks a proper cestui que trust, and fails. A
trust to erect or care for a monument lacks a living beneficiary, and
ought to fail as a private trust.^° Its aspects as a charitable trust
have been discussed elsewhere.'" And trusts for masses as pri-
vate trusts are for the benefit of deceased persons, and not sus-
tainable on principle.'' They are generally valid charities.'*
The state may be a cestui que trust,'" as may a corporation, if
the purpose of the trust is within its corporate powers.'" A
joint-
stock company,'^' a school district," and a tribe of Indians '' have
been held to be qualified to act as beneficiaries. "At common law,
it is true, a deed of conveyance to an unincorporated voluntary as-

sociation was bad for lack of a capable grantee, and cases will be
found which hold that, where the grantee could not take directly,
he or it cannot take through the medium of a trustee. But from
this grew an abuse which equity was prompt to remedy. So that it
is now recognized that a valid grant may be made to trustees for
such an unincorporated voluntary association, and that such title
°*
will descend in perpetuity."

2oClelaiid y. Waters, 19 Ga. 35; American Colonization Soc. v. Gartrell,

23 Ga. 448 ; Shaw v. Ward, 175 N. O. 192, 95 S. E. 164. In the case in 23
Ga. Lumpkin, J., said: "That many trusts are valid if executed by the trustee
that cannot be carried into effect compulsorily I have no doubt." Page 456.
21 Ante, § 59.
2^ In re Dean, 41 Ch. Div. 552.
2 8 Brown v. Burdett, Wkly. Notes (1882) 134!
24 Kelly V. Nichols, 17 K. I. 306, 21 Atl. 906.
2s Gilmer's Legatees v. Gilmer's Ex'rsj 42 Ala. 9.
2 6 Ante, § 61.
27 In re Schouler, 134 Mass. 426.
2 8 Ante, § 57.

2»NeIlson v. Lagow, 12 How. 98, 13 L. Ed. 909.

3 Sheldon v. Chappel, 47 Hun, 59; Adams v. Perry, 43 N. T. 487; Frazier
V. St. Luke's Church, 147 Pa. 256, 23 Atl. 442.
81 Hart V. Seymour, 147 111. 598, 35 N. E. 246. '

82 In re Sayre's Will, 179 App. Div. 269, 166 N. Y. Supp. 499.

3 3 Ruddick V. Albertson, 154 Cal. 640, 98 Pac. 1045.

84Buddick v. Albertson, 15^ Cal. 640, 644, 98 Pac. 1045. In re Clarke,

 ,

426 THE INTBEEST OF THE CBSTOT QUE TEUST (Ch. 13

It is not necessary that the beneficiary be non sui juris,'^ in the

absence of a statute restricting trusts to such persons." The set-
tlor may also be the sole cestui que trust or one among other ces-
tuis que trust,'^ if he does not thereby commit a fraud upon his
creditors.^' The possibility that a trustee may also be a cestui que
trust has been discussed elsewhere.^* Subject to the chance of
merger *" if he be the sole trustee and sole cestui que trust, and to
the further possibility of -being disqualified to act as a trustee when
his own interest as cestui que trust is concerned, the trustee may
be named as cestui que trust.*^'
The beneficiaries of a charitabletrust must be a well-defined class
of persons from whom
the individuals to be aided are to be selected
by the trustees. A
charitable trust for A., B., and C, known and
defined persons, is a contradiction in terms. The class may be as
small as the residents of a particular town,*^ and it need not be con-
fined to residents of the state where the trust is to be established.*'
A trust to aid a charitable institution not yet in being may be a vaHd

[1901] 2 Ch. 110 In re Drummond, [1914] 2 Ch. 90; Austin v. Shaw, 10 Al-
;

len (Mass.) 552 Sangston v. Gordon, 22 Grat. (Va.) 755, accord. Tlie older
;

view is represented by Kain v. Gibboney, 101 U. S. 362, 25 L. Ed. 813; Ger-

man Land Ass'n v. SehoUer, 10 Minn. 331 (Gil. 260) King v. Townshend, 141
;

N. Y. 358, 36 N. E. 5(13. A trust for an unincorporated village was sustained

in Miller v. Rosenberger, 144 Mo. 292, 46 S. W. 16T.
30 Appfeal of Ogden, 70 Pa. 501 ;Appeal of Williams, 83 Pa. 377.
8s Lester v; Stephens, 113 Ga. 495, 39 S. E. 109; Armour Fertilizer Works
V. Lacy, 146 Ga. 196, 91 S. E. 12. And see First Nat. Bank v. Kashville Tr.
Co. (Tenn. Ch. App.) 62 S: W. 392.
31 Lawrence v. Lawrence, 181 111. 248, 54 N. E. 918; Poster v. Coe, 4 Lans.
(N. Y.) 53 CoFvin v. Martin, 68 App. Dlv. 633, 74 N. T. Supp. 11 ; Appeal of
;

Ashhurst, 77 Pa. 464.

ssHackley v. Littell, 150 Mich. 106, 113 N. W. 787; Sloan v. Birdsall, 58
Pun, 317, 11 N. Y. Supp. 814.' And see ante, § 51, regarding spendthrift
,

trusts.
38 See ante, § 74.
*»Shops v. Unknown Claimants, 174 Iowa, 662, 156 N. W. 850; Smith v.
Smith, 194 Mo. App. 309, 188 S. W. 1111 McAfee v. Green, 143 N. O. 411, 55
;

S. E. 828 Lee v. Gates, 171 N. C. 717, 88 S. B. 889, Ann. Cas. 1917 A, 514.
;

But an expressed intent contra inay prevent merger. Highland Park Mfg.
Co. V. Steele, 235 Fed. 465, 149 C. O. A. 11 Kowlin v. Citizens' Bank & Trust
;

Co., 131 Ark. 97, 198 S. W. 288, 2 A. L. R. 575.

*i Summers v. Higley, 191 111. 193, 60 N. E. 969.
*2 Richardson v. Essex Institute, 208 Mass. 311,- 94 N. E. 262, 21 Ann. (Jas.

1158; In re Bogart's Will, 43 App. Dlv. 582, 60 N. Y. Supp. 496. See, ante,
8-53.
*3 In re Robinson's Will, 203 N, Y. 380, 96 N. E. 925, 37 L. R. A. (N, S.)
1023.
 ;
;

§ 110) A EIGHT m PERSONAM OE IN EEM? 427

charity.** By the weight of authority an unincorporated associa-

tion may be the beneficiary of a charitable trust.*"

A RIGHT IN PERSONAM OR IN REM?

110. .While legal scholars have disagreed -as to whether the right
_ of cestui que trust is in personam, in rem, or partly both,
the modem tendency is to give the right of cestui que
trust incidents which make it, not only a right against
the trustee to have the trust carried out, but also the equi-
valent of ownership of the trust res in equity.

Whether cestui que trust's rights are in rem or in personam has

been the subject of much discussion among legal scholars. Rights
in rem have been defined as "Rights residing in persons, and avail-
:

ing against other persons generally. * * * Thg duties which

correlate with rights in rem are always negative; that is to say,
they are duties to forbear or abstain." And rights in personam
have been thus described: "Rights residing in persons, and avail-
ing exclusively against persons specifically determinate. * * *
Of the obligations which correlate with rights in personam, some
.

are negative, but some (and most) are positive; that is to say, olv
ligations to do or perform." **
Is the cestui que trust the owner merely of a claim against the
trustee to have the trust carried out, or the equitable owner of the
trust property, or do his rights combine both a right against the
trustee and an ownership of the trust res, good against the world?
The theory of a right in personam is supported by Holland,*^ Mait-
land,** Langdell,*® Ames,''" and some present-day writers,"^' the eq-

44Huger V. Protestant Episcopal Church, 137 Ga. 205, 73 S. E. 385; Keith

V. Scales,124 N. C. 497, 32 S. E. 809.
*5 In re Merchant's Estate, 143 Cal. 537, 77 Pac. 475; Seda v. Huble, 75
Iowa, 429, 39 N. W. 685, 9 Am. St. Rep. 495 Tappan v. Deblois, 45 Me. 122
;

Book Depository of Baltimore Annual Conference of M. E. Church v. Trus-

tees of Church Booms Fund M. E. Church, 117 Md. 86, 83 Atl. 50 ; White v.
Bice, 112 Mich. 403, 70 N. W. 1024 Cobb y. Denton, 65 Tenn. (6 Baxt:) 235
;

Laird v. Bass, 50 Tex. 412. Contra: Church Extension of Methodist Episco-

pal Church V. Smith, 56 Md. 362'; Lane v. Eaton, 69 Minn. 141, 71 N. W. 1031,
38 L. K. A. 669, 65 Am. St. Rep. 559 Downing v. Marshall, 23 N. Y. 382, 80
;

Am. Dec. 290. But these decisions are explained by peculi^ local statutory
conditions:
46 1 Austin on Jurisprudence (3d Ed.) 381, 382.
4T Jurisprudence (9th Ed.) 231 et seq. '

*8 Equity, 111-155.
4» Brief Survey of Equity Jurisdiction, 1 Harv.Law Rev. 59, 60.
BO Cases on Trusts (2d Ed.) 244-281.
61 See, for example, Harlan F. Stone, The Nature of the Rights of the Ces-
tui que Trust, 17 Col. Law Rev. 467.
428 THE INTEBEST OP THE ^ESTUI QUE TRUST (Ch. 13

uitable title hypothesis is maintained by Salmond,"^ While several

able recent authors in the field of trusts have argued that the ces-
tui has both a right against the trustee and an ownership of the
trust res.''^

The terminology used by the courts will be of little guidance.

Some have called the right of the cestui que trust an "equitable
estate," °* some an "equitable fee," °° others an "equitable title," "'
and others "absolute ownership in equity," "^ or even an "equitable
lien" ;
°*
while yet other judges have described the right as only
a right to enforce the trust against the trustee.^'" Iri several states
,

there are statutes purporting to adopt the ih personam theory and

to declare the cestui^que trust the owner of no interest or estate
in the trust property.*" The incidents which the decisions give to-
the cestui's right and their bearing on its actual nature will be
treated in later sections.

sz Jurisprudence, 278-282.
58 Roscoe Pound, 26 Harv. Lkw
Rev. 462; Huston, The Enforcement of De-
crees In Equity, 138; Scott, The Natureof the Rights of Cestui que Trust,
17 C6I. Law Rev. 269 ; Whitlock, Classification of the Law of Trusts, 1 Cal.
Law Rev. 215.
4 Dunkerson Goldberg, 162 Fed. 120, 89 C. C. A, 120; Honnett v. Wil-
v.
liams, 66 Ark. 148, 49 S. W. 495 Leigh v. Laughlin, 211 111. 192, 71 N. E; 881;
;

McFall v. Kirkpatrick, 236 111. 281, 86 N. B. 139 Handy v. McKim, 64 Md.

;

560, 4 Atl. 125; Mercer v. Safe-Deposit & Trust Co., 91 Md. 102, 45 Atl. 865;
Wood V. Kice, 103 Mo. 329, 15 S. W. 623 Knowlton v. Atkins, 184 N. T. 313,
;

31 N. E. 914; Appeal of Fowler, 125 Pa. 388, 17 Atl. 431, 11 Am. St Rep. 902;
Citizens' Nat. Bank v. Watkins, 126 Tenn. 453, 150 S. W. 96; Hutchinson v.
Maxw-ell, 100 Va. 169, 40 S. E. 655, 57 L. R. A. 384, 93 Am. St. Rep. 944; Bank
of Berkeley Springs v. Green, 45 W. Va. 168, 31 S. E. 260.
B6 Durant v. Muller, 88 Ga. 251, 14 S. E. 612; Laughlin v. Page, 108 Me.
307, 80 Atl. 753; Reardon'v. Reardon, 192 Mass. 448, 78 N. E. 430; Comwell
V. Orton, 126 ^o. 355, 27 S. W. 536; Wright v. Miller, 4 barb. (N. T.) 600;
Davis V. Heppert, 96 Va. 775, 32 S. E. 467.
BeHallowell Bav. Inst. v. Titcomb, 96 Me. 62, 51 Atl. 249; Mathlas v.
Fowler, 124 Md. 655, 93 Atl. 298; Blake v. O'Neal, 63 W. Va. 483, 61 S. E.
410, 16 L. R. A. (N. S.) 1147.
or Ex parte Jonas, 186 Ala. 567, 64 South. 960; Badgett v. Keating, 31 Ark.'
400'; Ellsworth College of Iowa Falls v. Emmet County, 156 Iowa, 52, 135 N..
W. 594, 42 L. R. A. (N. S.) 530.
OS In re Hart's Estate, 203 Pa. 503, 53 Atl. 373.
OS United States v. Devereux, 90 Fed. 182, 32 O. C. A. 564; Southern Pac.
R. R. Go. V. Doyle (O. C.) 11 Fed. 253 Fortner v. Phillips, 124 Ark. 395, 187
;

S. W. 318 Hunt v. Hunt, 124 Mich. 502, 83 N. W. 371 ; McCosker v. Brady,.

;

1 Barb. Ch. (N. T.) 329; Bennett v. Garlock, 79 N. Y. 302, 35 Am. Rep. 517;
Cheyney v. Geary, 194 Pa. 427, 45 Atl. 369.
80 Civ. Code Cal. § 863; New York Real Property Law (Consol. Laws, c.
50) i 100. For cases construing the latter statute, see Crooke v. County of
Kings, 97 N. Y. 421 Schenck v. Barnes, 156 N. Y. 316, 50 N. E. 967, 41 L. R.
;

A. 395; Newton v. Hunt, 134 App.. Diy.,325, 119 N. Y. Supp. 3, affirmed ia

 :

§110) A EIGHT IN PERSONAM OB IN REM? 429

The advocates of the in personam position claim

(a)That the rights of the cestui que trust are not enforceable
against the whole world, since a bona fide purchaser of the trust res
from the trustee is excepted, and therefore, from the very definition
of a right in rem, the cestui's right cannot be in rem but in reply ;

it. is shown that many rights admittedly in rem are cut off by trans-

fers to bona fide purchasers, as, for example, in cases of sales in

market where a second deed is recorded before
overt, sales of realty
the negotiations of negotiable paper, sales by a fraudulent
first,
vendee of personal property, sales by a seller left in possession of
personal property, sales by agents having apparent authority to sell,
and sales by conditional vendees of goods when the contract has not
been filed ; and it is also answered that where the trust res is an
equitable interest in property and the trustee sells' it to a bona fide
purchaser, the right of the cestui que trust is not cut off, showing
that at least in that instance the cestui has a right in rem and it is ;

further alleged that the bona fide purchaser rule regarding trusts
is based on the respect of equity for the legal title and on the com-
mercial expediency of having property easily transferable, that
is, that such rule is a mere exception to the general rule that the

cestui' que trust has a right to the trust res enforceable against all
the world.
(b) It is said that equity acts in personam, and the cestui's right,
being admittedly equitable, must be in personam; to which the
reply is that the nature of a right is not necessarily determined by
the nature of the remedy given for its enforcement, and that mod-
ern statutes give equity almost generally power to act in rem, -and
to transfer title or possession directly in case the trustee refuses to
obey a decree.*^
(c) The impossibility of two persons owning the same thing is
also urged as favorable to the in personam theory; but to this re-
ply has been made that one may be the legal owner of a thing and
a second the equitable owner, and that both law and equity re-

201 N. T. 599, 95 N. E. 1134. In Marx v. McGlynn, 88 N. Y. 357, it was held

an alien might be a cestui que trust of a real property trust, although an
alien could not then hold title to land. The court said (page 876) "The fact :

that Bradley is an aUen does not incapacitate him from receiving the income.
He had no interest in the r^al estate. The income does not come to him as
real estate or even as an incident of real estate. It comes to him as personal
property. The title, both legal and equitable, is in the trustee, and it is ex-
pressly provided that a beneficiary or cestui que trust in su<ai a case takes
no interest in the lands, but has the simple right to enforce the performance
of the trust in equity."
81 See Huston, The Enforcement of Decrees in Equity, appendix, for a list
of statutes giving chancery power to act in rem and transfer title.

y
430 THE INTEREST OP THE CESTUI QUE TRUST (Ch. 13

gard the tfiistee as the legal owner !and the beneficiary as the eq-
uitable proprietor.
(d) Finally, it is urged that the duties which the trustee owes
to th'e cestui que trust are positive and characteristic of rights in
personam, while the obligations to the holder of a right in rem are
always negative, merely to refrain from action. The answer is that
the trustee has positive duties of management, and also negative
duties to refrain from treati^ng the trust res as his private property
or acting in his own interest, and that these latter duties attach to
the general public also in part.
In support of the contention that the cestui's rights are in rem,
fights of ownership', it has been shown (a) That, if the trust res
:

be realty, curtesy and dower attach to the cestui's interest; (b)

that his interest descends to heirs at law or personal representa-
tives, dependent on whether the trust res is realty or personalty;
(c) that, if the res is real, escheat operates on the cestui's rights;
(d) that the cestui's powers of alienation show him to be an own-
er of the res ; (e) that a disseisor of the trustee does not take the
property free from the trust; (f) that creditors of the cestui que
trust may take the trust res ; (g) that a trust may be created without
consideration, thus partaking more of the nature of a grant than of
a contract; (h) that the modern tendency is to preserve the rights
of cestui que trust even after the trustee is barred by the statute of
lim'itations ; (i) that the trustee's interest is purely formal and
gives rise to no beneficial incidents to his wife as a dowress, to his
creditors, or to the crown or state in case of forfeiture or escheat.
The situation would seem to be summarized by the statement
that, while the right of cestui que trust was originally purely in per-
sonam against the trustee, it has become increasingly a right in
rem and is now substantially equivalent to equitable ownership of
the trust res. The cestui que trust, of course, also has rights in
personam against the trustee.

INCIDENTS OF THE CESTUI QUE TRUST'S RIGHT

111. Upon the cestui que trust's death intestate his interest passes
to his heirs or personal representatives, dependent on the
nature of the trust property.
The interest of the cestvii que trust escheats to ther state on his
death without heirs or next of kin.
Curtesy and dower are incidents of the beneficiary's interest.
His right may be made the subject of a homestead claim, when the
trust res is realty.
 ;;

§ 111) INCIDENTS OF THE CESTUI QUE TRUST'S BIGHT 431

The rule in Shelley's Case operates on the equitable interest of ^

cestui que trust, just as it would on a corresponding le-

gal estate. -
;

In the absence of lawful provision in the trust instrument re-

straining him from alienating his interest, or of statutory
.

prohibition, cestui que trust may transfer his rights inter

vivos or by will, as freely as he could a legal estate.

The interest of cestui que trust passes to his heirs at law or per-
sonal representatives, dependent on the nature of the property held
in trust, if the cestui dies intestate and the trust is to continue be-
yond his life.°^ From this rule it would appear that the cestui que
trust has a property right in the trust property, since the nature
of the latter determines the course of devolution of the cestui's in-
terest. "In the case at bar, theSe legatees took no legal interest in
the real property. Their interest in the body of the estate, so far as
the matter is now before us for determination, is an equitable one,
and equitable estates are governed by^the same rules of descent that '

govern the duration of legal estates." **

Escheat
m
The early rule England was that the interest of cestui que trust
did not escheat to the crown, but that the trustee held the property
free from a trust.** A
statute now provides for escheat of the bene-
ficiary's interest.*" In America the interest of cestui, whether the
trust res be real or personal, passes to the state on the^ death of
cestui without heirs or next of kin.*' While technically escheat
applies only to realty, an analogous principle has been introduced
with respect to personal property .< "From this review of the law
it would' seem that there is no substantial difference between real
and personal property in respect to the rights acquired by the state,
upon the death of its owner intestate, without heirs or next of kin.
A clear deduction from the authorities seems to lead to the conclu-
sion that the doctrine of escheat applies only to legal estates, and
does not in a strict sense affect either equitable estates or personal
property. It seems also to follow from the authorities cited, that

82 Shackleford v. Elliott, 209 111. 333, 70 N. E. 745; Doran v. Kennedy, 122

Minn. 1, 141 N. W. 851 Boone v. Davis, 64 Miss. 133, 8 South. 202 Bredell
; ;

V. Collier, 40 Mo. 287 Gill's Heirs v. Logan's Heirs, 11 B. Mon. (Ky.) 231
;

Glynn v. Maxfield, 75 N. H. 482, 76 Atl. 196.

6 3 Lich V. Lich, 158 Mo. App. 400, 138 S. W. 558, 562.
64 Burgess v. Wheate, 1 Wm. Blackstone, 123.
6 6 St. 47 & 48 Vict. c. 71, § 4.
66 Matthews v. Ward, 10 GUI & J. (Md.) 443; Scott v. Gittings, 125 Md.
595, 94 Atl. 209 (dictum) Johnston v. Spicer, 107 N. Y. 185, 13 N. E. 753
;

Commonweallsh v. Naile, 88 Pa. 429 In re Lrinton's Estate, 198 Pa. 438, 48

;

Atl. 298.
432 THE INTEREST OF THE CESTUI QUE TRUST (Ch. 13

upon the death of Ellen Spicer [the cestui que trust] the state took
not the land, but succeeded to the equitable right which she had
to a conveyance thereof." *' While the result would be the~ same
whether the interest of the beneficiary were regarded as a prop-
erty right in the trust res or as a mere claim against the trustee,
since both would pass to the state, regardless of. the nature of the
trust property, yet the courts have discussed the cases where the ,

trust property was realty upon the theory that the^ equitable estate
of the cestui que trust passed to the state by technical escheat; that
is, as real property.

Curtesy and Dower

If a wife has been cestui que trust of a fee-simple interest in real
property, her widower is now generally given curtesy in the trust
res.°* This can only be on the theory of an equitable property right
by the wife in the trust res. If she owned a mere claim to have the
trust enforced, her interest would be personal property, regardless
of the subject-matter of the trust, and so not subject to curtesy.
If the wife's interest as cestui was a separate estate in equity, the
prevailing view is that curtesy aris£s in favor of the surviving hus-
band,°° unless a contrary intent appears in the trust instrument.'"
iThe exclusion of the husband from interest in or control of the
property is deemed to be limited to the period of coverture.

87 Johnston v. Spicer, 107 N. Y. 185, 200, 13 N. E. 753. The right of cestui

que trust is declared by statute in New York to be a mere right to the en-
forcement of the trust. Real Property Law (Consol. Laws, C. 50) § 100.
ssRoblson v. Codman, Fed. Oas. No. 11,970; Ogden v. Ogden, 60 Ark. 70,
28 S. W. 796, 46 Am. St. Rep. 151; Jackson v. Becktold Printing &BoDk Mfg.
Co., 86 Ark. 591, 112 S. W. 161, 20 L. R. A. (N. S.) 454; Payne v. Payne, 11
B. Mon. 138 Rawlings v. Adams, 7 Md. 26
; ; Richardson v. Stodder, 100 Mass.
528; Alexander v. Warrance, 17 Mo. 228; Donovan v. Griffith, 215 M.o. 149,
114 S. W. 621, 20 li. B. A. (N. S.) 825, 128 Am. St. Rep. 458, 15 Ann. Cas. 724;
Gushing v. Blake, 30 N. J. Eq. 689; Sentill v. Robeson, 55 N. C. 510; Hunt
V. Satterwhite, 85 N. C. 73; Lowry's Lessee v. Steele, 4 Ohio, 170; Dubs r.
Dubs, 31 ^a. 149; Carson v. Fuhs, 131 Pa. 256, 18 Atl. 1017; TUlinghast t.
Coggeshall, 7 R. I. 388 ; Baker v. Heiskell, 1 Cold. (Tenn.) 641 Norman's
;

Ex'x V. Cunningham, 5 Grat. (Va.) 63. But see Hall v. Crabb, 56 Neb. 892,
"

76 N. Ws 865; In re Grandjean's Estate, 78 Neb. 849, 110 N. W. 1108, 15 Ann.

Cas. 577.
e»Luntz Greve, 102 Ind. 173, 26 N. E. l28; Gushing v. Blake, 29 N. J.
V.
Eq. 399 ; Egev. Medlar, 82 Pa. 86; In. re Steinmetz's Estate, 3 Pa. Dist. R.
440. Contra: Cochran v. O'Hern, 4 Watts & S. (Pa.) 95, 39 Am. Dec. 60;
Stokes V. McKibbin, 13 Pa. 267; Ash v. Ash, 1 PhUa. (Pa.) 176; Jones t.
Jones' Ex'r,,96 Va. 749, 32 S. E. 463.
70 Frey v. Allen, 9 App. D. C. 400; Tremmel v. Kleiboldt, 6 Mo. App. 549;
McTigue v. McTigue, 116 Mo. 138, 22 S. W. 501; Wood\^ard v. Woodward, 148
-Mo. 241, 49 ^S. W. 1001; McBreen v. McBreen, 154 Mo. 323, 55 S. W. 463, 77
Am. St. Rep. 758 ; Jamison v. Zausch, 227 Mo. 406, 126 S. W. 1023, 21 Ann.
Cas. 1132; McGulloch v. Valentine, 24 Neb. 215, 38 N. W. 854 > Ball v. Ball,
20 R, I. 520, 40 Atl. 234.
§ 111) INCIDENTS OP THE CESTUI QXTE TRUST'S EIGHT 433

The widow of cestui que trust was not entitled to dower in Eng-
^^'
land until the passage of a comparatively recent statute.''^ In
America, a few states follow the old English rule and refuse the
widow dower,'* but either by virtue of statute or by common law
the incident of dower attaches to the estate of the cestui que trust
in a great majority of American states.'* In some states it is only
when the husband was a ctestui que trust at his death that the widow
is endowed.'" That dower attaches as an incident to the cestui's
right where the res is real property shows the tendency of modern
law to treat cestui's interest as a property right in the res.
An equitable owner of land may establish a homestead in his in-
terest.'* The cases arising have generally been those of contract
vendees, but there seems to be no reason to differentiate the cestui •

que trust. If so, the rule is strong evidence that his interest is
treated as a property right in land, when the trust res is land.
Where a trustee holds in trust for A. for life, with a remainder
in trust for A.'s heirs, the rule in Shelley's Case applies and A. will
become the owner of an equitable fee." Some courts have held
that the rule would not be applied in the case of active trusts, where
to apply it would defeat the testator's intent.'* The application of
the rule is strongly confirmatory of the modern view that the ces-
tui's interest is an estate in the res.
Power to Alienate
In the absence of ""provisions in the trust instrument or statutes
to the contrary, the cestui que trust may alienate his interest as
freely as he might a legal estate or interest.'" "The law, however,

Ti D'Arcy v. Blake, 2 Sch. & Let 387.

72 St. 3 4 & Wm. IV, c. 105.
Ts Seaman v. Harmon, 192 Mass, 5, 78 N.-B. 301; HopMnson v. Dumas, 42
N. H. 296.
7* Bush V. Bush, 5 Bel. Ch. 144; Jones & A. Ann. St. 111. 1913, par. 4237;
Gen. St. Kan. 1915, § 3831; Rev. St Mo. 1909, § 345; Comp. St. N. J. 1910, p.
2043; Gen. Code Ohio 1910, § 8606; Gen. Laws R. I. 1909, c. 329, § 1; Comp.
Laws Utah 1907, § 2826.
Lugar V. Lugar, 160 App. Div.
75 807, 146 N. X. Supp. 37; Thomp. Shan.
Ann. Code Tenn. 1917, § 4139.
Rockafellow v. Peay, 40 Ark. 69; Allen v, Hawley, 66 111. 164; Hewitt
76
V. Rankin, 41 lowaj 35; Moore v. Reaves, 15 Kan. 150; Tarrant v. Swain,
15 Kan. 146 Wilder v. Haughey, 21 Minn. 101 Jellnek v. Stepan, 41 Minn.
; ;

412, 43 N. W. 90 Smith v. Chenault, 48 Tex. 455 Doane's Ex'r v. Doane, 46

; ;

Vt. 485.
Gushing v. Blake, 30 N. J. Bq. 689; Boyd v. Small, 56 N. C. 39; Mack
77

V. Champion, 26 Wkly. Law Bui. (Ohio) 113 Crosby v. Davis, 4 Pa. ;Law J.
;

193 Carson v. Fuhs, 131 Pa. 256, IS Atl. 1017 Danner v. Trescot, 5 Rich.
; ;

Eq. (S. C.) 356..

78 Berry v. Williamson, 11 B. Mon. (Ky.) 245; Porter v. Doby, 2 Rich. Bq.
(S. C.) 49.
7 8l>rennen v. Heard (D. C.) 198 Fed. 414; Honnett v. Williams, 66 Ark.
BoGEBT Trusts ^28 —
434 THE INTEREST OF THE CESTUI QUE TRUST (Ch. 13

is perfectly settled that the estate of a cestui que trust may be con-
veyed as well as any other." *" He may join with the trustee and
transfer the whole title, legal and equitable. The consent of the ^'^^

trustee is not necessary to the conveyance by the cestui of his in-

terest, unless the trust instrument provides otherwise.*^
' Cestui
que trust may convey to a co-cestui,'^ or to the trustee,'* although
in the latter case there is ^ presumption of fraud which must be
overcome by the trustee, and which, if not overcome, will give rise
to a Constructive trust. This power of alienation exists in the ces-
tui que trust of an irrjplied as well as an express trust.'' Some
courts have gone so far as to allow the beneficiary to vest absolute
title to the trust res in another, free and clear of the trust.'^

148, 49 S. W. 495 Bea v. Steamboat Eclipse, 4 Dak. 218, 30 N. W. 159 Se-

; ;

curity Trust & Safe Deposit Co. v. Martin, 10 Del. Ch. 330, 92 Atl. 245 Hiss ;

V. Hiss, 228 111. 414, 81 N. E. 1056 ; Nelson v. Davis, 35 Ind. 474 ; Martin v.
Davis, 82 Ind. 38; Parkhill v. Doggett, 150 Iowa, 442, 130 N. W. 411; Bayer
V. Cockerill, 3 Kan. 282 Beuley v. Curtis, 92 Ky. 505, 18 S. W. 357 Brain
; ;

V. Bailey, 82 S. W. 582. 26 Ky. Law Rep. 853 Palmer v. Stevens, 15 Gray

;

(Mass.) 343 Young v. Snow, 167 Mass. 287, 45 N. B. 686 Security Bank of
; ;

New York v. Callahan, 220 Mass. 84, 107 N. E. 385 Boston Safe Deposit & ;

Trust Co. V. liUke, 220 Mass. 484, 108 N. E. 64, L. K. A. 1917A, 988; Dibrell v.
-Carlisle, 51 Miss. 785; Kingman v. Winchell (Mo.) 20 S. W. 296; Ryland v.
Banks, 151 Mo. 11, 51 S. W. 720 Freeman v. MarweU, 262 Mo. 13, 170 S. W.
;

1150 Converse v. Noyes, 66 N. H. 570, 22 Atl. 556 Rogers v. Colt, 21 N. J.

; ;

Law, 704 McCrea v. Yule, 68 N. J. Law, 465, 53 Atl. 210 Camden Safe Deposit
; ;

& Trust Co. V. Schellenger, 78 N. J. Eq. 138, 78 Atl. 672 Jenkinson v. New ;

York Finance Co., 79 N. J. Eq. 247, 82 Atl. 36; Branch v. Griffin, 99 N. C.

173, 5 S. B. 393, 398 Cherry v. Cape Fear Power Co., 142 N. C. 404, 55 S. B.
;

287 Sayles v. Tibbitts, 5 R. I. 79

; Ives v. Harris, 7 R. I. 413
; Henson v. ;

Wright, 88 Tenn. 501, 12 S. W. 1035 Mortimer v. Jackson (Tex. Civ. App.)

;

155 S. W. 341 Burnett v. Hawpe's Ex'r, 25 Grat. (Va.) 481 Morgan v. Mor-
; ;

gan, 60 W. Va. 327, 55 S. E. 389, 9 Ann. Cas. 943 Lamberton v. Pereles, 87

;

Wis. 449, 58 N. W. 776, 23 L. R. A. 824 Mangan v. Shea, 158 Wis. 619, 149
;

N. W. 378. The power of alienation is not handicapped by the contingent

nature of the beneficiary's interest. Brown v. Fletcher, 165 C. C. A. 35, 253
Fed. 15.
80 Elliott V. Armstrong, 2 Blackf. (Ind.) 198, 208.
81 Jones V. Jones, 111 Md. 700, 77 Ati. 270.
82 Foster v. Friede, 37 Mo. 36.
83 Murry v. King, 153 Mo. App. 710, 135 S. W. 107.
84 Sprague v. Moore, 130 Mich. 92, 89 N. W. 712 People's Trust Co. v. ;

Harman, 43 App. Div. 348, 60 N. Y. Supp. 178.

85 Sinclair v. Gunzenhauser, 179 Ind. 78, 98 N. E. 37, 100 N. B. 376; Buck

V. Swazey, 35 Me. 41, 56 Am. Dec. 681 Osgood v. Eaton, 62 N. H. 512.

;

8 8 Hancock v. Ship, 1 J. J. Marsh. (Ky.) 437; Monroe's Trustee v. >fcnroe,

155 Ky. 112, 159 S. W. 651; Packer v. Johnson, 1 Nott & McC. (S. C.) 1.
Thus, in Smith v. Witter, 174 N. C. 616, 94 S. E. 402, real property was held
to be alienable by a widow, without the joinder of the.trustee, where the trust
had been a married woman's trust.
 ;

§ 111) INCIDENTS OF THE CESTUI QUE TRUST'S EIGHT 435

The interest of cestui que trust may also be devised,*^ mortgaged,

or incumbered/* and made the subject of a gift.*'
Naturally a right accruing to the cestui que trust under the trust,
which is purely personal in character, and is intended for his sole
benefit, cannot be assigned. Examples are a right to occupy the
trust property and use it for grazing and pasturage,*" and a right
to a bona fide exercise of the trustee's discretion in applying the
residue of the estate.®^' If the trustee has the discretion of giving'
the cestui que trust something or nothing, the cestui que trust has
no assignable right.*^
The date of notice to the trustee of an assignment fixes the pri-
orities between several assignees:"* If the assigning cestui que trust
is also a trustee, the assignee takes subject to any equities in favor
of the co-cestuis and against the assigning trustee-cestui.**'
Control by Trust Instrument
The trust instrument may enlarge the power of alienation which
would ordinarily exist,"" or may expressly confer the power to mort-
gage °" or exchange "^ the cestui que trust's interest. Conversely
the settlor may restrain alienation by the cestui que trust until a
certain age,"* or at any time during the life of the trust in states
where spendthrift trusts are lawful."" And not only expressed in-

87 NewhaU
Wheeler, 7 Mass. 189.
v.
88 Blordan 146 Ala. 615, 41 South. 842 Tift v. Mayo, 61 Ga.
v. Schlieher, ;

246 Tillson v. Moulton, 23 111. 648 Jackson v. West, 22 Md. 71

; ; Stump v.
;

Warfield, 104 Md. 530, 65 Atl. 346, 118 Am. St. Rep. 434, 10 Ann. Cas. 249;
Perrine v. Newell, 49 N. J. Eq. 57, 23 Atl. 492 Newton v. Jay, 107 App. Dlv.
;

457, 95 N. T. Supp. 413; Edwards v. Barstow, 21 R. I. 562, 45 Atl. 579;

Brown v. Ford, 120 Va. 233, 91 S. E. 145.
89 Henderson v. Sherman, 47 Mich. 267, 11 N. W.,153.
so Davis V. Harrison, 240 Fed. 97, 153 C. C. A. 133.
81 True Real Estate Co. v. True, 115 Me. 533, 99 Atl. 627.
»2 In re Coleman, 39 Ch. Div. 443.
93 Lambert v. Morgan, 110 Md. 1, 72 Atl. 407, 24 L. R. A. (N. S.) 413, 132
Am. St. Rep. 412, 17 Ann. Cas. 439; Parker v. Parker, 71 Vt. 387, 45 Atl.
756.
94 Belknap v. Belknap, 5 Allen (Mass.) 468.
»»Bernheim v. Heyman, 104 S. W. 388, 31 Ky. Law Rep. 984; Mandel
V. FideUty Trust Co., 128 Ky. 239, 107 S. W. 775, 32 Ky. Law Rep. 1104.
9» Mills V. Davison, 54 N. J. Bq. 659, 35 Atl. 1072, 35 L. B. A. 113, 55
Am. St. Rep. 594.
97 Stratton McKinnie, 62 S. W. (Tenn. Ch. App.) 636[
v.
98 Southern Nat. Life Ins. Co. v. Ford's Adm'r, 151 Ky. 476, 152 S. W
243. .
9 9 White v. Williams, 172 111. App. 630; In re MehafCey's Estate, 139 Pa.
276, 20 Atl. 1056; Wenzel v. Powder; 100 Md. 36, 59 Atl. 194, 108 Am. St!
Rep. 380; Hackley v. Littell, 150 Mich. 106, 113 N. W. 787; Perrine v. Per-
rine,,11 N. J. Eq. 142 Monroe v. Trenhohn, 114 N. C. 590, 19 S. E. 377
;

Cherry v. Cape Fear Power Co., 142 N. C. 404, 55 S. E. 287. Section 867^
Civ. Code Cal., provides that "the beneficiary of a trust for the receipt of
436 THE INTEREST OF THE CESTUI QUE TRUST (Ch. 13

tent, but intent implied from the nature of the trust, may result in
prohibiting the beneficiary from transferring his interest.^" Thus,
where the trust is for the maintenance of a family, none of the bene-
ficiaries has any separable alienable interest.'' The trust instrument
may affix a condition to the right of the cestui to alienate, as, for
example, that the trustee consent to alienation.* It has been held
that an attempted assignment of a portion of the principal by a
beneficiary of a spendthrift trust will operate to entitle the assignee
to the payment of the amount assigned on the termination of the
trust.*
In a few states the beneficiary of certain kinds. of trusts is pro-
hibited by statute from alienating his interest." This statutory rule
is very important, since it causes every trust of the kind described
to violate the rule against restraints on alienation, if the period of
the trust exceeds the time during which the power of alienation
may be suspended. The rule against restraints upon the power of
alienation the rule against perpetuities in the states having this
is
statutory prohibition of the alienation of the cestui's interest.

the rents and profits of real property, or for the payment of an annuity
out of such rents and profits, may be restrained from disposing of his In-
terest in such trust, during his life or for a term of years, by the instru-
ment creating the trust."
1 First Nat. Bank v. Nashville Trust Co. (Tenn. Ch. App.) 62 S. W. 392;

Monday v. Vance, 92 Tex. 428, 49 S. W. 516.

2 Talley v. Ferguson, 64 W. Va. 328, 62 S. E. 456, IT L. R. A. (N. S.) 12l5.
8 Colyar v. Wheeler, 110 Tenn. 5^, 75 S. W. 1089.
* In re Hall's Estate, 248 Pa. 218, 93 Atl. 944, 2 A. L,. R. 855.

"Howell's St. Mich. 1913, § 10687; Gen. St. Minn. 1913, § 6718; Rer.
Code Mont. 1907, § 4547; St. Wis. 1917, § 2089. The New York statute
(Real Property Law [Consol. Laws, e. 50] § 103) is typical: "The right of
a beneficiary of an express trust to receive the rents and profits of real
property and apply them to the use of any per^n, cannot be transferred
by assignment or otherwise, but the right and Interest of the beneficiary
of any other trust in real property may be transferred." See, also, section
15, Personal Property Law (Consol. Laws, N. T. c. 41). These statutes
have no application to a trust to use income for the support of another.
In re Bloodgood, 184 App. Div. 798, 172 N. Y, Supp. 509. In two states
statutes restrain the power of certain cestuis to alienate their interests un-
less the trust instrument expressly provides otherwise. Burns' St. Ind.
1914, § 4015; Gen. St. Kan. 1915, § 11677. For decisions construing these
statutes, see Collier v. Blake, 14 Kan. 250; Weaver v. Van Akin, 71 Mich.
69, 38 N. W. 677 ; Noyes "v. Blakeman, 6 N. Y. 567 ; First National Bank
of Paterson v. National Broadway Bank, 156 N. Y. 459, 51 N. E. 398, 42 L.
R. A. 139; Hooker v. Hooker, 166 N. X^. 156, 59 N. E. 769; Woodbridge
V. Bockes, 170 N. Y. 596, 63 N. E. 362; Robb v. Washington & JefCersou
College, 185 N. Y. 485, 78 N. E. 359; In re Williams, 187 N. Y. 286, 79 N.
E. 1019; Slater v. Slater, 188 N. Y. 633, 81 N. E. 1176; Newton v. Hunt,
201 N. Y. 599, 95 N. E. 1134, affirming 134 App. Div. 325, 119 N. Y. Supp.
 ;

§ 112) INABILITY FOB DEBTS 437

LIABILITY FOR DEBTS

1 12. The interest of cestui que trust is, in the absence of statute or
valid direction by the settlor to the contrary, liable for
the payment of his debts in equity or at law.
In bare or passive trusts the creditor may resort to a legal ex-
ecution. In active trusts a creditor's bill in chancery was
originally the only remedy and is still the exclusive method
available in some jvirisdictions ; but the modem tendency
of court and Legislature is to subject the beneficiary's in-
terest to execution, attachment, and garnishment as if it
were a legal estate.
The right of cestui que trust may be unavailable to the creditor,
because it is too. vague, uncertain, or contingent ; or be-
cause the trustee has the discretion^to give something or
nothing; or because the cestui is entitled merely to the
application of an uncertain amount to his support; or be^
cause the interest of the debtor cestui is inseparably bound
up withthat of other beneficiaries.
Where spendthrift trusts are allowed either absolutely or to a
limited extent, ^e creditors may be shut off entirely or
partially from resort to trust property or its income for
satisfaction of their debts.

Is liability for the payment of debts an incident of the interest

of cestui que trust? Aside from statute and control by the settlor,
his interest is voluntarily alienable. Is it likewise involuntairily
alienable ?
Passive Trusts
By the tenth section of the Statute of Frauds ' it was provided
that "it shall and may be lawful for every sheriff or other officer to
whom any writ or precept is or shall be directed, at the suit of
3; Bull Y. Odell, 19 App. Div. 605, 46 N. Y. Supp. 306; Rothschild v. Eoux,
78 App. Div. 282, 79 N. Y. Supp. 833 Baymond v. Harris, 84 App. Div. 546,
;

82 N. y. Supp. 689; People's Trust Co. v. Flyim, 106 App. Div. 78, 94 N.
T. Supp. 436 ; In re Kirby's Will, 113 App. Div. 705, 100 N. Y. Supp. 155
Garrett v. Duclos, 128 App. Div. 508, 112 N. Y. Supp. 811; Seely v. Fletcher,
135 App. Div. 920, 120 N. Y. Supp. 1145 Ungrich v. Ungricji, 141 App. Div.
;

485, 126 N. Y. Supp. 419; Clute v. Bool, 8 Paige (N. Y.) 83 Grout v. Van
;

Schoonhoven, 1 Sandf. Ch. (N. Y.) 336; Titus v. Weeks, 37 Barb. (N. Y.) 136;
Graver v. Jermain, 17 Misc. Eep. 244, 40 N. Y. Supp. 1056; First Nat. Bank
of Plainfield v. Mortimer, 28 Misc. Rep. 686, 60 N. Y. Supp. 47 In re Foster's
;

Estate, 37 Misc. Eep. 581, 75 N. Y. Supp. 1067.

• St 29 Car. II, c. 3 (1677).
438 THE INTEREST OF THE CESTUI QUE TRUST (Ch. 13

any person or persons, of, for, and upon any judgment, statute, or
recognizance hereafter to be made or had, to do, make, and deliver
execution unto the party in that behalf suing, of all such lands,
tenements, rectories, tithes, rents, and hereditaments as any other
person or persons be in any manner of wise seised or possessed,
or hereafter shall be seised or possessed, in trust for him against
whom execution is so sued," in like manner as if the debtor had been
seised or possessed of the legal estate. This statute gave a creditor
of cestui que trust the right to collect his debt by an execution at
law from the trust property, but it obviously applied only to trusts
of land, and was construed to be effective only against freehold in-
terests and when the trust was a bare or passive trust. In many
American jurisdictions similar statutes have been enacted, or the
same result achieved by adoption of the tenth section as a part of
the common law, or by judicial action.'^ .Thus, if the trust is pas-
sive, so that the Statute of Uses executes the use and passes title to
the cestui, his creditors may take the trust res by legal process.
But, although resulting trusts are passive, the interest of the
beneficiary thereunder has not generally been held to be subject to '

legal execution.^ The creditor has been remitted to equity for his
remedy. In one state, where A. pays the consideration for land and

T Atypical American statute witli corresponding result is section 1431,

Code Civ. Proc. N. Y.: "Real property, held by one person, in trust or for
the use of another, is liable to levy and sale by virtue of an execution, issued
upon a judgment recovered against the person, to whose use it is so held,
in a case where it is prescribed by law, that, by reason of the invalidity of
the trust, an estate vests in the beneficiary; but special provision is not
otherwise made by law, for the mode of subjecting it to his debts." See,
also, Doe ex dem. McMuUen v. Lank, 4 Houst. (Del.) 648; Pitts v. Me-
Whorter, 3 Ga. 5, 46 Am. Dec. 405 ; Moll v. Gardner, 214 111. 248, 73 N. E.
442; Copeland v. Bruning, 44 Ind. App. 405, 87 N. B. 1000, 88 N. E. 877;
Hunnicutt v. Alabama Great Southern R. Co. (Miss.) 50 South. 697 (citing
section 2779, Code of 1906); First Nat. Bank v. Burns (Mo. App.) 199 S.
W. 282; Bogert v. Perry, 17 Johns. (N. Y.) 351, 8 Am. Dec. 411; Jackson
ex dem. Livingston v. Bateman, 2 Wend. (N. T.) 570; Jackson ex dem. Ten
Eyck V. Walker, 4 Wend. (N. Y.) 462; Kellogg v. Wood, 4 Paige (N. Y.) 578;
Hawkins v. Sneed, 10 N. C. 149; Freeman v. Perry, 17 N. C. 248; Lum-
mus V. Davidson, 160 N. C. 484, 76 S. E. 474; Bristow v. McCall, 16 S. C. 545;
Smitheal v. Gray, 1 Humph. (Tenn.) 491, 34 Am. Dec. 664.
» Smith's Ex'r v. Cockrell, 66 Ala. 64; Goodbar v. Daniel, 88 Ala. 583,
7 South. 254, 16 Am. St. Rep. 76; Robinson v. Springfield Co., 21 Fla. 203;
Mayer v. Wilkins, 37 Fla. 244, 19 South. 632 ; Low v. Marco, 53 Me. 45 ; Gray
V. Chase, 57 Me. 558; Anderson v. Biddle, 10 Mo. 23; White v. Kavanaugh,
8 Rich. (S. 0.) 377; Richardson v. Mounce, 19 S. C. 477; Cunningham v.
Wood, 4 Humph. (Tenn.) 417; Dewey v. Long, 25 Vt. 564. Contra: Tevis
V. Doe, 3 Ind. 129; Peterson v. Farnum, 121 Mass. 476;, Thomas v. Walker,
6 Humph. (Tenn.) 93.
§ 112) LUBHilTT FOR DEBTS 439

has the title taken in the name of B., by statute no trust results
for A., but there is a statutory trust for the creditors of A. Thus
they obtain their remedy by a bill in chancery as statutory cestuis
que trust.'

Active Trusts
If the trust be active, it is elementary that the creditor of the
cestui que trust can subject'his interest in the trust to the satisfac-
tion of the debt, either in law or equity, unless a statute or valid
spendthrift trust prevents this result. The question of the rights
of creditors of a trust beneficiary is, therefore, largely one of meth-
ods and procedure. "There are several ideas that are inseparable
from the institution of property, among the most prominent of
which are, the right of alienation, and its being subject to the pay-
ment of debts.' In all cases like the present, the inquiry must be,
whether the debtor has a vested, determinate interest in the equitable
estate sought to be subjected, with the present right of enjoy;nent
in severalty. If he has, the right of the creditor follows as a corol-
lary in mathematical science does the main proposition. Under the
above qualifications and conditions, the creditor is entitled to re-
lief, and in some form or other the debtor's estate, be that more or

less, should be disposed of or sequestrated for the satisfaction of

his debt." ^° Another' court has forcibly said: "There cannot be
a legal or equitable right in or to property, or to its rents, income,
or profits, not so blended with the rights of others as to be incapable
of separation and identification, that may not, by some appropri-
ate remedy, in law or in equity, according to the nature of the case,
be condemned to the satisfaction of debts. It is violative of public
policy, and in fraud of the rights of creditors, to create a well-de-
fined beneficial interest, legal or equitable, in property, real or per-
sonal, or in its rents, income, or profits, which can be enjoyed by
an insolvent debtor, free from liability for the payment of debts." ^^
The estate or interest of cestui que trust is now recognized as a
property right and liable for the owner's debts equally with his legal
interests, unless specially exempted by statute or act of the settlor.
The creditor of the cestui que trust may always come into equity
and ask to have the trust res or its income applied to the satisfac-
tion of his debt." And in some jurisdictions this equitable rem-

»New York Real Property Law (Consol. Laws, c. 50) § 94; Garfield v.
Hatmaker, 15 N. Y. 475; McCartney v. Bostwick, 32 N. Y. 53.
i» Heath v. Bishop, 4 Rich. Eg. (S. C.) 46, 50, 55 Am. Dec. 654.
11 Taylor v. Harwell, 65 Ala. 1, 13.
i^Raynolds v. Hanna
(O. C.) 55 E'ed. 783; Taylor v. Harwell, 65 Ala. 1;
Burk&v. Morris, 121 Ala. 126, 25 South. 759; Clarke v. Windham, 12 Ala,
798, contra (cestui in possession) ; Huntington v. Jones, 72 Conn. 45, 43 Atl.
440 THE INTEREST OP THE CESTUI QUE TRUST (Ch. 13

edy is his only relief. "It is well settled that a judgment at com-
mon law not a lien upon a mere equitable estate or interest, nor
is
is such interest the subject of a levy and sale by virtue of an execu-
tion at law unaided by a decree of a court of equity." ^*
"It is a well-settled general rule that trust property, unless other-
wise provided by statute, can only be subjected to the payment of
debts in a court of equity. * * * i\. ^as early held in this state
that the estate of cestui que trust is not subject to attachment or
execution." ^* In a recent case a federal court has said "The in- :

cidents of a legal title attach to an absolute equitable interest to

such an extent as to permit alienation, and such interest may be
taken for the payment of the debts of the owner. * * * If an
equitable estate be chargeable with the debts of the owner, it fol-
lows that such estate may be sold to discharge the debt. It is true
that an execution issuing on a jtidgment is not leviable on an
equitable estate but it is also true that the corpus of an equitable
; ,

estate may be subjected in equitable proceedings, and sold to pay the

debt of the owner of the equitable estate." ^^ But in states where
the creditor's remedy is equitable only, if the trust is void because
for a person sui juris, the creditor may levy upon and sell the prop-
erty under execution against the cestui while it is in the hands of
the trustee.^'

564; Bronson v. Thompson, 77 Conn. 214, 58 Atl. 692; Coyne v. Plume, 90

Conn. 293, 97 Atl. 337 (by statute trust income is liable, if the trust is not
for the support of the oeneficiary or his family, and in the latter cdse only
the surplus above the amount necessary for support can be reached) Gen. ;

St. Conn. 1918, §§ 5872-5874; Macfarlane v. Dorsey, 49 Fla. 341, 38 South.

512; Johnston v. Redd, 59 Ga. 621; Jennings v. Coleman, 59 Ga. 718; De
Rousse V. Williams, 181 Iowa, 379, 164 N. W. 896; Knefler v. Shreve, 78
Ky. 297; Dickison v. Ugden's Ux'r, 89 Ky. 162, 12 S. W. 191; Southern
Nat. Life Ins. Co. v. Ford's Adm'r, 151 Ky. 476, 152 S. W. 243; People's
Bank of Madison, Ind., v. Deweese, 144 Ky. 172, 137 S. W. 850 (citing sec-
tion 439, Civ. Code Prac.) Dockray v. Mason, 48 Me. 178; Haley v. Pahner,
;

107 Me. 311, 78 Atl. 368; Presley v. Rodgers, 24 Miss. 520; Hunnicutt v.
Ala. Great Southern R. Co. (Miss.) 50 South. 697; McGregor-Noe Hard-
ware Co. V. Horn, 146 Mo. 129, 47 S. W. 957; Heaton v. Dickson, 153 Mo.
App. 312, 133 S. W. 159 Hogan v. Jaques, 19 N. J. Eq. 123, 97 Am. Dec.
;

644; Smith v. Collins, 81 N. J. Eg. 348, 86 Atl. 957; Spencer v. Eichmona,

46 App. Div. 481, 61 N. Y. Supp. 397; Sergmann v. Lord, 194 N. Jf. 70, 86
N. E. 828 Lummus v. Davidson, 160 N. G. 484, 76 S. E. (N. C.) 474 Decker
; ;

V. Directors of Poor, 120 Pa. 272, 13 Atl. 925; Egbert v. De Solms, 218
Pa. 207, 67 Atl. 212; Wyue v. White, 10 Rich. -Eq. (S. C.) 294; Bristow v.
McCall, 16 S. C. 545; Leake v. Benson, 29 Grat. (Va.) 153.
13 Smith V. Collins, 81 N. J. Eq. 348, 350, 86 Atl. 957. Accord: Johnston
v. Smith, 76 Fla. 474, 80 South. 184.,
»* Feldman v. Preston, 194 Mich. 352, 160 N. W. 655, 658.
IB First Nat. Bank of Spartanburg v. Dougan (D. C.) 250 Fed. 510, 512.
18 Armour Fertilizer Works v. Lacy, 146 Ga. 196, 91 S. E. 12.
§ 112) UABILITT FOR DEBTS 441

Some courts have subjected the trust res to the equitable execu-
tion/^ while others have decreed that the debt be satisfied out of
the income from the trust.^' The procedure may be said to be dis-
cretionary with chancery. "And consequently the estate, whether
it consist of land or personal property, may be subjected and sold,,

or if practicable and to the interest of the parties, the rents, inter-

est, or profits may be subjected and applied by a court of equity
to payment of debts of the cestui que trust." ^* Where the subject-
matter of the trust is applied to the satisfaction of the beneficiary's
debts, considerable support of the modern theory that the cestui's
right is a property right in the trust res is found.
Statutory Control
In many states the right of a creditor to procfeed in equity to
obtain satisfaction of his claim from cestui que trust's interest is
described and defined by statute. These judgment creditor's suits
are ordinarily required to be based upon evidence of the return of an
execution at law unsatisfied, or proof that the remedies at law for
the satisfaction of the debt have been exhausted,"" or at least evi-
dence that the debtor is insolvent."^ But in Massachusetts prior
judgment at law and return of execution unsatisfied are not pre-
requisites to the maintaining of this bill."'' A
typical statute pro-
vides: "' "When an execution against the property of a judgment
debtor, issued out of a court of record, as prescribed in the next
section, has been returned wholly or partly unsatisfied, the judg-
ment creditor may maintain an action against the judgment debtor,,
and any other person, to compel the discovery of any thing in ac-
tion, or other property belonging to the judgment debtor, and of
any money, thing in action, or other property due to him, or held

IT In the following cases the res was applied to the discharge of the debt:
Taylor v. Harwell, 65 Ala. 1; Southern Nat. Life Ins. Co. v. Ford's Adm'r,
151 Ky. 476, 152 S. W. 243; McGregor-Noe Hardware Co. v. Horn, 146 Mo.
129, 47 S. W. 957 ; McKimmon v. Eodgers, 56 N. C. 200. But in Huntington
V. Jones, 72 Conn. 45, 43 Atl. 564, it was held that the corpus could not be
taken by the creditor.
18 See remaining cases cited in note 12, ante.
19 Marshall's Trustee v. Rash, 87 Ky. 116, 118, 7 S. W. 879, 12 Am. St..
Rep. 467.
2 Burke V. Morris, 121 Ala. 126, 25 South. 759 (referring to section 814,
Code Ala. 1896) Jones & A. Ann. St. 111. 1913, par. 929; Durand v. .Gray,
;

129 111. 9, 21 N. E. 610; Ladd v. Judsbn, 174 lU. S44, 51 N. B. 838, 66 Am. St.
Rep. 267; Binns v. La Forge, 191 111. 598, 61 N. E. 382 Trotter v. Lisman,.
;

199 N. Y. 497, 92 N. E. 1052; Ann. Code Tenn. 1918, § 6092; Hooberry v.

Harding, 3 Tenn. Ch. 677.
21 De Rousse v. Williams, 181 Iowa, 379, 164 N. W. 896.
22 Barry v. Abbot, 100 Mass. 396. See, also, Heaton v. Dickson, 153 Mo.
App. 312, 133 S. W. 159.
23 code Civ. Proc, N. Y. §§ 1871, 1879, in part.
442 THE INTEREST OF THE CESTUI QUE TEUST (Ch. 13

in trust for him; to prevent the transfer thereof, or the payment

or delivery thereof, to him, or to any other person and to procure
;

satisfaction of the plaintiff's demand, as prescribed in the next sec-

tion but one. * * * This article does not * * * authorize
the discovery or seizure of * * * any money, thing in action,
or other property, held in trust for a judgment debtor, where the
trust has been created by, or the fund so held in trust has proceeded
from, a person other than the judgment debtor. * * * "
The interest of cestui que trust passes to his assignee in bank-
ruptcy.^* "And the beneficial interest of a bankrupt in property
held in trust passes also, in all cases where that interest might
have been transferred to another by the bankrupt, or might have
been levied upon under judicial proceedings against him." ^^
The principle that relief must first be sought at law has been
thus expressed by a New York court: "The rule was early estab-
lished in this state, that creditors, seeking the aid of a court of
equity to reach equitable assets of their debtor in satisfaction of
their claims, must first have exhausted their legal remedies, accord-
ing to the laws of this state, by the recovery of a judgment in one
of its courts and the return of execution thereon unsatisfied." ^°
While the opposing view is voiced by a rConnecticut court in these
words "Such a bill [a creditor's bill] is one brought to enforce the
:

payment of a debt out of the property of the debtor, under circum-

stances which impede or render impossible the collection of the
debt by the ordinary process of execution. * * * As, for illus-
tration, to reach equitable interests in property belonging to the
debtor which could not be reached by an execution at law. * * *
In this state it is not necessary that a judgment should be rendered
before the creditor's bill is brought. The judgment may be ren-
dered in the very action in which the equitable relief is asked." ^'
Execution at Law
Cburts and legislatures have increasingly taken the position that
the interest of cestui que trust is subject to levy and sale under an
execution at law, so that now in a number of states the creditor
may seize the interest of the beneficiary without resort to chan-
cery.^* "It is the policy of our law that all the property of a debt-

2* Matter of Alden, 16 Am. Bankr. Rep. 362; In re Reynolds (D. C.) 243
Fed. 268; Jenks v. Title Guaranty & Trust Co., 170 App. Div. 830, 156 N.
Y. Supp. 478.
25 In re Jersey Island Packing Co., 138 Fed. 625, 627, 71 C. C. A. 75, 2
L. R. A. (N. S.) 560.
28 Trotter v. Lisman, 199 N. Y. 497, 501, 92 N. E. 1052.
2T Huntington v. Jones, 72 Conn. 45, 49-50, 43 Atl. 564.
2 8 By St. 1 & 2 Vict. c. 110, execution at law against an equitable interest

in land was allowed, and where the judgment debtor has the entire equita-
ble interest in personal property it has been recently held that such inter-
 ;

§ 112) LIABILITY FOB DEBTS ^^3

or should be responsible for his debts, and in consonance with this

policy we have held that our statutes regulating attachments and
executions subject to these processes certain equitable interests in
property. The interests which have been thus brought within the
reach of execution have included the equitable title which a cestui
que trust has in lands or property, the legal title of which is held
by another under a trust for his benefit, the equity of redemption in
property subject to a mortgage, the equity in shares of stock pledg-
ed as collateral for a loan, and the income of a trust fund which the
cestui que trust is entitled to receive as a right." ^° A
typical stat-
ute on the subject is that of Kentucky "Estates of every kind held
:

or possessed in trust, shall be subject to the debts and charges of

the persons to whose use, or for whose benefit, they shall be re-
spectively held or possessed, as they would be subject if those per-
sons owned the like interest in the property held or possessed as
they own or shall own in the use or trust thereof." '"
The rights of attachment ^^ and garnishment ^^ have also been ac-
corded to the creditor of a cestui que trust in several jurisdictions.

est may be reached on legal execution. Stevens v. Hince, 110 L. T. E. 935.

See Keed v. Munn, 148 Fed. 737, 80 O. C. A. 215 (construing a statute which
is now Mills' Ann. St. Colo. § 4163); Ives v. Beecher, 75 Conn. 564, 54 An.
207 (action to foreclose a judgment lien on land under sections 5232-5236,
Gen. St. Conn. 1918) ; Hempstead v. Dickson, 20 111. 193, 71 Am. Dec. 260;
Code Iowa 1897, § 3961; Burns' Ann. St. Ind. 1914, §§ 724, 795; State
Bank V. Macy, 4 Ind. 362; Maxwell v. Vaught, 96 Ind. 136; Gen. St. Kan.
1915, §§ 7426, 7428; Carroll's Ky. St. 1915, § 2355; Eastland v. Jordan,
3 Bibb (Ky.) 186; Blanchard v. Taylor's Heirs, 7 B. Mon. (Ky.) 645; Hancock
V. Twyman (Ky.) 45 S. W. 68; Ann. Code Md. 1911, art. 88, § 1 Qand only)
Rev. St Mo. 1909, § 2192 (land only); Hutchins v. Hey wood, 50 N. H. 491;
Girard Life Ins. & Trust Co. v. Chambers, 46 Pa. 485, 86 Am. Dec. 513. Oomp.
St. N. J. 1910, p. 2254, §§ 30a and 30b, provide that where the trust is
created by the cestui t}ie income may be reached by proceedings supple-
mentary to .execution, and where a third person creates the trust the in-
come over $4,000 a year may be taken by the same process.
28 Humphrey v. Gerard, 83 Conn. 346, 355, 77 Atl. 65.
soCarroU's Ky. St. 1915, § 2355.
81 Price V. Taylor, 110 Ky. 589, 62 S. W. 270; Fidelity Trust & Safety
Vault Go. V. Walker, 116 Ky. 381, 76 S. W. 131; Watson v. Kennard, 77 N.
H. 23, 86 Atl. 257; 1 Comp. St. N. J. 1910, p. 136; Baumann v. Ballantine.
76 N. J. Law, 91, 68 Atl. 1114; Gjrard Life Ins. & Trust Co. v. Chambers,
46 Pa. 485, 86 Am. Dec. 513 Ann. Code Tenn. 1918, § 5260. Contra Feld-
; :

man v. Preston, 194 Mich. 352, 160 N. W. 655.

32 Riordan v. Schlicher, 146 Ala. 615, 41 South. 842; Gen. St. Conn, 1918,
§§ 5978, 5979; Easterly v. Keney, 36 Conn. 18 Ladd v. Judson, 174 111. 344,
;

51 N. E. 838, 66 Am. St. Rep. 267 (but see May v. Baker, 15 111. 89) ; Burns'
Ann. St. Ind. 1914, § 977; Estabrook v. Earle, 97 Mass. 302 (if trust revo-
cable and controllable by cestui at will) ; Warner v. Rice, 66 Md. 436, 8
Atl. 84; Richards' v. Merrimack & 0. R. R. R., 44 N. H. 127; Comp. St.
444 THE INTEEEST OF THE CESTUI QUE TEUST (Ch. 13

JV^hen Nature of Trust Prevents Subjection to Debts

The courts haAre been disinclined to seize the interest of a cestui
que trust in payment of his debts when that right has been uncer-
tain, contingent or on condition precedent,'^ but it will be no ob-
jection to the taking of cestui's interest that it is liable to be de-
feated or lessened by the happening of a condition subsequent, as,
for example, where the birth of children may decrease the share of
the debtor.^*
If the trust is for the purpose of enabling the trustee to apply
the income of the trust res to the use of the bene^ciary, and is
wholly discretionary, so that the cestui may receive nothing at
all, the creditors of the cestui have no rights in the trust property

or trust income. And the same is true where the trustee's duty is
merely to- apply the funds to the Support of the cestui.'" The bene-
fits of the trust are personal to the cestui and too vague to be sub-

jected to the payment of his debts.

And so, too, if the debtor is one of a group of cestuis que trust,
and the interests of the several beneficiaries are inseparable, no
part of the trust property or its avails may be applied in payment

Supp. N. J. 1911-1915, p. 586 (If the income is $18 a week or more, 10 per
cent, on the income up to $1,000 may be taken, and beyond $1,000 the
amount to be paid is in the discretion of the court) Code Civ. Proc N. Y. J
; .

1391 (where the income Is $12 a week or more) ; King v. Irving, 103 App.
Div. 420, 92 N. Y. Supp. 1094; Heppenstall v. Baudouine, 73 Misc. Rep.
118, 132 N. Y. Supp. 511; John G. Myers Co. v. Reynolds (Sup.) 166 N. Y.
Supp.. 654 ; Brearley School v. "Ward, 201 N, Y. 358, 94 N. E. 1001, 40 L. E.
A. (N. S.) 1215, Ann. Cas. 1912B, 251 ; In re Ungrich, 201 N. Y. 415, 94 N.
B. 999; Grieves v. Keane, 23 R. I. 136, 49 Atl. 501. Contra: Plunkett v.
Le Huray, 4 Har. (Del.) 436; Peninsular Sav. Bank v. Union Trust Co.,
127 Mich. 355, 86 N. "W. 798 (Construing sections 13436, 13437, How. Ann.
St. Mich. 1913); Ross v. Ashton, 73 Mo. App. 254 (unless trust deed is
fraudulent); Willis v. Curtze, 203 Pa. Ill, 52 Atl. 5; Oglesby v. Durr
(Tex. Civ. App.) 173 S. W. 275 ; White's Ex'r v. White, 30 Vt. 338.
83 Russell V. Milton, 183 Mass. 180; HiU v. Fulmer (Miss.) 39 South. 53;
Myer v. Thomson, 35 Hun (N. Y.) 561.
3* First Nat. Bank of Spartanburg v. Dougan (D. C.) 250 Fed. 510.
soFortner v. Phillips, 124 Ark. 395, 187 S. W. 318; Holmes v. Bushnell,
80 Conn. 233, 67 Atl. 479; Baker v. Brown, 146 Mass. 369, 15 N. E. 783;
Nickerson v. Van Horn, 181 Mass. 562, 64 N. E. 204; Mitchell v. Choctaw
Bank, 107 Miss. 314, 65 South. 278; Banfleld v. Wiggin, 58 N. H. 155; Chase
V. Currier, 63 N. H. 90 ; Wolf man v. Webster, 77 N. H. 24, 86 Atl. 259 ; Park-
er V. Carpenter, 77 N. H. 453, 92 Atl. 955; Raymond v. Tiffany, 59 Misc.
Rep. 283, 112 N. Y. Supp. 252. Contra: Marshall's Trustee v. Rash, 87
Ky. 116, 7 S. W. 879, 12 Am. St. Rep. 467. And where necessaries were
furnished to the cestui with the knowledge of the trustee recovery has been
allowed from the trust property, even tliough the trust was one to apply
income. Cooper v. Carter, 145 Mo. App. 387, 129 S. W. 224; Sherman v.
Skuse, 166 N. Y. 345, 59 N. E. 990.
§ 113) RIGHT OF CESTUI QUE TRUST AGAINST TRUSTEE 445

of the debts of any particular cestui que trust.*' Trusts for the
support of a family are illustrative. The creditors of the father or
mother of the family have no rights in the trust property. But, of
course, debts contracted for the benefit of the entire group are co"!-
lectible from the trust estate.*^

When Express Stipulation of Settlor Prevents Liability for Debts —

Spendthrift Trusts
Spendthrift trusts have previously been defined and their legali-
ty in the various jurisdictions stated. In the few states where they
are void as against public policy, of course, an attempt to prescribe
in the trust instrument that the cestui's interest shall not be taken
for his debts is wholly without effect. In a considerable group of
states the creditor of the beneficiary of a spendthrift trust is re-
stricted to taking the surplus income, after subtraction of an
amount sufficient to maintain and educate the cestui in the style to
which he has been accustomed. In the larger class of states,
where spendthrift trusts flourish in their full vigor, a statement in
the trust instrument by the settlor that the interest of the cestui
que trust is to be free from the claims of his creditors accomplishes
its object, and the creditors must look elsewhere than to the trust
property for satisfaction. Reference is made to the previous dis-
cussion for a statement of the extent to which the rights of credi-
tors are affected in any particular jurisdiction by these trusts.**

THE RIGHT OF CESTUI QUE TRUST AGAINST THE

TRUSTEE
113. The
right of cestui que trust against the trustee is that the
trust be carried out as laid down in the trust instrument
and in accordance with ihe rules of equity.
Beneficiaries of private trusts majTpfoceed in their own behalf to
enforce this right by a bill in equity against the tfustee.
Where the trust is charitable, the indefinite cestuis are
represented by the Attorney General or other public of-
ficer.

88 Brooks V. Raynolds, 59 Fed. 923, 8 C. C. A. 370; Bell v. Watkins, 82

Ala. 512, 1 South. 92, 60 Am. Hep. 756; St. John v. Dann, 66 Conn. 401,
34 Atl. 110; Tolland County Mut. Fire Ins. Co. v. Underwood, 50 Conn.
493; McCann v. Taylor, 10 Md. 418; Brown v. Postell, 4 Rich. Eq. (S. C.)
71; Roberts v. Hall, 35 Vt. 28.
»T Mandell v. Fulcher, 86 Ga. 166, 12 S, E. 469 ; Campbell v. Brannin, 8
B. Mon. (Ky.) 478.
88 See ante, S 5L
 . .

446 THE INTEBEST OP THE CESTUI QUE TRUST (Ch. 13

The settlor cannot institute a suit to enforce this right of the ces-
tui que trust.

The rights of cestui que trust may be divided naturally into those
against the trustee and those against third persons. The rights
against the trustee are correlative to the duties of the trustee dis-
cussed in a previous chapter. It was there shown that the duties
of the trustee toward the beneficiary include the exercise of the
skill and care of a reasonably prudent man in the management of
his own affairs, the manifestation of the highest degree of good
faith and honesty, action solely in the interest of cestui que trust,
investment of the trust fund according to the standards of chan-'
eery or the statutes of the state, payment of the necessary ex-
penses of the trust, payments to the beneficiaries according to the
terms of the trust instrument, keeping accurate records of the trust
affairs, informing the cestui of the trust business on ^application,
and rendering an account in a court of competent jurisdiction. '°
Viewed from the cestui's standpoint those are his rights against
the trustee. They may be summarized by saying that the right of
the cestui que trust is to have the trustee carry out the trust as laid
down in the trust instrument and in accordance with the rules of
equity. This right is so axiomatic as to need no treatment and has
often- been described and enforced by the courts on the application
of the cestui que trust.*"
Thus, expressing this fundamental idea, a Delaware court has
said that "every cestui que trust, whether a volunteer or not, or be
the limitation under which he claims with or without a considera-
tion, is entitled to the aid of a court of equity, to avail himself of
the benefit of a trust, * * * ^^d that the forbearance of the
trustees shall not prejudice him. * * * i^ these cases the prin-
ciple seems to be fully established, that the person for whose bene-
fit a trust is created may compel the performance, although he may

be no pajty to the contract." *^

This right to compel the execution of the trust rests in the ces-

39 Ante, §§ 97-107.
40 Robinson v. Mauldin, 11 Ala. 977; Smith v. Wildman, 37 Conn. 384;
Cooper V. McClun, 16 111. 435; Wyble v. McPheteps, 52 Ind. 393; Forsythe
V. Lexington Banking & Trust Co. (Ky.) 121 S. W. 962; Suydam v. De-
quindre, Har. (Mich.) 347; Goble v. Swobe, 64 Neb. 838, 90 N. W. 919; Brock
V. Sawyer, 39 N. H. 547; Attorney General ex rel. Bailey v. Moore's Ex'rs,
19 N. J. Eq. 503; In re Scherrer's Estate, 24 Misc. Rep. 351, 53 N. T.
Supp. 714; Fogg v. Middleton, 2 Hill, Bq. (S. C.) 591; Clark v. BroWu
(Tex. Civ. App.) 108 S. W. 421; Bell's Adm'r v. Humphrey, 8 W. Va. 1;
Harrigan v. Gilchrist, 121 Wis. 127, 99 N. W. 909.
*i Kodney v. Shankland, 1 Del. Ch. 35, 45, 46, 12 Am. Dec. 70.
 ;

§ 113) EIGHT OF CESTUI QUE TRUST AGAINST TRUSTEE 447

tui que trust alone. A

person having no fii;iancial interest in the
carrying out of the trust has no standing in equity.*^ Where the
interest of the beneficiary is inheritable, obviously, the right to
enforce passes to the heirs ^^ or personal representative** on the
cestui's death. The right of enforcement is not affected by tlie con-
tingent *^ or remote *° nature of cestui que trust's interest. Where
the interest is assignable, the assignee may come into court to de-
mand that the trust be carried out.*^ Where a trust is for a group
like a family, any member may enforce the trust.** Beneficiaries
of resulting *° and constructive ^^ trusts have the same rights as
those of an express trust in this respect. It has been held, that in
the case of a trust for support, one furnishing support to the ces-
tui que trust may maintain an action to enforce the trust." ^
Cestui Alone may Enforce
Persons having no financial interest In the trust as, for example,
a relative of the cestui, who is only affected by reasons of senti-
ment,^'' or a claimant of the legal title in hostility to the trust,"*
cannot sue for the enforcement or construction of the trust. Where
a private trust is for the aid of an individual pauper, a town can-
not maintain a bill to enforce the trust, on the theory that it has a
financial interest because the pauper may become a, town charge."*
The interest is too remote.
It has previously been demonstrated that the settlor retains no
interest enabling him to require a construction or enforcement of

4i2Bayley v. Clark, "53 111. App. 154; Tarbert v. Rollins, 130 Md. 413,
100 Atl. 637; Foster v. Friede, 37 Mo. 36.
4sMendenhaU v. "Walters, 53 Okl. 598, 157 Pac. 732.
*4 Schwebel v. Wohlsen, 254 Pa. 281, 98 Atl. 864; Smith v. Smith, 38 Pa.
Super. Ct. 251.
*o Williams v. Sage, 180 App. Div. 1, 167 N. T. Supp. 179; Clarke v. De-
veaux, 1 S, C. 172.
*8 Pritchard v. Williams, 175 N. C. 319, 95 S. E. 570
; Cooper v. Day, 1 Rich.
Eq. 26.
*T Smith V. Orton, 21 Hiow. 241, 16 L. Ed. 104 ; Mitchell v. CarroUton
Nat. Bank, 97 S. W. 45, 29 Ky. Law Rep. 1228; Clark v. Crego, 47 Barl).-(N.
Y.) 599.
*8 Chase v. Chase, 2 Allen (Mass.) 101.
49 Franklin v. CoUey, 10 Kan. ,260 ;Sherburne v. Morse, 132 Mass. 469
Leader v. Tierney, 45 Neb. 753, 64 N. W. 226. But the heirs of a person who
could have elected to be a resulting trustee, but did not, are not entitled to
enforce the trust. Cooper v. Cockrum, 87 Ind. 443.
'bo Fox V. Fox, 77 Neb. 601, 110 N. W. 304; Johnston v. Reilly, 66 N. J. Eq.
451, 57 Atl. 1049 Trustees of Amherst College v. Ritch, 10 Misc. Rep. 503, 31
;

N. Y. Supp. 885.
51 Bulkley 31 Hun (N. Y.) 137.
v. Staats,
2 Autrey
Stubenrauch, 63 Tex. Civ. App. 247, 133
v. S. W. 531.
03 Warren v. Warren, 75 N. J. Eq. 415, 72 Atl. 960.
B4 Town of Sharon v. Simons, 30 Vt. 458.
448 THE INTEEEST OF THE CESTUI QUE TRUST (Ch. 13

the trust. Unless he is also a cestui que trust, his reasons for hav-
ing the trust carried out are sentimental, not financial, and his right
moral, not legal.""
It has likewise been stated that, in jurisdictions where the trus-
tee is empowered to devise the trust res or where it descends to his
heirs or representatives at his death, the devisee,"' heir °' or rep-
resentative "* is bound by the trust, as was the ancestor, and the
right of cestui que trust to enforce the trust obligation extends to
the devisee, heir, or representative. The same principle applies to
3. substituted trustee who replaces the original trustee by decree of

chancery."*
As in the case of a private trust, so with the charitable trust there
is a right to have the trustee enforce the trust in the manner provid-

ed by the settlor and by the rules of chancery.*" This right is in-

herent in the cestuis que trust of the charitable trust, but, since
they are always indefinite until they have been selected by the trus-
tees and have received the behefits of the trust, the right must be
enforced by some representative of the public generally, the pros-
pective beneficiaries. The officer usually selected has been the At-
torney General,*^ although in some states the prosecuting attor-

»» Ante, § 71.
68 Ante, § 81; Hill v. True, 104 Wis. 294, 80 N. W. 462.
»' Ante, § 81; Mendenhall v. Walters, 53 Okl. 598, 157 Pac. 732; Smalley
V. Paine, 62 Tex. Civ. App. 52, 130 S. W. 739.
soAnte, § 81; Austin v. Wilcoxson, 149 Cal. 24, 84 Pac. 417; Smith t.
Darby, 39 Md. 268 ; Anderson v. Thomson, 38 Hun (N. Y.) 394; Devoe v. Lutz,
133 App. Div. 356, 117 N. T. Supp. 339 ; Xoung v. Hughes, 39 Or. 586, 65 Pac.
«87, 66 Pac. 272; Bible v. Marshall, 103 Tenn. 324, 52 S. W. 1077.
BO Ante, § 82;, In re Appley (Sup.) 33 N. Y. Supp. 724. '

eo Harris v. Cosby, 173 Ala. 81, 55 South, 231; Kauffman v. Foster, 3 Cal.
App. 741, 86 Pac. 1108; Attorney General v. Wallace's Devisees, 7 B. Mon.
(Ky.) 611; EUenherst v. Pythian, 110 Ky. 923, 63 S. W. 37; Brunnenmeyer v.
Buhre, 32 111. 183; Lamb v. Cain, 129 Ind. 486, 29 N. E. 13, 14 L. R. A. 518;
Peter v. Carter, 70 Md. 139, 16 Atl. 450; President, etc., of Harvard College v.
Society for Promoting Theological Education, 3 Gray (Mass.) 280; Sessions v.
Doe ex dem Reynolds, 7 Smedes & M. (Miss.) 130; Chambers v. City of St.
Louis, 29 Mo. 543 ; Adams Female Academy v. Adams, 65 N. H. 225, 18 Ati. '

777, 23 Atl. 430, 6 L. B. A. 785; Allen v. Stevens, 161 N. Y. 122, 55 N. E. 568;

Penfield v. Skinner, 11 Vt. 296; Overseers of Poi)r of Richmond County v.
Tayloe's, Adm'r, Gilmer (Va.) 336. But, of course, equity will take jurisdiction
only to protect a property right. Houston v. Howze, 162 Ala. 500, 50 South.
266. And equity will not interfere merely to control' the discretion of the trus-
tee. Society of Cincinnati's Appeal (In re Washington Monument Fund) 134
Pa. 621, 26 Atl. 647, 20 L. R. A. 323.
61 People ex rel. Ellert v. Cogswell, 113 Cal. 129, 45 Pac. 270, 35 L. B. A.
269; Parker v. May, 5 Gush. (Mass.) 336; Burbank v. Burbank, 152 Mass. 254,
25 N. E. 427, 9 L. R. A. 748 ; Attorney General v. Bedard, 218 Mass. 378, 105
N. E. 993 ; Tyree v. Bingham, 100 Mo. 451, 13 S. W. 952 ; N. Y. Real Property
 § 113) RIGHT OP CESTUI QUE TRUST AGAINST TRUSTEE 449

ney *^ performs this function. If tne trustees are guilty of neglect

•
or maladministratioil, the Attorney General, or other correspond-
ing officer, may, either on his own initiative or on the relation of
any citizen, institute proceedings in chancery for the enforcement of
the trust. "Courts of equity, have jurisdiction to prevent a misuse or
an abuse of charitable trusts. * * * The Attorney General or a
state's attorney representing the public is charged with the duty of
preventing a breach of a trust for a public charity ot to restore a
trust fund after it has been diverted." "^ A
Massachusetts court
has recelitly voiced the same principle as follows "If the trustees
:

appointed under the decree neglect or refuse to execute the trust,

or abuse their powers, the Attorney General on his dwn initiative or
at the relation of thoie who are beneficially interested can peti-
tion for their removal, and also can have relief in equity for an ac-
counting, or, if the trustees are uncertain or are unable to agree
among themselves as to their powers and duties, they can ask for
instructions making him a party defendant." °* Any person may
act as a relator in a charitable information, regardless of personal
financial interest in the enforcement of the trust.""
Settlor's Powers ""

^ ,

In the discussion of the rights of the settlor the law was shown
to be that, by the weight of authority, the settlor has no capacity
to sue to enforce the rights of the cestuis que trust, or to obtain a
construction of the charitable trust."" "Before it was established
that a valid trust was created by the will, no question as to its exe-
cution could arise. After that was done and it was determined
that the trust was charitable, it became the duty of the Attorney
General to see that the rights of the public in the trust were pro-
tected and that it was properly executed. The heirs had no inter-
est in the question apart from the general public, whose j-ights were
represented by the Attorney General." "' The court was speaking
of the heirs of the settlor of the charity. A
person expecting or

Law^ (Consol. Laws, c. 50) § 113 N. Y. Personal Property Law (Consol. Laws,
;

c.41) § 12; BueU v. Gardner (Sup.) 149 N. Y. Supp. 803; Association for the Relief
of Respectable, Aged Indigent Females v. Beekman, 21 Barb. (N. T.) 565;
Ewell V. Sneed, 136 Tenn. 602, 191 S. W. 131, 5 A. L. R. 303.
62 Howell's Ann. St. Mich., § 10701.
»a People ex rel. Smith v. Braucher, 258 111. 604, 608, 101 N. E. 944, 47 L. R
A. (N. S.) 1015.
64 Crawford v. Nies, 224 Mass. 474, 490, 113 N. B. 408.
88 Mackenzie v. Trustees of Presbytery of Jersey City, 67 N. J. Bq. 652, 61
Atl. 1027, 3 L. R. A. (N. S.) 227.
66 Ante, § 71. And see Strong v. Doty, 32 Wis. 381.
67 Petition of Bumham, 74 N. H. 492, 494, 69 Atl. 720;

BOGEET Tbusts —29

450 THE INTEREST OF THE CESTUI QUE TEUST (Ch. 13

hoping to be a cestui que trust of a charity is not a proper plaintiff

in a bill to enforce the trust.** ,

Visltorial Powers
The visitor of an eleemosynary corporation has no power to en-
farce the right of the public that the charity be carried on. The
power of visitation is the authority retained by the founder for
himself and his heirs, or his nominees, to inspect and regulate the
internal affairs of a charitable corporatioVi. It is not a power vest-
ed in courts of equity in the United States. It is a rule of the ,law
of corporations, rather than of trusts. °° After considering the
common law of England upon the subject of visitation, as laid down
in Philips v. Bury [1 L,d. Raym. 5, 2 Term. R. 346], an early case, a
Massachusetts court has stated; "By that law the visitor of ally
eleemosynary corporations is the founder or his heirs, unless he has
given the power' of visitation to some other person or body, which
is generally the case; and to -the visitor thus constituted belongs
the right and power of inspecting the affairs of the corporation and
superintending all officers who have the management of them, ac-
cording to such regulations and restrictions as are prescribed by
the founder in the statutes which he ordains, without any control
or revision of any other person or body, except the judicial tribunals
by whose authority and jurisdiction they may be restrained and
kept within the limits of their granted powers, and made to regard'
the Constitution and general laws of the land." "* With respect to
the possession of the power of visitation by chancery ^ New York
court has said "While a court of equity never had visitorial pow-
:

er, yet it always assumed jurisdiction over the charity and its offi-
cers when a question arose as to the proper use and disposition of
the funds. The poyer of visitation, therefore, pertained to the
supervision and regulation of the work and purpose of the charity,
while the court of equity, not as a visitor, but in its inherent power
over trusts, assumed jurisdiction to determine whether the funds
were being spent in accordance with the trust and purpose of the
charity." '^ But in England, when the visitorial power cannot be
exercised by the fouijder or his nominee, it results to the crown and
will be exercised by the Chancellor as the representative of the

8 8 Association for the Relief of Respectable, Aged Indigent Females v. Beek-

man, 21 Barb. (N. Y.) 565.

o» Allen V. JUcKean, 1 Sumn. 276, Fed. Cas. No. 229; Trustees of Auburn
Academy v. Strong, 1 Hopk. Oh. (N. Y.) 278; Koblitz v. Western Reserve
University, 21 Ohio Cir. Ct. R. 144. i

70 In re Murdock, 7 Pick. (Mass.) 303, 321.

71 In re Norton, 97 Misc. Rep. 289, 299, 161 N. Y. Supp. 710.
§ 114) EIGHTS OF CESTXJI QUE TRUST AGAINST THIRD PERSONS 451

crown.'"'^And courts have been given quasi-visitorial powers in

some cases in America.^*
It is self-evident that the Legislature, being a law-making rather
than a law-enforcing body, has no power to enforce the right, of the
Cestuis que trust of a charitable trust. It cannot enact statutes
which modify the terftis of the trust, as by a change in trustees or
beneficiaries. Such acts have been held to violate the constitutional
guaranty against the impairment of the obligation of contracts.''*
"The acceptance by the town [the trustee] of Maria Gary's propo-
sition contained in her letter created a contract, which was executed
on her part by the payment of the money, and which continued
binding on the town and the trustees as to their conduct in refer-
ence to the charity. * * * -y/^ ^^e of opinion that the statute
,

which we are considering impairs the obligation of the contract

under which this charity is administered." '° The act referred to
by the court changed' the trustee.

THE RIGHTS OF CESTUI QUE TRUST AGAINST THIRD

PERSONS
114. The cestui que trust has a right that third persons (that is,
strangers to the trust) shall not injure or appropriate to
their own use tiie trust property, and that they shall not
participate or aid in a breach of the trust by the trustee.
A bank, having on deposit trust funds, is under a duty to the
cestui que trust not to use such funds to satisfy individual
obligations of the trustee to it, and not to aid the trustee
in misappropriating the trust funds.
A buyer of property from a trustee is under no duty to the cestui
que trust to see to the proper application of the purchase
price paid by him to the trustee.

T2 Lewin on Trusts (12th Ed„) 622, citing St. 36 & 37 Vict. c. 66, § 17.
Ts N. T. Membership Corporations Law (Consol. Laws, c. 35) § 16; N. Y.
Religious Corporafions Law (Consol. Laws, c. 51) § 14.
74 Tharp v. Fleming, 1 Houst. (Del.) 580 ; Town of Greenville v. Town of
Mason, 53 N. H. 515; Brown v. Hummel, 6 Pa.47 Am. Dec. 431; Plymouth
86,
V. Jackson, 15 Pa. 44 ; Field v. Directors of Girard Colleg'e, 54 Ta. 233. But
acts authorizing a change in the character of the trust property have been
allowed as valid. Stanley v. Colt, 5 Wall. 119, 18 L. Ed. 502 Petition of Van ;

Home, 18 E. I. 389, 28 Atl. 341. And where the Legislature has appointed a
corporation as the trustee (the settlor having appointed none), the Legislature
can revoke the charter of the first corporation and create another to take the
property in trust. Wambersie v. Orange Humane Soc.; 84 Va. 446, 5 S. E. 25.
76 Cary Library v. Bliss, 151 Mass. 364, 375, 378, 25 N. E. 92, 7 L. B. A. 765.
452 THE INTEREST OF THE CESTUI QUE TKUST (Ch. 13

Every property owner, be his interest legal or equitable, has a

funda^nental right to have third persons refrain from injuring or
appropriating the subject of his property right. It is therefore a
truism that cestui que trust, being the owner of an equitable prop-
erty right, has the support of the law in his Claim that strangers
shall not cause damage to the trust res or prevent the application
of it to the purposes of the trust. An elevated railroad company
which erects structures injurious to the trust property must re-
spond in damages to the trust." If a stranger converts to his own
use slaves which are the subject-matter of the trust, an action of
trover may be maintained.'' If persons unconnected with the trust
wrongfully retain possession of the trust estate, replevin or eject-
ment or a similar possessory action will lie.'* In whose name these
actions must be brought is not here the question. The actions
inure to the benefit of cestui que trust. They represent rights
which belong to him, or, viewed otherwise, duties owed to him by
the public at large.
That the third person violates his duty to the beneficiary, or in-
fringes upon the cestui's rights, in conjunction with the trustee is
naturally of no importance as far as the liability of such third per-
son is concerned. Such liability exists, nevertheless. "There can
be no dispute that as a general principle all persons who knowingly
participate or aid in committing a breach, of trust are responsible
for the money and may be compelled to replace the fund which
they have been instrumental in diverting." " Thus, a cestui que
trust of a trust for creditors may maintain a bill in equity against
a third person who has induced the trustees to transfer the trust
assets to him *" and individual creditors of the trustee, who know-
;

ingly accept trust funds from the trustee as paymetit of their debts,
are liable therefor to the cestui que trust.*^
'
Rights Against Banks
This right of the beneficiary to have third persons refrain froni
interfering with the trust property and from -aiding in a breach
of trust has been frequently discussed in cases involving the rights
and duties of banks holding trust funds on deposit. To what ex-
tent,, if at all, may the bank apply the trust funds to its own use by
taking them to satisfy a debt of the trustee to it? To what extent

76 Roberts v. N. Y. El. E. R. Co., 155 N. Y. 31, 49 N. E. 262.

T7 Jones V. Cole, 2 Bailey (S. 0.) 330.
7 8 Warren v. Howard, 99 N. 0. 190, 5 S. E. 424.
Tc Duckett V. National Mechanics' Bank, 86 Md. 400, 403, 88 Atl. 983, 39 L.
R. A. 84, 63 Am. St. Rep. 513.
80 Kentucky Wagon Mfg. 'Co. v. Jones & Hopkins Mfg. Co., 248 Fed. 272, 160
C. C. A. 350.
81 Stratton v. Stratton's Adm'r, 149 Ky. 473, 149 S. W. 900.
 §114) EIGHTS OP CESTUI QUE TRUST AGAINST THIRD PERSONS 453

is the bank obliged to scrutinize the withdrawals by the trustee

from the trust fund to ascertain that the trustee is not diverting the
'

trust funds to improper uses?

It has been almost universally held that a bank, which has notice
that funds deposited with it are trust funds has no lien upon such
deposit for the debts of the trustee to it, has nb right to apply such
trust funds to the satisfaction' of the individual debt of the trustee,
,
with or without his consent, and will be liable to the cestui que
trust if it makes such application. This doctrine applies to all
fiduciary accounts, even though not strictly trust accounts. It has
been used in cases of funds deposited by agents, guardians, execu-
tors, and commission merchants. The bank may rtot take the trust
money to pay the it, whether the account be en-
trustee's debt to
whether it be a personal account in
titled a trust account,*'' or
which the bank knows trust funds have been deposited.** Where
82 Cu Albert v. Robarts, Lubbock & Co. [1909] 2 Ch. 226; Ex parte Kingston,
L. R. 6 Ch. App. 632; United States Fidelity & Guaranty Co. v. Union Bank &
Trust Co., 228 Fed. 448, 143 C. C; A. 30; Central Nat. Bank v. Connecticut
Mut. L. Ins. Co., 104 U. S. 54, 26 L. Ed. 693 Bank of Guntersville v. Crayter,
;

75 South. 7, L. R. A. 1917F, 460 Sayre v. Weil, 94 Ala. 466, 10 South. 546, 15

;

li. R. A. 544 ; Keeney v. Bank of Italy, 33 Cal. App. 515; 165 Pac. 735; Lowndes

V. City Nat. Bank of South Norwalk, 82 Conn. 8, 72 Atl. 150, '22 L. R. A. (N.
S.) 408 ; American Trust & Banking Co. t. Boone, 102 Ga. 202, 29 S. E. 182, 40
L. R. A. 250, 66 Am. St. Rep. 167 ; Miami County Bank v. State ex rel. Peru
Trust Co., 61 Ind. App. 360, il2 jN. E. 40 Washbon v. Linscott State Bank,
;

87 Kan. 698, 125 Pac. 17 ; Farmers' & Traders' Bank of Shelbyville v. Fidelity
& Deposit Co. of Maryland; 108 Ky. 384, 56 S. W. 671 Allen v. Puritan Trust
;

Co., 211 Mass. ,409, 97 N. E. 916, L. R. A. 1915(3, 518; State Bank of St.
Johns V. McCabe, 135 Mich. 479, 98 N. W. 20 Jeffray v.' Towar, 63 N. J. Eq.
;

530, 53 Atl. 182; McStay Supply Co. v. Stoddard, 35,Nev. 284, 132 Pac. 545;
Fidelity & Deposit Co. of Maryland v. Rankin, 33 Okl. 7, 124 Pac. 71 ; United
States Fidelity & .Guaranty Co. v. Adoue & Lobit, 104 Tex. 379, 137 S. W. 648,
138 S. W. 383, 37 L. R. A. (N. S.) 409, Ann. Cas. 1914B, 667; Boyle v. North-
western Nat. Bank, 125 Wis. 498, 108 N. W. 1123, 104 N. W. 917, 1 L. R. A.
(N. S.) 1110, 110 Am. St. Rep. 827. In First Nat. Bank of Sharon v. Valley
State Bank, 60 Kan. 621, 57 Pac. 510, it was held that the depositary was
not liable when the account from which the bank received payment was an in-
dividual account and the trustee had withdrawn from it more than the
amount of the trust fund and the bank had had a right to suppose that such
withdrawals were paid to the cestui'. See Thulin, "Misappropriation of Funds
by Fiduciaries ; the Bank's Liability," 6 Cal. Law Rev. 171 ; Scott, "Partici-
pation in a Breach of Trust," 34 Harv. Law Rev. 454.
^'' Santa Marina Co. v. Canadian
Bank of Commerce (D. C.) 242 Fed. 142:
Miami County Bank v. State ex rel. Peru Trust Co., 61 Ind. App. 360, 112 n!
E. 40 ; Nehawke Bank v. Ingersoll, 2 Neb. UnofC. 617, 89 N. W. 618 ;'

Globe
-

Sav. Bank v. Nat. Bank of Commerce, 64 Neb. 413, 89 N. W. 1030 ; Interstate

Nat. Bank v. Claxton, 97 Tex. 569, 80 S. W. 604, 65 L. R. A. 820, 104 Am. Bt.
Rep. 885; Pratt v. Commercial Trust Co., 105 Misc. Rep. 324, 174 N.
Y. siipp
88, affirmed (Sup.) 175 N. X. Supp. 918; Hale v. Windsor Say. Bank, 90
Vt!
454 THE INTEEEST OF THE CESTUI QUE TRUST (Ch. 13

a check on a trust account deposited by the trustee

in the A. bank is

in his individual account in the B. bank when such

latter account
is overdrawn, the bank is liable to the cestui for the full amount
of the check so deposited.** In a recent New York case '" it was
held that, where a trustee drew a check on his trust account in the
A. bank, deposited it to his private credit in the B. bank, and .then
paid the funds to the B. bank to satisfy his own debt to such bank,
the B. bank was liable to the cestui que trust for the amounts it
received, and also for all amounts subsequently taken from tthe pri-
vate account to pay other debts of the trustee to third parties, since
the bank had made no inquiry after receiving notice of a breach of
trust by the wrongful payment to it. In another case a chteck pay-
able to "A, guardian," was deposited by the guardian to his in-
dividual account and part of the credit used to pay A.'s debt to the
depositary. This rendered the depositary liable to the cestui for
the amount received by it.*°
Basis of Liability
The basis of liability in this class of cases has been clearly stated
by the courts. "The principle governing the defendant's liability
is, that a banker who knows that a fund on deposit with him is a

trust fund cannot appropriate that fund for his private benefit, or
where charged with notice of the conversion join in assisting others ,

to appropriate it for their private benefit, without being liable to ,

487, 98 Atl. 993. But it has been held that the bank is not liable if it merely
credited the trust deposit to a personal account of the trustee which was then
overdrawn and thus paid the overdraft, without any intent to make a profit
(Coleman v. Bucks & Oxon Union Bank [1897] 2 Ch. 243) ; nor is there
liability if the bank did not know that the funds deposited in the personal ac-
count were trust funds (First Denton Nat. Bank v. Kenney, 116 Md. 24, 81 Atl.
227, Ann. Cas. 1913B, 1337) ; or if the trustee's individual account, since the
trust deposit has been mingled with his own moneys, has been reduced below
the amount of the trust money and there is no proof that the trust money is
still in the account (Mayer v. Citizens' Bank of Sturgeon, 86 Mo. App. 422).
8* Allen V. Puritan Trust Co., 211 Mass. 409, 97 N. E. 916, KE. A. 1915C,
518. /
85 BischofC Yorkville Bank, 218 N. T. 106, 112 N. E. 759, D. R. A. 1916F,
V.
1059. See, Corn Exch. Bank v. Manhattan Sav. Inst'n, 105 Misc. Rep.
also,"
615, 173 N. y. Supp. 799; Atwood-Stone Co. v. Lake County Bank, 38 S.
D. 377, 161 N. W. 539, and United States Fidelity & Guaranty Co. v. Adoue '

& Lobit, 104 Tex. 379, 137 S. W. 648, 138 S. W. 383, 37 L. R. A. (N. S.) 409,
Ann. Cas. 1914B, 667. But in Interstate Nat. Bank v. Claxton, 97 Tex. 569, SO
S. W. 604, 65 L. R. A. 820, 104 Am. St. Rep. 885, while holding the bank
liable for the benefit it received from the payment of its debt out of the trust
fund, t^e court did not extend the liability to money thereafter withdrawn by
the trustee and used to pay debts of other, creditors.
86 United States Fidelity & Guaranty Co. v. Adoue & Lobit, 104 Tex.
379, 13T
S. W. 648, 138 S. W. 383, 37 L. R. A. (N. S.) 409, Ann. Gas, 1914B, 667; Brovan
V. Kyle, 166 Wis. 347, 165 N. W. 382,
 § 114) EIGHTS OF CESTm QUI; TRUST AGAINST THIRD PERSONS 455

refund the money if the appropriation is a breach of the trust." "

Or, as the New York Court of Appeals has put it: "Inasmuch as
the defendant knew that the credits to Poggenburg created by the
proceeds of the checks were of a fiduciary character and were
equitably owned by the executor, it had not thd right to participate
in a diversion of them from the estate or the proper purposes under,
the will. Its participation in a diversion of them would result from
either (a) acquiring an advantage or benefit directly through or
from the diversion, or (b) joining in a diversion, in which it was
not interested with actual notice or knqwledge that the diversion
was intended or was being executed, and thereby becoming privy
to it." »»
When Bank Not Liable
When a trustee checks on a trust account, or on his individual
account containing trust funds, the bank is entitled to presume that
the withdrawal is made for the proper purposes of the trust. The
mere fact that the check is payable to the trustee in his private
capacity or is not payable to a beneficiary of the trust places no
duty on the bank to inquire into the disposition of the trust money.
It is only when the bank has actual notice of an intended misappro-
priation of the trust fund that it is warranted in refusing to honor the
trustee's check, and is liable if it does honor it, according to the
great weight of authority. Thus, the mere deposit of trust funds
in an individual account is not of itself wrongful and creates no lia-
bility on the part of the bank for later withdrawals.*" "An admin-
istrator of other person having charge of trust funds may deposit
them in a bank to the credit of his personal account and check them
out in the usual course of business, and the bank, though it has
knowledge of the character of the funds so deposited, is not thereby
made liable to the beneficial, or actual, owners of such funds, in the
absence of any knowledge on its part that the funds are being mis-
appropriated or misapplied by such trust officer." '"' But when a
bank is expressly directed to credit a check to a trust acc6unt and

87 Allen V. Puritan Trust Co., 211 Mass. 409, 422, 97 N. E. 916, L. R. A.

1915C, 518.
88 BischofE V. Torkvllle feank, 218 N. Y. 106, 112, 112 N. E. 759, L. R. A.
1916F, 1059.
"•^ Miami County Bank v. State ex rel. Peru Trust Co., 61 Ind. App.
360, 112
N. E. 40; Batchelder v. Central Nat. Bank, 188 Mass. 25, 73 N. E. 1024;
United States Fidelity & Guaranty Co. v. Adoue & Loblt (Tex. Civ. App.) 128
S. W. 636. But, if the bank knows that the deposit of trust funds in the in-
dividual account is wrongful, it will be li^ible for subsequent misappropria-
tions. British America El. Co. v. Bank of British N. A., [1919] A. b. >658.
»" Miami County Bank t. State ex rel. Peru Trust Co., 61 Ind. App. 360,
112 N. E. 40, 43.
456 THE INTEBEST OF THE CESTUI QUE TEUST (Ch. 13

credits it to an individual account,'^ or when a certificate of deposit

belonging to a trust estate is applied by the trustee to pay his debt

to the bank and to pay other debts by check, and this use of the
certificate is regarded as a single fraudulent transaction,"^ the bank
will be liable. And the bad reputation of the fiduciary, known to
the bank, may have an effect to change the usual rule.**
Ordinarily the payment of a check on a trust account to the
order of the trustee does not render a bank liable, if it turns out
that the trustee has misappropriated the money so paid.** The
bank is not required to demand proof that he intends to use the
proceeds of the check for trust purposes. The presumption is to
the contrary. It would be an intolerable burden on a bank to re-
quire it to investigate the intent and powers of every trustee doing
business with it. The obligation of watching for dishonesty is
rather on the cestuis que trust. But it has been held that where a
trustee checked on trust funds to take up notes of a corporation in
which he was interested, the bank was liable for the amount of the
checks when it had previous notice of breaches of the trust by use
of trust funds to pay debts of the trustee to the bank, and when the
bank officials had been negligent in supervising the affairs of the
bank."'*
Nor, in the absence of special circumstances implicating the bank'
in the breach, is a bank liable wherie it honqrs checks of the trustee

upon the trust account and these checks run to the individual credi-

91 Blanton v. First Nat. Bank of Forrest City, 136 Ark. 441, 206 S. W. 745;
Duckett V. National Mechanics' Bank, 86 Md. 400, 38 Atl. 983, 39 T,. E. A. 84,
63 Am. St. Rep. 513.
92 United States Fidelity & Guaranty Co. v, Adoue & Lobit, 104 Tex. 379,
137 S. W. 648, 138 S. W. 383, 37 L. K. A. (N. S.) 409, Ann. Oas. 1914B, 667.
93 Farmers' Loan & Trust Co. v. Fidelity Trust Co., 86 Fed. 541, 30 C. 0. A.
247.
9* Lowndes City Nat. Bank, 82 Conn. 8, 72 Atl. 150, 22 L. R. A. (N. S.)
v.
408; First Nat. Bank
of Sharon v. Valley State Bank, 60 Kan. 621, 57 Pac.
510; Allen v. Fourth Nat. Bank, 224 Mass. 239, 112 N. E. 650; Kendall v.
Fidelity Trust Co., 230 Mass. 238, 119 N. B. 861; Town of Eastchester v. Mt
Vernon Trust Co., 173 App. Div. 482, 159 N. Y. Supp. 289 Fidelity & Deposit
;

Co. of Maryland v. Queens County Trust Co., 174 App. i>iv. 160, 159 N. Y.
Supp. 954; Taylor v. Astor Nat. Banli, 105 Misc. Rep. 386, 174 N.'Y. Supp.
279.
9 5 Lowndes v. City Nat. Bank of South Norwalk, 82 Conn.
8, 72 Atl. 150, 22
L. R. A. (N. S.) 408. And so, too, where a bank is charged with notice that an
account is a trust account, and, by reason of a section of the Bankruptcy Act
and the countersignature of some checks, is also charged with notice that with-
drawals from the fund could not lawfully be made without the signature of
the clerk of the court, it is liable for moneys paid out on checks payable to the
trustee individually and not countersigned. Fidelity & Deposit Oo. of Mary-
land V. Queens County Trust Co., 226 N. Y. 225, 123 N. E. 370.
 § 114) EIGHTS OF CESTUI QUE TRUST AGAINST THIRD PERSONS 457

tors of the trustee. Without facts showing an intended' breach, the

bank is assume that the payees are creditors of the trust
entitled to
estate, or that the payments are for the benefit of the cestuis que
trust.*' The bank is not obliged to require the payees to prove
that the checks satisfy valid claims against the trust, or were issued
in the trust business. But where a bank allows a trustee to check
on the trust account to pay bucket shop debts, with full knowledge
of the nature of the account and the use to which the checks were
being put, it will be liable to the beneficiary.*^ And it has been
held that the bank will render itself liable by paying out trust funds
to the individual creditors of the trustee, when it does so without
inquiry, after knowledge that the trustee has committed a breach
of trust.**
Where a trustee draws a check on his personal account, known
by the bank to contain trust fund|S, and the check is to pay debts
of the trustee to third' persons, the bank will not be liable in the
absence of knowledge of an intended breach."* This knowledge
has been held to be shown by action of the bank in crediting a trust
check to the personal account when expressly ordered to place it
to a trust account,^ or by a participation by the bank in the appro-
priation of trust funds to the 'payment of the trustee's debts to it
and others.^
Liability on the part of the-B. bank has been denied when the
trustee drew a check on the trust account in the A. bank, deposited
it to his individual account in the B. bank, the A. bank paid the

96 Gray v. Johnstoii, L. R. 3 H. L. 1 ; Pa. dTitle & Trust Co. v. Meyer, 201

Pa. 299, 50 Atl. 998; Merchants' & Planters' Nat. Bank of Union v. Clifton
Mfg. Co., 56 S. C. 320, 33 S. E. 750; First State Bank of Bonham v. Hill (Tex.
Civ. App.) 141 S. W. 300; Anderson v. Walker, 93 Tex. 119, 53 S. W. 821;
Boyle V. Northwestern Nat. Bank, 125 Wis. 498, 103 N. W. 1123, 104 N. W.
917, 1 L. B. A. (N. S.) 1110, 110 Am. St. Rep. 8(44. But see Farmers^ Loan &
Trust Co. V. Fidelity Trust Co., 86 Fed. 541,. 30 C. C. A. 247.
»r Pearce v. Dill, 149 Ind. 136, 48 N. E. 788.
98 BischofiC V. Yorkville Bank, 218 N. Y. 106, 112 N. E. 759, L. R. A, 1916F,
1059.
99 v. Bucks & Oxon. Union Bank [1897] 2 Ch. 243; Interstate Nat.
Coleman
Bank Claxton, 97 Tex. 569, 80 S. W. 604, 65 L. R. A. 820, 104 Am. St. Rep.
v.
885. Where the indorsement of the instrument enabling the trustee to place
it to his private account was a forgery, the bank was liable for the funds
thereafter withdrawn for the trustee's benefit. Hope Vacuum Cleaner Co. v.^
CoAimercial Nat. Bank of Independence, 101 Kan. 726, 168 Pac. 870.
Duckett V. National Mechanics' Bank, 86 Md. 400, 38 Atl. 983, 39 L. R. A,
1

84, 63 Am. St. Kep. 513.

2 United States Fidelity & Guaranty Co. v. Adoue & Lobit, 104 Tex. 379, 137

S. W. 648, 138 S. W. 383, 37 L. R. (A. (N. S.) 409, Ann. Cas. 1914B, 667.
 ;

458 THE INTEREST OP THE CESTUI QUE TRUST (Ch. 13

check, and thereafter the trustee checked out the funds for his own
benefit.'
In cases where a trustee has had in his possession a check pay-
able to "A., trustee," and has deposited it to his individual account
and checked it out for his individual benefit, the courts have dis-
agreed upon the ques1;ion of the liability of the bank, some courts
taking the view that such action was a participation in the breach
by the bank,* while others held that the facts did not necessarily
imply a breach of trust and that the bank was not liable in the
absence of -evidence of actual knowledge of intended fraud."
If a trustee holds a check to his order as trustee, indorses it to
B., and B. deposits it and checks out the fund, the bank of deposit
is not liable if the trustee misappropriated the moneys represented

by the check.*
Notice to the Bank
If the bank does not know
that funds are trust funds, it is not
liable for their disposition by the
trustee.' Notice of the existence
of the trust acquired by an officer of the bank while acting in his
official capacity will bind the bank,' but otherwise if the officer
acquired the »informatiory outside his official duties." The use of
the word "trustee" or "attorney" in connection with the trtist ac-
count is not ordinarily, of itself, enough to charge the bank with
notice that the funds are trust funds.^" Marginal notes on instru-

s Havana Cent. R. Co. v. Central Trust Co. of New York, 204 Fed. 546, 123 C.

C. A. 72, L. R. A. 1915B, 715 ;Allen v. Puritan Trust Co., 211 Mass. 409, 97
N. E. 916, L. R. A. 1915C, 518 Kendall v. Fidelity Trust Co., 230 Mass. 238,
;

119 N. E. 861 Havana Central R. Co. v. Knickerbocker Trust Co., 198 N. Y.

;

422, 92 N. E. 12, L. R. A. 1915B, 720; Blschoff v. Yorkville Bank, 218 N. Y.

106, 112 N. E. 759, L. r!. A. 1916F, 1059.
4 Bank of Hickory v. McPherson, 102 Miss. 852, 59 South. 934; United States
Fidelity & Guaranty Co. v. People's Bank, 127 Tenn. 720, 157 S. W. 414.
5 Safe Deposit & Trust Co. v. Diamond Nat. Bank, 194 Pa. 334, 44 Atl. 1004

United States Fidelity & Guaranty Co. v. Home Bank for Savings, 77 W. Va.
665, 88 S. E. 109.
6 Hood v. Kensington Nat. Bank, 230 Pa. 508, 79 Atl. 714.
7 Martin v. Kansas Nat. Bank, 66 Kan. 655, 72 Pac. 218; First State Bank of
Bonham v. Hill (Tex. Civ. App.) 141 S. W. 300.
8 Lowndes v. City Nat. Bank of South Norwalk, 82 Conn. 8, 72 Atl. 150, 22
L. R. A. (N. S.) 408; Tesene v. Iowa State Bank (Iowa) 173 N. W. 918; At-
wood-Stone Co. v. Lake-County Bank, 38 S. D. 377, 161 N. W. 539. ,

9 Bank of Hartford v. McDonald, lOT Ark. 232, 154 S. W. 512 ; First Denton
Nat. Bank v. Kenney, 116 Md.
24, 81 Atl. 227, Ann. Cas. 1913B, 1337.
10 Keeney v. Bank
of Italy, 33 Cal. App. 515, 165 Pac. 735 ; First Denton
Nat. Bank v. Kenney, 116 Md. 24, 81 Atl. 227, Ann. Cas. 1913B, 1337; Fidelity
& Deposit Co. of Maryland v. Queens County Trust Co., 174 App. Div. 160, 159
N. Y. Supp. 954. But see Santa Marina Co. v. Canadian Bank of Commerce
(D. C.) 242 Fed. 142, in which an indorsement, "S. M. Co., by H., Sec'y," was
held to be notice to the bank of a trust, when the check was deposited in an
individual account. v
§ 114) EIGHTS OF CESTUI QUE TRUST AGAINST THIRD PERSONS 459

merits deposited are not notice of the trust character of the funds
represented by such instruments.^^
The theory' of the bank's liability in these cases is well stated in
Duckett V. National Mechanics' Bank/^ as follows: "It is true,
undoubtedly, that a bank is bound to honor the checks of its cus-
tomer so long as he has funds on deposit to his credit, unless such
funds are intercepted by a garnishment or other like process, or are
held under the bank's right of set-off. It is equally true that when-
ever money is placed in bank on deposit and the bank's officers are
unaware that the fund does not belong to the person depositing it,
the bank upon paying the fund out on the depositor's check will
be free from liability even though it should afterwards turn out
that the fund in reality belonged to some one else than the individ-
ual who deposited it. It is immaterial, so far as i^espeCts the duty
of the bank to the depositor, in what capacity the depositor holds
or possesses the fund which he places on deposit. The obligation
of the bank is simply to keep the fund safely and to return it to the
proper person or to pay it to his order. If it be deposited by one
as trustee, the depositor as trustee has the right to withdraw it, and
the bank, in the absence of knowledge or notice to the contrary,
would be bound to assume that the trustee would appropriate the
money, when drawn, to a proper use. Any other rule would throw
upon a bank the duty of inquiring as to the appropriation made of
every fund deposited by a trustee or other like fiduciary; and the
imposition of such a duty would practically, put an end to the bank-
ing business, because noibank could possibly conduct business if,
without fault on its part, it were held accountable for the miscon-
duct or malversation of its depositors who occupy some fiduciary
relation to the fund placed by them with the bank. In the absence '

of notice or knowledge a bank cannot question the! right of its cus-

tomer to withdraw funds, nor refuse (except in the instances al-
ready noted) to honor his demands by check; and therefore, even

11 DuckettNational Mechanics' Bank, 86 Md. 40(), 38 Atl. 983, 39 L. R. A.

V.
84, 63 Am. Rep. 513 First Denton Nat. Bank v. Kenney, 116 Md. 24, 81 Atl.
St. ;

227, Ann. Cas. 1913B, 1337; Fidelity & Deposit Co. of Maryland v. Qijeens
County Trust Co., 174 App. Div. 160, 159 N. Y. Supp. 904.
"86 Md. 400, 405, 406, 38 Atl. 983, 39 L. R. A. 84, 63 Am. St. Rep. 513.
For further discussions of the principles underlying these bank cases, see Gray
V. Johnston, L. R. 3 H. L. 1 ; United States Fidelity & Guaranty Trust Co. v.
Union Bank & Trust Co., 228 Fed. 448, 143 C. C. A. 30 Lowndes v. City Nat.
;

Bank of South Norwalk, 82 Conn. 8, 72 Atl. 150, 22 L. R. A. (N. S.) 408; Allen
T. Puritan Trust Cb., 211 Mass. 409, 97 N. E. 916, L. R. A. 1915C, 518 ; Bisch-
off V. Yorkville Bank, 218 N. Y. 106, 112 N. E. 759, L. B. A. 1916F, 1059; Unit-
ed States Fidelity & Guaranty Co, v. Home Bank for Savings, 77 W. Va. 665,
S8 S. E. 109.
460 THE INTEREST OP THE CESTUI QUE TRUST (Ch. 13

though the deposit be to the customer's credit in trust, the bank is

under no obligation to look after the appropriation of the trust
funds when withdrawn, or to protect the trust by setting up a jus
tertii against a demand. But if the bank has notice or knowledge
,

that a breach of trust is being committed by an improper with-

drawal of funds or if it participates in the profits or fruits of the
fraud, then it will undoubtedly be liable."
Negligence by Bank
Occasionally gross negligence by the bank or palpable aid in the
breach will make liability certain. Thus, where the trustee has an
individual and trust account in the same bank, and the bank charges
individual checks against ^he trust account, it is openly aiding a
breach.^' And where the cashier of the bank and the trustee are
one and the same person, and the directors, after breaches of trust
with notice of which they were charged, failed to exercise any
supervision over the affairs of the bank, they may be held liable
to the beneficiaries of the trust on the ground of negligence.^*
The doctrine of early English equity ^° that a purchaser of trust
property from a trustee was bound to see to the application of the
purchase money, that is, was bound to pay direct to the cestuis que
trust or make sure that they received the money, has been abolish-
ed by statute in England,^" and has either never been accepted or
has been abandoned in America.^^ - An occasional trace of the old

IS United States Tidellty & Guaranty

Co. v. United States Nat. Bank, 80 Or.
361, 157 Pac. 155, L. R. A. 1916E, 610. And so in Tesenev.Iowa
State Bank (Iowa>
173 N. W. 918, a bank which had knowledge of the lack of authority by a
mother to receive money for her children, but which paid moneys, standing In
her name as guardian for the children, to her personally, was held to have aid-
ed in a breach.
14 Lowndes v. City Nat. Bank of South Norwalk, 82 Conn. 8, 72 Atl. 150, 22
L. R. A. (N. S.) 408.
15 Lewin on Trusts (12th Ed.) 536.
18 56 & 57 Vict., c. 53, § 20.
17 Dawson y. Ramser, 58 Ala. 573; Jacks v. State, 44 Ark. 61; Colesbury v.
Dart, 61 Ga. 620 ; Davis v. Freeman, 148 Ga. 117, 95 S. B. 980 ; Ely v. Pike,
115 111. App. 284; Bevis v. Heflin, 63 Ind. 129; Pike v. Baldwin, 68 Iowa, 263,
26 N. W. 441 ; Henriott v. Good, 153 Ky. 418, 155 S. W. 761 ;Burroughs v.
Gaither, 66 Md. 171, 7 Atl. 243 Cady v. Lincoln, 100 Miss. 765, 57 South. 213;
;

Gate City Building & Loan Ass'n v. National Bank of Commerce, 126 Mo. 82,
28 S. W. 633, 27 L. R. A. 401, 47 Am. St. Rep. 633 Conover v. Stothoff, 38 N.
;

J. Eq. 55 Doscher v. Wyckoff, 132 App. Div. 139, 116 N. Y. Supp. 389; N. Y.
;

Real Property Law (Consol. Laws, c. 50) § J08; Kadis v. Weil, 164 N. C. 84,
80 S. B. 229 Stall v. City of Cincinnati, 16 Ohio St. 169; In re Streater's Es-
;

tate, 250 Pa. 32S, 95 Atl. 459; Petition of Van Home, 18 R. I. 389, 28 Atl. 341;
Campbell v. Virginia-Carolina Chemical Co., 68 S. C. 440, 47 S. E. 716 Spencer
;

y. Lyman, 27 S. D. 471, 131 N. W. 802; Weakley v. Barrow, 137 Tenri. 224, 192
S. W. 927; WJiatley v. Ogles'by (Tex. Civ. App.) 44 S. W. 44; Redford r.
Clarke, 100 Va. 115, 40 S. E. 630; Woodwine v. Woodrum, 19 W. Va. 67.
§ 114) EIGHTS OF CESTUI QUE TRUST AGAINST THIRD PERSONS 461

rule may be found in early cases,^* and some courts have declared
that itshould be applied unless the trust is a general and unlimited
trust.^* The duty to see to the application of the purchase money
may be placed upon the purchaser by the trust instrument in
at least one state.^" It has been held that if the pilirchaser or other
debtor payS money to the trustee, knowing that the latter is on the
verge of insolvency and will surely misappropriate the money, the
purchaser will remain liable to the cestui after payment to the
trustee,''^ If the purchaser knows that th^ sale constitutes a breach
of trust, naturally he is not an innocent purchaser, and the trust
property will be subject to the trust in his hp.nds.^''
/

18 Indiana I. & I. R. Co. v. Swannell, 54 111. App. 260.

i» Duffy V. Calvert, 6 Gill (Md.) 487; St. Mary's Church of Burlington v.
Stockton, 8 N. J. Bq. 520.
2 Curd V. Field. 103 Ky. 293, 45 S. W. 92; Walter v. Brugger, 78^8. 'W.419,
25 Ky. Law Rep. 1597; Ky. St. § 4846.
21 Darnaby v. Watts (Ky.) 28 S. W. 338.
22 Grider v. Driver, 46 Ark, 109 ; Leake v. Watson, 58 Conn. 332, 20 Atl.
543, 8 L. R. A. 666, 18 Am. St. Rep. 270 ; Kenwbrthy v. Levi, 214 Pa. 235, 63
Ath 690; Cardwell v. Cheatham, 2 Head (Tenn.) 14.
462 THE KEMEDIES OF THE CESTUI QUE TRUST (Ch. 14

'
CHAPTER XIV
THE REMEDIES OF THE CESTUI QUE TRUST—HOW ENFORCED OR
BARRED
115. Action by Trustee or by Cestiii Que Trust?
116. In What Court?
117. Conditions Precedent.
118. Venue.
119. Parties.
120. Personal Liability of the Trustee.
121. Personal Liability of Third Person.
122. Personal Liability and Lien.
123. Personal Liability or Recovery of the Trust Res.
124. Recovery of the Trust Res or its Substitute.
125. Control of the Trust Administration.
126. Remedy Barred by Act or Omission of Cestui Que Trust
127. Remedy Barred by the Statute of Limitations.

ACTION BY TRUSTEE OR BY CESTUI QUE TRUST?

lis. The remedy of cestui que trust against third persons is ordi-
narily enforced by an action by the trustee; but a cestui
que trust, entitled to possession or in possession, may main-
tain actions based on possession or the right to it. The
cestui que trust of a dry trust where the trust purpose has
been accomplished may maintain ejectment, and the cestui
que trust may sue where the trustee fails or refuses to
act, has an adverse interest, or for'other reason a demand
on the trustee is futile or impossible.

Under the headings of Duties of the Trustee and Rights of the

Cestui Que Trust consideration has been given to the rights of
the beneficiary of the trust, to their definition and description.
Somewhat distinct is the method of enforcing such rights. It re-
mains to treat the mechanism by which courts give the cestui que
trust the benefit of his rights. What are the remedies available to
him ? '

A preliminary question is whether the cestui may proceed di-

rectly, that is, in his own name as a party plaintiff, to enforce his
rights, or whether he must act indirectly, that is, through his trus-
tee as an intermediary. It is apparent that if the right sought to
be enforced against the trustee himself, is a right to have the
is
trust enforced, or to recover damages for a wrong inflicted on the
beneficiary, or to prevent threatened wrong by the trustee to the
 § 115) ACTION BY TRUSTEE OB BY CESTUI QUE TRUST 7 463

^
beneficiary, the question of direct or indirect action for relief can-
not arise. The cestui que trust must proceed in his own name as a
party plaintiff.
if the right of cestui que trust is against a third person, the
But
cestuimight be required to depend on action by the trustee, or he
might be allowed to act directly against the third person. The
ordinary trust is founded on legal title, right to possession, and the
duty of administration in the trustee. Hence the general rule is
that causes of action in favor of the trust and against third persons
are enforced by actions by the trustee.^' Thus, an action to recover
the trust property or for injury to it,' lio restrain the wrongful taxa-
tion of the trust res,^ to recover on a bond payable to the trustee,*
to recover for use and occupation of the trust property,^ in eject-
ment," to recover on a covenant,^ or to recover hire for the trust
prpperty,* should be brought by the trustee, in the absence of spe-
cial circumstances.
The cestui que trust may not sue a third person for injury to or
recovery of the trust property, in the absence of one or more of the
special facts hereinafter mentioned.* Thus, the cestui has been
denied relief against a third person in actions of trover,^" eject-
ment,^^ for the recovery of damages to the trust property," and
to recover the trust fund.^*
But an action by the cestui que trust against a third person joined
with the trustee, under an allegation of a breadh of trust aided by
the third person, is maintainable.^* And where the action is to
'

cancel an assignment of the cestui's interest fraudulently obtained

by the defendant, it may naturally be brought by the cestui in his

1 Morgan v. Kansas Pae. R. Co. (0. C.) 21 Blatchf. 134, 15 Fed. 55.
2 Robinson v. Adams, 81 App. Div. 20, 80 N. Y. Supp. 1098, affirmed 179 N.
Y. 558, 71 N. E. 1139.
« Western E. Co. v. Nolan, 48 N. Y. 513.
4 Forrest v. O'Donnell, 42 Mich. 556, 4 N. W. 259.
s Grady v. Ibach, 94 Ala. 152, 10 South. 287.

8 Simmons v. Richardson, 107 Ala. 697, 18 South. 245.

I Lovell V. Nelsoil. 6 J. J. Marsh. (Ky.) 247.
« Denton's Guardians v. penton's Ex'rs, 17 Md. 403.
» Weetjen v. Vibbard, t Hun (N. Y.) 265; Thompson v. Remsen, 27 Misc.
Rep. 279, 58 N. Y. Supp. 424; Woolf v. Barnes, 46 Misc. Rep. 169, 93 N. Y.
Supp. 219 Dameron v. Gold, 17 N., C. 17.
;

10 Myers v. Hale, 17 Mo. App. 204; Poage v. Bell, 8 Leigh CVa.) 604.
II Obert V, Bordine, 20 N. J. Law, 394; Bruce v. Faucett, 49 N. C. 391.
12 Lindheim v. Manhattan Ry. Co., 68 Hun, 122, 22 N. Y. Supp. 685; Penn-
sylvania R. Co. V. Duncan, 111 Pa. 352, 5 Atl. 742.
18 Morrow v. Morrow, 113 Mo. App. 444, 87 S. W. 590.
14 Meal 7. Bleckley, 51 S. C. 506, 29 S. E. 249.
 ;

464 THE REMEDIES OP THE CESTUI QUE TRUST ' (Ch. 14

own name.*' A cestui que trust, who has furnished the considera-7
tion for a promise running to the trustee, but for the benefit of the
cestui, has been allowed to maintain an action on the promise.*'
And where the "real party in interest" statutes are in effect it has
been held that the cestui might sue on a contract m&de by the
trustee without joining the trustee.*^
W'hen Cestui may Sue
If the purposes of the trust are accomplished, and the trust is
therefore a dry trust, the cestui que trust may maintain ejectment.*'
And likewise the beneficiary may bring ejectment, if he is entitled
to the possession of the trust property.*' And if the cestui que trust
is in possession he may recover at law for an injury to the pos-
session,^" or enjoin a disturbance of the possession by a third par-
ty."
refuses to bring the action, after demand,^" or
If the trustee
or the trusteeship is vacant,^* or the trustee has been
fails to act,"*
absent for many years,"' or the trustee has an adverse ihterest,"'
the cestui may bring the action against the third person. To wait
until a new trustee could be appointed, or until the present trustee
saw fit to act, or his disabilities were removed, would, endanger the

15 LovatoV. Catron, 20 N. M. 168, 148 Pac. 490, L. R. A. 1915B, 451.

16 Ruev; Meirs,'4.3 N. J. Eq. 377, 12 Atl. 369.
1' Potter V. Potteri 8 N. T. Civ. Proe, R. 150.
isDoggett V. Hart, 5 Fla. 215, 58 Am. Dec. 464; Cable v. Cable, 146 Pa.
451, 23 Atl. 223 ; Hopkins v. Stepheils, 2 Rand. (Va.) 422 ; Hopkins v. Ward,
6 Munf. (Va.) 38.
i» Glover v. Stamps, 73 Ga. 209, 54 Am. Rep. 870; School Directors v. Dun-
kleberger, 6 Pa. 29; Johnston, 1 Watts & S.
Presbyteriap Congregation v.
(Pa.) 9; Cape v. 150, 93 N. W.
Plymouth Congregational Church, 117 Wis.
449. In McCoy v. Anderson, 137 Ark. 45, 207 S. W. 213, the cestui que trust
had been in possession for many years, the trustee was dead, and the benefi-
ciary was allowed to bring ejectment.
20 Yates V. Big Sandy R. Co. (Ky.) 89 S. W. 108 ; Stearns v. Palmer, 10
Mete. (Mass.) 32.
21 Reed v. Harris, 30 N. Y. Super. Ct. 151.
22 Bowdoin College v. Merritt (C. C.) 54 Fed. 55; Reinach v. Atlantic &
G. W. R. Co. (C. C.) 58 Fed. 38 Blackburn v. Fitzgerald, 130 Ala. 584, 30
;

South. 568 (semble) Eagan v. Mahoney, 24 Colo. App. '285, 174 Pac. 1119
;

Canada v. Daniel, 175 Mo. App. 55, 157 S. W. 1032 De Kay v. Hackensack ;

Water Co., 38 N. J. Eq. 158; O'Beirne v. Allegheny & K. R. Co., 151 N. Y.

372, 45 N. E. 873 Anderson v. Daley, 38 App. Div. 505, 56 N. Y. Supp. sll,
;

appeal dismissed 159 N. Y. 146, 53 N. E. 753 Phoebe v. Black, 76 N. C. 379.

;

23 Brown, 26 111. 369.

Wheeler v.
24 Zimmerman v. Makepeace, 152 Ind. 199, 52 N. E. 992; Judd v. Dike, 30
Minn. 380, 15 N. W. 672.
2B Hemmerich v. Union Dime 'Sav. Inst., 144 App. Div. 413, 129 N. Y. Supp.
-267.
28 Webb V. Vermont Cent. R. Co. (C. C.) 9 Fed. 793 ; Hale v. Nashua & L.
R. R., 60 N. H. 333,
§ 115) ACTION BY TRUSTEE OR BY CESTUI QUE TRUST? 465

cause of action. The necessities of the case eijtitle the cestui que
trust to proceed directly.
The principle is illustrated by a New York case, in which a bond-
holder cestui que trust was allowed to maintain a bill to foreclose
a mortgage, because of the absence of the trustee in a foreign coun-
try. There was the additional allegation th^t the trustee was in-
sane. The court, through Finch, J., said " "It is conceded that
:

<the beneficiary may sue where the trustee refuses, but that is
because there is no other remedy, and the right of the bondholder,
otherwise, will go unredressed. The doctrine does not rest rigidly
upon a technical but upon a substantial necessity.
ground,
* * * the present case was tantamount to and
What occurred in
an equivalent of a refusal by the trustee. He had gone beyond the
jurisdiction; the whole apprehended mischief would be consum-
mated before he could be reached ; and if reached there was suffi-
cient reason to believe that he was incompetent. But the Special
Term say that in such event a new trustee should have been ap-
pointed. That simply reproduces the difficulty in another form, for
a court would hardly remove a trustee without notice to him and
giving him an opportunity to be heard. And why should a new
appointment be made when any one of the bondholders can equally
do the duty of pursuing the foreclosure ? The court, in such an ac-
tion, takes hold of the trust, dictates and controls its performance,
distributes the assets as it deems just, and it is not vitally impor-
tant which of the two possible plaintiffs set the court in motion.
The bondholders are the real parties in interest; it is their right
which is to be redressed, and their loss which is to be prevented;
and any emergency which makes a demand upon the trustee futile
or impossible and leaves the right of the bondholder without other
reasonable means of redress should justify his appearance as plain-
tiff in a court of equity for the purpose of foreclosure."
The trustee and cestui que trust may unite in an action to re-
cover the trust fund, although the addition of the cesltui as a party
plaintiff is ordinarily unnecessary."*

2 7 Ettlinger v. Persian Bug & Carpet Co., 142 N. Y. 189, 192, 193, 36 N. B.
10D5, 40 Am. St. Rep. 587.
28 Jennings' Ex'rs v. Davis, 5 Dana (Ky.) 127 ; Malrble v. Whaley, 33 Miss.
157.
BOGERT TBUSTS —30
466 THE REMEDIES OF THE CESTUI QUE TRUST (Ch. 14

IN WHAT COURT?
116. Ordinarily the remedy of the cestui que trust for the enforce^
ment of his rights against trustee or a third person is by

suit in equity, but frequently the beneficiary is allowed to

proceed at law, as, for example, where a definite sum is
fixed as due from the trustee to the cestui que trust by
virtue of a promise from the trustee, or by the terms of the
trust, or by an account stated, or-an order of court.
By the weight of authority the existence of an adequate remedy
at law does not bar the cestui que trust from proceeding
in equity. The jurisdiction of equity to enforce the rights
of cestui que trust is based on its original jurisdiction
over trusts, and not upon proof of the inadequacy of a
remedy at law.

Are the remedies of the cestui que trust against the trustee and
third persons enforceable by suits in equity, or by actions at law,
or may resort be^ had to either forunl at the option of the plaintiff?
Since the right of a cestui que trust is equitable in its nature, it
may assumed that courts of chancery, 6r the equity
naturally be
side of courts having double jurisdiction, will grant a remedy to
the beneficiary. Ordinarily relief should be sought by the cestui in
equity.^" Thus the recovery of the trust property from the trus-
tee '" or a third person ^^ should be demanded in equity. And
bills to establisha resulting trust,^^ to protect the trust estate,"
or for an account and a decree against the sureties on ^he trustee's
bond °* are properly brought in equity.

29 Clews V. Jamieson, 182 U. S. 461,. 21 Sup. Ct. 845, 45 L. Ed. 1183; Hop-
kins V.Granger, 52 111. 504 ; Hobart v. Andrews, 21 Pick. (Mass.) 526 Wright
;

y. Dame, 22 Pick. (Mass.) 55 Malone v. Malone, 151 Mich. 680, 115 N. W.

;

716; Ewing v. Parrish, 148 Mo. App. 492, 128 S. W. 538; Husted v. Thomson,
158 N. Y. 328, 58 N. E. 20; McCoy t. McCoy, 30 Okl. 379, 121 Pac. 176, Ann.
Cas. 1913C, 146; Washington Nat. Building & Loan Ass'n v. Heironimus, 62
W. Va. 6, 57 S. E. 256.
80 McCampbell v. Brown (O. C.) 48 Fed. 795 ; Bullock v. Angleman, 82 N. J.
Eq. 23, 87 Atl. 627 Reade v. Continental Trust Co., 27 Misc. Rep. 435, 58 N.
;

Y. Supp. 321 ; Clarke v. Deveaux, 1 S. O. 172.

«i Smith V. American Nat. Bank, 89 Fed. 832, 32 O. C. A. 368; Lee v. Simp-
son (C. C.) 37 Fed. 12, 2 L. B. A. 659; Lehnard v. Specht, 180 111. 208, 54
N. E. 315; Buck v. Lockwood, 193 Mich. 242, 159 N. W. 509; Calhoun v. Bur-
nett, 40 Miss. 599 ; Luscombe v. Grigsby, 11 S. D. 408, 78 N. W. 357.
32 Fausler v. Jones, 7 Ind. 277; Johnston t. Sherehouse, 61 Fla. 647, 54
South. 892.
ssDorsey's Lessee v. Garey, 30 Md. 489.
84 Thruston v. Blackiston, 36 Md. 501.
 ;

§ 116) m WHAT COURT? " 467

In many cases the remedy of a cestui que trust is in equity only.

He has no option but to proceed by bill in chancery. The law pro-
vides him no means of redress. This is true where the trust is open
and the suit is for the statement of ah account and the recovery of
an unliquidated sum.*" Equity has exclusive jurisdiction to aid the
cestui likewise where the basis of the suit is the negligence of the
trustee in managing the trust property,*' or the wrongful convey-
ance of the trust property to another,*'^ or a breach of trust in neg-
lecting to collect and apply the trust assets according to the trust
terms,** or damage to the trust property by the trustee which would
be waste if committed by a tenant,*" or where the possession of trust
realty *" or the value of trust property wrongfully sold *^ is sought
hy the cestui que trust, or where the object is an account of rents
and profits of land held in trust,*" or where the foundation is the
conversion by the trustee of the trust property and its proceeds.*'
Remedy at Law \

But in many
cases remedies are open to the cestui que trust in
courts of law for the enforcement of rights against the trustee or
third parties. Thus, where a third person has trust property under
circumstances which entitle the cestui to have him declared a
constructive trustee (as, for example, where the property has been
obtained by fraud), the cestui may also maintain money had and
received against the third party in a court of law.** The liability of
the surety on the trustee's bond is almost always solely at law.*'
The cestui may proceed at law wher^ the title to realty is involved
and the only question is whether trust money has gone into the real-
ty.*' It has been held that, where the trustee has misapplied the
trust fund and it cannot be followed, damages at law for the breach
of trust may be recovered.*^ And a similar holding is found in cases

8 5 Goldschmidt v. Maier, 140 Cal. xvii, 73 Pac. 984; Robison v. Carey, 8

Ga. 527 Davis v. Coburn, 128 Mass. 377 Upham v. Draper, 157 Mass. 292,
; ;

32 N. E. 2 Kendall v. Kendall, 60 N. H. 527 Congdon v. Cahoon, 48 Vt. 49

; ;

Goupille V. Chaput, 43 Wash. 702, 86 Pac. 1058.

86 HukiU V. Page, 6 Biss. 183, Fed. Cas. No. 6854. '

ST Norton v. Ray, 139 Mass. 230, 29 N. E. 662.

8 8 Bishop V. Houghton, 1 E. D. Smith (N. Y.) 566.
89 Kincaird v. Scott, 12 Johns. (N. Y.) 368.
*o Matthews v. McPherson, 65 N. O. 189.
*i Jasper y. Hazen, 1 N. D. 75, 44 N. W. 1018.
42 Oearnes v. Irving, 31 Vt. 604.
*8 Redwood V. Rlddick, 4 Munf. (Va.) 222.
44 Clifford Banking Co. v. Donovan 'Commission Co., 195 Mo. 262, 94 S. W.
527 Hanford v. Duchastel, 87 N. J. Law, 205, 93 Atl. 586.
;

45 Hite V. Kite's Ex'r, 133 Ky. 554, 118 S. W. 357 ; Clagett v. Worthington,
3 Gill (Md.) 83.
46 Nanheim v. Smith, 253 Pa. 380, 98 Atl. 602.
*i Snyder v. Parmalee, 80 Vt. 496, 68 Atl. 649.
 468 THE REMEDIES OF THE CESTUI QUE TRUST (Ch. 14

where the trustee has broken his trust by a wrongful sale of the
trust res,** and where the purpose of the trust was accomplished
and the trustee had no function to perform.*"
Perhaps the most common case in which the beneficiary may
proceed at law against the trustee is that where the trustee has
promised to pay the cestui que trust a definite sum, or the trust
has been closed, the accounts settled, a definite sum fixed as that
due, and the trustee has no further duty except to pay it to the ces-
tui que trust. In these cases very generally courts of law have
entertained jurisdiction in the action for money had and received
or its equivalent and have not obliged the cestui to proceed in
equity.^" "It is well settled that a cestui que trust cannot bring
an action at law against a trustee to recover for money had and
received while the trust is still open but when the trust has been
;

closed and settled, the amount due the cestui que trust established
and made certain, and nothing remains to be done but to pay over
money, such an action may be maintained." "^ The same doctrine
has been framed somewhat differently by a Delaware court, as
follows: "Where the only remaining function and duty of a trus-
tee is to pay over to his cestui que trust a sum of money, made cer-
tain by the terms of the trust, by an account passed by the trus-
tee, by agreement between them, or by an order of court, the cestui
que trust has an action at law against the trustee to recover such
amount, and it is attachable in the hands of the trustee by a creditor
of the cestui que trust by attachment fi> fa.,, or in foreign attachment,
as, the cage may be." "" In Massachusetts and Pennsylvania, before

48 Holderman v. Hood, 70 Kan. 267, 78 Pac. 838 ; Brys v. Pratt, 55 Wash.

i22, 104 Pac. 169. In Davis v. Dickerson, 137 Ark. 14, 207 S. W. 436, the
cestui que trust was held to have the alternatives of an action at law for
money had and received, or a bill In equity for damages for breach of trust
49 Thomas v. Harkness, 13 Bush. (Ky.) 23.
Vincent v. Rogers, 30 Ala. 471; Sterling v. Tantum, 5 Boyce (Del.) 409,
94 Atl. 176; Guthrie v. Hyatt, 1 Har. (Del.) 446; Daugherty v. Daugherty,
116 Iowa, 245, 90 N. W. 65; O'Neil v. Epting, 82 Kan. 245, 108 Pac. 107;
Crooker v. Bogers, 58 Me. 339 Nelson v. Howard, 5 Md. 327 Rogers v. Dan-
; ;

iell, 8 Allen (Mass.) 343

; Brown v. Cowell, 116 Mass. 461 Johnson v. John-
;

son, 120 Mass. 465 ; Arms v. Ashley, 4 Pick. (Mass.) 71 ; Chase v. Perley, 148
Mass. 289, 19 N. E. 398; Henchey v. Henchgy, 167 Mass. 77, 44 N. E. 1075;
Collar V. Collar, 75 Mich. 414, 42 N. W. 847, 4 L. R. A. 491; Prank v. Morley's
Estate, 106 Mich. 635, 64 N. W. 577 ; Pitcher v. Rogers' Estate, 199 Mich. 114,
165 N. W. 813; Batchis v. Leask, 149 App. Dlv. 713, 134 N. Y. Supp. 850;
Van Camp v. Searle, 147 N. Y. 150, 41 N. E. 427 Spencer v. Clarke, 25 K. I.
;

163, 55 Atl. 329; Parker v. Parker, 69 Vt. 352, 37 Atl. 1112.

51 Johnson v. Johnson, 120 Mass. 465, 466. ,

; 62 sterling v. Tantum, 5 Boyce (Del.) 409, 94 AtL 176, 183.

§ 116) IN WHAT COUET? 469

the establishment there of courts of equity, all remedies of cestui que

trust had to be worked out through courts of law."'
Inadequacy of Remedy at Law
It has been sometimes held that equity would not take jurisdiction
to enforce the rights of a cestui que trust where a complete and ade-
quate remedy at law existed."* But it is believed that the prevailing
and better view is that the existence of a remedy at law has no
effect on the equitable remedy, that originally all the remedies of the
cestui que trust were in chancery, and that he continues to be en-
titled to enforce all his rights in that court, even though the courts of
law may have conceded to him certain remedies from time to time.""
In other words equity has original and complete jurisdiction over
trusts and will enforce the rights of a cestui' que trust because they
arise out of a trust. No showing of inadequacy of the remedy at
law is necessary to give a cestui que trust standing in a court of
equity. The statement of Lord Mansfield is applicable, although it
was made with reference to another question. He said: "This
court will not allow itself to be ousted of any part of its original
jurisdiction, because a court of law happens to have fallen in love
with the same or a similar jurisdiction, and has attempted (the
attempt for the most part is not very successful) to administer such
relief as originally was to be had here and here only." °° To the
same purpose is a statement of Leaming, V. C, in a recent New
Jersey case: "It is undoubtedly true, as suggested by defendant,
that the danger of irreparable injury may be said to constitute the
foundation of a great part of equitable jurisdiction, and especially
that part of equitable jurisdiction calling for relief by way of in-
junction, either pendente lite or perpetual; but it is not the sole
ground of equitable jurisdiction by any means. Where, as here, a
trust is involved, and the suit is for the purpose of preserving for
the benefit of the cestui que trust the existence of property rights

osNewhall v. Wheeler, 7 Mass. 189; Martzell v. Stauffer.S Pen. & W. 398.

4 Fidelity Trust Co. v. Alexander, 243 Fed. 162, 156 C. C. A. 28; Langdon
v. Blackburn, 109 Cal. 19, 41 Pac. 814 Ooe v. Turner, 5 Conn. 86 White v.
; ;

White, 1 Md. Ch. 53 Van Sciver v. Churchill, 215 Pa. 53, 64 Atl. 322 Downs
; ;

V. Downs' Ex'r, T5 Vt. 383, 56 Atl. 9 ;Franks v. Cravens, 6 W. Va. 185.

5 5 Camody v. Webster, 197 Ala. 290, 72 South. 622; Thompson v. Hartline,
105 Ala. 263, 16 South. 711; Hum«s v. Scott, 130 Ala. 281, 30 South. 788;
(Hubbard v. United States Mortg. Co., 14 111. App. 40; Dorenkamp v. Doren-
kamp, 109 111. App. 536; First Congregational Soc. in Raynham v. Trustees
of Fund, etc., in Raynham, 23 Pick. (Mass.) 148 ; Flye v. Hall, 224 Mass. 528,
113 N. E. 366 Farrell v. Farrell, 91 Mo. App. 665 Gutch v. Fosdiek, 48 N.
; ;

J. Eq. 353, 22 Atl. 590, 27 Am. St. Rep. 473 ; McCrea v. Purmort,, 16 Wend.
(N. T.) 460, 30 Am. Dec. 103 ; Farrelly v. Skelly, 130 App. Div. 803, 115 N. Y.
Supp. 522 ; Goldrick v. Roxana Petroleum Co. (Okl.) 176 Pac. 932 ; Nease v.
Capehart, 8 W. Va. 95 Borchert v. Borchert, 132 Wis. 593, 113 N. W. 85.
;

5 6 Eyre v. Everett, 2 Russell (Eng.) 381, 382.

470 THE EEMEDrES OF THE CESTUI QUE TRUST (Ch. 14

which have arisen through and hy reason of the trust or its breach,
it is no answer to a bill seeking the enforcement or preservation of

those property rights, with a view of preserving the corpus in which

tjie rights exist, that adequate money damages might be recovered
against the defendant for a breach of his trust. Trusts are enforced,
and trust rights are established and preserved, without reference to
the possibility of a money judgment in an action for damages
affording a measure of compensation for threatened injuries." '^
A probate court may of course construe a will purporting to cre-
ate a trust, for the purpose of determining whether such trust was
validly created,"' and occasionally probate courts have concurrent
jurisdiction with courts of equity over trusts created by will "^ but, ;

aside from statute, probate or surrogate's courts have no jurisdic-

tion to declare or enforce trusts.*""

CONDITIONS PRECEDENT
117. The right of cestui que trust to enforce the trust is subject to
the conditions precedent that he come into court with
clean hands and that he do equity by reimbursing thp trus-
tee or third person defendant for all expenditures which
equitably ought to be paid by the beneficiary, but which
have been paid by the defendant.

When, as is usually the case, the cestui que trust seeks his reme-
dy in equity, he must, of course, comply with the fundamental max-
ims of equity that a complainant enter the court with clean hands '^
and himself do equity. Thus, if it is sought to make defendant a
resulting trustee, and the plaintiff will by the establishment of such
trust obtain the benefit of services or advances of the defendant,
the plaintiff must reimburse the defendant for the services or ad-
vances as a condition to obtaining the relief asked."^ For example,
it has been held that, where the defendant had worked eighteen

years without wages in a business belonging to the plaintiff, and

57 Hussong Dyeing Mach. Co. v. Morris, 89 Atl. 249, 250.

68 In re Hinckley's Estate, 58 Cal. 457; Carpenter v. Cook, 132 Cal. 621,
64 Pac. 997, 84 Am. St. Kep. 118.
6 8 Green v. Gaslyll, 175 Mass. 265, 56 N. E. 560.
00 In re Dunn's Estate, Myr. Prob. (Cal.) 122; Haverstick v. Trudel, 51 Cal.
431 Butler v. Lawson, 72 Mo. 227 Hayes v. Hayes, 48 N. H. 219 Koch v.
; ; ;

Peick, 81 N. J. Eg. 120, 86 Atl. 67.

«i Tipton V. Powell, 2 Cold. (Tenn.) 19.
«2 Broatch v. Boysen, 236 Fed. 516, 149 C. C. A. 568; Robles v. Clarke, 25
Cal. 317; Second Unitarian Society in Portland v. Woodbury, 14 Me. 281;
Beck v. TJliricli, 16 Pa. 499.
§ 117) CONDITIONS PRECEDENT 471

had invested part of the proceeds of such business in realty and

taken the title in the name of the defendant, the plaintiff would be
required to reimburse the defendant for such services as a condition
precedent to the declaration of an implied trust in the realty.*'
Where the suit is to recover the trust res or its substitute from a
third person, and such third person has performed services or made
expenditures for which the cestui should equitably pay, reimburse-
ment will be a prerequisite to relief."* For example, an action to
recover the trust res from a taker who has paid no consideration will
succeed only upon the payment to the holder of the property of ad-
vances which he has made to cancel incumbrances on the proper-
ty.*° Frequently in bills to charge the defendants as constructive
trustees because of actual or presumed fraud this principle has been
applied."' Thus, an attorney charged as a constructive trustee be-
cause he acquired an adverse interest while acting for the plaintiff
is entitled to be reimbursed for money spent to acquire titles ad-
verse to those of the cestui que trust."^
On principle it would seem that a purchaser of the trust proper-
ty with notice of the trust ought not to be allowed to charge the
cestui que trust with the payment of the cost of improvements as a
condition to the recovery of the property; °' but the opposite view
has sometimes found judicial approval."'
The expenses incurred by the trustee in carrying on the trust
business or protecting the trust property should clearly be paid by
the beneficiary as a condition of relief against the trustee.'" But
claims by the trustee against the cestui que trust arising out of oth-
er transactions unconnected with the trust cannot be required to be
paid as a condition precedent to the enforcement of the trust.''^
If the cestui que trust has already received the equivalent of the

Bumpus V. Bumpus,^ 59 Mich. 95, 26 N. W. 410.

«s
8*Wormley v. Wormley, 8 Wheat. 421, 5 L. Ed. 651; Bates v. Kelly, 80
AlEi 142 Hawley v. Tesch, 88 Wis. 213, 59 N. W. 670.
;

eo Feingold v. Roeschlein, 276 111. 79, 114 N. E. 506.

McKibben v. Diltz's Ex'r, 138 Ky. 684, 128 S. W. 1082, \37 Am. St. Rep.
68
408; Coburn v. Page, 105 Me. 458, 74 Atl. 1026, 131 Am. St. Rep. 575; Iddings
'V. Bruen, 4 Sandf. Ch. (N. Y.) 223; McKennan v. Ply, 6 Watts (Pa.) 137;
Haight V. Pearson, 11 Utah, 51, 39 Pac. 479 Soderberg v. McRae, 70 Wash.
;

235, 126 Pac. 538.

6T Home Inv. Co. v. Strange (Tex. Sup.) 195 S. W. 849.
8 8 Hawley v. Tesch, 88 Wis. 213, 59 N. W. 670.
«9 Rines v. Bachelder, 62 Me. 95.
7 Pujol V. McKinlay, 42 Cai. 559; Wagenseller v. Prettyman, 7 111. App
192.
TiWaller v. Jones, 107 Ala. 331, 18 South. 277; Fitzgerald v. Hollan 44
.Kan. 499, 24 Pac. 957.
472 THE REMEDIES OF THE CESTUI QUE TRUST ^ (Ch. 14

trust property, and seeks to obtain the trust res, he must return the
equivalent.''''
Neither a demand ^' nor a previous action at law '* are ordinarily
conditions precedent to the maintenance of a suit in equity to en-
force the trust.

VENUE
118. The venue of a suit by cestui que trust to enforce a trust
against the trustee or a third person is generally determin-
ed by the jurisdiction in v^hich the defendant can be found,
except that, if the trustee has been appointed by a court,
. such court wnll have exclusive jurisdiction to compel the
performance of the trust by him.

The may ordinarily seek his remedy in any ju-

cestui que trust
risdiction where the trustee or other defendant can be found, re-
gardless of the nature and situs of the trust res. Equity acts in
personam and, if it has jurisdiction of the person of the defendant,
may order him to account for or dispose of the trust 'property as
the principles of equity dictate, even though the trust property may
be situate in a foreign jurisdiction. '° "When a court of equity ac-
quires full jurisdiction of the trustee in whom the legal title to trust
property is vested, and other necessary parties are before the court,
either in obedience to process or by their voluntary appearance, it
can compel the trustee to dispose of the legal title and distribute
the proceeds thereof as it may direct, although a part of the trust
property may be located outside of the territorial limits of its ju-
risdiction." "
But by virtue of statute, or sometimes where the question is as
between different counties in the same state, it has occasionally
been held that the venue of an action to enforce a trust of realty is
determined by the situs of the realty.''

"Marx Clisby, 130 Ala. 502, 30 South. 517; Graves v. Pinchback, 47

V.
Ark. 470, 1 W. 682.
S.
7 3 Garard v. Garard, 135 Ind. 15, 34 N. B. 442, 809.

74 Neresheimer v. Smyth, 167 N. Y. 202, 60 N. E. 449.

7 6 Massie v. Watts, 6 Craneh, 148, 3 L. Ed. 181; Memphis Sav. Bank v.
Houchens, 115 Fed. 96, 52 0. C. A. 176 Le Breton v. Superior Court, 66 Gal.
;

27, 4 Pac. 777 Stone v. Fowlkes, 29 App. D. C. 379

; Paget v. Stevens, 143
;

N. Y. 172, 38 N. E. 273 ; Clark v. Clark, 180 Pa. 186, 36 Atl. 747 ; Whittaker
V. Whittaker, 10 Lea (Tenn.) 93; State v. Superior Court, 7 Wash. 306, 34
Pac. 1103.
76 Memphis Sav. Bank v. Houchens, 115 Fed. 96, 108, 52 C. C. A. 176.
77 Booth Bradford, 114 Iowa, 562, 87 N. W. 685; Morris v. Vyse,' 154
V.
Mich. 253, 117 N. W. 639, 129 Am. St. Rep. 472; Servis v. Nelson, 14 N. J.
Eq. 94; Goodwin v. Colwell, 213 Pa. 614, 63 Atl. 363.
 ;

§ 119) PAKTIES 473

If the trustee is appointed by a. court, rather than by act of a set-

tlor, the court of appointment has exclusive jurisdiction over suits
by the cestuis que trust to enforce the trust against the trustee.'^
"It^ is undoubtedly a well-established principle of law that a trus-
tee appointed by a foreign court is amenable only to that court,,
and the fact that his residence is in another jurisdiction will not
confer authority there to control the administration of his trust, pr
to require accountability for the trust property. The rationale of
this doctrine is that, the trust relations having been created by ju-
dicial decree in another country, the trustee is accountable only to
the court creating the trust. He becomes the instrumentality of
the court for the administration of the property intrusted to his
care and custody, which is to be considered as in custodia legist
and, if other jurisdictions were permitted to interfere with' and to di-
rect the execution of the trust, it would lead to great conflict of au-
thority and inextricable confusion, which would hinder rather than
aid in the rightful administration thereof. * * * " '»

PARTIES
119.In an action or suit by cestui que trust to enforce his rights the
necessary parties defendant are those whose presence is
essential to enable the court to render a complete and
binding judgment or decree with respect to the subject-
matter of the action.
Proper parties are those possessing interests in the subject-mat-
ter of the action which can be conveniently, but need not
necessarily be, settled by the action.
The object and nature of the action or suit determines in each in-
dividual case the necessary and proper parties.

In seeking the various remedies which are open to him, the ces-
tui que trust must make parties to his suit or action all those per^
sons whose presence before the court is indispensable to a complete
adjudication of the controversy. These are the necessary parties.
Just when trustees, co-cestuis, and various third persons are neces-
sary parties to actions brought by a cestui que trust cannot be stat-
ed by general rule. Each case must stand on its own peculiarities.
In suits against a third person to recover the trust res trustees have
frequently been held necessary parties *° as they have in suits to
;

T8 Jenkins v. Lester, 131 Mas§. 355

; Chase v. Chase, 2 Allen (Mass.) 101
Schwartz v. Gerhardt, 44 Or. 425, 75 Pac. 698 (semble).
T9 Schwartz v. Gerhardt, 44 Or. 425, 427, 428, 75 Pac. 698.
80 Butler V. Butler, 41 App. Div. 47T, 58 N. Y, Supp. 1094; Oowdry t.
474 THE REMEDIES OF THE CESTUI QUE TKUST (Ch. 14

have the trust declared ended,* ^ or actions for breach of trust,'" or

for a.n accounting,*^ or against third parties where th& trustee has fail-
ed to bring the action,** or against a bank in which the trust fund
is deposited.*' Where the title to property owned by a sole trustee
at his death is sought to be affected, naturally the personal repre-
sentatives or heirs of the deceased trustee must be made parties.*'
And it is equally obvious that, when an attempt is made to fasten a
trust on property in the hands of a third person, such third person
is a necessary party.*'
Where tlie rights of cestuis que trust inter sese are litigated, one
beneficiary seeking a remedy must make his co-cestuis defend-
ants,** but if there is no contention about the shares of the various
co-cestuis and the sole question is one between one cestui que trust
and the trustee or a third person, the remaining cestuis que trust
are not necessary parties.*" Where several separate trusts are es-
tablished by the same will, it is obvious that the cestui of one trust
need not make the cestuis of the other trusts parties to an action."*
And occasionally one beneficiary is allowed to sue on behalf of all
others."
Former cestuis que trust quite apparently have no financial in-
terest in the outcome of an action about the trust and are not nec-

OhesMre, 75 N. C. 285 Carter v. Jones, 40 N. C. 196, 49 Am. Dec. 425 ; Mc-

;

Daniel v. BaskerviU, 13 Grat. (Va.) 228.

81 Benton v. Benton, 84 Kan. 691, 115 Pac. 535.
82 Hannahs v. Hammond (Sup.) 19 N. Y. Supp. 883.
83 Hutchinson v. Ayres, 117 111. 558, 7 N. E. 476.
84 Billings T. A'spen Co., 51 Fed. 338, 2 C. C. A. 252.
85 Gregory v. Merchants' Nat. Bank, 171 Mass. 67, 50 N. E. 520.
88 Freeman v. Kussell, 40 Ark. 56; Bates v. Hurd, 65 Me. 180; Newman
V. Newman, 152 Mo. 398, 54 S. W. 19; Kichardson v. Richardson, 83 Mich.
653, 47 N. W. 500 Moore v. Moore, 42 App. Div. 92, 58 N. ¥. Supp. 905.
;

87 Babb V. Lindley, 23 Kan. 478; Chicago & A. Bridge Co. v. Fowler, 55

Kan. 17, 39 Pac. 727 Van Hook v. Frey, 13 App. D. C. 543.
;

8 8 Jenkins v. Frink, 30 Cal. 586, 89 Am. Dec. 134; Carter v. Uhleln (N. J.
Ch.) 36 Atl. 956; Schuler v. Southern Iron & Steel Co., 77 N. J. Eq. 60, 75
Atl. 552; General Mutual Ins. Co. v. Benson, 12 N. Y. Super. Ct. 168; Par-
menter v. Homans, 125 App. Div. 399, 109 N. Y. Supp. 800; Campbell v.
Johnston, 1 Sandf. Ch. (N. Y.) 148; Slatter v. Carroll, 2 Sandf. Ch. (N. Y.)
573; Mason v. Mason's Ex'r, 4 Sandf. Ch. (N. Y.) 623; In re Aldrich's Will,
81 Vt. 308, 70 Atl. 566 ; Dow v. Jewell, IS N. H. 340, 45 Am. Dec. 371.
88 Bowdoln College v. Merritt (0. C.) 54 Fed. 55; Rogers v. Penobscot
Min. Co., 154 Fed. 606, 83 C. C. A. 380 ; Pickering v. De Rochemont, 45 N. H.
67; Hitchcock v. Linsly, 17 Hun (N. Y.) 556 Hubbard v. Burrell, 41 Wis.
;

365,
9 Steinway v. Steinway, 78 App. Div. 207, 79 N, Y.-'Supp. 541.
»i Mana v. Butler, 2 Barb. Ch. (N. Y.) 362.
§ 119) PARTIES 4:75

essary or proper parties-'^ The heirs of a deceased cestui que trust

are necessary, if the interest was an inheritable interest; "^ but
mere relationship to the beneficiary does not make one a necessary
party."* Persons who may, upon certain contingencies, become
cestuis que trust, are not necessary parties.**
Settlor as a Party
Neither the settlor "* nor his heirs,*'' since they have no financial
interest, are necessary parties; nor is an executor who has deliv-
ered the trust res to a trustee,®' nor the administrator of a deceased
trustee where the res is realty," nor the representatives of a de-
ceased trustee where other trustees survive,^ nor a trustee who has
removed from the state and so renounced the trust,^ nor a defaulting
trustee in an action by ^ cestui against a tliird party,' nor a trustee
who has been relieved of his,duties,* nor a street railway company,
where the trust res is the franchise of such company."
All who have or claim to have a financial interest in the subject-
matter of the action which may conveniently be, but need not nec-
essarily be, adjudicated are proper parties.* Thus, even though the
action affect the interest of one cestui only, the others may proper-
ly be made parties,' or, if any be dead, the heirs or representatives
of the deceased cestui que trust may be joined.'
One who will become the successor of a trustee is a proper party
»2 Andrews v. Hobson's Adm'r, 23 Ala. 219 ; Brissell v. Knapp (C. C.) 155
Fed. 809; Teeter v. Veitch (N. J. Ch.) 61 Atl. 14; Ward v. Funsten, 86 Va.
359, 10 S. E. 415.
»3 Kelly V. Karsner, 72 Ala. 106.
9* Cody V. Cody, 98 Wis. 445, 74 N. W. 217.
95 Green v. Grant, 143 111. 61, 32 N. E. 369, 18 L. R. A. 381; Dame r.
Catlett, 6 Har. & J. (Md.) 475.
9 8 Donegan v. Bater & Holmes Co., 73 Ma. 241, 74 South. 202. In Dor-
man V. Balestier (Sup.) 175 N. Y. Supp. 677, a settlor who reserved nothing
was said to have a "contingent interest" and to be a necessary party.
9 7 Whayne v. Davis, 66 S. W. 827, 23 Py. Law Eep. 2174; Boyer v. Decker,

5 App. Div. 623, 40 N. Y. Supp. 469.

9 8 McBride v. Mclntyre, 91 Mich. 406, 51 N. W. 1113.
9 9 McKee v. Downing, 224 Mo. 115, 124 S. W. 7.
1 Steinway v. Stelnway, 78 App. Div. 207, 79 N. Y. Supp. 541,
2 Earle v. Earle, 48 N. Y. Super. Ct. 18.
8 Mann v. Benedict, 47 App. Div. 173, 62 N. Y. Supp. 259.
4 Hubbell V. Hubbell, 22 Ohio St. 208.
8 Buckner v. Carter (Tex. Civ. App.) 137 S. W. 442.
8 Broder v. Conklin, 77 Cal. 330, 19 Pac. 513; Elam v. Garrard, 25 Ga. 557;

Day T. Devltt, 79 N. J. Eq. 342, 81 Atl. 368; Bums v. Niagara Co., 145
App. Div. 280, 130 N. Y. Supp. 54.
7 Kelly V. Browning, 113 Ala. 420, 21 South. 928; Hayles v. Farmer, 58
Ga. 324; McGuire v. Devlin, 158 Mass. 63, 32 N. E. 1028; Sears v. Hardy,
120 Mass. 924 ; Hill v. True, 104 Wis. 294, 80 N. W. 462.
8 Butler V. Lawson, 72 Mo, 227 ; MuUin v, MuUin, 119 App, Div. 521, 104

N. Y. Supp. 323, .
476 THE REMEDIES OF THE CESTOT QUE TRUST (Ch. 14-

in an action to recover the property from a defaulting trustee,' and

in an action against the trustee, a third person holding some of the
trust property under the trustee may properly be made a party,^"
as n^ay a third person who aided in the breach.^^ A claimant ad-
verse to the cestui is a proper party.^^ Where the trust res con-
sists of shares of corporate stock, and the object is to compel the
transfer of the stock by the trustee, the corporation may be made a
party defendant.^' Tenants at will of the trustee,^* personal repre-
sentatives of a deceased resulting trustee of land,^" and other par-
ties having no financial interest and against whom no relief is pray-
ed, are not proper parties.^'

PERSONAL LIABILITY OF THE TRUSTEE

120. If sum is due the cestui que trust under the trust, or
a definite
damages have resulted to him from a breach of the trust,
he may recover a money judgment against the trustee, or
his representatives if he is dead.
The trustees are jointly and severally liable where they unite in
a breach of trust.
Where the cestui que trust is not able to obtain the trust proper-
ty or its substitute by tracing such property into the assets
of the trustee, he is not a preferred creditor and must share
equally with the general creditors of the trustee.
A trustee is liable to the cestui que trust for wrongful acts of an
agent employed by the trustee only when the trustee has
been guilty of negligence in the selection or use of the
agent.
In dealing with a cotrustee a trustee is required to use the care
of a reasonably prudent man in the conduct of his own af-
fairs. A
trustee is liable for the wrongful acts of his co-
trustee only when he negligently allows or assists the co-
trustee to obtain or retain the control of the trust properly,,
and such control gives opportunity for the default.

9 Andrews Hurt's Adm'r, 14 Ky. Law Rep. 765.

v.
10 Chapman Hughes, 134 Cal. 641, 58 Pac. 298, 60 Pac. 974, 66 Pac.
v.
982; Weaver
v. Van Akin, 77 Mich. 588, 43 N. W. 1081.
11 Fort V. Amos, 108 Ga. 588, 34 S. E. 150.
12 Beckwith v. Sheldon, 154 Cal. 393, 97 Pac. 867.
18 Howison V. Baird, 145 Ala. 683, 40 South. 94.
i« Reynolds v. Lynch, 64 Cal. 442, 1 Pac. 893.
10 Shaffer v. Fetty, 30 W. Va. 248, 4 S. E. 278.
i« Harton v. Little, 176 Ala. 267, 57 South, 851.
 ;

§ 120) PERSONAL LIABILITY OF THE TRUSTEE 477

The cestui que trust may recover interest, simple or com-

pound, when it is necessary to compensate him for the loss
of the use of the trust property which has been occasioned
by the default of the trustee.
Under many modern statutes the trustee is criminally liable for
an appropriation of the trust property.

It is obvious that if the trust instrument requires the payment to

the cestui que trust of a definite sum, and the trustee refuses to
make the payment, the beneficiary may seek his remedy by the re-
covery of a money judgment against the trustee.^' The right of
cestui que trust to proceed in a court of law in this instance has al-
ready been mentioned.^'
The personal liability of the trustee to respond in money dam-
ages for his acts in the administration of the trust which are wrong-
ful and which cause damage to the cestui que trust is also elemen-
tary.^" Thus, the making of unauthorized payments to other, ces-
tuis que trust,^" the conversion of the trust property,^^ negligence
in recording instruments affecting the trust property,^* or in ob-
taining security,^* or in collecting the trust property,^* or in the re-

iT McColllster v. Willey, 52 Ind. 382. As to the measure of the trustees'

liability in various cases, see Strachan, Compensation for Breach of Trust,
34 Law
Quart. Kev. 168.
18
See ante, § 116.
19 Miller v. Butler, 121 Ga. 758, 49 S. E. 754; Graham v. Graham, 85 111.
App. 460; West v. Biscqe, 6 Har. & J. (Md.) 460; Moore v. Robertson, 62
Hun, 623, 17 N. T. Supp. 554; Burris v. Brooks, 118 N. C. 789, 24 S. E.
521; Robertson v. Sublett, 6 Humph. (Tenn.) 313; Silliman v. Gano, 90
Tex. 637, 39 S. W. 559, 40 S. W. 391.
2 Kendall v. De Forest, 101 Fed. 167, 41 C. C. A. 259; Prince de Beam
V. Winans, 111 Md. 434, 74 Atl. 626. In re Tod, 86 Misc. Rep. 616, 148 N.
y. Supp. 618. But the trustee may recover the unauthorized payment from
the one to whom it was made. Marks v. Semple, 111 Ala. 637, 20 South. 791.
aiMilloglav V. Zacharias, 33 Cal. App. 561, 165 Pac. 977; Appeal of Fisk,
81 Conn. 433, 71 Atl. 559; White v. Sherman, 168 111. 589, 48 N. E. 128, 61
Am. St. Rep. 132; United States Fidelity & Guaranty Co. v. Douglas' Trus-
tee, 134 Ky. 374, 120 S. W. 328, 20. Ann. Cas. 993; Duckett v. National
Bank of Baltimore, 88 Md. 8, 41 AtL 161, 1062 Brown v. Cowell, 116 Mass.
;

461; Davis v. HofEman, 167 Mo. 573, 67 S. W. 234; Madison Trust Co.
V. Carnegie Trust Co., 215 N. Y. 475, 109 N. E. 580; Smith v. Frost, 70
N. Y. 65 Brown v. Lambert's Adm'r, 33 Grat. (Va.) 256.
'

22 Appeal of Hatch (Fa.) 12 Atl. 593; Cooper v. Day, 1 Rich. Eq. (S. C.)
26 ;Cogbill v. Boyd, 77 Va. 450.
23 Waterman v. Alden, 144 111. 90, 32 N. E. 972.
2* Kennedy v. Winn, 80 Ala. 165 Cross v. Petree, 10 B. Hon, (Ky.) 413
;

Hunt V. Gontrum, 80 Md. 64, 30 Atl. 620; Bentley v. Shreve, 2 Md. Ch. 215;
Tatem v. Speakman, 50 N. J. Eq. 484, 27 Atl. 636; In re Willett's Estate, 15
N. 1. St, Eep. 445.
478 THE EEMBDIES OF THE CESTUI QUE TEUST ( Ch. 14

tention of property until it is worthless,^" wrongful sale of the trust

res,^° and negligence or misconduct in the making or retaining of
investments/^ may giye rise to a right in favor of cestui que trust
to have the trustee pay money damages. Where the trustee is fi-
nancially responsible this affords a remedy which is usually com-
plete and satisfactory.
The burden of proving misconduct by the trustee in these ac-
tions is on the cestui que trust. The trustee is aided by the pre-
sumption of the regularity of his proceedings.^*
The remedy of a cestui que trust here treated, namely, that of
recovery ofmoney due under the trust or due for breach of the
trust, may be asserted against the representatives of the trustee
after his death, as well as against the trustee during his life."'
Joini and Several Liability
If several trustees unite in a breach of trust, they are jointly and
severally liable, and the entire claim of the cestui may be satisfied
from the property of one trustee.^" In the words of a Nejv Jersey
court :
*^ "A liability to make good a loss resulting from a breach

25 Snyfler's Adm'rs v. McComb's Ex'x (C. C.) 39 Fed. 292.

28 Voorhees' Ex'x v. Melick, 25 N. J. Eq. 523; Weisel v. Cobb, 118 N. 0.
11, 24 S. B. 782 ; Cresap v. Brown, 82 W. Va. 467, 96 S. E. 66.
27 De Jarnette v. De Jarnette, 41 Ala. 708; Johus v. Herbert, 2 App. D.
C. 485 ; Hitchcock v. Cosper, 164 Ind 633, 73 N. E. 264; Eobertson v. Robert-
son's Trustee, 130 Ky. 293, 113 S. W. 138, 132 Am. St. Eep. 368 Jordan v. ;

Jordan's Trust Estate, 111 Me. 124, 88 Atl. 390; Tuttle r. Gilmore, 36 N.
J. Eq. 617; Gray v. Fox, 1 N. J. Eq. 259, 22 Am. Dec. 508; Smith v. Smith, 4
Johns. Ch. (N. Y.) 281; In re Blauvelt's Estate (Sur.) 20 N, T. Supp. 119;
In re Stark's Estate (Sur.) 15 X. Y. Supp. 729; In re Hart's Estate, 203
Pa. 480, 53 Atl. 364; Metzger v. Lehigh Valley Trust & Safe Deposit Co.,
220 Pa. 535, 69 Atl. 1037; Dunn v. Dunn, 1 S. C. 350; Wynne v. Warren,
2 Heisk. (Tenn.) 118; Carr's Adm'r v. Morris, 85 Va. 21, 6 S. E. 613; Key
V. Hughes' Ex'rs, 32 W. Va. 184, 9 S. E. 77 ; Simmons v. Oliver, 74 Wis. 633,
43 N. W. 561.
28 Mead v. Chesbrough Bldg. Co., 151 Fed. 998, 81 C. O. A. 184; Anderson
V. Thero, 139 Iowa, 632, 118 N. W. 47; Kirby v. State, 51 Md. 383; OfEen-
stein V. Gehner, 223 Mo. 318, 122 S. W. 715.
28 Hazard v. Durant (C. O.) 19 Fed. 471; Pryor v. 'Davis, 109 Ala. 117,
19 South. 440; Hill v. State, 23 Ark. 604; Green v. Brooks, 25 Ark. 318;
Benson v. Liggett, 78 Ind. 452; Frank v. Morley's Estate, 106 Mich. 635, 64
N. W. 577; In re Turpin's Estate, 7 Ohio N. P. 569; In re Gaffney's Estate,
146 Pa. 49, 23 Atl. 163 In re Spatz's Estate, 245 Pa. 334, 91 Atl. 492.
;

s» Heath v. Erie Ry. Co., 8 Blatehf. 347, Fed. Gas. No. 6306 Hazard v.
;

Durant (C. C.) 19 Fed. 471; Fellrath v. Peoria German School Ass'n, 66 lU.
App. 77 ; Furman v. Rapelje, 67 111. App. 31; WindmuUer v. Spirits Distrib-
uting Co., 83 N. J. Eq. 6, 90 Atl. 249; Gilchrist v. Stevenson, 9 Barb. (N. Y.)
9; Sortore v. Scott, 6 Lans. (N. Y.) 271; Meldon v. Devlin, 31 App. Dlv.
146, 53 N. Y. Supp. 172, affirmed 167 N. Y. 573, 60 N. E. 1116; Deaderick

81 General Proprietors of Eastern Division of New Jersey v. Force's iiJx'rs,

72 W. J. Eq. 56, 68 AH. 914, 942. /
§ 120) PEBSONAL LIABILITY OF THE TRUSTEE 479

of trust participated in by more than one trustee is both joint and

several, so that each guilty trustee is liable for the whole of the
loss." But where several persons are constructive trustees each
is liable only for the amount of property coming into his hands.*''

Cestui Not Preferred -

The
right of a cestui que trust to a money judgment against the
trustee is not a preferred right. He stands on a level with other
creditors of the trustee,*' and has no lien ** upon the general assets
of the trustee. If the trustee is bankrupt, the cestui must take his
dividend in the bankruptcy court with the other creditors, unless
he can trace the trust res into the property in the hands of the re-
ceiver, assignee, or trustee mbankruptcy. If the trust property,
or its substitute, can be traced into the property inNthe hands of
the trustee, or his representative, then the cestui is not dependent
upon the recovery of a money judgment against the trustee and its
collection from the trustee's general assets; but the cestui que
trust may elect the remedy of following the trust property,'" a
remedy the limitations of which are hereinafter discussed. "But to
entitle the owner of trust property to a preference over the general
creditors of an insolvent trustee it must appear that his property,
or its proceeds, went into and became a part of the fund or estate
upon which it is sought to impress a trust." *'

V. Cantrell, 10 Xerg. (Tenn.) 263, 31 Am. Dec. 576; Thomas v. Scruggs,

10 Yerg. (Tenn.) 400; Harrigan v. Gilchrist, 121 Wis. 127, 99 N. W. 909.
s2Htmter v. Hunter, 50 Mo. 445.
ss Wales V. Sammis & Scott, 120 Iowa, 293, 94 N. W. 840; City of Lincoln
V. Morrison, 64 Neb. 822, 90 N. W. 905, 57 L. R. A. 885
; Mertens v. Schlemme,
68 N. J. Eq. 544, 59 Atl. 808; Clark v. Timmons (Tenn. Ch. App.) 89 S. W.
534; Johnson's Ex'rs v. Johnson's Heirs, 88 W. Va. 598, 98 S. E. 812.
84 Spokane County v. First Nat. Bank, 68 Fed. 979, 16 C. C. A. 81; Bur-
goyne v. McKillip, 182 Fed. 452, 104 C. C. A. 590; Pharis v. Leachman, 20
Ala. 662; Lathrop v. Bampton, 31 Cal. 17, 89 Am. Dec. 141 ; Lang v. Metz-
ger, 206 111. 475, 69 N. E. 493; City of St. Paul v. Seymour, 71 Minn. 303,
74 N. W. 136; In re Mumford, 5 N. Y. St. Rep. 308; MacArthur v. Gor-
don, 52 Hun, 615, 5 N. Y. Supp. 513 ; Shute v. Hinman, 34 Or. 578, 56 Pac.
412, 58 Pac. 882, 47 L. B. A. 265; Appeal of Cross, 97 Pa. 471; Heidel-
bach V. Campbell, 95 Wash. 661, 164 Pac. 247!
3 5 Weiss V. Haight & Freese Co. (C. C.) 152 Fed. 479; Metropolitan Nat.
Bank T. Campbell Commission Co. (C. C.) 77 Fed. 705; Gray v. Perry, 51
Ga. 180; McCutchen v. Roush, 189 Iowa, 351, 115 N. W. 903; Farnsworth
V. Muscatine Produce & Pure Ice Co., 177 Iowa, 21, 158 N. W. 741; Hart-
sock V. Russell, 52 Md. 619; State v. Bank of Commerce, 54 Neb. 725, 75
N. W. 28; Lathrop v. GUbert, 10 N. J. Eq. 344; Warwick v. Warwick, 31
Grat. (Va.) 70.
30 Morrison v. Lincoln Sav. Bank & Safe Deposit Co., 57 Neb. 225, 227,
77 N. W. 655. A cestui que trust, having the right to take specific assets
from the trustee's estate, may waive it and come in as a general creditor.
Keller v. Washington,' 83 W. Va. 659, 98 S. E. 880.
480 THE REMEDIES OF THE CESTUI QUE TRUST (Ch. 14

If the trustee, against whom the cestui brings his bill to recover
a decree for the payment of money on account of a duty to
pay
under the trust instrument or on account of a breach of trust, is
also a cestui que trust, and in that capacity has funds due him or
property which is equitably his, the plaintiff cestui may have a lien
upon this interest of the defendant as cestui que trust for the re-
covery of the plaintiff's claim. *^
Where the respective rights of persons claiming to be cestuis que
trust of resulting trusts and creditors of the alleged trustee of such
trust come into question, a different problem from that just con-
sidered is presented. In this latter case the object of the cestui que
trust is to recover the res itself, and not a inoney judgment. The
prevailing view is that, in the absence of estoppel, the resulting
cestui prevails over the creditors of the. resulting trustee.*' A
similar holding has been made in the case of a constructive trust."
Liability forActs of Third Person
The trustee may be liable for the acts of another which cause in-
jury to the interest of the cestui que trust. The trustee may, of
course, employ agents to perform ministerial acts; but if he en-
trust the entire management of the trust to an agent, and exercise
no supervision and the agent misapply the trust funds, the trustee
will be responsible for the amount so lost.*" But reasonable care
in the selection and supervision of an agent will relieve the trustee
of responsibility for losses resulting from the agent's acts. "A
trustee is not an insurer of trust funds against the possibility of
loss, and all that is' required of him is good faith and reasonable
diligence."*^ Hence it has been held that a trustee who intrusts
an attorney of good reputation with the key to a safety deposit box
<;ontaining trust securities is not liable for the theft of the securities
by the attorney; ** and a trustecmay employ a broker in investing
funds, and if due care is used in the selection and supervision of

37 Eaynes v. Eaynes, 54 N. H. 201; MUler v, MUler, 148 Mo. 113, 49 S. W.

852.
3 8 Murphy v. Clayton, 113 Cal. 153, 45 Pac. 267; Waterman v. Buckingham,

79 Conn. 286, 64 Atl. 212; McLaurie v. Partlow, 53 111. 340; Robinson v.

Robinson, 22 Iowa, 427; Hudson v. Wright, 204 Mo. 412, 103 S. W. 8.
Contra: Buck v. Webb, 7 Colo. 212, 3 Pac. 211; Roberts v. Broom, 1 Del.
Ch. 388.
3 Arntson v. First Nat. Bank of Sheldon, 39 N. D. 408, 167 N. W. 760, L. R.
A. 1918F, 1038.
<» Earle v. Earle, 93 N. T. 104,
<i In re Darlington's Estate, 245 Pa. 212, 218, 91 Atl. 486.
42 In re Darlington's Estate, 245 Pa. 212, 91 Atl. 486. See, also, Pennsyl-
vania Co. for Ins. on Lives v. Franklin Fire Ins, Co., 5 Pa, Dist R. 323.
§ 120) PERSONAL LIABILITY OF THE TRUSTEE *^1

the broker, the trustee will not be liable for the broker's theft of ,

trust property.**
If the defendant trustee has joined with his cotrustee in a breach
of trust, he is liable to the if he had separately com-
same extent as
mitted the wrongful Thus, a trustee who discovers a breach
act.*^
of trust by his fellow trustee, and thereafter joins with the original
wrongdoer in misapplying trust property in an attempt to retrieve
the earlier losses, is liable to the cestui que trust for the breaches
in which he aided.*'
A trustee who has renounced the, trust is obviously not liable
thereafter for wrongs committed by another trustee, because the re-
nunciation makes him no trustee at all.*'
Liability upon Default by Cotrustee ,

Frequent instances are ^ound in the books of inactivity by one

trustee and a loss to the trust estate resulting immediately from
the negligence or fraud of the active cotrustee. Is kn inactive trus-
tee liable to the cestui que trust where the trust property has been
dissipated by the wrongful act of the active associate in the trus-
teeship? Great lack of harmony has been shown by the courts
in the discussion of a rule to be applied in this case. In the
reign of Charles I the Lord Keeper stated the rule to be that the
inactive trustee was not liable "unless some purchase, fraud, or evil
dealing appear." " This doctrine seemed to limit liability to cases
of practical joinder by the passive trustee in the breach by the
active trustee.
A Pennsylvania judge in 1843 thus formulated the rule ** "It is :

said to be the harshest demand that can be made in equity to com-

pel a trustee to make up a deficiency, where the money has not
come into his hands. In such a case equity will not charge him
unless he has been guilty of neglect so gross as almost amounts to
fraud."
A Tennessee court has made the rule depend upon the discretion-
ary or directory nature of the trust "A discretionary trust is, when
:

by the terms of the trust no direction is given as to the manner in

which the trust funds shall be vested, till the time arrives at which
it is to be appropriated in satisfaction of the trust. In such cases,
in order to charge a trustee for an abuse by his cotrustee, some act

48 Speight V. Gaunt (1883) 9 App. Cas. 1.

4* In re Cozzens', Estate (Sur.) 15 N. Y. Supp. 771.
46 Westerfield v. Rogers, 174 N. Y. 230, 66 N. B. 813.
*• Clagett V. HaU, 9 Gill & J. (Md.) 80.
47 Townley v. Sherborne, J. Bridgman, 35, 37.
48 Bell, J., In Nyce's Estate, 5 Watts & S. 254, 255, 40 Am. Dec. 498.
BOOEBT Teusts —31
482 THE REMEDIES OP THE CESTUI QUE TRUST (Ch. 14

of commission must be shown on his part, by which the trust fund

was attained by his cotrustee, or some act of omission amounting,
to gross neglect in permitting the fund to be wasted. * * * ^
directory trust is when by the terms of the trust the fund is direct-
ed to be vested in a particular manner, till the period arrives at
which it is to be appropriated. In such cases, if the fund be not vest-
ed, or vested in a different manner from that pointed out, it is an
abuse of trust for which both trustees are responsible, though but
one received the money, because both are bound to attend to the
directions of the trust, and must be careful to execute it faithfully,
according to its terms and the intention of the person by whom it
was created." **
John Romilly, Master of the Rolls, has said that "giving one
Sir
trustee the sole and absolute control over the fund was a breach
of trust." "" By this principle affirmative action by the passive
trustee giving the activie trustee sole control seemed to be all that
was necessary in order to show liability.
The New York Court of Appeals has taken the position that an
inactive trustee is he "unnecessarily do an act by
liable only if

which the funds are. transferred from the joint possession of all to
the sole possession of one," and it has said that "an act is unneces-
sary when done outside of the usual course of business pertaining
to the subject." "
The Supreme Judicial Court of Massachusetts has formulated
the rule as follows °^ "It is well settled that a trustee is not re-
:

sponsible for the acts or misconduct of a cotrustee in which he has

not joined, or to which he does not consent or has not aided or
made possible by his own neglect."
This disorder in the statement of the governing principle lends
some color to the statement of Woodward, J., in Irwin's Appeal,"
that "there is, perhaps, no one subject on which English authorities
are so contradictory and irreconcilable as upon the question, when
is one trustee or executor liable for moneys that have been lost in
the hands of a cotrustee or executor ? "
The decisions may be placed in four classes, namely (a) Those :

in which the inactive trustee has done nothing but passively allow
his cotrustee to assume exclusive possession of the trust property;
(b) those in which the sole basis of the inactive trustee's alleged

48 Turley, J., in Deaderick v. Cantrell, 10 Yerg. 263, 269, 270, 272, 31 Am.
Dec. 576.
so Wiglesworth v. Wigles worth, 16 Beav. 269, 272.
Bi Purdy v. Lynch, 145 N. "? 462, 473, 40 N. E. 232.
02 Ashley v. Winkley, 209 Mass. 509, 528, 95 N. E. 932,
Bs 35 Pa. 294, 295.
§ 120) PEKSONAIi LIABILITY OP THE TRUSTEE 483

liability isan affirmative act on his part giving the active trustee
exclusive possession; (c) cases in which there is an intrusting
of possession by positive or negative conduct and, in addition, a
failure to supervise the administration of the trust after the 90-
trustee has taken exclusive control ; (d) instances in Vhich the
intrusting of possession was followed by notice to the inactive trus-
tee of a possible specific danger to the trust fund and thereafter by
continued inaction by the passive trustee.
Passively Allozving Cotrustee to Take Bxclusive Possession
The earliest case raising the question of an inactive trustee's lia-
bility is Townley v. Sherborne.^* There a trustee who had passive-
ly allowed his fellow trustee to receive the rents of the trust realty
was held not liable when the funds were lost, the Lord Keeper
,

saying that the passive trustee was not liable in the absence of
some "purchase, fraud or evil dealing" in allowing the cotrustee
exclusive possession, "for they being by law joyn tenants or tenants
in common, every one by law may receive either all or as much of
the profits as he can come by; and it being the case of most men in
these days, that their personal estates do not suffice to pay their
debts, prefer their children, and perform their wills, they are en-
forced to trust their friends with some part of their real estate, to
make up the same, either by the sale, or perception of profits and if
;

such of these friends, who carry themselves without fraud, should

be chargeable out of their own estate for the faults and deficiencies
of their cotrustees, who were not nominated by them, few men
would undertake any such trust. And if two executors be, and one
of them waste all, or any part of the estate, the devastavit shall by
law charge him only, and not his coexecutor; and in that case,
'equitas sequitur legem,' there have been many precedents re-
solved in this court, that one executor shall not be charged for the
act or default of his companion. And it is no breach of trust to per-
mit one of the trustees to receive all or the most part of the profits,
it falling out many times that some of the trustees live far from

the lands, and are put in trust out of other respects than to be
troubled with the receit of profits." This early case which treated
exclusive possession by one trustee as natural and the liability of a
trustee as confined to his own receipts, in the absence of fraud, has
been followed by many English decisions.'" This rule has also
been applied to passively allowing the cotrustee to have exclusive

64 J. Bridgman, 35, 37, 38.

6 Spalding v. Shalmer, 1 Vern. 301; Anonymous, 12 Mod. 560; Aplyn v.
Brewer, Bench's Prec. Ch. 173; Fellows v. Mitchell, 1 P. Wms. 81; Leigh
V. Barry, 3 Atk. 583; In re Fryer, 3 Kay & J, 317.
484 THE REMEDIES OP THE CESTUI QUE TRUST (Ch. 14

possession of the evidence of trust property, as, for example, title

deeds."" The court said in the last-cited case " that "no laches
could be imputed to the trustees for suffering one of their number
to hold the deeds. 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 different locks, of which each trustee
should hold one of the keys, and negligence cannot be imputed to
trustees for not taking such precautions as these."
Yet in other cases passively allowing a cotrustee to take exclu-
sive possession has been regarded as a breach of trust, rendering
the inactive trustee liable for loss of the funds while in the cotrus-
tee's hands."* In Rodbard v. Cooke "* th,e court said: "It may be
stated as a general rule of law that where there are two trustees,
and one of them places a fund so that it is under the sole control
of the other, if the money is misapplied by that other, both are
equally liable. The object of having two trustees is to double the
control over the trust property, and when one trustee thinks fit to
give the other the sole power of dealing with the trust property he
defeats that object and becomes himself responsible." The words
of this quotation suggest active conduct resulting in exclusive con-
trol by the cotrustee, but the facts of the case seem to indicate mere
passivity.
Rare circumstances may justify the exclusive control by one
trustee and thus obviate any dispute as to the inactive trustee's lia-
bility. Thus, where the trust property consisted of shares in a
company, the deed of creation of which prohibited ownership of
shares by two or more jointly, obviously one trustee must hold the
shares.*"
If exclusive possession is obtained without the actual or con-
structive knowledge of the passive trustee, naturally there is no
liability, because there is no acquiescence in the sole control of the
active trustee;"^ and the same is true where exclusive control is
obtained by fraud, as by altering a check.®* Here there is lack of
real consent.
In a number of American cases the doctrine of Townley v. Sher-
borne has been approved, passive acquiescence in exclusive posses-

6" Cottam Eastern Counties Ry. Co., 1 Johns. & H. 243.

V.
"' Cottam Eastern Counties Ky. Co., 1 Johns. &/H. 243, 247.
V.
B8 Ex parte Shakeshaft, 3 Bro. Ch. 197; Gregory v. Gregory, 2 T. & 0.
813; Lockhart v. Eeilly, 25 L. J. Ch. 697 ; Rodbard t. Cooke, 36 L. T, N,
S. 504; Lewis v. Nobbs, 8 Ch. D. 591. ,

08 36 L. T. N. S. 505.
60 Ooiisterdlne v. Consterdine, 31 Beav. 331.
81 Derbishire v. Home, 3 De G., M. & G. 80.
82 Barnard v. Bagshaw, 3 De G., J. & S. 355.
 ;

§ 120) PERSONAL LIABILITT OP THE TRUSTEE 485

sion by a cotrustee has not been regarded as negligence or a breach

of trust, and the inactive trustee has been absolved from liability.'^
In support of this attitude Finch, J., said in Ormiston v. Olcott '* :

"There would be neither wisdom nor justice in a rule which would

practically end in making a trustee a guarantor of the diligence and
good faith of his associates, and hold him responsible for acts
which he did not commit and could not prevent."
Asmaller number of American courts have considered passively
surrendering the trust property to the exclusive possession of a
cotrustee to be negligence, and have held the inactive trustee lia-
ble.^" Where the cotrustee was found in exclusive control,"" or
was passively allowed to assume it,"^ and the inactive trustee there- ^

after did nothing to return the property to joint control, he has

been held liable.
If the active trustee has obtained exclusive control of the prop-
erty without the knowledge or consent of the inactive trustee, ob-
viously there is no basis for a judgment against the latter."*
Intrusting Cotrustee with Bxclftsive Control by Positive Act
The English cases are almost unanimous in regarding as a negli-
gent breach of trust a positive act by the passive trustee (as, for
example, the execution of a power of attorney) by means of which
,

the cotrustee is enabled to get exclusive control of trust assets and

Colburn v. Grant, 181 U. S. 601, 21 Sup. Ct. 737, 45 L. Ed. 1021 Taylor
«3 ;

V. Roberts, 3 Ala. 83; Glenn v. McKim, 3 Gill (Md.) 366; Stowe v. Bowen,
99 Mass. 194; Hunter v. Hunter, 50 Mo; 445; Dyer v. Riley, 51 N. J. Eq.
124, 26 Atl. 327; Bankes v. Wilkes' Bx'rs, 3 Sandf. Oh. (N. T.) 99; Kip v.
Deniston, 4 Johns. (N. T.) 23; Ormiston v. Olcott, 84 N. T. 339; Purdy v.
Lynch, 145 N. Y. 462, 40 N. E. 232; Westerfield v. Rogers, 174 N. T. 230, 66
N. E. 813; Worth v. McAden, 1 Dev. & B. Eq. (21 N. C.) 199; Ochiltree v.
Wright, 1 Dev. & B. Eq. (21 N. C.) 336 ;State v. Guilford, 18 Ohio, 500, re-
versing 15 Ohio, 593; Stell's Appeal, 10 Pa. 149; Estate of Fesmire, 134 Pa.
67, 19 Atl. 502, 19 Am. St. Rep. 676 ; Birely's Estate, 7 Pa. Dist. R. 395
Boyd's Ex'rs v. Boyd's Heirs, 3 Grat. (Va.) 113; Griffin's Ex'r v. Macau-
lay's Adm'r, 7 Grat. (Va.) 476, 578; Keenan v. Scott, 78 W. Va. 729, 90 S.
E. 331. See, also, City Bank v. Maulson^ 3 Chanc. Ch. R. (U. C.) 334.
84 84 N. X. 339, 346.
86 Royall's Adm'r v. McKenzie, 25 Ala. 363 ; Fox v. Tay, 89 Cal. 339,
24 Pac. 855, 26 Pac. 8^7, 23 Am. St. Rep. 474 ; Ringgold v. Ringgold, 1 Har.
& G. (Md.) 11, 18 Am. Dec. 250; Maccubbin v. Cromwell's Ex'rs, 7 Gill
& J. (Md.) 157; Laroe v. Douglass, 13 N. J. Eq. 308; Mumford v. Mur-
ray, 6 Johns. Ch. (N. Y.) 1; Bowman v. Rainetaux, Hofe. Ch. (N. Y.) 150;
Spencer v. Spencer, 11 Paige (N. Y.) 299 ; Earle v. Earle, 93 N. Y. 104.
86 Thomas v. Scruggs, 10 Yerg. (Tenn.) 400.
67 Harvey v. Schwettman (Mo. App.) ISO S. W. 413.
88 Lansburgh v. Parker, 4L App.. D. C. 549.
486 THE REMEDIES OF THE CESTUI QUE TRUST ( Ch. 14

thereby to waste them."* But Mendes v. Guedella ""^ seems to run

counter to this weight of authority. In that case two trustees
placed in the hands of a third the key to a bank box, for the pur-
pose of allowing him to get the coupons from securities. The bank
was instructed to deliver to the active trustee the coupons only,
and not the box; but it negligently delivered the box to the active
trustee, and he defaulted. The court declined to hold the passive
trustees liable, although it would seem that their act enabled the
cotrustee to get exclusive control.
The American courts have not been harmonious in their treat-
ment of the inactive trustee, whose sole negligence, if such it be,
has been the taking of a positive step for the purpose of intrusting
his active cotrustee with exclusive possession of the trust property.
In numerous instances the passive trustee, or guardian or other
fiduciary treated by the court as a trustee, has been held respon-
sible, upon the loss of the property by the negligence or crime of
the active trustee.'^ But the opposite result has been reached in
several cases; ^^ the courts stating that, in the absence of warning
that the active trustee is in financial difficulty or is dishonest, such
conduct by the inactive trustee is not negligent. In Purdy v.
Lynch ''^ the purpose of the trust was the payment of the debts of

6 9 Bradwell v. Catchpole, 3 Swanst. 78, note; Chambers v. Minchin, 7 Ves.

186; Hanbury v. Klrkland, 3 Simon, 265; Marriott v. Kinnersley, Tamlyn,
470; Wiglesworth v. Wiglesworth, 16 Beav. 269; Brumridge v. Brumridge,
27 Beav. 5; Cowell v. Gatcombe^ 27 Beav. 568; Ingle v. Partridge, 32
Beav. 661 ; In re Taylor, 81 L. T. N. S. 812.
70 2 Johns. & Hen. 259. See, also, Home v. Pringle,- 8 Clark & Fin. 264,
and Shepherd v. Harris, (1905) 2 Ch. 310.
TiWallis V. Thornton's Adm'r, 2 Broefc. 422, Fed. Cas. No. 17111; Ed-
monds V. Crenshaw, 14 Pet. 166, 10 L. Ed. 402; Gray v. Reamer, 11 Bush
(Ky.) 113; Barrel! v. Forman, 88 Md. 188, 40 Atl. 883; Smith v. Pettlgrew,
34 N. J. Eq. 216; Monell v. Monell, 5 Johns. Ch. (N. Y.) 283, 9 Am. Dec.
298; Bruen v. GHlet, 115 N. Y. 10, 21 N. E. 676, 4 L. K. A. 529, 12 Am.
St. Rep. 764; Matter of Litzenberger, 85 Hun, 512, 33 N. X. Supp. 155:
Graham v. Davidson, 2 Dev. & B. Eq. (22 N. C.) 155; Hauser v. Lehman,
2 Ired. Eq. (37 N. C.) 594; Clark's Appeal, 18 Pa. 175; Donnelly's Es-
tate, 11 Pa. Dist. R. 211; Graham v. Austin, 2 Grat. (Va.) 273. To the
same effect is Mickleburgh v. Parker, 17 Grant Ch. (U. C.) 503.
'2 Laurel County Court v. Trustees of Laurel Seminary, 93 Ky. 379, 20
S. W. 258 ; Adair v. Brimmer, 74 N. Y. 539 Purdy v. Lynch, 145 N. Y. 462;
;

40 N. E. 232; State v. Guilford, 18 Ohio, 500, reversing 15 Ohio, 593;

Jones' Appeal, 8 Watts & S. (Pa.) 143, 42 Am. Dec. 282; Appeal of Hatch
(Pa.) 12 Atl. 593. In Re McLatchie, 30 Ont. 179, it was held that where
affirmative action of the passive trustee would put the cotrustee in sole
control only if the cotrustee committed a crime (forgery), there was no
negligence by the passive trustee.
" 145 N. Y. 462, 40 N. E. 232,
 § 120) PERSONAL LIABILITY OF THE TRUSTEE 487

a bank. One? trustee, who was also a receiver of the bank and had
. a good reputation, was intrusted by the other trustees with exclu-
sive control of the trust property for the purpose of paying' off the
bank's debts to its depositors. This was approved by the court as
reasonable conduct, and liability for the loss of the funds by the
active trustee was not fastened upon the inactive trustees.
The act of intrusting the res to a cotrustee may obviously be neg-
ligent, if the passive trustee 'has knowledge, prior to his surrender
of possession, that the cotrustee is financially embarrassed.''*
Failure to Supervise the Conduct of the Active Cotrustee
In many cases the evidence shows, not only exclusive control
by the active trustee, obtained through the acquiescence or affirm-
ative aid of the inactive trustee, but also the lapse, of a considerable
period of time after such intrusting, with no investigation by the
inactive trustee of the conduct of the active trustee. This situa-
tion raises the question whether failure to supervise the work of a
cotrustee, as, for example, failure to examine the investments made
by him, is such negligence as makes the inactive trustee liable for
damage to the trust estate.
The English cases have been unanimous in asserting a duty to
watch an active cotrustee in exclusive control, to examine his ac-
counts, and to inspect his investments. To fail to give such super-
vision has been held negligence, rendering the passive trustee lia-
ble, whether the active trustee acquired exclusive control through
the mere passivity of the inactive trustee ^^ or through his positive
action.'"
The American cases also very generally place upon the inac-
tive trustee the duty of supervising and inspecting the work of the
active trustee. Atrustee who has, by failure to act or by direct
action, enabled his cotrustee to obtain exclusive possession of the
trust subject-matter, must examine the investments and accounts of

74 In re Evans' Estate, 2 Ashm. (Pa.) 470.

TB Lincoln v. Wright, 4 Beav. 427 Thompson v. Finch, 22 Beav. 316 Wynne
; ;

V. Tempest, 13 T. L. R. 360. in the last-named case the trustee was held

not to be protected by the provision of section 3 of the Judicial Trustees
Act of 1896 to the effect that a court might relieve from liability for a
breach of trust a trustee who had acted "honestly and reasonably."
76Broadhurst v. Balguy, 1 Y. & O. Ch. 16; Wiglesworth v. Wiglesworth,
16 Beav. 269; Trutch v. Lamprell, 20 Beav. 116; Mendes v. Guedella, 2
Johns. & H. 259; Hale v. Adams, 21 W. B. 400; In re Second East Dul-
wich Soc, 68 L. J. Ch. (N. S.) 196. In Horton v. Brocklehurst, 29 Beav.
504, there was the additional fact that the passive trustee had represented
to the cestui que trust that the funds had been properly invested by the
active cotrustee, although he (the inactive trustee) Jsnew nothing about the
investments. Liability was fixed upon the inactive trustee.
488 THE REMEDIES OF THE CESTUI QUE TRUST (Ch. 14

the active colleague.''^ Thus, in Richards v. Seal ''* an inactive trus-

tee, who for eleven years made no examination of the status of a
bond intrusted to a cotrustee, and thus failed to learn that the co-
trustee had collected it and held the proceeds uninvested, was held
liable for a loss resulting from the inability of the cotrustee to turn
over the money.''' This duty to supervise exists, whether the in-
active trustee, at the time he becomes a trustee, finds the cotrustee
in control,*" or has passively allowed the cotrustee to take exclusive
possession,*^ or has by his own positive act put the cotrustee into
possession.*^
If the trust settlement directs that the funds be invested in a par-
ticular way, as, for example, in mortgages upon real estate, the

7 7 In re Adams' Estate, 221 Pa. 77, 84, 70 Atl. 4^6, 128 Am. St. Rep. 727, 15

Ann. Cas. 518. But see Kerr v. Kirkpatrick, 8 Ired. Eq. (43 N. C.) 137, where
it is denied that "one trustee is bound to keep a supervision over the acts of
another."
78 2 Del. Ch. 266.
7» To the same effect, see Estate of Hilles, 13 PMla. 402. Jones' Appeal, 8
Watts & S. (Pa.) 143, 42 Am. Dee. 282, held that mere inquiry of a coguardlan
was suflBcient i)erformance of the duty to investigate; Gibson, O. J., saying
(page 151) "To require him to have dealt with his colleague as a rogue, by
:

calling for the securities, would require of him the highest and most exact vig-
ilance, a degree of it that would ruin every guardian." This seems a question-
able principle as applied to trustees.
8» Ralston v. Easter, 43 App. D. C. 513.
81 In the following cases the loss arose from the bad management or im-
proper investments of the active trustee: Ashley v. Winkley, 209 Mass. 509, 95
N. E. 932 ; Klatt v. Keuthan, 185 Mo. App. 306, 170 S. W. 374 Wilmerding v.
;

McKesson, 103 N. T. 329, 8 N. E. 665. Whereas, in other instances, the de-

falcation of the active trustee was the Immediate cause of the loss Bates v.
Underbill, 3 Redf. Sur. (N. Y.) 365 ; City Bank v. Maulson, 8 Chanc. Ch. E. (U.
0.) 334 ;Crowe v. Craig, 29 Nov. Scot. 394. In Wilmerding v. McKesson, 103
N. X. 329, 8 N. E. 665, however, the court refused to hold the passive trustee
liable for the conversion of the trust property by the active trustee, saying
that there was-no duty to guard against such conduct, unless there was reason
to suspect the cotrustee, some fact to put the inactive trustee upon inquiry.
And in Matter of Halsted, 110 App. Div. 909, 95 N. Y. Supp. 1131, affirmed
without opinion in 184 N. Y. 563, 76 N. B. 1096, a trustee who for five years
allowed trust securities to remain in a bank box to which both trustees had
keys, without examining the securities, was held not liable when his active
cotrustee stole the securities, since the passive trustee had no reason to sus-
pect his cotrustee.
82 Caldwell v. Graham, 115 Md. 122, 80 Atl. 839, 38 L. R. A. (N. S.) 1029;
Thompson v. Hicks, 1 App. Div. 275, 37 N. Y. Supp. 340 ; Estate of Fesmire,
134 Pa. 67, 19 Atl. 502, 19 Am. St Rep. 676; McMurray v. Montgomery, 2
Swan (Tenn.) 374. Contra: In re Cozzens' Estate (Sur.) 15 N. Y. Supp. 771. In
Caldwell v. Graham the court says (115 Md. 129, 80 Atl. 839, 38 L. R. A. [N.
S.] 1029) "In accepting the appointment the trustees assumed the joint and
:

equal obligation of exercising their discretion and control with respect to the
trust in its entirety."
 ;

S 120) PEESONAL LIABILITY OF THETEUSTEE 489'

duty of the inactive trustee to supervise the conduct of the active

associate would seem to be accentuated, if anything. For failure to
make such inspection, resulting in the continuance of an improper
investment, the passive trustee has been charged.*' The opinion
of the Tennessee court is forcefully put by Turley, J., in Deaderick
v. Cantrell, as follows '* "Two trustees are appointed to execute
:

a trust, the final operation of which is not to be completed for years

they undertake to- execute it they are intended as checks on each
;

other, have an equal control over the fund, are mutually bound to at-
tend to the interest of the trust, and shall one.be permitted to go to
sleep and trust everything to the management of his cotrustee, and
when, in the course of ten or fifteen years, the fund having been
wasted, and his cotrustee insolvent, he is called upon to make it
good, shall he be heard to say that he had implicit confidence in his
companion, and permitted him to retain all the money, and appro-
priate it as he pleased, and that he ought not therefore to be
charged ? Surely not ; it is neither law nor reason."
Warning of Danger to Trust Pund, Followed by Continued Inactivity
It frequently happens that the active trustee has got exclusive
possession of the trust property, by the act of the passive trustee
or without his objection, and that the inactive trustee thereafter
learns of an act committed or about to be committed by the active
trustee, which is or will be dangerous to the interests of the cestui
que trust. In such circumstances there can be no doubt of the pas-
sive trustee's duty to act to protect the beneficiary, and, if he fails
to bestir himself, he will be liable for injury to the trust estate sub-
sequently resulting from the conduct of the active trustee.*^ Rob-
ertson, L. P., in Millar's Trusteps v. Poison,*® has graphically de-
scribed the position of the inactive trustee in this case: "It is, of
course, disagreeable to take a cotrustee by the throat but if a man
;

undertakes to act as a trustee he must face the necessity of doing

disagreeable things when they become necessary in order to keep
the estate intact. A
trustee is not entitled to purchase a quiet life at
the expense of, the estate, or to act as good-natured men sorhetimes

83 Beatty's Es.tate, 214 Pa. 449, 63 Atl. 975; Deaderick v. Cantrell, 10 Terg.
(Tenn.) 263, 31 Am. Dec. 576. But in Cocks v. Haviland, 124 N. Y. 426, 26 N.
E. 976, a passive trustee was not held liable, notwitlistanding a direction to-
invest in bonds and mortgages, which, to his knowledge, had not been carried
out by the cotrustee.
84 10 Yerg. 263, 272, 31 Am. Dec. 576.
85 Boardman v. Mossman, 1 Bro. Ch. 68; Brlce v. Stokes, 1 Ves. 319; Booth
V. Booth, 1 Beav. 125 ; Curtis v. Mason, 12 L. J. Ch. (N. S.) 452 Millar's Trus-
;

tees v. Poison, 34 Sc. L. R. 798.

8 6 34 Sc. li. K. 804.
i90 THE REMEDIES OP THE CESTUI QUE TRUST (Ch. 14

do in their own affairs in letting things slide and losing money

rather than create ill feeling."
The American courts have been equally clear that idleness after
a warning of danger is a negligent breach of trust. "It is the duty
of one trustee to protect the trust estate from any misfeasance by
his cotrustee, upon being made aware of the intended act, by ob-
taining an injunction against him ; and, if the wrongful act has been
already committed, to take measures, by suit or otherwise, to com-
pel the restitution of the property, and its application in the manner
required by the trust." *' This rule has been applied where the
knowledge was of an improper investment,*^ a refusal to return the
property to joint control,** the insolvency of the active trustee,'" an
interest in the active trustee antagonistic to that of the cestui que
trust,°^ or any breach of trust.'^ A
recent case of this type is In re
Adams' Estate,"* where a trustee had knowledge that a cotrustee
had wrongfully assumed exclusive control of the trust property
but, after restoring the property to joint control, the inactive trustee
allowed his cotrustee the means of regaining exclusive- possession.
Such failure to guard the estate was held negligence, rendering the
inactive trustee liable.

Statutory Rules
An English statute of 1859 '* lays down important rules regard-
ing the liabilities of trustees. It provides that every trust instru-
ment shall be deemed to contain a clause to the effect that the
several trustees shall be chargeable only for such property "as they
shall respectively actually receive notwithstanding any receipt for
the sake of conformity,"' and shall be answerable and accountable

87 Crane v. Hearn, 26 N. J. Eq. 378, 381 ; see, also, Elmendorf v. Lansing, 4

Johns. Ch. (N. Y.) 562.
8 8 Bermingham v. Wilcox, 120 Gal. 467, 52 Pac. 822 ; Matter of Nlles, 113 N.

Y. 547, 21 N. E. 687; In re Cozzens' Estate (Sur.) 15 N. X. Supp. 771; Meldon

V. Devlin, 31 App. Div. 146, 53 N. Y. Supp. 172, affirmed without opinion 167
N. Y. 573, 60 N. B. 1116 Pirn v. Downing, 11 Serg. & R. (Pa.) 66.
;

8 » Ralston v. Easter, 43 App. D. C. 513; contra, Stewart's Estate, 21 Pa.

Dist. R. 635.
»» Damaby v. Watts (Ky.) 21 S. W. 333.
01 Hill V. Hill, 79 N. J. Eq. 521, 82 Atl. 338.
» 2 In re Howard, 110 App. Div. 61, 97 N. Y. Supp. 23, affirmed without opin-

ion 185 N. Y. 539, 77 N. E. 1189.

»3 221 Pa. 77, 70 Atl. 436, 128 Am. St. Rep. 727, 15 Ann. Cas. 518.
»* St. 22 & 23 Vict. e. 35, § 31.
»5 Some courts in earlier cases made the distinction that trustees acting
— —
"for conformity only" that is, merely formally were not liable for the propf-
erty received by their cotrustees. Gray v. Reamer, 11 Bush (Ky.) 113. And
the same doctrine hks been applied to executors. Terrill v. Mathews, 12 L. J.
Ch. N. S. 31.
§ 120) PERSONAL LUBILITY OF THE TRUSTEE 491

only for their own acts, receipts, neglects, or defaults, and not for
those of each other, nor for any banker, broker, or other person with
whom any trust moneys or securities may be deposited. * * * "
This act has been copied in Canada, AustraHa, and New Zealand,'*
and was incorporated into the English Trustee Act of 1893.°^ A
statute applicable to Scotch trustees, enacted in 1861, provided that
each trustee "shall only be liable for his acts and intromissions,
and shall not be liable for the acts and intromissions of cotrustees,
and shall not be liable for omissions." °* ;

tThe decisions since 1859 make no mention of the statute. There

are a number of cases in which an inactive trustee who had at one
time had possession of the trust property has been held liable for
neglect which contributed to the loss."" This seems lo'gical under
the statute. There are also a few cases in which an inactive trustee
has been held responsible for property which he never actually
received, on the basis of neglect after the receipt of it by his co-'
trustee.^ These latter cases are difficult to reconcile with the ex-
press provision of the statute that a trustee shall be liable only for
what he actually receives.;^
Another English statute bearing on the liability of trustees is
that section of the Judicial Trustees Act ^ which gives the court
power to excuse a trustee from liability for a breach of trust, if
he has acted "honestly and reasonably." But this statute has been
held not to be intended to protect the inactive trustee, who dele-
gates the trust duties and fails to supervise the administration of
the trust. Such conduct is not "reasonable" or "honest." ' Hence
this section would seem to be of little importance in determining
the liabilities of inactive trustees.
A
few American states have codified the law regarding the lia-

New Brunsw. Tr. Act, § 17; Consol. St. Newf.

96 Brit. Col. Tr. Act, § 88;

(1892) §14; Nov. Sc. Tr. Act, § 24; Ont. Tr. Act, § 35; Sask. Tr. Act, §
c. 84,
9; New So. Wales Tr. Act (1898) § 69; Queensl. Tr. & Ex. Act (1897) § 25;
Vict. St. Trusts (1864), § 78; New Zealand Tr. Act, § 82.
97 St. 56 & 57 Vict. c. 53, § 24.
»8 St. 24 & 25 Vict. c. 84, § 1.
Hale V. Adams, 21 Week. R. 400; Lewis v. Nobbs, 8 Cp. D. 591; Rodbard
88
V. Cooke, 36 L. T. N. S. 504 ; Bacon v. Camphausen, 58 L. T. N. S. 851 ; Rob-
inson V. Harkin, [1896] 2 Ch. 415 In re Taylor, 81 L. T. N. S. 812, semble.
;

1 Babin v. Hughes, 31 CK D. 390 ; Wynne v. Tempest, 13 L. T. R. 860; In

re Second East Dulwicb- Soc, 68 L. J. Cb. N. S. 196.
2 St. 59 & 60 Vict., c. 35, § 3.^ Tbis act has also been copied in the Dominions.

Brit. Col. Tr. Act, § 89; New Br. Tr. Act, § 49; Ont Tr. Act, § 37; New So.
Wales Tr. Amend. Act 1902, § 9; Queensl. Tr. & Ex. Act 1897, § 51; New Zeal.
Tr. Act, § 89.
3 In re Turner [1897] 1 Ch. 536. See, also. In re Second East Dulwich Soc,
68 L. J. Ch. N. S. 196. But see Dover v. Denne, 3 Ont. h. R. 664.
 492 THE EEMEDIES OF THE CESTUI QUE TRUST ' (Ch. 14

bility ofan inactive trustee in the following form * "A trustee is :

responsible for the wrongful acts of a cotrustee to which he con-

sented, or which by his negligence he ^enabled the other to commit,
but for no others." These statutes are not believed to alter the pre-
existing rules of equity.
Change of Inactive Trustee's Liability by Stipulation of Parties
A settlor may provide that each of two trustees shall be liable for
only a moiety of the trust property," or that four trustees shall take
turns in administering the trust for a year each, and that each shall
be liable only during the period of his active administration.* Eng-
lish courts have not been friendly to clauses in trust instruments
excusing trustees from liability except for property actually re-
ceived by them, and have construed such clauses to mean that the
, trustee is liable for what he ought to have received, as well as for
what he actually did have in his hands.'' In Brumridge v. Brum-
ridge, Romilly, M. R., said * "This clause is constantly brought for-
:

ward to sanction the misappropriation of trust property but until ;

it is provided, by the instrument creating the trust, that the trustee

shall be liable for no breach of trust, provided he does not ob-

tain a personal advantage, I shall not consider the clause as giving
a trustee the right or liberty of conniving at a breach of trust. Even
if an instrument containing such an inconsistent clause were
brought before me, I express no opinion on the result; but, until
it is, I cannot allow a trustee to say that it is not his business to

act properly in the performance of his duty as trustee."

A provision in the trust deed or will that each trustee shall be lia-
ble only for his own default does not protect an inactive trustee from
liability for allowing a cotrustee to have exclusive possession.
Such negligence is a default as much as a positive breach would be.'
These constructions of the clauses inserted in trust instruments
by settlors before 1859 are consistent with the decisions previ-
ously referred to as occurring since the English statute of 1859.
Both sets of decisions recognize negligence as a default, and both'
treat a duty to get actual possession as equivalent to actual posses-
sion.

* Civ. Code Oal. § 2239 ; Civ. Code Mont. § 5385 ; Comp. Laws N. D. 1913, J
6292 ; Rev. Code S. D. 1919, § 1206.
B Birls V. Betty, 6 Maddock, 90.
eAtty. Gen. v. Holland, 2 Y. & C. 683.
7 Mucklow V. Fuller, Jacobs, 198 ; Bone v. Cook, McClelland, 168 ; Brum-
ridge V. Brumridge, 27 Beav. 5.
8 27 Beav. 7.

» Marriott v. Kinnersley, Tamlyn, 470 ; Dix v. Burf ord, 19 Beav. 409.

§ 120) PERSONAL. LIABILITT OF THE TRUSTEE 493

As for the American cases, we find that in Walker v. Walker's

Ex'rs *" the settlor's direction that one trustee should have exclu-
sive possession of the trust property was held to excuse the inac-
tive trustee from liability for the loss of such property.^^' But in
Graham v. Austin ^* an attempt by the settlor to restrict the lia-
bility of a trustee to a moiety of the property was not allowed
to have effect. No matter' what may be the settlor's power to lim-
it liability by insertions in the trust instrument, it is obvious that
oral statements of a testator-settlor to a prospective' trustee, not in-
corporated into the will, can have no effect to restrict the trustee's
liability.^'
The hostility of the courts to settlor's directions that a trustee's
liability shall be limited to the property he actually obtains was fur-
thershown in Caldwell v. Graham,^"* where such a clailse was some-
what remarkably construed to provide merely against liability for
depreciation of the property while, in the trustee's hands.
A clause restricting- the trustee's responsibility to cases of "will-
ful default" was sustained in Crabb v. Young; ^^ Ruger, C. J.,
stating: ^' "The testator had an absolute right to select the agen-
cies by which his bounty should be distributed and to impose the
terms and conditions under which it should be done. * * * The
court has not the right to increase the measure of their responsi-
bility or impose obligations from the burden of which he has in his
will so carefully protected them." But in Litchfield v. White ^"'
an assignment for the benefit of creditors, containing a provision
that the trustee should be liable only for gross negligence and will-
ful default, was held void. A
clause excusing the trustees from all
liability for losses occurring without "willful default" was held, in
Matter of Howard,^* not to exempt from liability a trustee who,
after knowledge of a breach of trust by his cotrustee, passively allowed
the cotrustee to take exclusive control of the property.
The settlor's power over the details of trust administration has

10 88 Ky. 615.
11 The decisions in Duckworth v. Ocean Steamship Co., 98 Ga. 193, 26 S. E.
736, and Markel v. Peck, 168 Mo. App. 358, 151 S. W. 772, allowing the settlor
to alter the usual powers of the trustees, would seem to support the principle
that the settlor may also change the several liabilities of the trustees.
12 2 Grat. (Va.) 273.
18 Dover v. Denne, 3 Ont. L. R. 664.
1* 115 Md. 122, 80 Atl. 839, 38 L. R. A. (N. S.) 1029.
15 92 N. Y. 56.
16 92 N. X. 65, 66.
ir 7 N. X. 438, 57 Am. Dec. 534.
I's 110 App. Div. 61, 97 N. X. Supp. 23, affirmed without opinion 185 N. X.
9, 77 N. B.' 1189.
494 THE REMEDIES OF THE CESTUI QUE TRUST ( Ch. 14

frequently been sustained, as, for example, in giving the trustees

greater latitude than usual in the selection of investments. It
would seem that this power should extend to such limitations of
the trustee's liability as are not repugnant to the essential elements
of a trust and do not attempt to make crime lawful.
Trustees have no power by agreement among themselves to di-
vide their responsibilities and to limit the liability of any particular
trustee to a portion of the trust property.^' Thus, in Caldwell v,
Graham,^" where trustees divided the trust property among them-
selves, one taking the realty and the other the personalty, the court
declined to excuse one trustee for negligence respecting the prop-
erty allotted to the other trustee, and said ^^ "It was optional with
:

him to accept or decline the trust but, having undertaken the duty
;

imposed by the will, it was not competent for him to limit his obli-
gations or divest himself of any part of his fiduciary discretion."
The consent of the cestui que trust to division of responsibility
among trustees has been held not to render such division proper.^^
This result is readily understandable where the consenting benefi-
ciary possesses only a temporary interest and the rights Of remain-
dermen cestuis que trust would also be affected.^" But it would
seem patent that any cestui que trust of full age and sound mind
might estop himself from asserting liability against any partic-
lar f:rustee, either wholly or in part.
A contract made by
trustees in, the trust instrument to the effect
that each shall be liable for the acts of the other is unobjectionable
and valid.^*
The power of equity to make one trustee liable primarily and an-
other secondarily would seem unquestionable; "^ but the action of a

10 Fellows V. Mitchell, 1 P. Wms. 81 Lewis v. Nobbs, 8 Cb. D. 591; Mickel-

;

burgh V. Parker, 17 Grant Ch. (U. C.) 503; Bermingbam v. Wilcox, 120 Oal.
467, 52 Pac. 822 In re Stong's Estate, 160 Pa. 13, 28^Atl. 480 Thomas v.
; ;

Scruggs, 10 Yerg. (Tfenn.) 400 contra. In re Cozzens' Estate (Sur.) 15 N. Y.

;

Supp. 771 Appeal of Jones, 8 Watts & S. (Pa.) 143, 42 Am. Dec. 282 (case of
;

joint guardians treated as trustees).

2 115 Md. 122, 80 Atl. 839, 38 L. R. A. (N. S.) 1029.
21 115 Md. 127, 80 Atl. 839, 38 I>. R. A. (N. S.) 1029.
22 FeUows V. Mitchell, 1 P. Wms. 81.
28 Mickelburgh v. Parker, 17 Grant Ch. (tJ. O.) 503.
24 Leigh V. Barry, 3 Atk. 583.
25 MeCartin v. Traphagen, 43 N. J. Eq.
323, 11 Atl. 156. Upon the question
whether a trustee who has been held liable for a breach of trust ever has a
right to contribution from his cotrustee, see Fletcher v. Green, 33 Beav. 426;
and as to the right of indemnity in the same case, see LocUhart v. Rellly, 25
L. J. Ch. 697; Price v. Price, 42 L. T. R. 654; Bahin v. Hughes, 31 Ch. D.
390; Bacon v. Camphausen, 58 L. T. N. S. 851; In re Turner, [1897] 1 Ch.
536 ; Head v. Gould, [1898] 2 Ch. 250 In re Ldnsley, [1904] 2 Ch. 785.
; .
§ 120) PERSONAL LIABILITY OP THE TRUSTEE /
495

federal court ^* in approving the decree of a probate court which

divided the trust property between trustees, and in limiting the lia-
bility of each trustee to his share of the property, seems to amount
to violating the settlor's intent and remakirig the trust for him.
The liability of the inactive trustee should, it would seem, be
determined in the light of the joint title and powers of trustees, and
by the aid of the rule requiring the trustee, whether active or in-
active, to use the prudence of an ordinarily careful man in his own
affairs, and also the rule prohibiting the delegation of discretionary
powers.
The failure of an inactive trustee to act to protect the trust es-
tate after notice of impending danger is assuredly a want of ordi-
nary prudence. The refusal to supervise the administration of the
active cotrustee would seem to be a delegation of discretionary pow-
ers and also a failure to use reasonable care. Whether the mere
exclusive possession of the trust property by the active cotrustee,
acquired by the aid of the inactive trustee or with his passive ac-
quiescence, is sufficient to charge the inactive trustee would seem
to be a more difficult question. In cases where there was necessity
for intrusting the exclusive control to the cotrustee, and there was
no apparent danger, it might well be held that such intrusting was
not negligence on the part of the inactive trustee. But, on the other
hand, where there was no necessity for such intrusting, and the
character of the property (as, for example, its negotiability) ren-
dered the intrusting dangerous, the inactive trustee might well be
regarded as negligent if he allowed the active trustee sole control.^'
Liability of Trustee for Interest, Simple or Compound
Frequently, where the cestui que trust pursues the remedy of
recovering a money judgment or decree against the trustee, in-
terest is included as a part of the amount directed to be paid. The
trustee has deprived th^ cestui of the use of trust property or its
proceeds, and the value of that use is estimated by interest. The
sole object of allowing the cestui que trust interest is to make him
whole, to place him in the position he would have been in if the
trustee had performed his duty. When interest will be allowed
and at what rate is wholly in tlie discretion of the court. "As a gen-
eral-rule, in the absence of anything to the contrary, the question of
requiring a trustee to pay interest on the trust funds is one which
must depend upon the facts and circumstances in each particular

2« American Bonding Co. of Baltimore v. Richardson, 214 Fed. 897, 131 C.

C. A. 565.
2^ For a discussion of tliis subject on principle, see Bogert, The Liability of
an Inactive Co>-Trustee, .34 Harv. Law Kev. 483,
496 THE REMEDIES OF THE CESTUI QUE TRUST (Ch. 14

case; arid where good conscience requires that the trustee be

charged with interest, the payment thereof ought to be exacted." "'
This principle has been stated as follows by another court "Inde- :

pendent of contract or statute, a court of equity in its sound discre-

tion may require one who has converted to his own use the funds
of another to pay damages equal to the legal rate of interest, as
compensation for the loss of the use of his funds." "'
Where the property, of the use of which the beneficiary has been
deprived, has produced a known income, this furnishes a more sat-
isfactory basis for the award of damages than interest. Thus,
where the trustee mingles the trust funds with his own property,
and the separate earnings of the trust property are known, recov-
ery of such separate earnings is frequently allowed ^° but the ces- ;

tui que trust may elect between such earnings and interest.*^ And
so, also, the actual rents received from real property used by the
trustee,'^ and the actual interest on money justifiably left in a
bank,'^ have been allowed as damages, rather than interest or es-
timated value. The gains actually made from the trust property
by the trustee are more apt to be awarded as damages when the
trustee has shown good faith than when he has been guilty of
fraud."
Occasionally, where the trustee has had the use of trust proper-
ty, its rental value isused as the measure of damages.^°
Whether simple or compound interest shall be allowed, where
interest is the basis, is a question of discretion and fact in each
case. It simple interest will adequately compensate the cestui que
trust, it will be added; if compound interest will more accurately
make the beneficiary whole, then that standard of computation will

28 Stanley's Estate v. Pence, 160 Ind. 636, 644, 66 N. E. 51, 67 N. E. 441.

29 Cree v. Lewis, 49 Colo. 186, 112 Pac. 326, 328.
so Title Ins. & Trust Co. v. IngersoU, 15S Cal. 474, 111 Pac. 360; Kalnsford
T. Rainsford, McMul. Eq. (g. O.) 335.
31 Treacy v. Powers, 112 Minn. 226, 127 N. W. 936; City of Lincoln v. Mor-
rison, 64 Neb. 822, 90 N. W. 905, 57 L. R. A. 885; In re Eisenlohr's Estate, 258
Pa. 431, 102 Atl. 115.
32 Percival-Porter Co. v. Oaks, 139 Iowa, 212, 106 N. W. 626; Hayes v. Kerr,
40 App. Div. 348, 57 N. Y. Supp. 1114 Owens v. Williams, 130 N. C. 165, 41
;

S. B. 93; Hill v. Cooper, 8 Or. 254; Thomson v. Peake, 38 S. C. 440, 17 S. E.

45, 725.
33 Cornet v. Cornet, 269 Mo. 298, 190 S. W. 333; In re WUey, 98 App. Div.
«3, 91 N. y. Supp. 661.
3* Van Buskirk v. Van Buskirk, 148 111. 9, 35 N. E. 383 ; Phillips v. Burton,
107 Ky. 88, 52 S. W. 1064; Beale v. Kline, 183 Pa. 149, 38 Atl. 897; Watson
V. Dodson (Tex. Civ. App.) 143 S. W. 329.
85 Johnson v. Rlchey, 5 Miss. (4 How.) 233 ; Weltner v. Thurmond, 17 Wyo.
268, 98 Pac. 590, 99 Pac. 1128, 129 Am. St. Rep. 1113.
 ;

§ 120) PERSONAL LUBILITT OF THE TRUSTEE 497

be followed. "Although as a general rule it may fairly be stated

that, where the trustee is guilty of gross neglect or fraud, or min-
gles the money with his own, he should be chargfed with interest
at the legal rate, with annual rests, and, if he is guilty of mere neg-
lect, with simple interest only, this rule is subject to exceptions, and
the real question is what the equities of the particular case de-
mand." "
If the trustee has converted the trust property to his own use,
simple interest on the value of the property at the time of conver-
sion is ordinarily allowed.*^ Simple interest has also been fre-
quently charged when the trustee has failed to invest the funds, al-
though directed to do so by the trust instrument,"* or when he has
allowed the funds to lie idle in the absence of any express direction
for investment,^* or when he has been negligent in collecting the
funds and reinvesting them.*" The trustee should invest within a
reasonable time after the receipt of the funds. A reasonable time
has been variously defined, as, for example, within three months,*^
six months,*'' twelve months,*" or by the end of the calendar year.**
Simple interest has also been awarded on funds improperly in-
vested, from the date of the investment,*" on money held by the

seBackes v. Crane, 87 N. J. Eq. 229, 100 Atl. 900, 904, 905.

87Primeau v. Granfield (C. C.) 184 Fed. 480; Hall v. Glover, 47 Ala. 467;
Clapp V. Vatcher, 9 Oal. App. 462, 99 Pac. 549 Cree v. Lewis, 49 Colo. 186, 112
;

Pac. 326'; Stanley's Estate v. Pence, 160 Ind. 636, 66 N. E. 51, 67 N. B. 441;
Campbell v. Napier, 182 Ky. 182, 206 S. W. 271; McKim v. Hibbard, 142 Mass.
422, 8 N. E. 152 ; Darling v. Potts, 118 Mo. 506, 24 S. W. 461 ; Van Rensselaer
V. Morris, 1 Paige (N. T.) 12 ; Mable v. Bailey, 95 N. T. 206 ; Hazard v. Du-
rant, 14 R. I. 25 Oresap v. Brown, 82 W. Va. 467, 96 S. E. 66.
;

S8 Nicholson v. McGulre, 4 Cranch, C. C. 194, Fed. Cas. No. 10249; Boreing

V. Faris, 127 Ky. 67, 104 S. W. 1022; Ringgold v. Ringgold, 1 Har. & G. (Md.)
11, 18 Am. Dee. 250; Smith v. Darby, 39 Md. 268 ; Backes v. Crane, 87 N. J.
Eq. 229, 100 Atl. 900; In re MuUer, 31 App. Div. 80, 52 N. Y. Supp. 565
Breneman v. Frank, 28 Pa. 475 Landis v. Scott, 32 Pa. 495 ; Appeal of Mc-
;

Causeland, 38 Pa. 466; Appeal of Stearly, 38 Pa. 525; Baker v. Lafltte, 4

Rich Eq. (S. C.) 392.
3 9 McComb V. Frink, 149 U. S. 629, 13 Sup. Ct. 993, 37 L. Ed. 876; Jennings'

Bx'rs V. Davis, 5 Dana (Ky.) 127; Comegys v. State, 10 Gill & J. (Md.) 175
Weisel v. Cobb, 118 N. C. 11, 24 S. E. 782; Landis v. Scott, 32 Pa. 495; Appeal
of Lukens, 47 Pa. 356; Pettus v. Sutton, 10 Rich. Eq. (S. 0.) 356; Smith v.
Thomas, 8 Baxt. (Tenn.) 417.
*o Hamilton v. Reese, 18 Ga. 8.
<i Appeal of Lukens, 47 Pa. 356.
*2 Ringgold V. Ringgold, 1 Har. & G. (Md.) 11, 18 Am. Dec. 250.
48 Weisel v. Cobb, 118 N. 0. 11, 24 S. E. 782.
** Baker v. Lafltte, 4 Rich. Eq. (S. C.) 392.
45 Hitchcock V. Cosper, 164 Ind. 633, 73 N. E. 264; Cogbill v. Boyd, 79
Va. 1.
BoGEET Trusts —32
498 THE REMEDIES OF THE CESTUI QUE TRUST (Ch. 14

trustee after he should have paid it over to the beneficiary,*' and on

trust moneys used by the trustee in his ow|i business.*''
Occasionally the trustee has a good Reason for holding the trust
property in an unproductive condition, and he will not be liable to
pay to the cestui interest or the value of the use measured in any
other way. Thus, where the money is held under a mistake of
law,*' or where the money is held during a period when there is no
duty to pay over or invest,*' or where the trustee has in good faith
paid the money to the wrong party under a mistake of law,"" or
where the trustee is holding the money to await the determina-
tion of conflicting claims to it,^^ or there is no unreasonable delay
in applying the trust money and no use of it by the trustee for his
own purposes,"*^ or where the money is held as probably necessary
to pay debts,®^ there will be no liability to pay interest. And if,
due to the neglect of the cestui que trust, there is no opportunity
to pay over or invest accnaed income, the trustee will not be liable
on it."*
for interest
Compoui^d interest will be allowed where it is necessary to com-
pensate the beneficiary. It is not awarded as punishment, but as
compensation. "The rule which makes an executor or other trustee
chargeable with compound interest upon trust funds used by him

*« Lasker-Morris Bank & Trust Co. v. Gans, 132 Ark. 402, 200 S. W. 1029;
Knapp V. Marshall, 56 111. 362; Haines v. Hay, 169 111. 93, 48 N. E. 218;
Mathewson v. Davis, 191 111. 391, 61 N. B. 68; Glenn's Bx'rs v. Cockey, 16
Md. 446 Rowland v. Haddock, 183 Mass. 360, 67 N. E. 347; McBride v. Mc^
;

Intyre, 100 Mich. 302, 58 N. W. 994 ;Judd v. Dike, 30 Minn. 380, 15 N. W. 672;
Macklanburg v. Griffith, 115 Minn. 131, 131 N. W. 1063 Isler v. Brock, 134 N.
;

O. 428, 46 S. E. 951 ; Knight v. Reese, 2 Dall. 182, 1 L, Ed. 340 Lomax v.

;

Pendleton, 3 Call (Va.) 538.

*7 Lehmann v. Rothbarth, 111 111. 185 ; Dorsey's Ex'rs v. Dorsey's Adm'r, 4
Har. & McH. (Md.) 231 ; Union Trust Co. v. Preston Nat. Bank, 144 Mleh.
106, 107 N. W. 1109; St. Paul Trust Co. v. Strong, 85 Minn. 1, 88 N. W. 256;
Kerr v. Laird, 27 Miss. 544; Knowlton v. Bradley, 17 N. H. 458, 43 Am. Dea
609; First Congregational Soc. v. Pelham, 58 N. H. 566; Lathrop v. Smalley's
Bx'rs, 23 N. J. Eq. 192; Mumford v. Murray, 6 Johns. Ch. (N, Y.) 1; In re
MuUer, 31 App. Div. 80, 52 N. Y. Supp. 565 In re Jones, 143 App. Div. 692, 128
;

N. Y. Supp. 215 ; In re Bosler's Estate, 161 Pa. 457, 29 Atl. 57 ; Reid v. Keid,
237 Pa. 176, 85 Atl. 85; In re Hodges' Estate, 66 Vt. 70, 28 Atl. 663, 44 Am.
St. Rep. 820; Miller v. Beverleys, 4 Hen. & M. (Va.) 415.
*8 Southern Ry. Co. v. Glenn's Adm'r, 102 Va. 529, 46 S. E. 776.
4 Mathewson v. Davis, 191 111. 391, 61 N. E. 68; January v. Poyntz, 2 B.

Mon. (Ky.) 404; Martin v. Martin, 43 Or. 119, 72 Pac. 639.

50 Calkins v. Bump, 120 Mich. 335, 79 N. W. 491.
51 Calkms v. Bump, 120 Mich. 335, 79 N. W. 491.
62 Minuse v. Cox, 5 Johns. Ch. (N. Y.) 441, 9 Am. Dec. 313; In re Sdleck,
111 N. Y. 284, 19 N. E. 66.
63 Fulton V. Davidson, 3 Heisk. (Tenn.) 614.
64 Cassels v, Vernon, 5 Mason, 332, Fed. Cas. No. 2503.
 :

§ 120) PERSONAL LIABILITY OF THE TRUSTEE 499

in his own not adopted for the purpose of punishing him

business is
for any intentional wrongdoing in the use of such fund, but rather
to carry into effect the principle, enforced by courts of equity, that
the trustee shall not be permitted to make any profit from the un-
authorized use of such funds." "^ As Chancellor Walworth said
"Stating the account with periodical rests, and compounding inter-
est, is only a convenient mode, adopted by the court, to charge the
trustee with the amount of profits supposed to have been made by
him in the use of the money where the actual amount of profits,
;

which he has made, beyond simple interest, cannot be ascertain-

^
ed." °® Compound generally allowed in case of fraud,"
interest is
willful misconduct,"* or other gross delinquency."'
Perhaps the most common instance of the collection of com-
pound interest from the defaulting trustee is found where he has
used the trust fund in his own business and the actual profits earn-
ed by the trust fund are not claimed or are impossible of compu-
tation,'" or where there is a strong presumption that the trustee
has used the funds in his own business, because he renders no ac-
count and in no way shows the disposition of the trust money.'^
Compound interest has also been granted on money unlawfully in-
vested,*^ and upon money not invested after a decree of a court di-
-^
recting its investment.'*
Criminal Liability of Trustee
Until the enactment of recent statutes a breach of trust by a trus-
tee, even though fraudulent, was not a crime. The trustee had the
legal title, and his original possession was lawful. In discussing a

00 Millerv. Lux, 100 Cal. 609, 616, 35 Pac. 345, 639.

58 Utica Ins. Co. v. Lynch, 11 Paige (N. Y.) 520, 524.
7 St. Paul Trust Co. v. Strong, 85 Minn. 1, 88 N. W. 256.

08 Adams v. Lambard, 80 Cal. 426, 22 Pac. 180. But it may be awarded in

the absence of any misconduct. Page's Ex'r v. Holman, 82 Ky. 573.
8 Mathewson v. Davis, 191 111. 391, 61 N. E. 68.
80 In re Thompson's Estate, 101 Cal. 349, 35 Pac. 991, 36 Pac. 98, 508;
Faulkner v. Hendy, 103 Cal. 15, 36 Pac. 1021; Bemmerly v. Woodward, 124
Cal. 568, 57 Pac. 561 State v. Howarth, 48 Conn. 207
; Clement v. Brainard,
;

46 Conn. 174; Lehman v. Rothbarth, 159 111. 270, 42 N. E. 777 Page's Ex'r
;

V. Holman, 82 Ky. 573; Clemens v. Caldwell, 7 B. Mon. (Ky.) 171; Montjoy

V. Lashbrook, 2 B. Mon. (Ky.) 261 Ringgold v. Ringgold, 1 Har. & G. (Md.)
;

11, 18 Am. Dec. 250 Dlffenderffer v. Winder, 3 Gill & J. (Md.) 311 ; Pullis
;

V. Somerville, 218 Mo. 624, 117 S. W. 736 Bobb v. Bobb, 89 Mo. 411, 4 S. W.
;

511; Cornet v. Cornet, 269 Mo. 298, 190 S. W. 333; McKnight's Ex'rs v.
Walsh, 23 N. J. Eq. 136 Cook t. Lowry, 95 N. Y. 103 In re Reed', 45 App,
; ;

Div. 196, 61 N. Y. Supp. 50.

81 Voorhees' Adm'rs v. Stoothoff, 11 N. J. Law, 145.
62 White V. Sherman, 168 111. 589, 48 N. E. 128, 61 Am. St Rep. 132.
63 Latimer v. Hanson, 1 Bland (Md.) 51.
 500 THE REMEDIES OF THE CESTUI QtJE TRUST (Ch. 14

fraudulent appropriation of trust funds, a New York court recent-

ly said : '* "The acts of the defendant were not larceny at com-
mon law, and not cognizable in a criminal prosecution. The un-
derlying concept of larceny at common law was an initial trespass
and trover. Where there was no trespass, there was no larceny,
though trespass and trover in themselves were not necessarily lar-
ceny. * * * The defendant's conduct amounted to what was
known formerly as 'a criminal breach of trust,' and until quite re-
cent times was cognizable only in a court of equity and punishable
only as contempt of court, where restitution was not made in obedi-
ence to a judgment so decreeing. * * * Nor did the defend-
, ant's act come within the scope of the tearly statutes creating the
crime of embezzlement, which statutes were enacted to meet some
of the deficiencies of the common-law rules as to larceny."
But modern statutes frequently make the appropriation of the
trust property by the trustee larceny or embezzlement, so that the
cestui que trust has the additional remedy of prosecuting the trus-
tee for a crime, and in some cases collecting a fine from him under
the criminal law."

8< People V. Shears, 158 App. Div. 577, 580, 143 N. T. Supp. 861.
85 The New York statute (Penal Law [Consol. Laws, c. 40] § 1302) may be
taken as a sample. It reads as follows: "A person acting as executor, ad-
ministrator, committee, guardian, receiver, collector or trustee of any de-
scription, appointed by a deed, a will, or other instrument, or by an order or
judgment of a court or officer, who secretes, withholds, or otherwise appropri-
ates to his own use, or that of any person other than the true owner, or per-
son entitled thereto, any money, goods, thing in action, security, evidence of
debt or of property, or other valuable thing, or any proceeds thereof, in his
possession or custody by virtue of his office, employment, or appointment, is
guilty of grand or petit larceny in such degree as is herein prescribed, with
reference to the amount of such property; and upon conviction, in addition
to the punishment in this article prescribed for such larceny, may be ad-
judged to pay a fine, not exceeding the value of the property so misappropri-
ated or stolen, with interest thereon from the time of the misappropriation,
withholding, concealment, and twenty per centum thereon, in addition, and to
be imprisoned for not more than five years in addition to the term of his
sentence for larceny, according to this article, unless the fine is sooner paid."
See, also, Pen. Code Ariz. 1913, § 503, construed in Wooddell v. Arizona, 187
Fed. 739, 109 C. O. A. 487; Park's Ann. Pen. Code Ga. § 188; Purdon's Dig.
Pa. (13th Ed.) p, 940, construed in Commonwealth v. Levi, 44 Pa. Super. Ct
253.
§ 121) PERSONAL LIABILITT OF THIRD PERSON 501

PERSONAL LIABILITY OF THIRD PERSON

121. Where a third person alone, or in conjunction with the trus-
tee,commits a wrongful act injuriously affecting the inter-
est of the cestui que trust, the latter may hold the third
person liable in damages.
When the trustee defaults, the cestui que trust may also have a
remedy against the sureties upon the trustee's bond. The
extent and nature of this remedy will depend upon the
terms of the bond and the rules of suretyship.

The liability of a third person to the beneficiary, when the for-

•

mer joins with the trustee in a breach of the trust, or commits an

independent tort affecting the trust property, is self-evident ; but a
statement of it and illustrations are inserted for the sake of com-
pleteness.
A stranger to the trust cannot convert the trust res to his own
use without liability to the cestui que trust,*' nor can he partici-
pate in a conversion by the trustee,*' or in a wrongful sale,** or
fraudulently induce a transfer of the trust property to him,*" with- ,

out rendering himself liable to an action for damages. "The law

holds all persons aiding and assisting trustees of any character,
with* a knowledge of their misconduct in misapplying assets, di-
rectly accountable to the party injured, * * * and persons thus
wronged may proceed against the trustees and their coadjutors
jointly or severally at their option." '•
Actions Against Sureties
As has been previously shown,'^ the trustee often gives a bond
for the faithful performance of his duties and is joined in this bond
by sureties. The question when such a bond will afford a cestui a
remedy against a surety upon it depends partly upon the language
and intent of the bond. Ordinarily the misapplication of trust
funds by the trustee,^ ^ the failure of the trustee to turn over the

ea Jones 2 Bailey (S. C.) 330.

v. Cole,
6T Bigham 71 Ga. 176 Hlckson v. Bryan, 75 Ga. 392 Stratton
v. Cioleman, ; ;

T. Stratton's Adm'r, 149 Ky. 473, 149 S. W. 900 Mock v. Akron Savings &
;

Xoan Co., 87 Ohio St. 273, 101 N. E. 278; Covington v. Anderson, 16 Lea
(Tenn.) 310. >
r^.
6 8C*ke v. Minor, 25 Grat. (Va.) 246; Patteson v. Horsley, 29 Grat. (Va.)
263.
6 9 Kentucky Wagon Mfg. Co. v. Jones & Hopkins Mfg. Co., 248 Fed. 272,

160 C. C. A. 350; Polkowitz v. Nash, 87 N. J. Bq. 489, 100 Atl. 564.

10 Hickson v. Bryan, 75 Ga. 392, 396.
71 See ante, § 77.
7 2 State V. Thresher, 77 Conn. 70, 58 Atl. 460; McKim v. Blake, 139 Mass.
B93, 2 N. E. 157; Mclntire v. Linehan, 178 Mass. 263, 59 N, E. 767.
 502 THE REMEDIES OF THE CESTUI QUE TEUST- (Ch. 14

trust property to his successor or to render an account required

'"'

by statute/* or the mixture of and private funds by the trus-

trust
tee with consequent loss '° is a default which will render the sure-
ty liable. Whether the surety becomes liable for defaults occur-
ring before the execution of the bond is a question the answer to
which depends upon the wording and intention of the bond. In
some cases the wording has been broad enough to cover transac-
tions occurring prior to the bond/" while in others the wording has
been prospective, and led to a decision that future acts of the trus-
tee only were to be covered.^^
'

In whose name the action against the surety should be brought

depends upon the terms of the bond. Such bonds frequently run to
the judge of the probate court/^ the county judge/' or to the
state.'" The public officer or body, however, is merely the nomi-
nal plaintiff, and the cestuis que trust are the real parties in inter-
est,*'^ as is illustrated where the statute of limitations is involv-

ed.*^ When the bond runs to the clerk or master ~ of an equity

court, the cestui cannot sue without leave of court.**
The nature of the surety's liability and the conditions precedent
to fixing responsibility upon him are questions of the law of sure-
tyship, not of trusts. Ordinarily the surety's liability is secondary
to that of the trustee, and cosureties are equally liable among them-
selves.** In pursuance of this rule the cestui has been required to
prosecute an action against the trustee to have the amount of the
default decreed before seeking recovery from the surety; *" but in

73 state V. Howarth, 48 Conn. 207; State v. Hunter, 73 Conn. 435, 47 Atl.

665; Haddock v. Perham, 70 Ga. 572; Bogard v. Planters' Bank & Trust Co.
,
(Ky.) 112 S. W. 872 ; Bassett v. Granger, 136 Mass. 174 ; McKlm v. Doane,
137 Mass. 195.
'* Prindle v. Holcomb, 45 Conn. 111.
7B Knowlton V. Bradley, 17 N. H. 458, 43 Am. Dec. 609.
-76Ladd V. Smith (Ala.) 10 South. 836; Comegys v. State, 10 Gill. & J.
(Md.) 175 ; Commonwealth v. Fidelity & Deposit Co. of Maryland, 224 Pa. 95,
73 Atl. 327, 132 Am. St. Rep." 755.
T! State V. Hunter, 73 Conn. 435, 47 Atl. 665 ; Lamar v. Walton, 99 Ga.
356, 27 S. E. 715 ; State v. Banks, 76 Md. 136, 24 Atl. 415 ; Thomson v. Amer-
ican Surety Co. of New York, 170 N. Y. 109, 62 N. E. 1073.
78 Bassett V. Granger, 136 Mass. 174.
7 Mey^ V. Barth, 97 Wis. 352, 72 N. W. 748, 65 Am. St. Rep. 124.
80 Commonwealth v. Allen, 254 Pa. 474, 98 Atl.
1056; State v. Graham, 115
Md. 520, 81 Atl. 31.
81 Close V. Farmers' Loan & Trust Co., 195 N. Y. 92, 87 N. E. 1005.
82 Pearson v. McMillan, 37 Miss. 588.
8s Floyd V. Gilliam, 59 N. C. 183.
81 Clagett V. Worthington, 3 Gill (Md.) 83. But in Harmon v. Weston, 215
Mass. 242, 102 N. E. 470, the surety and the principal were held jointly liable.
8B Crane v. Moses, 13 S. C. 561.
§ 121) PERSONAL UABUJTT OP THIRD PERSON 503

cases where the trustee is a nonresident, '° or a bankrupt, fugitive

from and of unknown residence,*^ this requirement of prior
justice,
action against the trustee has been dispensed with. The courts are
not in harmony upon the effect to be given to a decree against the
trustee adjudging him in default and fixing the amount of the de-
falcation. Some have held such decree prima facie evidence of the
fact and amount of the surety's liability ** others have treated it
;

as conclusive upon the surety.*® Yet other courts have held that
the surety was not at all bound by a proceeding against the trus-
tee to which he was not a party,'" or that he was bound only when
he had agreed by his bond to be bound by such adjudication."^ In
discussing the question a Pennsylvania court recently said *^ "As :

to official bonds, bonds of indemnity, and bonds to insure the faith-

ful performance of duty and to secure a proper accounting by per-
sons in fidiuciary relations, the rule of our cases seems to be that a
judgment against the principal is conclusive against his sureties as
to his misconduct and failure properly to account. In this class of
cases, the surety submits himself to the acts of his principal and to
the judgment as a legal consequence, following the scope of the
suretyship." And Winslow, J., speaking in a Wisconsin case, has
said:'* "Whatever may be the rule in other jurisdictions, this
court has definitely adopted the rule that sureties upon a probate
bond are, in the absence of fraud or collusion, concluded by the de-
cree of the proper court, rendered upon an accounting by their
principal, as to the amount of the principal's liability; and this is
the rule, even though the sureties be not parties to the accounting."

88 Xates vi Thomas, 35 Misc. Eep. 552, 71 N. Y. Supp. 1113.

87 Commonwealth v. Allen, 254 Pa. 474, 98 Atl. 1056.
88 Haddock v. Perham, 70 Ga. 572; Cully v. People, to Use of Dunlap, 73
111. App. ^01.
89 State V. Banks (Md.) 24 Atl. 540; Appeal of Glover, 167 Mass. 280, 45
N. E. 744; Commonwealth v. Fidelity & Deposit Co. of Maryland, 224
Pa. 95, 73 Atl. 327, 132 Am. St. Rep. 755 Meyer v. Barth, 97 Wis. 352, 72
;

N. W. 748, 65 Am. St. Kep. 124.

9 Thomson v. American Surety Co. of New York, 170 N. Y. 109, 62 N. E.
1073.
91 People ex rel. Collins v. Donohue, 70 Hun, 317, 24 N. Y. Supp. 437.
Commonwealth v. Fidelity & Deposit Co. of Maryland, 224 Pa. 95,
92 102,
73 Atl. 327, 132 Am. St. Rep. 755.
93 Meyer v. Barth, 97 Wis. 352, 355, 72 N. W. 748, 65 Am. St. Rep. 124.
504 THE REMEDIES OF THE CESTUI QUE TRUST (Ch. 14

PERSONAL LIABILITY AND A LIEN

122. Where the trustee has been guilty of a breach of trust and has
the trust res or its substitute in his hands, the cestui que
trust may elect to hold the trustee personally liable and
enforce the liability by means of a lien upon the res or sub-
stitute.

In treating the questions of the personal liability of the trustee

and third persons in preceding sections, it has been assumed that
any judgment or decree against the defendant would be collected
out of the general assets of the defendant, and that no preference
would be given to the judgment creditor, the cestui que trust, ex-
cept as the docketing of his judgment or the levying of his execution
might entitle him to superiority.
But, if the trustee who has defaulted has in his hands the trust
res or its substitute, the right of the cestui que trust to hold the
trustee to personal liability may be supplemented by a lien upon the
res or its substitute. T.he cestui may obtain a judgment or decree
that the defendant pay money, and also that such payment be en-
forced by the sale of the- trust res or its substitute, if necessary.
This action proceeds upon the theory that the res or its substitute
belongs to the defendant, and that his property is being sold to sat-
isfy his debt."* Thus, in cases where the trust property had been
misapplied by the trustee and the proceeds invested,'^ or where the
trustee had made a wrongful investment,*' or where the trustee
had mixed trust and personal fqnds 'and invested them in land,"
it has been held that the cestui que trust might hold the trustee per-

sonally liable and enforce the liability by foreclosing a lien on the

trust property or its substitute in the trustee's hands. In Will of
Mendel a trustee was directed to invest the funds in "first-class in-
terest-bearing real estate mortgage securities." It being held that
the securities actually purchased were improper investments under
this direction, the cestuis were allowed to hold the trustee person-
ally liable and to enforce an equitable lien upon the securities.

»* Malone v. Malone, 151 Mich. 680, 115 N. W. 716 ; Wood v. Stafford, 50

Miss. 370 (semble) Crawford v. Jones, 163 Mo. 577, 63 S. W. 838 ; Massey v.
;

Alston, 173 N. C. 2lS, 91 S. B. 964 ; Thum v. Wolstenholme, 21 Utah, 446, 61

Pac. 537.
80 Citizens' Bank of Paso Eobles v. Rucker, 138 Cal. 606, 72 Pac. 46; Hin-
sey V. Supreme Lodge K. of P., 138 111. App. 248 Newis v. Topf er, 121 Iowa,
;

433, 06 N. W. 905.
86 Primeau v. Granfield (0. C.) 184 Fed. 480.
ei Bohle V. Hasselbroch, 64 N. J. Eq. 334, 51 Atl. 508, 61 L. R. A. 323.
§ 123) PERSONAL LIABILITY OB EECOVEBT OF TEUST RES 505

The court said '* "Counsel for appellant contend that the judg-
:

ment, affording respondents the benefit of the securities, so far as

money can be realized therefrom, to restore the trust funds, is in-
consistent with the'judgment against the guilty trustee for the mon-
ey improperly diverted; that appellant cannot have the securities
in question and have a judgment for a recovery of the money in-
vested therein, as well. The difficulty with that is that the judg-
ment does not proceed upon the theory that the title "to the securities
is in the trustees, or that they are to have them; but rather upon
the ground that the securities have been rejected, subject to an
equitable lien thereon in favor of the trust fund. We do not per-
ceive any difficulty in that. This is not a case of following the trust
fund into the property in which it has been improperly invested,
and claiming such property, and, at the same time, claiming to re-
cover the fund upon personal liability therefor. * * * The trus-
tees do not claim the securities. They claim that, in equity, they are
entitled to hold them as property of the wrongdoer, charged with a
lien to make good, so far as practicable, the damage caused by the
wrong. There can be no doubt but what the cestui que trust, in
such circumstances as exist here, may retain the property and there-^
by ratify the wrong, or reject it and claim damages for the wrongful
investment therein, or claim such damages and charge such prop-
erty, as belonging to the wrongdoer, with a lien for the damages
suffered."

PERSONAL LIABILITY OR RECOVERY OF THE

TRUST RES
123. Where the triistee or a third person has rendered himself per-
sonally liable to the cestui que trust by committing or
joining in a breach of trust, and the trust res involved, or
its substitute, can be traced into the hands of one not a
bona fide taker for value, the cestui que trust may elect be-
tween the remedy of personal liability and that of following
the trust res or its substitute.

It frequently happens that the trustee has committed a breach

of trust and rendered himself personally liable, and that the trust
property affected by this breach of trust, or its substitute, can be
traced into the hands of the trustee or a third person. And also a
third person may make himself personally liable by a joinder in a
breach of trust or by other tort, and the trust res or its substitute

»8 164 Wis. 136, 143-144, 159 N. W. 806.

506 THE REMEDIES OP THE CESTUI QUE TRUST (Ch. 14

may likewise be available. The question arising in these situations is

whether the cestui que trust is confined to a money decree against

the trustee or third person, or whether he must pursue his trust
property, or whether he may have the benefit of both remedies,
or whether he must make an election.
It is universally held that the cestui has the election of taking a
money judgment against the wrongdoer or of tracing the trust
property.** This right to elect exists, whether the property in-
volved is in the hands of the trustee ^ or of a third person,^ so long
as the third person is affected by notice of the trust or has not paid
value for the property. The
trustee cannot compel the beneficiary
to resort to either remedy. it is well settled that, when a
"Now,
trustee uses the property of the trust for his own benefit, the
true owner is not compelled to follow the property, even though he
might be able, by proving notice, to follow it successfully. He has
his option, in such a case, to sue the trustee or follow the property.
It would be monstrous to permit the trustee, in such cases, to say:
'Yes; I have used the trust property; I have got the benefit of that
use; but you can prove that the party now in possession had notice
of your claim. He trusted, it is true, to my statements; but he
ought to have known me better. Your remedy is oil him.' The rule
is well established that the cestui que trust may sue the trustee,
even though it appear that he has a right also to sue the person
dealing with the trustee." *
Examples of the exercise of this right of election are found in
cases where the trustee has made an unlawful investment, and the
cestui que trust has had the option of taking the investment or of
holding the trustee for the trust money thus invested, with in-
terest.* And likewise where the trustee wrongfully withdraws
89 Oliver V. Piatt, 3 How. 333, 11 L. Ed. 622 Lathrop v. Bampton, 31
; Cal.
17, 89 Am. Dec. 141 ; Woodrum v. Washington Nat. Bank, 60 Kan. 44, 55 Pac.
333.
1 Small V. Hockinsmith, 158 Ala. 234, 48 South. 541; Phinizy v. Few, 19
Ga. 66 Baughman v. Lowe, 41 Ind. App. 1, 83 N. E. 255 MacGregor v. Mac-
; ;

Gregor, 9 Iowa, 65; Peabody v. Tarbell, 2 Gush. (Mass.) 226; Isom v. First
Nat. Bank, 52 Miss. 902; Prewitt v. Prewitt, 188 Mo. 675, 87 S. W. 1000;
Prondzinski v. Garbutt, 10 N. D. 300, 86 N. W. 969 In re Carr's Estate, 24
;

Pa. Super. Ot 369; Shanks v. Edmondson, 28 Grat. (Va.) 804.

2 Roberts v. Mansfield, 38 Ga. 452; Parker v. Straat, 39 Mo. App. 616;
Treadwell v. McKeon, 7 Baxt. (Tenn.) 201 D. Sullivan & Co. v. Ramsey (Tex.
;

Civ. App.) 155 S. W. 580.

8 Roberts v. Mansfield, 38 Ga. 452, 458, 459. But In Crutchfield v. Haynes,
14 Ala. 49, It was held that, where the trustee was amply able to respond in

* Clark V. Anderson, 13 Bush (Ky.) Ill ; Baker v. Disbrow, 18 Hun (N.

r.) 29.
§ 123) PERSONAL LIABILITY OE RECOVERY OP TRUST EES 507

money from the trust funds, the cestui may sue for conversion or
have the money or its product impounded in the hands of a third
party." An administrator who used trust money to buy realty in
his own name may be compelled to restore the money or the real
property may be subjected to the trust.'
Cestui Must Elect
The remedies in rem and in personam are naturally mutually
exclusive.' would be unjust to compel a trustee to restore
It
funds unlawfully invested and at the same time to take from him the
securities in which he had placed the money. This would be double
recovery it would do more than restore the cestui que trust to his
;

former position. Hence it has been held that bringing action " or
rec.overing judgment * against the trustee on a claim of personal
liability bars later attempts to take the res or its substitute as the
property of the beneficiary. The Supreme Court of Oregon in a re-
cent decision has stated the principle as follows ^^ "When a trus-
:

tee has violated the trust by purchasing property with trust funds
and taking the title in his own name, the cestui que trust has the
right to elect either to proceed to fasten the trust upon the purchas-
ed property, or to proceed against the trustee personally. When
with knowledge of the facts he thus makes an election, it is binding
upon him, and it cannot be revoked. When a cestui que trust, with
knowledge of the facts, elects to proceed against the trustee per-
sonally, he waives all right to have the trust impressed upon prop-
erty purchased with trust funds, but conveyed to the trustee, and,
under such conditions, a court has no right to decree that the prop-
erty so purchased be sold to obtain funds to satisfy the amount due
the beneficiary for the violation of the trust." But unless the rem-
edy selected results in satisfying the cestui's claim, the alternate
remedy ought not to be barred. Thus, where the cestui recovered
judgment against the trustee, but execution upon the judgment was
returned nulla bona, it has been held that resort might be had to
^^'
trust property in the hands of a transferee.

damages, the title of a purchaser from the trustee should not be disturbed,
even though the property could have been followed into his hands.
B Robinson v. Tower, 95 Neb. 198, 145 N. W. 348.
6 Market v. Smith, 33 Kan. 66, 5 Pac. 394.
T Barker v. Barker, 14 Wis. 131.
8 Stoller V. Coates, 88 Mo. 514; Bettencourt v. Bettencourt, 70 Or. 384, 142
Pac. 326.
8 Carter v. Gibson, 61 Neb. 207, 85 N. W. 45, 52 L. R. A. 468.
10 Bettencourt v. Bettencourt, 70 Or. 384, 142 Pac. 326, 330.
11 Barksdale v. Finney, 14 Grat. (Va.) 338.
508 THE REMEDIES OF THE CESTUI QUE TRUST ( Ch. 14

RECOVERY OF THE TRUST RES OR ITS SUBSTITUTE

124. Thecestui que trust may follow the trust res or its substitute
into the hands of all persons except purchasers without no-
tice of the trust.
Notice may be actual or constructive, and it may exist because
the purchaser had knowledge of facts putting him on in-
quiry which, if investigated, would have disclosed the trust.
A purchaser is one who pays money or money's worth for the
property, or for a lien upon it.
To recover the trust res or its substitute the cestui que trust must
trace it into specific property or into a specific fund in the
assets of the trustee or other holder. If the disposition
of the trust property is umknowii, or it has been dissipated
so that no tangible product of it remains, the beneficiary
stands on the same level as general creditors.
The first payments out of a fund containing several trust funds,
but not private moneys, are to be charged to the first de-
posits. If trust funds and the trustee's private funds are
mixed, withdrawals for the trustee's use will be charged to
the private funds until they are exhausted.
Deposits of his own money by a trustee to the credit of a fund in
which trust and private moneys are mixed will not inure
to the benefit of the trust funds, unless expressly made as a
restoration of misappropriated trust funds.

A most important remedy available to the cestui que trust is that

of recovering the trust res or its substitute from the trustee or a
third person.^* That this remedy exists, subject to qualifications
to be explained, whether the property or its product is in the trus-
tee's hands ^'^ or is held by a third person,^* is unquestioned. The
beneficiary naturally must elect to take one or the other, the original

12 Oliver v. Piatt, 3 How. 333, 11 L. Ed. 622 Cooper v. Landis, 75 N. 0.

;

526 In re Freas' Estate, 231 Pa. 256, 79 Atl. 513.

;

18 Taber v. Bailey, 22 Cal. App. 617, 135 Pac. 975; Breit v. Teaton, 101 111.
242; Clifford v. Farmer, 79 Ind. 529; Brothers v. Porter, 6 B. Men. (Ky.)
106 Freeman v. Maxwell, 262 Mo. 18, 170 S. W. 1150 Lucia Mining Co. v.
; ;

Evans, 146 App. Div. 416, 131 N. Y. Supp. 280 Frank v. Firestone, 132 App.
;

Dlv. 932, 116 N. Y. Supp. 700; Berry v. Evendon, 14 N. D. 1, 103 N. W. 748;

O'Neill V. O'Neill, 227 Pa. 334, 76 Atl. 26; Wilkinson v. Wilkiason, 1 Head
(Tenn.) 305; Kaphan v. Toney (Tenn. Ch. App.) 58 S. W. 909; Mitchell v.
BlancHard, 72 Vt. 85, 47 Atl. 98; Overseers of Poor of Norfolk v. Bank of
Virginia, 2 Grat. (Va.) 544, 44 'Am. Dee. 399 Crumrine v. Crumrine, 50 W.
;

Va. 226, 40 S. E. 341, 88 Am. St. Kep. 859; Hubbard v. Burrell, 41 Wis. 365.
14 Cobb V. Knight, 74 Me. 253 ;Chaves v. Myer, 13 N. M. 368, 85 Pac. 233,
6 L. R. A. (N. S.) 793; Barnard v. Hawks, 111 N. C. 333, 16 S. E. 329.
§ 124) RECOVERY OP THE TRUST RES OR ITS SUBSTITUTE 509

trust property or the substitute, where both are capable of identifi-

cation.^" "The law is now
well settled that as between the cestui
que trust and trustee, and all parties claiming under the trustee
otherwise than by purchase for a valuable consideration without no-
tice, all property belonging to a trust, however much it may be
changed or altered in its nature or character, and all the fruit of
such property, whether in its original or altered state, continues to
be subject to or affected by the trust." ^* This doctrine has recently
been expressed by the Supreme Court of California in the following
words "It is well settled that the beneficiary of a trust may fol-
:

low and recover the trust fund, if any property in the hands of the
trustee or of those taking with notice can be identified, either as the
original property of the cestui que trust or as the product of it." ^'
The cestui's right is not that of a lienholder or a preferred cred-
itor. It is based on a property right in the res or its substitute.
"The right of the beneficiary to pursue a fund and impose upon it
the character of a trust is based on the principle that it is the prop-
erty of the beneficiary, not upon any right of lien against the wrong-
doer's general estate; and this, whether the property sought to be
recovered is in the form in which the beneficiary parted with its
possession or in a substituted form." ^'
This remedy may be illustrated. If A. is trustee for B., and the
original trust res is certain land, A. breaches the trust by selling
the land to X., who knows of the breach, and A. then deposits the
proceeds of the sale in a bank B. may follow the original property
;

into the hands of X. and recover it, or he may follow the proceeds
of the original property into the bank account and take the claim
against the bank as his property.
This right to recover the property is, however, qualified. Its ex-
ercise depends upon two considerations, namely: (a) The status
of the holder of the property sought to be recovered ; and (b) the
ability of cestui que trust to identify the property in question as the
original trust res or its substitute. These conditions of the exer-
cise of the remedy will be separately considered.

(a) Status of Holder of Property

The cestui que trust can always recover the res or its substitute
from the trustee, assuming satisfactory identification ; but recovery

IB Bonner v. Holland, 68 Ga. 718; Cadieux v. Sears, 258 111. 221, 101 N.
B. 542.
IB Hill V. Fleming, 128 Ky. 201, 107 S.W. 764, 766, 16 Ann. Cas. 840.
17 People V. California Safe Deposit & Trust Co., 175 Cal. 756, 167 Pac. 388,
889, L. R. A. 1918A, 1151.
18 Heidelbach v. Campbell, 95 Wash. 661, 665, 164 Pac. 247. See, also, Chase
& Baker Co. v. Olmsted, 93 Wash. 306, 160 Pac. 952.
 :

510 THE EEMEDIES OP THE CESTUI QUE TRUST ( Ch. 14

from a third person depends upon the so-called "bona fide purchaser
rule." Ames stated this rule as foUow/s ^'^ "A court of equity will
:

not deprive a defendant of any right of property, whether legal or

equitable, for which he has given value without notice of the plain-
tiff's equity, nor of any other common-law right acquired as an

incident of his purchase. * * * The purchaser of any right, in

its nature transmissible, whether a right in rem or a right in per-
sonam, acquires the right free from all equities of which he had no
notice at the time of .its acquisition." Mr. Justice Story stated the
same rule in Oliver v. Piatt as follows "" "It is a clearly established
principle in that jurisprudence that, whenever the trustee has been
guilty of a breach of the trust and has transferred the property, by
sale or otherwise, to any third person, the cestui que trust has a full
right to follow such property into the hands of such third person,
unless he stands in the predicament of a bona fide purchaser, for a
valuable consideration, without notice."
This rule has been frequently applied, and the holder, where he
was a purchaser in good faith, has been protected in his ownership
and possession of the property,''^ whether the property was eq-
uitable ^^ or legal in its nature. So, also, a bona fide purchaser from

i» 1 Harv. law Eev. 3, 16. See, also, Kenneson, Purchaser for Value With-
out Notice, 23 Tale Law J. 193 ; Searey, Purchaser for Value Without Notice,
23 Tale Law J. 447.
20 Oliver v. Piatt, 3 How. 383, 401, 11 L. Ed. 622. For a criticism of the
rule, see Jenks, The Legal Estate, 24 Law Quart. Rev. 147.
21 Ck)le V. Thompson (C. C.) 1C9 Fed. 729; Sorrells v. Sorrells, 4 Ark. 296;
Ricks V. Reed, 19 Cal. 551; In re Lyon's Estate, 163 Gal. 803, 127 Pac. 75;
Learned v. Tritch, 6 Colo. 432; Saunders v. Richard, 35 Fla. 28, 16 South.
679 ; Lewis v. Equitable Mortg. Co., 94 Ga. 572, 21r S. E. 224 ; McCaskill v.
Lathrop, 63 Ga. 96 Carrie v. Games, 145 Ga. 184, 88 S. E. 949 Prevo v.
; ;

Walters, 5 111. (4 Scam.) 35; Lennartz v. Popp's Estate, 118 111. App. 31;
Beckett V. Bledsoe, 4 Ind. 256 Dillon v. Farley, 114 Iowa, 629, 87 N. W. 677;
;

Bailey v. Dyer, 65 S. W. 595, 23 Ky. Law Rep. 1585 Bromley v. Gardner, 79

;

Me. 246, 9 Atl. 621 Newell v. Hadley, 206 Mass. 335, 92 N. E. 507, 29 L. R.
;

A. (N. S.) 908; Curtis v. Brewer, 140 Mich. 139, 103 N. W. 579; Clark v.
Rainey, 72 Miss. 151, 16 South. 499 Shirley v. Shattuck, 28 Miss. 13 Groye
; ;

V. Robards' Heirs, 36 Mo. 523; McWaid v. Blair State Bank, 58 Neb. 618,
79 N. W. 620 Doremus v. Doremus, 66 Hun, 111, 21 N. T. Supp. 13; Petrie v.
;

Myers, 54 How. Prac. (N. T.) 513; Lincoln Soc. of Friends v. Joel (Sup.) 163
N. T. Supp. 860 McClelland v. Myers, 7 Watts (Pa.) 160 Price v. Krasnofe,
; ;

60 S. C. 172, 38 S. E. 413; Schneider v. Sellers, 98 Tex. 380, 84 S. W. 417;

Magnolia Park Co. v. Tinsley, 96 Tex. 364, 73 S. W. 5; Martin v. Granger
(Tex. Civ. App.) 204 S. W. 666; Waterman v. Cochran, 12 Vt. 699; Love v.
Braxton, 5 Call (Va.) 637; Chancellor v. Ashby, 2 Pat. & H. (Va.) 26.
22 Breedlove v. Stump, 3 Terg. (Tenn.) 257. "Just as the honest purchaser
of a legal title from one who holds It subject to an equity acquires the legal
title discharged of the equity, so also the purchaser of an equitable title from
one who, holds it subject to an equity takes the equitable title discharged of
 ;
;

§ 124) RECOVERY OF THE TRUST RES OR ITS SUBSTITUTE 511

a trustee who has a voidable title is superior to the cestui que

trust."
On the other hand are many cases holding that, if the third per-
son from whom the cestui que trust seeks to recover the trust
property either has not paid value therefor, or has been affected
with notice of the trust, the cestui may take the property.^*
Purchaser Must Have Title [

In order that one may be a bona fide purchaser his contract must
be executed. He must have become the owner of the property, and
he must have paid the purchase price. If he has merely contracted
to buy the trust res at the time he receives notice of the trust, he is
bound by the trust, even though he has paid part or all of the con-
sideration.^'' And if he has received the title to the trust property,

the equity." Ames, Purchaser for Value without Notice, 1 Harv. Law Bev.
1, 9.
23 Booraem v. Wells, 19 N.
Eq. 87. J.
2* Pennington v. 69 Fed. 188; Harrington v. Atlantic & Pac.
Smith (C. C.)
TeL Co. (C. C.) 143 Fed. 329 Hallett v. Collins, 10 How. 174, 13 L. Ed. 376
;

Jones' Adm'r v. Shaddock, 41 Ala. 262 Randolph v. East Birmingham Land

;

Co., 104. Ala. 355, 16 South. 126, 53 Am. St. Rep. 64; Clemmons v. Cox, 114
Ala. 350, 21 South. 426; Pindall v. Trevor, 30 Ark. 249; Orouse-Prouty v.
Rogers, 33 Cal. App. 246, 164 Pac. 901 Bean v. Bean, 39 Cal. App. 785, 180
;

Pac. 23 Gale v. Harby, 20 Fla. 171 Harris v. Brown, 124 Ga. 310, 52 S. E.
; ;

610, 2 L. R. A. (N. S.) 828; Masters v. Mayes, 246 111. 506, 92 N. B. 945;
Boyer v. Libey, 88 Ind. 235 Sleeper v. Iselin, 62 Iowa, 583, 17 N. W. 922
;

Gray v. Ulrich, 8 Kan. 112; Farmers' & Traders' Bank of Shelbyville v.

Fidelity & Deposit Co. of Maryland, 108 Ky. 384, 56 S. W. 671 Safe-Deposit ;

& Trust Co. V. Cahn, 102 Md. 530, 62 AtL 819; Elliott v. Landls Mach. Co.,
236 Mo. 546, 139 S. W. 356; Logan v. Aabel, 90 Neb. 754, 134 N. W. 523 Maz- ;

zoUa T. V^ilkie, 72 N. J. Eq. 722, 66 Atl. 584; Shepherd v. M'Evers, 4 Johns.

Ch. (N. I.) 136, 8 Am. Dec. 561; Havana Cent. R. R. Co. v. Knickerbocker
TMist Co., 135 App. Div. 313, 119 N. Y. Supp. 1035; Reynolds v. iEtna Life
Ins. Co., 28 App. Div. 591, 51 N. Y. Supp. 446, affirmed 160 N. Y. 635, 55 N. E.
305 English v. Mclntyre, 29 App. Div. 439, 51 N. Y. Supp. 697
; Moloney v. ;

Tilton, 22 Misc. Rep. 682, 51 N. Y. Supp. 19 Winters v. Winters, 34 Nev. 323,

;

123 Pac. 17; United States Fidelity & Guaranty Co. v. Citizens' State Bank
of Langdon, 36 N. D. 16, 161 N. W. 562, L. R. A. 1918E, 326 Fidelity & De- ;

posit Co. of Maryland v. Rankin, 33 Okl. 7, 124 Pac. 71 Lane v. Wentworth, ;

69 Or. 242, 138 Pac. 468 Hall v. Vanness, 49 Pa. 457 Coble v. Nonemaker,
; ;

78 Pa. 501; Jackson v. Thomson, 222 Pa. 232, 70 Atl. 1095; Sullivan v. Lat-
timer, 35 S. C. 422, 14 S. E. 933 Folk v. Hughes, 100 S. C. 220, 84 S. E. 713
;

Rabb V. Flenniken, 29 S. C. 279, 7 S. E. 597 Luscombe v. Grigsby, 11 S. D. ;

408, 78 N. W. 357 Bass v. Wheless, 2 Tenn. Ch. 531 Merchants' Nat. Bank
; ;

of Ft. Worth V. Phillip & Wiggs Machinery Co., 15 Tex. Civ. App. 159, 39
S. W. 217 Chadwick v. Arnold, 34 Utah, 48, 95 Pac. 527 Haslam v. Has-
; ;

1am, 19 Utah, 1, 56 Pac. 243 Schenek v. Wicks, 23 Utah, 576, 65 Pac. 732
;

Towle V. Mack, 2 Vt. 19.

25 Louisville & N. R. R. Co. v. Boykin, 76 Ala. 560; Dugan v. Vattier. '3
Blackf. (Ind.) 246, 25 Am. Dec. 105; Corn v. Sims, 3 Mete. (Ky.) 391; Grim-
stone V. Carter, 3 Paige (N. Y.) 421, 24 Am. Dec. 230; Hoover v. Donally, 3
Hen. & M. (Va.) 316. Contra: Wheaton v. Dyer, 15 Conn. 307, 311.
 512 THE REMEDIES OP THE CESTUI QUE TRUST (Ch. 14

but has not yet paid the consideration at the time he receives no-
tice, he cannot hold the property against the cestui que trust; ^' or
if he has paid part of the consideration can hold the property only
upon paying the beneficiary the unpaid portion of the purchase
price.^' In the words of Chancellor Kent: ^* "A plea of a purchase
for a valuable consideration, with notice, must be with the mon-
ey actually paid; or else, according to Lord Hardwicke, you are
not hurt. The averment must be, not only that the purchaser had
not notice, at or before the time of the execution of the deeds, but
that the purchase money was paid before notice. There must not
only be a denial of notice before the purchase, but a denial of notice
before payment of the money." And, as said by a Kentucky
court ^° "It is the well-settled doctrine that a purchaser of land
:

takes subject to the claim of the holder of a prior equity, although

such second purchaser may have made his contract, and fully paid
the purchase money before he had notice of it, provided he has such
notice before his own equity is clothed with the legal title."
The bona fide purchaser may hold the trust res against the cestui
que trust even though the former purchased from a volunteer,'"
or from a purchaser with notice of the trust; °^ and a purchaser
with notice from a bona fide purchaser without notice, is superior
to the beneficiary."^ An Illinois court quotes with approval Story's

2 0Burgett V. Paxton, 99 111.Kitteridge v. Chapman, 36 Iowa, 348;

288;
Paul V. Fulton, 25 Mo. 156 ; Moore, 32 N. H. 382 ; Dean v. Ander-
Patten v.
, son, 34 N. J. Eq. 496 Frost v. Beekman, 1 Jolins. Ch. (N. Y.) 288
; ; Murray
'
V. Finster, 2 Johns. Ch. (N. Y.) 155 Jewett v. Palmer, 7 Johns. Ch. (N. Y.)
;

65, 11 Am. Dec. 401 Everts v. Agnes, 4 Wis. 343, 65 Am. Dec. 314.
;

2' Dowell V. Applegate (O. C.) 7 Fed. 881; Florence Sewing Mach. Co. v.
Zelgler, 58 Ala. 221 ; Marchbanks v. Banks, 44 Ark. 48 ;Davis v. Ward, 109
Cal. 186, 41 Pac. 1010, 50 Am. St. Rep. 29; Green v. Green, 41 Kan. 47^ 21
Pae. 586 ; De Ford v. Orvls, 42 Kan. 302, 21 Pac 1105 Hardin's Ex'rs v. Har-
;

rington, 11 Bush. (Ky.) 367 Baldwin v. Sager, 70 111. 503 ; Rhodes v. Green,
;

36 Ind. 7 Haughwout v. Murphy, 21 N. J. Eq. 118; Phelps v. Morrison, 24 N.

;

J. Eq. 195 ; Farmers* Loan & Trust Co. v. Maltby, 8 Paige (N. Y.) 361 ; Sar-
gent v. Eureka Spund Apparatus Co., 46 Hun, 19; Youst v. Martin, 3 Serg. &
R. 423; Beck v. Ulrich, 16 Pa. 499; Mitchell v. Dawson, 23 W. Va. 86.
2 8 Jewett V. Palmer, 7 Johns. Ch. 65, 68, 11 Am. Dec. 401.
2» Corn V. Sims, 3 Mete. (Ky.) 391, 400, 401.
80 Richardson v. Haney, 76 Iowa, 101, 40 N. W. 115. But see Martin v. Fix,
44 Kan. 540, 24 Pac. 954, contra.
siBartlett v. Varner's Ex'r, 56 Ala. 580; Hampson v. Fall, 64 Ind. 382;
Hoffman Steam Coal Co. v. Cumberland Coal & Iron Co., 16 Md. 456, 77 Am.
Dee. 311; Wamburzee v. Kennedy, 4 Desaus. (S. C.) 474; Bracken v. Miller, 4
Watts & S. (Pa.) 102.
32 Brodie v. Skelton, 11 Ark. 120; Lathrop v. White, 81 Ga. 29, 6 S. E. 834;
St Joseph Mfg. Co. v. Daggett, 84 111. 556 Bracken v. Miller, 4 Watts & S.
;

(Pa.) 102. But such purchaser is charged with a trust, if the trust is recog-
§ 124) EECOVEET OP THE TEUST EES OE ITS SUBSTITUTE 513

Statement that "a purchaser with notice may protect himself by

purchasing the title of another bona fide purchaser for a valuable
consideration without notice; for, otherwise, such bona fide pur-
chaser would not enjoy the full benefit of his own unexceptionable
title." " If the title of the bona fide purchaser is good, it must be
good for sale purposes, as well as a foundation for use and occupa-
tion. But the wrongdoing trustee, himself, may not get good
title from a bona fide purchaser.'* If he could, the door would be
open for grave frauds on his part. If the trustee wrongfully trans-
fers the trust res, and later purchases it from one who holds it
innocently as a purchaser for value, the res will be affected with the
trust in the hands of the trustee, just as it was originally.
Reason for Rule
The, reason for the bona fide purchaser rule has been shown by
Langdell to lie in the nature of equitable jurisdiction. "The rea-
son why all equitable rights to property are lost the moment the
legal ownership is transferred for value to a person who has no
notice that it is subject to any equitable rights will be found in 'the
fundamental nature of equitable jurisdiction, as explained in pre-
vious paragraphs. It is only. by a figure of speech that a person
who has not the legal title to property can be said to be the equita-
ble owner of it. What is called equitable ownership, or equitable
title, or an equitable estate, is in truth only a personal claim
against the real owner; for equity has no jurisdiction in rem, and
cannot, therefore, confer a true ownership, except by its power
over the person with whom the ownership resides, i. e., by com-
pelling him to convey. Thus, if A. has been clothed with the
ownership of property for the sole purpose of holding it for the
benefit of B., or if, being the owner, he has made a valid agreement
with B. to convey it to him, or if A., though the owner of the prop-
erty, acquired his 'title from B. by fraud; in each of these cases,
equity will compel A. to convey to B. and it is only because of
;

this personal right of B. against A. (and because equity often

creates a semblance of true ownership by treating what ought to
be done as having been done), that B. can be said to be the owner
y V
nlzed and administered. Appeal of Booth, 35 Conn. 165. "Undoubtedly if a
perspn, though with notice, purchases from one without notice, he is entitled to
stand in his shoes, and take shelter under his bona fides. If It were not so
the bona fide purchaser without notice might be unable to dispose of the prop-
erty, and thus its value In his hands be materially deteriorated. But if the
second purchaser in such case be the original trustee, who reacquires the es-
tate, he will be fixed with the trust. * « »
" Church v. Ruland, 64 Pa. 432,
444.
83 St. Joseph Mfg. Co. v. Daggett, 84 111. 556, 564.
34 Oliver v. Piatt, 3 How. 333, 11 L. Ed. 622; Church v. Church, 25 Pa. 278;
Church V. Ruland, 64 Pa. 432.
BOiSEET Tbxtsts—33
514 THE EEMEDIES OP THE CESTUI QUE TRUST (Ch. 14

of the property' in equity. If, therefore, A. transfer the property to

C, B.'s remedy in respect to the property will be gone, unless C.
be privy to i. e., unless he have notice of it express or
B.'s equity;
implied. he paid nothing for the property (e. g., if he received
If
it as a gift, or in payment of a debt, or upon credit), the law will
imply notice against him, and thus establish privity but if he paid ;

for the property its full value, and had no knowledge or notice of
B.'s equity when he made the payment, it will be impossible to sub-
ject the property to B.'s claim without holding that the latter is
a right in rem." ^°
The courts have sometimes suggested that the reason for the
rule lay in the maxim, "Where the equities are equal, the law shall
prevail," or in the fact that the conduct of the cestui in placing the
property in the hands of the trustee has made possible the wrong-
doing of the trustee; ^^ or in the rule that "an innocent person
shall not in general have his title impeached." '''
Burden of Proof
'

Upon the subject of the burden of proof in the application of the

bona purchaser rule the authorities are not harmonious. Some
fide
cases require the cestui que trust to allege and prove that the holder
of the property was not a purchaser for value without notice;'*
others put the onus on the property holder to prove good faith and
payment of value.^® The reasoning of Dean Langdell is instructive,
though not followed by many courts. "It follows, from what has
already been said, that it is never a part of the plaintiff's case in
equity (more than at law) to allege or prove that he is a purchaser
for value without notice. If he has the legal title, such allegation
or proof will be unnecessary; if he has not the legal title, it will be
useless. It is only in reference to a defendant, therefore, that such
an inquiry can arise ; and it will always arise as to a defendant who
has the legal title to property, and whom a plaintiff attempts to
charge with an equity in respect to such property, upon the sole
ground that he is in privity with the person originally subject to
the equity. It has generally been supposed or assumed that a
defendant under such circumstances has the burden of alleging and
i
SB Summary of Equity Pleading, 90.
86 Behrmann v. Seybel, 178 App. Div. 862, 869, 166 N. Y. Supp. 254.
87 Groye Kobards' Heirs, 36 Mo. 523, 525. See, also, Scott v. Gallagher,
v.
14 Serg. & K. (Pa.) 333, 16 Am. Dec 508.
38 Bartlett v. Varner's Es'r, 56 Ala. 580; Wyrick v. Week, 68 Cal. 8, 8 Pac
522 ; Warnock v. Harlow, 96 Cal. 298, 31 Pac. 166, 31 Am. St. Rep. 209; Ha^
ris V. Stone, 15 Iowa, 273; Oaks v. West (Tex. Civ. App.) 64 S. W. 1033.
8 9 Buford V. McCormlck, 57 Ala. 428; Kaiser v. Waggoner, 59 Iowa, 40, 12
N. W. 754 Hume v. Frauzen, 73 Iowa, 25, 34 N. W. 490 ; Kringle v. Bhom-
;

berg, 120 Iowa, 472, 94 N. W. 1115 ; Ripley v. Seligman, 88 Mich. 177, 50 N.

W. 143.
§Il24) EECOVEEY OF THE TEUST EES OE ITS SUBSTITUTE 515

proving his purchase for value as an affirmative defense and this ;

view is countenanced by the fact that otherwise the plaintiff may-

be required to allege and prove a negative. It seems, however, that
the plaintiff clearly has no case against the defendant until it is
made to appear that the latter is privy to the plaintiff's equity and, ;

if so, the burden is on the plaintiff to allege and prove that the de-

fendant had notice in fact of his equity, or that he paid no value,

and so had notice in law." *"
What is Notice?
To affect a purchaser with. noticeit is not essential that it be
shown that he knew who the cestuis que trust were or the precise
terms of the trust. It is sufficient that he knew there was a trust.*^
Notice to an agent acting within the scope of his authority is notice
to the principal.*^ Thus, knowledge of a bank cashier may prevent
a bank from being a' purchaser in good, faith *' but a corporation ;

is not charged with the knowledge of an officer of it who acted

solely for his own benefit in the transaction,** nor is notice to a

mere advisor sufficient.*^ Where a trustee buys an interest in a
partnership with trust funds, the other partners are not charged
with notice of the trust.*° Notice to a trustee affects the cestuis
que trust.*'
If the trustproperty is represented by a document, as, for ex-
ample, a bond, certificate of stock, or note, and it appears on the
face of such document that the holder owns as trustee, a purchaser
will be held to have notice of the trust.** But in some cases the
*o Summary of Equity Pleading, 90, 91.
*i Mayfleld v. Turner, 180 111. 332, 54 N. E. 418; Zuver v. Lyons, 40 Iowa,
510 JefEray
; v. Towar, 63 N. J. Eq. 530, 53 Atl. 182. But see Conner v. Tuck,
11 Ala. 794.
42 Chapman v. Hughes, 134 Cal. 641, 58 Pac. 298, 60 Pac. 9T4, 66 Pae. 982;
Watson V. Sutrb, 86 Cal. 500, 24 Pac. 172, 25 Pac. 64; Webber v. Clark, 136
111. 256, 26 N. E. 360, 32 N. E. 748 Stewart v. Greenfield, 16 Lea (Tenn.) 13.
;

*s Duncan v. Jaudon, 15 Wall. 165, 21 L. Ed. 142; Gaston v. American

Exch. Nat. Bank, 29 N. J. Eg. 98.
44 Weber Richardson, 76 Or. 286, '147 Pac. 522, 1199.
v.
45 McNamara v. McNamara, 62 Ga. 200.
48 Gllruth V. Decell, 72 Miss. 232, 16 South. 250; Hollembaek v. More, 44
N. Y. Super. Ct. 107.
47 In Newell v. Hadley, 206 Mass. 335, 92 N. E. 507, 29 L. R. A. (N. S.) 908,
B. was trustee of the N. trust and of the P. trust. Having stolen money from
the P. trust, he stole funds from the N. trust and replaced his withdrawals
from the P. trust. The beneficiaries under the P. trust were held liable to the
N. trust for the N. funds so used by B. to make good his thefts. B. represent-
ed the beneficiaries of the P. trust, and his knowledge of the transaction
bound them. For a criticism of this case, see West, Money Stolen by a
Trustee from One Trust and Used for Another, 25 Harv. Law Rev. 602.
48 Duncan v. Jaudon, 15 Wall. 165, 21 L. Ed. 142; Eldridge v. Turner, 11
516 THE REMEDIES OF THE CESTUI QUE TRUST ( Ch. 14

bare word "trustee" in the paper has not been deemed sufficient to
charge a purchaser with notice,*' as, for example, where a search
to learn the extent of the trustee's power of sale would have been
fruitless, because it would have led the purchaser to records from
which no information could have been obtained, or to the trustee
who might have deceived the purchaser.""
Frequently the purchaser receives constructive notice,"^ or is put
on inquiry,"^ by the record of a deed or other instrument in his
chain of title but a deed which is not a link in that chain, but is
;

between third parties, will not act as constructive notice."^ It

has been held that, if the purchaser' makes diligent inquiry of the
records and does not learn of an instrument which reveals the
trust, because of an error of the clerk, the purchaser is not bound
by constructive notice."* A
voidable deed in the chain of title, as,
for example, from an executor to himself, does give the purchaser
notice of a constructive trust."" A
lis pendens may prevent the

purchaser of the trust res from being a purchaser in good faith."*

Ala. 1049 ; Watson v. Sutro, 86 Gal. 500, 24 Pae. 172, 25 Pac. 64 ; Turner t,
Hoyle, 95 Mo. 337, 8 S. W. 157; Gaston v. American Exch. Nat. Bank, 29 N.
J. Eq. 98 ; Harrison v. Fleischman, 70 N. J. Eq. 301, 61 Atl. 1025 ; Swan y.
Produce Bank, 24 Hun (N. Y.) 277; Stoddard v. Smith, 11 Ohio St. 581; Clem-
ens V. Heckscher, 185 Pa. 476, 40 Atl. 80; Simons v. Southwestern E. Bank, 5
Rich. Eq. (S. O.) 270.
*» Ash ton V. President, etc., of Atlantic Bank, 3 Allen (Mass.) 217; Kua v.
Watson, 13 S. D. 453, 83 N. W. 572 ; Lincoln Sav. Bank t. Gray, 12 Lea (Tenn.)
459.
so Grafflin v. Eobb, 84 Md. 451, 35 AtL 971.
01 Gaines v. Summers, 50 Ark. 322, 7 S. W. 301; Bazemorev. Davis, 55 Ga.
504 Dean v. Long, 122 111. 447, 14 N. B. 34; Hagan v. Vamey, 147 HI. 281, 35
;

N. E. 219; Martin v. Fix, 44 Kan. 540, 24 Pac. 954; Knowles v. Williams, 58

Kan. 221, 48 Pac. 856; Hagthorp v. Hook's Adm'rs, 1 Gill & J. (Md.) 270;
Turner v. Edmonston, 210 Mo. 411, 109 S. W. 33, 124 Am. St. Rep. 739; John-
son V. Prairie, 91 N. C. 159 ; Barrett v. Baniber, 81 Pa. 247 ; Simmons iv. Dins-
more, 56 Tex. 404 Stone v. Kahle, 22 Tex. Civ. App. 185, 54 S. W. 375; Mans-
;

field V. Wardlow (Tex. Civ. App.) 91 S. W. 859 ; Graff v. Castleman, 5 Rand.

(Va.) 195, 16 Am. Dec. 741 ; Heth v. Richmond, F. & P. R. Co., 4 Grat. (Va.)
482, 50 Am. Dec. 88; Justis v. English, 30 Grat. (Va.) 565; Morgan v. Fisher's
Adm'r, 82 Va. 417. But see Riley v. Cummings, 37 App. Div. 512, 56 N. T.
Supp. 60.
62 Hassey v. Wilke, 55 Cal. 525 Webber v. Clark, 136 lU. 256, 26 N. B. 360,
;

32 N. E. 748; Mercantile Nat. Bank of Cleveland v. Parsons, 54 Minn. 56, 55

N. W. 825, 40 Am. St. Rep. 299.
03 Moore v. Hunter, 6 111. (1 Gilman) 317 ; Murray v. Ballon, 1 Johns. Ch.
(N. T.) 566 ;Claiborne v. Holland, 88 Va. 1046. 14 S. E. 915l
B* Newark Aqueduct Co. v. Joralemon, 7 N. J. Eq. 304.
5 Cox V. Barber, 68 Ga. 836.
oe Murray v. Ballon, 1 Johns. Ch. (N. Y.) 566.
§ 124) RECOVERY OF THE TRUST RES OR ITS SUBSTITUTE 517

Open, notorious, and exclusive possession " of real property by a

cestui que trust has been held to give a purchaser notice of the
rights of the cestui,"* or at least to put him on inquiry."* "What
shall be deemed constructive notice in cases of this kind has been
much discussed in courts, and we consider it as perfectly well set-
tled that open exclusive possession is sufficient notice to all the
world of any claim which one who is so in possession has upon the
land. It is not to be supposed that any man, who wishes to pur-
chase land honestly, will buy it without knowing what are the
claims of a person who is in the open possession of it." °" In the
words of the Supreme Court of North Dakota "An open, notori-
:

ous, and adverse possession of real property is notice to the world

of every right or interest owned or held by the person in posses-
sion, whether such right be legal or equitable." '^ But where a
widow claims that heirs hold land in trust for her, joint occupancy
by the widow and the heirs is not notice of the widow's claim to a
purchaser from the heirs *" nor is there constructive notice of a
;

claim by a mother-in-law, when the occupation is joint between

her and her son-in-law,*° or of an alleged equity in favor of a
housekeeper, where she lives with her employer.** Exclusive and
open possession of part of the property by a cestui is constructive
notice of his claim to the whole,*" and possession by one of several
cestuis que trust of part of the land binds a purchaser with notice
of the claims of all cestuis to all the land."
Inadequacy of Consideration
Gross inadequacy of consideration paid alone may warrant a
finding of notice, since such a fact would inevitably lead a reason-

67 BeaubienHindman, 38 Kan. 471, 16 Pac. 796.

v.
B8 McVeyMcQuallty, 97 111. 93; McDaniel v. Peabody, 54 Iowa, 305, 6 N.
v.
W. 538 Rogers v. ScarfC, 3 Gill (Md.) 127 Jones v. Johnson Harvester Co., 8
; ;

Neb. 446, 1 N. W. 443; Oberlender v. Butcber, 67 Neb. 410, 93 N. W. 764;

Pritehard v. Brown, 4 N. H. 397, 17 Am. Dec. 431; Ferrln v. Errol, 59 N. H.
234; Flaherty v. Cramer, 62 N. J. Eq. 758, 48 Atl. 565; Grimstone v. Garter, 3
Paige (N. Y.) 421, 24 Am. Dec. 230 Ross v. Hendrix, 110 N. C. 403, 15 S. E.
;

4 Krause v. Krause, 30 N. D. 54, 151 N. W. 991; Petrain v. Kiernan, 23 Or.

;

455, 32 Pac. 158. Contra Scott v. Gallagher, 14 Serg. & R. (Pa.) 333, 16 Am.
:

Dec. 508.
09 Witter V. Dudley, 42 Ala. 616; Morrison v. Kelly, 22 111. 609, 74 Am. Dec.
169; Bowman v. Anderson, 82 Iowa, 210, 47 N. W. 1087, 31 Am. St. Rep.
473.
«o Pritehard v. Brown, 4 N. H. 397, 404, 17 Am. Dec. 431.
•1 Krause Krause, 30 N. D. 54, 151 N. "W. 991, 996.
v.
8 2 Carroll v. Draughon, 173 Ala. 327, 56 South. 207.
•s Ellis V. Young, 31 S. C. 322, 9 S. E. 955.
64 Harris v. Mclntyre, 118 111. 275, 8 N. E. 182.
88 Dayls V. Hendrix, 192 Ala. 215, 68 South. 863.
•6 Ramirez t. Smith, 94 Tex. 184, 59 S. W. 258.
 '

518 THE REMEDIES OF THE CESTUI QUE TRUST (Ch. 14

able man to believe that the title of his purchaser was defective or
subject to an equity or burden.*' A
purchaser at a sheriff's or
other judicial sale is held to be a purchaser in good faith, in the
absence of actual notice. The character of the sale to him charges
him with no constructive notice of equities."^
Facts Putting on Inquiry
If the purchaser learns of facts which, while not conclusively
showing the existence of a trust with respect to the property in
question, tend to excite suspicion or arouse doubt regarding the
title, he will be charged with notice of such further facts as he
could have ascertained by the use of reasonable diligence.*' Thus,
that the purchaser knew that a note which he bought was given for
property sold by a trustee,'" or that his grantor paid an inadequate
consideration to the trustee for the property,'^ or that another had
made some kind of claim to the property,'^ or that suits affecting
the property were pending,'^ or that his assignor had been describ-
ed as "trustee" in a paper affecting the property,'* or that securities
were trust securities and being pledged by a trustee to secure a pri-
vate debt,'° or that the records showed an indirect transfer of the
property from the trustee to himself,'" will put the purchaser upon
inquiry. Information should be sought from other sources than the
trustee, for he is not impartial." If he wrongfully transferred the
trust property, or committed another breach of trust, he will not be
a:pt to admit it. "It is well established that one who has reason to
believe that another is offering property for sale, which he holds

"' Carpenter v. Kofeinson, Fed. Cas. No. 2431; Gaines v. Summers, 50 Ark.
322, 7 S. W. 301; Storrs v. Wallace, 61 Mich. 437, 28 N. W. 662; Oondit v.
Blgalow, 64 N. J. Eq. 504, 54 Atl. 160; Hanrick v. Gurley, 93 Tex. 458, 54 S.
W. 347, 55 S. W. 119, 56 S. W. 330.
68 Fahn v. Bleckley, 55 Ga. 81 ; El ting v. First Nat. Bank of Biggsville, 173
111. 368, 50 N. E. 1095 ;Hampson v. Fall, 64 Ind. 382; Oatherwood v. Watson.
65 Ind. 576; Glfford v. Bennett, 75 Ind. 528; Booker v. Rocker, 75 Ind. 571;
Jackson ex dem. Lansing v. Chamberlain, 8 Wend. (N. Y.) 620; Lessee of
Paine v. Mooreland, 15 Ohio, 435, 45 Am. Dec. 585.
6» Bradley v. Merrill, 88 Me. 319, 34 Atl. 160; Condit v. Maxwell, 142 Mo.
266, 44 S. W. 467; Prall v. Hamil, 28 N. J. Eq. 66; JefCray v. Towar, 63 N. J.
Eq. 530, 53 Atl. 182 ; Federal Heating Co. v. City of Buffalo, 182 App. Div.
128, 170 N. Y. Supp. 515; Blaisdell v. Stevens, 16 Vt. 179.
"> Bunting v. Ricks, 22 N. O. 130, 32 Am. Dec. 699.
»i Hume V. Franzen, 73 Iowa, 25, 34 N. W. 490.
7J! Austin V. Dean, 40 Mich. 386 ;Cain v. Cox, 23 W. Va. 594.
'8 Swoope v. Trotter, 4 Port. (Ala.) 27.
'4 Pendleton v. Fay, 2 Paige (N. Y.) 202.
7B Loring v. Brodie, 134 Mass. 453.
'0 Beckett v. Tyler, 3 MacArthur (D. C.) 319.
- 7 7 Jonathan Mills Mfg. Co. v. Whitehurst, 72 Fed. 496, 19 C. C. A. 130; Gol-

Bon V. Fielder, 2 Tex. Civ. App. 400, 21 S. W. 173. Contra: Mercantile Nat
Bank of Cleveland v. Parsons, 54 Minn. 56, 55 N. W. 825, 40 Am. St Rep. 299.
 —

§ 124) BECOVEiiY OF THE TEUST BBS OE ITS SUBSTITUTE 519

either as trustee or agent for a third person, cannot become a bona

fide purchaser of the property for value by reliance on the state-
ments of the suspected trustee or agent, either as to his authority
or as to his beneficial ownership of the thing sold. In such a case,
inquiry must be made of some one other than the agent or trustee
of some one who will have a motive to tell the truth, in the interest
of the cestui que trust '*
or j)rincipal."
Who is a Purchaser^
Apurchaser is one paying money or money's worth for the
property. Therefore a donee inter vivos,''" a legatee* or devisee of
the trustee,*" or one taking by operation of law from the trustee,*^
is not entitled to protection, even though he may have taken the

property innocently. "A person to whose hands a trust fund

comes by conveyance from the original trustee is chargeable as a
trustee in his turn, if he takes it without consideration, whether he
has notice of the trust or not. This has been settled for three hun-
dred years, since the time of uses." *"
The giving of a note for the price does not constitute the maker
a purchaser, unless the note has been negotiated by the payee and
thus the maker absolutely bound upon it.*'
The cancellation of an antecedent debt has not generally been
regarded as value under the bona fide purchaser rule, since the debt
could be reinstated if the property transferred were taken away
from the creditor.**

78 Jonathan Mills Mfg. Co. v. Whitehurst, 72 Fed. 496, 502, 19 0. C. A. 130.

• T9 Joslyn V. Downing, Hopkina & Co., 150 Fed. 317, 80 C. C. A. 205 ; Lehnard
V. Specht, 180 111. Jacobs v. Jacobs, 130 Iowa, 10, 104 N. W.
208, 54 N. E. 315 ;

489, 114 Am. St. Rep. 402; Otis v. Otis, 167 Mass. 245, 45 N. E. 737; Davis v.
Downer, 210 Mass. 573, 97 N. B. 90; Attorney General v. Bedard, 218 Mass.
378, 105 N. E. 993 Edwards v. Welton, 25 Mo. 379 Johnson v. Johnson, 51
; ;

Ohio St. 446, 38 N. E. 61; Weber v. Richardson, 76 Or. 286, 147 Pac. 522 Ap- ;

peal of Sadler, 87 Pa. 154 Metzger v. Lehigh Valley Trust & Safe Deposit
;

Co., 220 Pa. 535, 69 Atl. 1037.

8» Evans v. Moore, 247 111. 60, 93 N. E. 118, 139 Am. St. Rep. 302; Talbott
V. Barber, 11 Ind. App. 1, 38 N. E. 487, 54 Am. St. Rep. 491 MfiCants v. Bee,
;

1 McCord, Eq. (S. C.) 383, 16 Am. Dec. 610; Kluender v. Fenske, 53 Wis. 118, ,
10 N. W. 370.
81 Derry v. Derry, 74 Ind. 560.
82 Holmes, J., in Otis v. Otis, 167 Mass. 245, 246, 45 N. E. 737.
83 Davis V. Ward, 109 Cal. 186, 41 Pac. 1010, 50 Am. St. Bep. 29; Partridge

V. Chapman, 81 111. 137; Jones v. Glathart, 100 111. App. 630; Kitteridge v.
Chapman, 36 Iowa, 348 Rush v. Mitchell, 71 Iowa, 333, 32 N. W. 367 Free-
; ;

ipan V. Deming, 3 Sandf Ch. (N. T.) 327. In Citizens' Bank of Parker v. Shaw,
.

14 S. D. 197, 84 N. W. 779, it was held the note constituted value, even though
not negotiated.
84 Orb V. Coapstlck, 136 Ind. 313, 36 N. E. 278; Swift v. Williams, 68 Md.
236, 11 AU. 835 Reeves v. Evans (N. J, Ch.) 34 Atl. 477 ; Wilson v. Doster, 42
;
 ;

520 THE REMEDIES OP THE CESTUI QUE TRUST (Ch. 14

Anassignee for the benefit of creditors stands' in the shoes of his

assignor, and takes subject to all equities which affected the prop-
erty at the time of the assignment. He is not a purchaser,*'
A
judgment creditor is not,'* in the absence of a statute,*^ a pur-
chaser. Property seized by him will be held subject to equities at-
taching to it in the hands of his debtor. "Attaching creditors, even
though without notice of the equitable claims of third parties, who,
in the transactions in which the debts sought to be collected were
incurred, gave no credit to, and had no knowledge of, the apparent
or record title of the debtor to the property attached, do not, as to
the equitable owners of such property, stand in the position of bona
fide purchasers for value, unless by force of some statute law to
that effect." "
Acorporation which issues its stock in return for the transfer to
it of property is a purchaser,** as is also one receiving property in

consideration of a promise to marry,*" or of marriage ; *^ but "one

dollar and love and affection," being merely "good" consideration,
does not constitute value under the rule.*^
(b) Identification
The remedy of recovery of the trust property, or its substitute,
is necessarily dependent on proof that the property in question is
the trust res or its product.. The property which the cestui seeks
to have equity decree to belong to him must be shown to be the
original subject-matter of the trust, or its successor. If the claim is

N. C. 231 ; Young v. Weed, 154 Pa. 316, 26 Atl. 420, 35 Am. St. Eep. 839; Black
V. Caviness, 2 Tex. Civ. App. 118, 21 St W. 635; Golson v. Fielder, 2 Tex. Civ.
App. 400, 21 S. W. 173. Contra, First Nat. Bank v. City Nat. Bank, 102 Mo.
App. 357, 76 S. W. 489. The transfer of property as security for the payment
of an antecedent debt has been regarded by some courts as making the trans-
feree a purchaser for value. Atkinson v. Greaves, 70 Miss. 42, 11 South. 688
Throckmorton v. Throckmorton, 91 Va. 42, 22 S. E. 162. Contra: Chalk v.
Daggett (Tex. Civ. App.) 204 S. W. 1057.
8 5 Chace v. Chapin, 130 Mass. 128; Martin v. Bowen, 51 N. J. Eq. 452, 26

Atl. 823 ; Stainback v. Junk Bros. Lumber & Mfg. Co., 98 Tenn. 306, 39 S. W.
530. Contra, Wlckham v. Martin, 13 Grat. (Va.) 427 ; Marshall v. McDermitt,
79 W. Va. 245, 90 S. E. 83(), L. R. A. 1917C, 883 (under the recording act).
88 Flanders v. Thompson, Fed. Cas. No. 4853; Houghton v. Davenport, 74
Me. 590 Harney v. First Nat. Bank, 52 N. J. Eq. 697, 29 Atl. 221.
;

8T Marshall v. Lister, 195 Ala. 591, 71 South. 411; Guin v. Guin, 196 Ala.
221, 72 South. 74.
88 Waterman v. Buckingham, 79 Conn. 286, 291, 64 Atl. 212.
80 Whittle V. Vanderbilt Min. & Mill. Co. (C. C.) 83 Fed. 48.
»o Smith V. Allen, 5 Allen (Mass.) 454, 81 Am. Dec. 758; De HierapoUs v.
Reilly, 44 App. Div. 22, 60 N. X. Supp. 417. Contra: Uonberger v. Baker, 88
Mo. 447.
»i Johnson v. Petersen, 101 Neb. 504, 163 N. W. 869, 1 A. L. B. 1285.
•2 Waddail v. Vassar, 196 Ala. 184, 72 South. 14.
§ 124) RECOVEET OP THE TBUST RES OR ITS SUBSTITUTE 521

made that the realty or personalty in dispute was once in the hands
of the trustee as trust property, the question of identification will
not ordinarily be extremely difficult; but if the cestui que trust
seeks to show that certain land or chattels are the avails of trust
property, that trust property has, perhaps through several trans-
actions, been traced into this land or these chattels, the problem is
apt to be more difficult. The courts have not always agreed on
what is sufficient identification.

Burden of Proof and Presumptions

If the cestui que trust alleges that certain property is trust prop-
erty, or that the proceeds of trust property have gone into it, the
burden is on the cestui to prove that fact.°* In this proof he may
be aided by certain presumptions, which will now be stated.
If the beneficiary proves that the trust property or its substitute
was in the hands of the trustee at a given date, prior to the death
or insolvency of the trustee, is there any presumption that it re-
mained among the assets of the trustee at his death or insolven-
cy? A few courts have held that proof of receipt of the property
and the existence of similar property in the estate at insolvency or
death raises a presumption that the trust property was among the
trustee's assets, or in other wdirds that the burden is on the trustee
or his representative to show that the property has been transfer-
red or dissipated.'* A somewhat similar presumption regarding^
the retention of property is found in a case where a trustee was or-
dered to invest trust funds in certain securities, he made such in-
vestment, and at his death securities of the kind ordered to be
bought were found among his possessions; it was held that the
securities on hand at his death were presumed to be trust se-
curities.*" But the majority of courts considering this question
have determined that the cestui que trust is aided by no presump-
tion of the retention of the trust property; that he must show not
only its receipt by the trustee, but also that it remained among the
assets of the trustee at the death or insolvency of the trustee, or
other event fixing the rights of the parties."* Thus, a cestui que

93 Schuyler v. Littlefield, U
232 U. S. 707, 34 Sup. Ot. 466, 58 Ed. 806 Wad-
;

deU v. WaddeU, 36 Utah, 435, 104 Pac. 743 ; Chase & Baker Co. v. Olmsted, 93
Wash. 306, 160 Pac. 952.
»* Famsworth v. Muscatine Produce & Pure Ice Co., 177 Iowa, 20, 158 N. W.
741 ; State v. Bank of Commerce of Grand Island, 61 Neb. 181, 85 N. W. 43, 52
li. B. A. 858; Widman v. Kellogg, 22 N. D. 396, 133 N. W. 1020, 39 L. B. A. (N.
S.) 563.
95 Kauffman v. Foster, 3 Cal. App. 741, 86 Pac. 1108.
96 Mathewson v, Wakelee, 83 Conn. 75, 75 Atl; 93; Shields v. Thomas, 71
Miss. 260, 14 South. 84, 42 Am. St. Bep. 458 Eockwood v. School District of
;
 522 THE REMEDIES OF THE CESTUI QUE TRUST ( Ch. 14

trustwho merely proves that a bank collected trust moneys, and

does not show their disposition, has not made out a case for fol-
lowing trust funds.'^ He must show that such trust funds remain-
ed in the hands of the bank or its representative at the time he
brought suit.
The beneficiary is occasionally aided in following trust property
by a rule which is sometimes called a presumption, but which is
really referable to the doctrine of the loss of property by confusion
of goods. If the trustee mingles trust funds with his own, the bur-
den will be on the trustee to make a separation and to show the
amount of his individual property in the mass,°^ and if the trustee
cannot separate trust and private funds, the whole will be treated
as trust property.**
Doctrine of Clayton's Case
Several important presumptions regarding withdrawals by a
trustee have been established. In Clayton's Case ^ it was held that
a banking firm, receiving deposits from Clayton and making pay-
ments to him, presumably applied the first money paid in to the
first drafts on the account. "Presumably it is the sum first paid in
that is first drawn out." If but one cestui que trust is interested in
a fund, and no moneys of the trustee are mixed with the trusts mon-
eys, this rule will not be of great importance, for ordinarily it will
be immaterial to the cestui whether the trustee is regarded as hav-
ing paid out first the money first deposited or the money later add-
ed to the fund. iBut if one trustee has mixed two or more trust
funds, made a number of deposits in the joint fund to the credit of
each trust fund and a number of withdrawals from the common
fund, it may be of prime importance to know to which trust fund
the withdrawals are to be charged. Conceivably it, might be held
that the balance should be divided among the several trusts in pro-
portion to the total deposits made to the credit of each fund. Un-
der this theory the withdrawals would be presumed to be from the
several trust funds pro rata; that is, if the total credits to the A.

Brookline, 70 Ni H. 388, 47 Atl. 704; Collins v. Lewis, 60 N. J. Eq. 488, 46 Ati.

1098 Ellicott v. Kuhl, 60 N. J. Eq. 333, 46 Atl. 945 In re Hicks, 170 N. Y. 195,
; ;

63 N. E. 276 Gardner v. Whitford, 24 E. I. 253, 52 Atl. 1082.

;

»7 Windstanley v. Second Nat. Bank of Louisville, 13 Ind. App. 544, 41 N. E.

956.
08 Evans v. Evans, 200 Ala. 329, 76 South. 95, semble; Atkinson v. Ward, 47
Ark. 533, 2 S. W. 77 ; Moore v. First Nat. Bank of Kansas City, 154 Mo. App.
516, 135 S. W. 1005; Yellowstone County v. First Trust & Savings Bank, 46 .

Mont. 439, 128 Pac. 596 Watson v. Tliompson, 12 R. I. 466:

;

ooByrom v. Gunn, 102 Ga. 565, 31 S. B. 560; Ward v. Armstrong, 84 111.

151; Hunt v. Smith, 58 N. J. Eq. 25, 43 Atl. 428 ; Waddell v. Waddell, 36 Utah,
435, 104 Pac. 743.
1 Clayton's Case, 1 Meriv. 572, 608.
 § 124) EECOVEET OF p:HE TEUST EES OB ITS SUBSTITUTE 523

trust were $1,000, and the total credits to the B. trust were $2,000,
one-third of the money withdrawn would be presumed to havd been
drawn from the A. fund and two-thirds from the B. fund, regard-
less of the dates of the various deposit^ and the dates of the with-
drawals. This theory has rarely received support.^ Generally the
rule in Clayton's Case has been applied, and it has been held that
the trust funds first deposited will be presumed to be those first
drawn out by the trustee.^;i Thus, if the trustee deposits $500 of the
money of the A. trust on January 1st and $500 of the money of the B.
trust in the same account on June 1st, and no other moneys have
entered into the fund, and on July 1st the trustee withdraws $500
and dissipates it, it will be presumed that it was the money of the
A. trust which he withdre,w, and the B. trust will be entitled to the
entire balance of $500.
Mixed Funds
If, however, the fund in question contains, not merely trust
funds, but also the funds of the trustee, the presumption with re-
spect to withdrawals will be different. In such case the presump-
tion that the trustee will perform his duty and will not be guilty
of a breach of trust enters into the situation. If funds are with-
drawn from this mixed account for the use of the trustee, it is log-
ical to assume that he withdrew his own money for his own use
before he touched the trust money. As long as any of the money of
the trustee remains in the mixed fund, the withdrawals for his
private benefit will be treated as being made from his private funds,
and only after the private funds are exhausted will the trust funds
be deemed to be invaded.* The leading case in establishing this

2Piano Mfg. Co. v. Auld, 14 S. D. 512, 86 N. W. 21, 86 Am. St. Rep. 769.
3In re Hallett's Estate, 13 Ch. Div. 696; Spokane County v. First Nat.
Bank, 68 Fed. 979, 16 C. C. A. 81; Empire State Surety Co. v. Carroll County,
194 Fed. 593, 114 O. C. A. 435 ; In re Bolognesl & Co., 254 Fed. 770, 166
C. C. A. 216; Hewitt v. Hayes, 205 Mass. 356, 91 N. B. 332, 137 Am. St.
Rep. 448; Cole v. Cole, 54 App. Div. 37, 66 N. Y. Supp. 314.
* Bank of British North America v. Frefghts, etc., of The Hutton (D. C.)
137 Fed. 534, 70 C. C. A. 118; In re Berry, 147 Fed. 208, 77 C. C. A. 434;
Board of Com'rs of Crawford County, Ohio, v. Strawn, 157 Fed. 49, 84 C.
C. A. 553, 15 L. R. A. (N. S.) 1100; In re City Bank of Dowagiac (D. C.) 186
Fed. 413; Empire State Surety Co. v. Carroll County, 194 Fed. 593, 114
C. C. A. 435; Clark Sparks & Sons Mule & Horse Co. v. Americus Nat.
Bank (D. C.) 230 Fed. 738; Covey v. Cannon, 104 Ark. 550, 149 S. W. 514;
People v. California Safe Deposit & Trust Co., 175 Cal. 756; 167 Pac. 388,
li. R. A. 1918A, 1151; Keeney v. Bank of Italy, 33 Cal. App. 515, 165 Pac.
735; Hewitt v. Hayes, 205 Mass. 356, 91 N. E. 332, 137 Am. St. Rep. 448;
Board of Fire & Water Com'rs of City of Marquette v. Wilkinson, 119 Mich.
655, 78 N. W. 893, 44 L. R. A. 493; Harrison v. Smith, 83 Mo. 210, 53 Am.
Rep. 571; State v. Bank of Commerce of Grand Island, 61 Neb. 181, 85
N. W. 43, 52 L. R. A. 858; Standish v. Babcock, 52 N. J. Bq. 628, 29 Atl.
327; Heidelbach v. National Park' Bank, 87 Hun, 117, 33 N. y. Supp. 794;
524 THE EEMEDIES OP THE CESTUI QUE TRUST (Ch. 14

rule is In re Hallett's Estate/ where Jessel, M. R., referred to the

principle "that, where a man does an act which may be rightfully-
performed, he cannot say that that act was intentionally and in
fact done wrongly," and then said "When we come to apply that
:

principle to the case of a trustee who has blended trust moneys

with his own, it seems to me perfectly plain that he cannot be
heard to say that he took' away the trust money when he
had a right to take away his own money. The simplest case
put is the mingling of trust moneys in a bag with money of the
trustee's own. Suppose he has a hundred sovereigns in a bag and
he adds to them another hundred sovereigns of his own, so rhat
they are commingled in such a way that they cannot be distinguish-
ed, and the next day he draws out for his own purposes £100, is
it tolerable for aiiybody to allege that what he drew out was the

first £100, the trust money, and that he misappropriated it, and
left his own £100 in the bag? It is obvious he must have taken
away that which he had a right to take away, his own £100.
What difference does it make if, instead of being in a bag, he de-
posits it with his banker, and then pays in other money of his own,
and draws out some money for his own purposes? Could he say
that he had actually drawn out anything but his own money? His
money was there, and he had a right to draw it out, and why
should the natural act of simply drawing out the money be at-
tributed to anything except to his ownership of money which was
at his bankers."
But this doctrine of In re Hallett's Estate has not been followed
to its logical conclusion in all cases. If a trustee has trust and ,pri-
vate funds in a single account, and then withdraws a sum less than
the amount and invests it in securities in
of the private funds
his own name, would seem logical that the securities would be
it

presumed to belong to the trustee, since he would be presumed to

use his own funds to make individual investments. But in some
cases where such withdrawal and investment has been made, and
later the trustee has withdrawn and dissipated the balance of the ,

fund, the cestui has been allowed to take the investments made
with the first withdrawals.' Thus, in In re Oatway ^ the trustee paid

Blair v. Hill, 50 App. Div. 33, 63 N. T. Supp. 670, affirmed 165 N. T. 672,
59 N. E. 1119; Widman v. Kellogg, 22 N. D. 396, 113 N. W. 1020, 39 L. R.
A. (N. S.) 563 ; Continental Nat. Bank v. Weems, 69 Tex. 489, 6 S. W. 802,
5 Am. St. Eep. 85; Waddell v. Waddell, 36 Utah, 435, 104 Pac. 743; Emigh
V. Earling, 134 Wis. 565, 115 N. W. 128, 27 L. R. A. (N. S.) 243 ; State v.
Foster, 5 Wyo. 199, 38 Pac. 926, 29 uR. A. 226, 63 Am. St. Rep. 47.
: In re Hallett's Estate, 13 Ch. Div. 696, 727, 728.

• Brennan v. TUlinghast, 201 Fed. 609, 120 C. C. A. 37 ; City of Lincoln

I [1903] 2 Ch. 356, 360.

§ 124) RECOVERY OP THE TRUST RES OR ITS SUBSTITUTE 525

for shares in the Oceana Company by a check on an account con-

taining trust funds and sufficient priyate funds to meet the check.
Later the trustee withdrew and dissipated the balance of the ac-
count. The beneficiary was allowed to take the Oceana stock;
Joyce, J., saying: "It is, in my opinion, equally clear that .when
any of the money drawn out has been invested, and the investment
remains in the name or under the control of the trustee, the rest of
the balance having been afterwards dissipated by him, he cannot
maintain that the investment which remains represents his own
money alone, and that what has been spent and can no longer be
traced and recovered was the money belonging to the, trust. In oth-
er words, where the private money of the trustee andthat which he
held in a fiduciary capacity have been mixed in the same banking
'

account, from which various payments have from time to time been
made, then, in order to determine to whom any remaining balance or
any investment that may have been paid for out of the account
ought to be deemed to belong, the trustee must be debited with all
the sums that have been withdrawn and applied to his own use, so
as to be no longer recoverable, and the trust money in like manner
debited with any sums taken out and duly invested in the names of
the proper trustees." Thus, if this presumption is advantageous to
the cestui que trust, it ^operates ; if it is disadvantageous, it is not
applied. If the trustee withdraws the money and wastes it, he is
deemed to withdraw his own money; but if he withdraws funds
and purports to make an investment on his own account, he is pre-
sumed to be making an investment for the cestui que trust.
Presumption Regarding Deposits
It might be supposed that if the. trustee reduces the mixed ac-
count below the amount of the trust funds by withdrawals for his
own use, and later makes deposits of private moneys in the ac-
count, the trustee would be presumed to be restoring the trust
funds; that is, that the presumption of the performance of duty
would again apply. But whether because the trustee has, in such a
situation, already shown an express intent not to perform his duty,
or for other reason, the courts have held that subsequent deposits

V. Morrison, 64 Neb. 822, 90 N. W. 905, 57 L. R. A. 885. But contra: State

7. Foster, 5 Wyo. 199, 38 Pac. 926, 29 L.. R. A. 226, 63 Am. St. Rep. 47,
where it was held that where a bank loaned money while its balance on
hand exceeded the trust fund, it would be presumed that the notes result-
ing from such loans represented private funds of the bank and .not trust
funds, even though the balance later became reduced below the amount of
the trust fund. And see, also, Burnham v. Barth, 89 Wis. 362, 62 N. W. 96,
where it was held that a bank using part of a mixed fund to pay debts and
expenses and part to buy securities, and having securities on hand at its
insolvency in an amount less than the trust fund, was not presumed to
have invested the trust funds in the securities.
 526 THE REMEDIES OP THE CESTUI QUE TEUST (Ch. 14

to the credit of an account which stands in the name of the trustee

individually, but which contains trust funds as well as private
funds, do not inure to the benefit of the cestui que trust. The sub-
sequent deposits are added to the private portion of the account.
Hence, if trustee A. has a bank account entitled merely "A.,"
and into such account $500 of trust moneys have entered, and
at some time in the history of the account the balance is reduced
below $500,* or the account is wholly exhausted,' by withdrawals
of funds for the use of A., deposits by A. after such reduction below
$500, or after such exhaustion, will not operate as a restoration of
the trust funds, and will inure to the benefit of A. But if the ac-
count is entitled "A., Trustee," it has been held that subsequent de-
. posits, under the circumstances just narrated, will be credited to
the trust funds. ^° And it has been held that where a trustee has a
mixed account, and has on hand trust funds not deposited, and lat-
er deposits in the mixed account an amount equal to the trust funds
which he was holding, it will be presumed that the funds so depos-
ited were trust funds or trust fund replacements.^^ And, of course,
there may be a restoration of misapplied trust funds by express ac-
tion, as where a defaulting trustee uses his own money to buy
land in his own name but with the express intent of making
a restoration.^^ The principal doctrine regarding subsequent
deposits is thus stated by the Supreme Court ^* "Where one
:

has deposited trust funds in his individual bank account, and

the mingled fund is at any time wholly depleted, the trust fund is

8 James Eoscoe (Bolton), Ltd., v. Winder, [1915] 1 Ch. 62 ; Mercantile

Trust Co. V. St.Louis & S. F. R. Co. (C. C.) 99 Fed. 485; Board of Com'rs
of Crawford County, Ohio, v. Strawn, 157 Fed. 49, '84 C. O. A. 553, 15 L. E.
A. (N. S.) 1100; In re M. E. Dunn & Co. (D. C.) 193 Fed. 212; Covey v.
Cannon, 104 Ark. 550, 149 S. W. 514; Hewitt v. Hayes, 205 Mass. 356, 91 N.
B. 332, 137 Am. St. Eep. 448. But see contra. In re T. A. Mclntyre & Co.,
181 Fed. 960, 104 C. C. A. 424; State Sav. Bank v. Thompson, 88 Kan. 461,
128 Pac. 1120. Supreme Lodge of Portuguese Fraternity of United States
V. Liberty Trust Co., 215 Mass. 27, 102 N. E. 96 (where the withdrawal was
a mistake and the subsequent deposit was expressly made as a replacement,
is a different case).
» Schuyler v. Littlefield, 232 U. S. 707, 34 Sup. Ct. 466, 58 L. Ed. 806, af-
firming decrees in In re Brown, 193 Fed. 24, 113 C. C. A. 348, and In re
A. O. Brown & Co., 193 Fed. 30, 113 C. C. A. 354.
10 United Nat. Bank of Troy v. Weatherby, 70 App. Div. 279, 75 N.
Y. Supp. .3.
n JefCray v. Towar, 63 N. J. Eq. 530, 53 Atl. 182; Baker v. New Xork
Nat. Exch. Bank, 100 N. Y. 31, 2 N.\E. 452, 53 Am. Rep. 150.
12 Houghton V. Davenport, 74 Me. 590.
13 Schuyler v. Littlefield, 232 U. S. 707, 710, 34 Sup. Ct 466, 58 L. Ed. 806.
§ 124) RECOVERY OF THE TRUST RES OR ITS SUBSTITUTE 527

thereby dissipated, and cannot be treated as reappearing in sums

subsequently deposited to the credit of the same account."
As a result of the presumptions regarding withdrawals and de-
posits which have just been discussed, it follows that the cestui que
trust can never recover from a mixed account a sum greater than
the lowest balance since the admixture of the funds. Thus, if trus-
tee A. have an account standing in his own name in a bank, contain-
ing $1,000 of his own funds, and he deposits $1,000 of trust funds
in the account on January 1st, makes deposits of his own moneys
and withdrawals for his own benefit until July 1st, when he is de-
clared a bankrupt, and when the balance in the account is $1,500,
the cestui's right to follow his money into the claim against the bank
will depend upon the state of the account between January and
July 1st; and if it appear that on March 1st the account had been
reduced to $500, the beneficiary will be confined to the recovery of
that amount.^* The sums added to the fund since March 1st do not
benefit the cestui, for they are not deemed to be restorations of the
trust money; and after the balance went below $1,000 it is obvious
that the trustee must have been withdrawing and dissipating trust
funds.
—
Degree of Identification Required (a) Specific Property Rule
Neither the number nor the character of the changes which have
affected the trust property will prevent the cestui que trust from
following it, if he can make sufiScient identification.^" If the trust
property is money and it has been mixed with other money, the
beneficiary need not identify particular coins and bills in order to
establish a right to trace his property; it is sufficient if he show that
his money has gone into a certain fund and remained there.^*

14 Schuyler v. Littlefield, 232 U. S. 707, 34 Sup. Ct. 466, 58 L. Ed. 806;

Mercantile Trust Co. v. St. Louis & S. F. Ey. Co. (C. C.) 99 Fed. 485;
Board of Com'rs v. Patterson (C. C.) 149 Fed. 229; Board of Com'rs of
Crawford County, Ohio, v. Strawn, 157 Fed; 49, 84 C. C. A. 553, 15 L. R. A. (N.
S.) 1100; Southern Cotton Oil Co. v. ElUotte, 218 Fed. 567, 184 C. C. A.
295; Covey v. Cannon, 104 Ark. 550, 149 S. W. 514; Hill v. Miles, 83 Ark.
486, 104 S. W. 198; Powell v. Missouri & Arkansas Land & Mining Co., 99
Ark. 553, 139 S. W. 299 Porter v. Anglo & London Paris Nat. Bank of San
;

Franciso, 36 Cal. App. 191, 171 Pac. 845; Hewitt v. Hayes, 205 Mass. 356,
91 N. E. 332, 137 Am. St. Rep. 448; Gray v. Board of Sup'rs of Tompkins
County, 26 Hun (N. Y.) 265, affirmed 93 N. Y. 603 ; Cole v. Cole, 54 App.
Div. 37, 66 N. Y. Supp. 314; Chase & Baker Co. v. Olmsted, 93 Wash. 306,
160 Pac. 952. Contra: Myers v. Board of Education, 51 Kan. 87, 32 Pac.
658, 37 Am. St. Rep. 263.
IB Bostwick-Gooddell Co. v. Wolff, 19 Ga. App. 61, 90 S. E. 975.
16 Western German Bank v. Norvell, 134 Fed. 724, 69 C. C. A. 330; School
Trustees v. Kirwin, 25 111. 62 (orig. ed. p. 73) Shopert v. Indiana Nat. Bank
; i

41 Ind. App. 474, 83 N. E. 515;' Farmers' & Mechanics' Nat. Bank v. King,
 : ;;

528 THE REMEDIES OF THE CESTUI QUE TRUST (Ch. 14

The great majority of the courts which have considered the de-
gree of identification required have held that the cestui que trust
must be able to trace the trust res to some particular piece of prop-
erty, and that proof that the trust res or its substitute is located
at some unknown place among the assets of the trustee is not sat-
isfactory. The trust fund must be traced into a particular bond,
or tract of land, or bank account, for example. As said by Lewis,
J., in Thompson's
Appeal " "Whenever a trust fund has been
wrongfully cofiverted into another species of property, if its iden-
tity can be traced, it will be held, in its new form, liable to the rights
of the cestui que trust. No change in its state and form can divest
it of such trust. So long as it can be identified either as the original
property of the cestui que trust, or as the product of it, equity
will follow it ; and the right of reclamation attaches to it Until de-
tached by the superior equity of a bona fide purchaser, for a val-
uable consideration, without notice. Th6 substitute for the original
thing follows the nature of the thing itself so long as it can be as-
certained to be such. But the right of pursuing it fails when the
means of ascertainment fail." This same rule is expressed thus in a
Massachusetts case " "The court will go as far as it can in thus
:

tracing and following trust money but when, as a matter of fact,

;

it cannot be traced, the equitable right of the cestui que trust to fol-

low it fails. Under such circumstances, if the trustee has become

bankrupt, the court cannot say that the trust money is to be found
somewhere in the general estate of the trustee that still remains
he may have lost it with property of his own, and in such case the
cestui que trust can only come in and share with the general cred-
itors." This rule requiring the cestui to trace his trust property to
specific property, rather than to rely on a mere general lien or in-
terest in the whole estate of the trustee, has been applied in many

57 Pa. 98 Am. Dec. 215; Wulbern v. Timmons, 55 S. C. 456, 33 S.

.202,
E. 568. See Scott, The Klght to Follow Money Wrongfully Mingled with
Other Money; 27 Harv. L. B. 125.
"22 Pa. 16, 17.
18 Little V. Chadwick, 151 Mass. 109, 110, 111, 23 N. B. 1005, 7 L. R. A.
570.
19 Illinois Trust & Savings Bank v. First Nat. Bank (C. C) 15 Fed. 858;
American Can Co. v. Williams, 178 Fed. 420, 101 C. O. A. 634; Bettendorf
Metal Wheel Co. v. P. P. Mast & Co., 187 Fed. 590, 109 C. C. A. 420 In re
;

'Brown, 193 Fed. 24, 113 C. C. A. 348, affirmed sub nom. First Nat. Bank
of Princeton, 111., v. Littlefield, 226 U. S. 110, 33 Sup. Ct. 78, 57 h. Ed. 145
In re Larkin & Metcalf (D. C.) 202 Fed. 572 ; In re See, 209 Fed. 172, 126
C. O. A. 120; State Bank of Winfield v. Alva Security Bank, 232 Fed.
847, 147 C. C. A. 41; Parker v. Jones' Adm'r, 67 Ala. 234; Goldthwaite v.
 ;

§ 124) RECOVERY OP THE TRUST KES OR ITS SUBSTITUTE 529

In the following illustrative cases the courts have held that, un-
der the specific property rule, the cestui que trust identified the
property sufficiently to enable. him to follow it: Where the cestui
sent money to the bankrupt to enable the latter to buy cotton for
the former, and the bankrupt bought some cotton, used some of the
funds for his own purposes, employed some of his own funds to
buy cotton for the beneficiary, and placed all the cotton in a ware-

Ellison, 99 Ala. 497, 12 Sduth. 812; Hutchinson v. National Bant of Com-

merce, 145 Ala. 196, 41 South. 143; Lummus Cotton Gin Co. v. Walker, 195
Ala. 552, 70 South. 754; Korrick v. Robinson (Ariz.) 180 Pac. 446; Hill
V. Miles, 83 Ark. 486, 104 S. W. 198; Red Bud Realty Co. v. South, 96
Ark. 281, 131 S. W. 340; School Trustees v. Kirwln, 25 111. 73; Wethereli
V. O'Brien, 140 111. 146; Seiter's Estate v. Mowe, 182 111. 351, 55 N. E.
526; Hauk v. Van Ingen, 196 111. 20, 63 N. E. 705; RicheUeu Hotel Co.
V. Miller, 50 111. App. 390; Kneisley v. Weir, 81 111. App. 251; Moninger
V. Security Title & Trust Co., 90 111. App. 246; Arnold Inv, Co. v. Citi-
zens' State Bank of Chautauqua, 98 Kan. 412, 158 Pac. 68, h. R. A. 1916F,
822; McCormick v. McCormiek's Adm'r (Ky.) 121 S. W. 450; Goodell v.
Buck, 67 Me. 514; Portland & H. Steamboat Co. v. Locke, 73 Me. 370;
Cushman v. Goodwin, 95 Me. 353, 50 Atl. 50; Gault v. Hospital for Con-
sumptives of Maryland, 121 Md. 591, 89 Atl. 105; Lowe v. Jones, 192 Mass.
94, 78 N. E. 402, 6 L. R. A. (N. S.) 487, 116 Am. St. Rep. 225, 7 Ann. Cas.
551; Hewitt V. Hayes, 205 Mass. 356, 91 N. E. 332, 137 Am. St. Rep. 448;
Board of Fire & Water Com'rs of City of Marquette v. Wilkinson, 119 Mich.
655, 78 N. W. 893, 44 L. R. A. 493; Watson v. Wagner, 202 Mich. 397, 168
N. W. 428 ; Neely v. Rood, 54 Mich. 134, 19 N. W. 920, 52 Am. Rep. 802
Twohy Mercantile Co. v. Melbye, 83 Minn. 394, 86 N. W. 411; Morrison v.
Kinstra, 55 Miss. 71 ; Phillips v. Overfield, 100 Mo. 466, 13 S. W. 705 ; Pear-
son V. Haydel, 90 Mo. App. 253; City of Lincoln v. Morrison, 64 Neb. 822,
90 N. W. 905, 57 L. R. A. 885 EUicott v. Kuhl, 60 N. J. Eq. 383,' 46 Atl.
;

945; Heinisch v. Pennington, 73 N. J. Eq. 456, 68 Atl. 233; Pierspn v. Phil-

lirfs, 85 N. J. Eq. 60, 95 Atl. 622; Van Alen v. American Nat. Bank, 52 N.
Y. 1; Ferris v. Van Vechten, 73 N. Y. 113; Welch v. Polley, 177 N. Y.
117, 69 N. E. 279; Brown v. Spohr, 180 N. Y. 201, 73 N. E. 14; JafCe v.
Weld, 155 App. Div. 110, 139 N. Y. Supp. 1101; People v. Bank of Dans-
ville, 39 Hun (N. Y.) 187; Virginia-Carolina Chemical Co. v. McNair, 189
N. C. 326, 51 S. B. 949; Widman v. Kellogg, 22 N. D. 396, 133 N. W. 1020,
39 L. R. A. (N. S.) 563; Muhlenberg v. Northwest Loan & Trust Co., 26
Or. 132, 38 Pac. 932, 29 L. R. A. 667; Ferchen v. Arndt, 26 Or. 121, 37 Pac.
161, 29 L. R. A. 664, 46 Am. St. Rep. 603; Dunham v. Siglin, 39 Or. 291, 64
Pac. 661; Appeal- of Thompson, 22 Pa. 16; Appeal of Cross, 97 Pa. 471;
McLaughlin v. Fulton, 104 Pa. 161; Commonwealth v. Tradesmen's Trust
Co., 250 Pa. 372, 95 Atl. 574; Appeal of Hopkins (Pa.) 9 Atl. 867; Groff
V. City Savings Fund & Trust Co., 46 Pa. Super. Ct. 423; Slater v. Orien-
tal Mills, 18 R. L 352, 27 Atl. 443 ; Buist v. Williams, 88 S. C. 252, 70 S. E.
817; Continental Nat. Bank v. Weems, 69 Tex. 489, 6 S. W. 802, 5 Am. St.
Rep. 85; Texas Moline Plow Co. v. Kingman Texas Implement Co., 32 Tex.
Civ. App. 343, 80 S. W. 1042; Hoopes v. Ma this, 40 Tex. Civ. App. 121, 89
S. W. 36; Waddell v. Waddell, 36 Utah, 435, 104 Pac. 743; Kent v. Kent,
50 Utah, 48, 165 Pac. 272; Overseers of Poor of Norfolk v. Bank of Virginia',
BOGEET TETJSTS —34
530 THE REMEDIES OP THE CESTUI QUE TBUST (Ch. 14

house belonging to the cestui que trust; ^" where an agent to op-
erate a store used the proceeds of sales to buy land, taking title in
his own name, the land clearly might be followed as the substitute
for the trust res "^ where trust money was used to purchase a drug
;

store which was conducted by the trustee in his own name for four
years it was held that, notwithstanding the shifting stock, the trust
funds were sufficiently identified as being in the store ^^ where ;

trust moneys were used to pay off a mortgage, it has been held that
the cestui que trust could not trace the funds into the land, but
would be entitled to have a lien on the land in his favor; ^* where
a trustee used trust funds to pay insurance premiums on a policy of
life insurance on his own life, payable to his wife, it has been held
that the cestui could trace the trust funds into the proceeds of the
policy upon the death of the trustee.^*
On the other hand, the identification has been held to be defec-
tive where there was merely a showing of the receipt of the trust
funds, their misappropriation, and the death of the trustee leaving
an estate ^° where the proof showed $1,400 of the trust money
;

invested in the trustee's mercantile business^ that the trustee for five
years did an annual business of $10,000, and that at the end of the
five years he died leaving a stock worth less than $1,000; ^° where
the trustee had $10,000 in trust -funds, used it indiscriminately
in his business, and the money was not shown to have gone into
any particular remaining property ^'^ and where a draft was de-
;

posited for collection, was collected, and the proceeds used to pay
the debts of the collecting bank.^*
The payment of interest on the trust fund by the trustee till his
death is strong evidence that he had the fund among his assets

2 Grat. (Va.) 544, 44 Am. Dec. 399; Watts v. Newberry, 107 Va. 233, 57
S. E. 657; Chase & Baker Co. v. Olmsted, 93 Wash. 306, 160 Pac. 952;
Gianella v. Momsen, 90 Wis. 476, 63 N. W. 1018; Burnham v. Barth, 89
Wis. 362, 62 N. W. 96; Emigh v. Earling, 131 Wis. 565, 115 N. W. 128,
27 L. K. A. (N. S.) 243; State v. Foster, 5 Wyo. 199, 38 Pac. 926, 29 L. E. A.
226, 63 Am. St. Rep. 47. See Williston, The Right to Follow Trust Prop-
erty When Confused with Other Property, 2 Harv. Law Rev. 28.
20 Southern Cotton Oil Co. v. BlUotte, 218 Fed. 567, 134. 0. C. A. 295.
21 Atkinson v. Ward, 47 Ark. 533, 2 S. W. 77.
22 Byrne v. McGrath, 130 Cal. 316, 62 Pac. 559, 80 Am. St. Rep. 127. But
see Byrne v. Byrne, 113 Cal. 294, 45 Pac. 536.
28 Standish v. Babcock, 52 N. J. Eq. 628, 29 Atl. 327.
24 Holmes v. Gilman, .138 N. Y. 369, 34 N. B. 205, 20 L. R. A. 566, 34 Am.
St. Rep. 463.
25 Holden v. Piper, 5 Colo. App. 71,. 37 Pac. 34.
2 8 Robinson v. Woodward, 48 S. W. 1082, 20 Ky. Law Rep. 1142.
27 Little V. Chadwick, 151 Mass. 109, 23 N. E. 1005, 7 L. R. A. 570.
2 8Nonotuck Silk Co. v. Flanders, 87 Wis. 237, 58 N. W. 383.
 I

§ 124) EECOVERT OF THE TRUST RES OR ITS SUBSTITUTE 531

at his death.^' If the trustee can follow the trust funds, even though
the property into whicji he is able to trace them is now worthless,
he will be obliged to accept such worthless property, if he wishes
to seek a remedy in rem, and cannot have a lien on the general as-
sets of the trustee.^"
Where the trust res is money, and the trustee invests it and his
own funds in property, the cestui que trust may claim a charge
thereon for his money, or he may demand a proportionate interest in
the property, on the basis of a constructive trust.*^' This righ~t to
a lien or the property itself has been previously stated.'''
Degree of Identification Required — (b) "Increased Assets" Theory
A few courts in Western states have held that the cestui que trust
might trace and recover his property, if he could show that the
assets in the hands of the trustee at his death or bankruptcy had
been "swelled" or increased by the use of the trust property, even
though no particular piece of property could be pointed to as the
product of the trust res. Their theory seems to have been that,
if the estate of the trustee was larger because of the uSe of the trust

property, then the cestui que trust ought to have a specific lien on
the estate, a preference over general creditors of the trustee. Thus,
in the Kansas case of Peak v. Ellicott '* a bank received money to
pay a note, used the money for its own purposes, there was no proof
that the trust fund was in the assets of the bank at its insolvency,
and yet the cestui was allowed a preference and recovery of the
full amount deposited, apparently on the theory that the use of his
money to pay checks on the bank had freed other money of the
bank which was to be found in the insolvent bank's assets. And in
a later case in the same state °* a treasurer of a school board wrong-
fully deposited school moneys in the bank of which he was manager,
the funds of the l^ank later became reduced below the amount of
the school fund, and the cestui was allowed the entire fund on hand
at the time of the bank's failure, although obviously there could be
no tracing into specific property; the court saying: "As the es-
tate was augmented by the conversion of the trust funds, no reason
is seen, under the equitable principle which has been mentioned,

2 In re Holmes, 37 App. Div. 15, 55 N. Y. Supp. 70S, affirmed 159 N, Y.

532, 53 N. B. 1126.
n/o Getting V. Berry, 50 Colo. 217, 114 Pac. 641.
81 Primeau v. Granfleld (C. C.) 184 Fed. 480.
32 See ante, § 122.
33 30 Kan. 156, 1 Pac. 499, 46 Am. Eep. 90. See, also, Ellicott v. Barnes,
31 Kan. 170, 1 Pac. 767.
Si Myers 7. Board of Education, 51 Kan. 87, 32 Pac 658, 37 Am. St. Rep,
263.
532 THE REMEDIES OF THE CESTUI QUE TRUST (Ch. 14

why they should not become a charge upon the entire estate."
And '" tracing was allowed and recovery from
in a Missouri case
the general property of the trustee granted where the trustee had
deposited trust funds in a private bank account, checked out all
but a trifling sum, and then became insolvent. In a recent Montana
case °* county funds were wrongfully deposited in a bank, which
resulted in making the bank a trustee of them, and recovery by the
county of the entire balance due on the county account was allowed
out of the assets of the insolvent bank, regardless of the state of
the bank's cash account between the date of deposit and the date of
failure; the court saying that it was sufficient to justify recovery
that the trust fund "enhanced the apparent value of the bank's total
assets." A case similar to that last mentioned is State v. Bruce,"'
in which were wrongfully deposited in a bank; became
state funds
thereby a trust fund in the bank's hands, were paid out to cancel
checks and expenses of the bank, and yet the cestui was allowed a
lien on all the property of the bank at the time of its insolvency,
and not merely on the cash on hand in the bank.
This theory that mere proof of benefit to the estate of the trustee
is sufficient to allow tracing has been accepted by a small number
of other courts.'" The Supreme Court of Idaho has explained the
reasoning on which it founds this rule in the following words "' :

"It is conceded that it [the trust money] went into the general
funds of the bank, and was paid out from day to day, together with
general deposits, on the checks of depositors and in the purchase
of securities and other assets. No pretense is made by the bank or
its receiver that thismoney was embezzled, stolen, or dissipated.
It was used due course of business as transacted by the bank.
in the
It is also conceded that no part of this fund can be traced into any

86 Evangelical Synod <rf North America v. Schoenelcb, 143 Mo. 652, 45

S. W. 64T.
36 TeUowstone County v. First Trust & Savings Bank, 46 Mont. 439, 128
Pact 596.
8T 17 Idaho, 1, 102 Pac. 831, L. E. A. 19160, 1, 134 Am. St. Eep. 245.
Hopkins v. Burr, 24 Colo. 502, 52 Pac. 670, 65 Am. St. Rep. 238; In
»8

re Knapp, 101 Iowa, 488, 70 N. W. 626; Bradley v. Chesebrough, HI Iowa,

126, 82 N. W. 472; Hubbard v. Alamo Irrigation & Mfg. Co., 53 Kan. 637,
36 Pac. 1053, 37 Pac. 625; Kansas State Bank v. First State Banlc, 62
Kan. 788, 64 Pac. 634; Carley v. Graves, 85 Mich. 483, 48 N. W. 710, 24
Am. St. Rep. 99; Stoller v. Ooates, 88 Mo. 514; McColl v. Fraser, 40 Hun
(N. Y.) Ill; Deering Harvester Co. v. Keifer, 20 Ohio Cir. a. K. 311;
Piano Mfg. Co. v. Auld, 14 S. D. 512, 86 N. W. 21, 86 Am. St. Rep. 769;
McLeod V. Evans, 66 Wis. 401, 28 N. W. 173, 214, 57 Am. Rep. 287.
39 State V. Bruce, 17 Idaho, 1, 102 Pac. 831, 833, L. R. A. 1916C, 1, 134
Am. St. Rep. 245.
§ 124) BECOVEBT OF THE TEUST BES OB ITS SUBSTITUTE 533

particular securities, paper, or assets. The bulk of it was doubtless

paid out on depositors* checks during the closing days the bank did
business, and while it was struggling to maintain its credit and to
continue business. We
fail to see what difference it can make in
point of fact, reason, or law whether the money was used in buying
bonds, mortgages, and other paper to add to the general assets of
the bank, or in discharging the debts of the bank. In either event,
it adds to or appreciates the body and value of the bank's assets.

If the money is used to-day to pay the bank's debts, and it sus-
pends business to-morrow, the indebtedness of the bank will be just
as much less than it would otherwise have been as the amount paid
out represents." ^

But the latest cases in Idaho, Iowa, Kansas, Michigan, Mis-

souri, Nebraska, and Wisconsin have either completely abandoned
the "swelling assets" theory and accepted the "specific property"
rule, or have so modified and limited the "swelling assets" doctrine
as to make it differ from the opposing rule only in words. It is now
quite generally held that proof that the trust property was used to
pay debts or expenses of the trustee, and that thus his general estate
has been relieved is not sufficient to allow tracing into the general
assets.*" Thus, in Bellevue State Bank v. Coffin,*^ the A. bank pro-
cured a loan from the B. bank by fraud, the A. bank used the mon-
ey to pay checks and other debts, and on the insolvency of the A.
bank it was held that the B. bank had no preferred claim or right to
trace the trust funds undfer a constructive trust, the court main-
taining that a use to discharge indebtedness did not constitute an
increase in the assets. It quoted with approval the present Kansas
rule, as stated in Travelers' Ins. Co. v. Caldwell,*^ as follows:
"The fund itself, or something into which it has gone and which
stand's as its representative, mu^t be on hand, subject to identifica-

«o Bellevue StateBank v. Coffin, 22 Idaho, 210, 125 Pac. 816; Farnsworth

V. Muscatine Produce & Pure Ice Co., 177 Iowa, 21, 158 N. W. 741; Trav-
elers' Ins. Co. V. Caldwell, 59 Kan. 156, 52 Pac. 440; Midland Nat. Bank of
Kansas City v. Brightwell, 148 Mo. 358, 49 S. W. 994, 71 Am. St. Rep.
608; board of Fire & Water Com'rs of City of Marquette v. WUkinson,
119 Mich. 655, 78 N. W. 893, 44 L. K. A. 493; Bircher v. Walther, 163
Mo. 461, 63 S. W. 691; Meystedt v. Grace, 86 Mo. App. 178; City of Lin-
.coln V. Morrispn, 64 Neb. 822, 90 N. W. 905, 57 L. R. A. 885; Burnham
v. Barth, 89 Wis. 362, 62 N. W. 96.
*i22 Idaho, 210, 125 Pac. 816, 821.
*2 59 Kan, 156, 158, 52 Pac. 440. For similar statements of the present
rule in these states, see opinion of Roscoe Pound, C, in City of Lincoln
V. Morrison, 64 Neb. 822, 829, 90 N. W. 905, 57 L. R. A. 885, and Arnold
Inv. Co. V. Citizens' State Bank of Chautauqua, 98 Kan. 412, 158 Pac 68
L. B. A. 1916F, 822.
 ;

534 THE REMEDIES OF THE CESTUI QUE TRUST '

(Ch. 14

tion, and separable from the general assets, in order to charge the
assignee with the trust; or, if the fund has been so commingled
with the general assets as to be incapable of identification or trac-
ing, the estate which came to the assignee must have been augr
mented pr bettered, in an appreciable and tangible way, in order to
charge it with the trust. The mere saving of the estate by the dis-
charge of general indebtedness otherwise payable out of it, or by
the payment of current expenses of the business, is not an augmen-
tation or betterment of the estate, within the meaning of the rule.
If the estate has not been' increased by specific additions to it, or if
what previously existed has not been improved or rendered more
valuable, it has not been impressed with the trust claimed."
The fallacy of the "increased assets" theory was in its failure to
recognize that a trust requires specific property as its subject-mat-
ter, and that the very essence of ^the cestui's right to follow is his
ability to point to the trust res or its exact substitute. As a credi-
tor a cestui que trust is entitled to no preference over any other
creditor. It is only as a property owner that he is entitled to take
particular chattels or realty. The matter is illuminated by the
statements of Stiness, J., in Slater v. Oriental Mills *' "While
:

one who has been wronged may follow and take his own property,
or its visible product, it is quite a different thing to say that he may
take the property of somebody else. The general property of an
insolvent debtor belongs to his creditors, as much as particular
trust property belongs to a cestui que trust. Creditors have no
right to share in that which is shown not to belong to 'the debtor,
and conversely a claimant has no right to take from creditors that
which he cannot show to be equitably his own. But right here
comes the argument that it is equitably his own because the debtor
has taken the claimant's money and mingled it with his estate,
whereby it is swelled just so much. But, as applicable to all cases,
the argument is not sound. Where the property oc^its substantial
equivalent remains, we concede its force but, where it is dissipat-
;

ed and gone, the appropriation of some other property in its stead

simply takes from creditors that which clearly belongs to them.
In the former case, as in Pennell v. Deffell, 4 De G., M. & G. 372,
and In re Hallett's estate, Knatchbull v. Hallett, ly. B. 13 Ch. Div.
696, the illustration may be used of a debtor mingling trust funds
with his own in a chest or bag. Though the particular money can-
not be identified the amount is swelled just so much, and the amount
added belongs to the cestui que trust. But in the latter case there
is no swelling of the estate, for the money is spent and gone; or,

48 18 R. I. 352, 353, 27 Atl. 443.

 § 125) CONTROL OF, TRUST ADMINISTKATION 535

as respondent's counsel pertinently suggests, 'Knight Bruce's chest,

Jessel's bag, is empty.' Shall we therefore order a like amount to
be taken out of some other chest or bag, or out of the debtor's gen-
eral estate?"
It may be noticed that many of the earlier cases in which the
"increased assets" rule was applied were cases where public funds
were in dahger of being lost and the temptation to prefer the pub-
lic claim to private creditors perhaps caused the courts to strain the
law and the logic of the situation.

CONTROL OF TRUST ADMINISTRATION

125. On the application of cestui que trust equity will control the
administration of the trust for his benefit by appointing or
removing a trustee, appointing a receiver, decreeing an ac-
count, directing the specific performance of the trust, en-
joining a threatened breach, setting aside unlawful acts,
and in many other ways compelling the execution of the
trust according to its terms.

The remedies of cestui que trust stated in the preceding para-

graphs have had to do with the recovery of the trust property or
its substitute, or of money, from the trustee or a third person, fol-
lowing a breach of the trust. But the beneficiary also has many
remedies connected with the enforcement of the trust. Equity will
decree the performance of acts necessary to carry out the trust and
will enjoin the commission of breaches of the trust. The decrees in
this latter class of cases do not direct the payment of money or the
delivery of property, but rather control the administration of the
, trust, compel the performance of acts in execution of it, and pro-
hibit the taking of steps which would be prejudicial to the interests
of cestui que trust or would be breaches of the trust. The remedies
which may thus be granted to the cestui are only limited by the
jurisdiction and power of chancery. No attempt at a complete
capitulation of these remedies can be made, but examples are given
to illustrate their nature.
Under this heading comes the right of the cestui que trust to
apply for the appointment of a trustee,** as in the case where none
has been lawfully appointed, or where the trustee has disappear-
ed.*' Equity will also remove the trustee on cause shown,** and

4* Howard v. Gabert, 39 Ala. 726 ;Wilson v. Euss, 17 Fla. 691. See dis-
cussion of the appointment of a trustee, ante, § 82. .

*ti Beachey v. Heiple, 130 Md. 683, 101 Atl. 553.

*8 Lasley's Ex'r v, Lasley, 1 Duv. (Ky.) 117. iSee, also, ante, § 80.
 .

536 THE REMEDIES OF THE CESTUI QUE TRUST (Ch. 14

if the trust fund is in danger- will appoint a receiver, either pending

the determination of the action, or for an indefinite period.*^ "It
is said that the appointing of a receiver rests in discretion. This
proposition does not teach much. A
receiver is proper, if the fund
is in danger; and this principle reconciles the cases found in the
books. There is no case, in which the court appoints a receiver,
merely because the measure can do no harm; and still less, when
the trustee is such under the appointment of a testator." ** The
doctrine regarding receivers has been thus stated by a Georgia
court: *° "Besides it is an established rule of the Court of Chancery
that, when a trust fund is in danger of being wasted or misapplied,
it will interfere on the application of those interested in the fund,

and by the appointment of a receiver, or in some other mode, secure

the fimd from loss."
If the cestui que trust cannot lay hands on the trust property,
he may bring a'^bill of discovery; °" if he is ignorant of the status
of the trust, he is entitled to a decree compelling the trustee to give
him information or to account;"^ if there has been misbehavior
by the trustee and the solvency of the trustee's bond is doubtful,
the beneficiary may have an inquiry into such solvency.^''
While equity will not interfere with the discretion of the trustee,
except when necessary,"* if there is no discretion, or the discretion
is not honestly or prudently exercised, the cestui que trust may
obtain a decree compelling the trustee to perform a specific act, as,
for example, to exercise a power of sale,"* or directing the trustee
to perform the trust generally.""* If the trust is passive, or for

*7 HagenbeckHagenbeck Zoological Arena Co. (C. C.) 59 Fed. 14;

v.
Hogg V. Hoag 80 Fed. 595; Vose v. Reed, 1 Woods, 647, Fed. Cas.
(C. O.)
No. 17,011; Calhoun v. King, 5 Ala. 523; Jones v. Dougherty, 10 Ga. 273;
Gale V. Sulloway, 62 N. H. 57; Bowling v. Scales, 2 Tenn. Ch. 63; Mc-
Candless v. Warner, 26 W. Va. 754.
* 8 Orphan Asylum Society v. McCartee, Hopk. Ch. (N. Y.) 429, 435.
48
Jones V. Dougherty, 10 Ga. 273, 287, 288.
Ferguson v. Rogers, 129 Ark. 197, 195 S. W. 22
60 ; Indian Land & Trust
Co. V. Owen (Okl.) 162 Pac. 818.
SI Alexander v. Fidelity Trust Co., 249 Fed. 1, 161 C. C. A. 61; Peters
V. Rhodes, 157 Ala. 25, 47 South. 183; Green v. Brooks, 81 Cal. 328, 22 Pac.
849; People v. Bordeaux, 242 111. 327, 89 N. E. 971; Dodge v. Black, 53
S. W. 1U39, 21 Ky. Law Rep, 992 ; Taf t v. Stow, 174 Mass. 171, 54 N. E.
506. See § 104, ante.
02 Walker v. Sharpe, 71 N. C. 257.
08 Cochran v. Paris, 11 Grat. (Va.) 348.
B4 Vrooman v. Virgil, 81 N. J. Bq. 301, 88 Atl. 372.
06 Callis V. Ridout, 7 Gill & J. (Md.) 1; Associate Alumni, etc., v. General
Theological Seminary, 163 N. Y. 417, 57 N. E. 626; Griflen v. Ford, 14 N.
Y. Super. Ct 123.
 ;
;

§ 125) CONTEOL OF TRUST ADMINISTRATION 537

Other reason no good will come from its maintenance, the cestui
may obtain a decree for a conveyance to him of the trust res."'
Instances in which equity has, at the instance of the cestui que
trust, enjoined the performance of a specific act on the ground that
it would be a breach of the trust, or at least prejudicial to the cestui

que trust, are found in the following cases: Where the making
of an oil and gas lease would constitute waste as to a remainderman
cestui; "^ where the transfer or incumbrance of the trust property
or its substitute has been prohibited "' and where the act enjoined
;

has been the misappropriation of the trust funds,"' the submission

of a question to arbitration,*" the voting of stock in a particular
way,'^ or the prosecution by persons denying the trust of an action
to recover the trust rfes.*'' If the trust funds are jeopardized, the
trustee may be compelled to give a bond.** The trustee may also
' be directed to pay the funds into court pending litigation.**
The cestui que trust may also regulate the administration of the
trust by bringing a bill in equity to set aside wrongful acts of the
trustee.*" Thus, where a mother held property in trust for several
children, ''and through fraud and undue influence of one child she

58 Brainard Buck, 184 U. S. 99, 22 Sup. Ct. 458, 46 L. Ed. 449; Brissell
v.
V. Knapp 155 Fed. 809 Kirten v. Spears, 44 Ark. 166
(O. C.) ; : White v. Cos-
tigan, 138 Cal. 564, 72 Pac. 178; Bell v. Solomons, 142 Cal. 59, 75 Pac. 649;
MeVey v. McQuality, 97 111. 93; Coryell v. Klehm, 157 111. 462, 41 N. E. 864;
StaM V. Stahl, 220 111. 188, 77 N. E. 67; Stewart v. Chad wick, 8 Iowa, 463;
Crawford v. Ginn, 35 Iowa, 543 Oehler v. Walker, 2 Har. & G. (Md.) 323
;

Rector V. Hutchison, 7 Mo. 522 Hill v. Hill, 90 Neb. 43, 132 N. W. 738,' 38
;

L. R. A. (N. S.) 198; Hill v. Smith, 32 N. J. Eq. 473; McOuUoch v. Tomkins,

62 N. J. Eci. 262, 49 Atl. 474 Bradstreet v. Schuyler, 3 Barb. Ch. (N. Y.) 608
;

Krause v. Krause, 30 N. D. 54, 151 N. W. 991; Beatty v. Henry, 10 Phila.

(Pa.) 35; Chadwick v. Arnold, 34 Utah, 48, 95 Pac. 527; Hatfield v.~ Allison,
57 W. Va. 374,' 50 S. E. 729 Blake v. O'Neal, 63 W. Va. 483, 61 S. E. 410,
;

16 li. R. A. (N. S.) 1147.

5 7 Ohio Oil Co. V. Daughetee, 240 111. 361, 88 N. E. 818, 36 L. R. A.
(N S.)
1108.
5 8 Preston v. Walsh (C. C.) 10 Fed. 315; Beachey v. Heiple, 130 Md. 683,
101 Atl. 553; Chamberlain v. Eddy, 154 Mich. 593, 118 N. W. 499; Raleigh
V. Fitzpatrick, 43 N. J. Eq. 501, 11 Atl. 1 ; Depau v. Moses, 3 Johns. Ch. (N.
Y.) 349; Cohen v. Mainthow, 182 App. Div. 613, 169 N. Y. Supp. 889;
Hunt
V. Freeman, 1 Ohio, 490.
6 9 Coleman v. McGrew, 71 Neb. 801, 99 N. W. 663; Commonwealth
v. Bank
pf Pennsylvania, 3 Watts & S. (Pa.) 184.
60 Crum V. Moore's Adm'r, 14 N. J. Eq. 436, 82 Am. Dec.
262.
61 McHenry v. Jewett, 90 N. Y. 58, semble.
82 St. Luke's Hospital v. Barclay, 3 Blatchf. 259, Fed. Cas. .No.
12241
63 Starr v. Wiley, 89 N. J. Eq. 79, 103 Atl. 865.
8* Bullock V. Angleman, 82 N. J. Eq. 23, 87 Atl. 627.
65 Towle V. Ambs, 123 lU. 410, 14 N. E. 689 Leiper v. Hoffman, 26 Miss.
;

615; Johns v. Williams, 66 Miss. 350, 6 South. 207; Price T. Estill, 87 Mo!
538 THE EEMEDIES OP THE CESTUI QUE TRUST (Ch. 14

was induced to transfer the trust property to such child, the re-
maining children may maintain a suit to set aside the wrongful
deed and to obtain a reconveyance to the mother."' And a settlor
cestui has been allowed to maintain a suit to set aside the trust
deed, when breaches of the trust had occurred."

REMEDY BARRED BY ACT OR OMISSION OF CESTUI

QUE TRUST
126. An act of the cestui que trust may bar his remedy, as where
he expressly releases his claim, or elects to take an alter-
native remedy, or consents to a wrongful act in advance
or approves it after its commission, or in any other way
conducts himself so as to render it inequitable to grant him
relief.
Regardless of statutes of limitation, if the cestui que trust, with-
out reasonable excuse, fails to assert his right and seek his
remedy for a certain period, and because of thiS' inaction
the position of the cestui que trust's opponent is preju-
diced, the cestui que trust may be held guilty of laches,
and his remedy regarded as barred.

Having, next preceding, considered the remedies

in the sections
available to the cestui que trust upon the breach of the trust or in
aid of its enforcement, the methods by which such remedies may
be lost, barred or destroyed ^vill now be discussed.
Remedy Barred by Acts of Cestui Que Trust
A large number of confusing and ill-defined terms have come into
use in connection with the barring or destruction of rights. Courts
and text-writers have joined in using in different senses and with
different implications such words as "release," "waKver,"- "election,"
"acquiescence," "adoption," "ratification," "confirmation," "estop-
pel," and "laches." The hopeless confusion in the use of the word
"waiver" has been strikingly shown by an eminent author." It is
believed that clarity will ensue from the abandonment of these
terms as far as possible and the description of the a'cts which re-
sult as a bar, without trying to give them technical names.
At the outset it is obvious that the remedy of cestui que trust

.378; Walker v. Sharpe, 71 N. O. 257; Blake v. O'Neal, 63 W. Va. 483, 61 S.

a 410, 16 L. E. A. (N. S.) 1147. '

88 Reardon v. Reardon, 219 Mass. 594, 107 N. E. 522,

87 Koefoed v. Thompson, 73 Neb. 128, 102 N. W. 268.
68 Bwart, Waiver Distributed.
 ° ;

§.126) BAERED BY ACT OE OMISSION OF CESTUI QUE TEUST 539

may be barred either by his act or his failure to act. The destruc-
tion of his remedy by his positive conduct will be treated first.
The most direct way of barring his remedy is to execute a release
to the trustee or third person against whom he has the remedy. As
any one having a cause of action may discharge it, so it is elemen-
tary that the cestui que trust may contract to cancel his cause of
action; that is, may release.'* Thus, where the cestui has filed a
bill for an account, a compromise has been offered, and after an
examination of the accounts with the aid of attorneys the offer of
compromise is accepted and a release executed by the beneficiary
to the trustee, the cestui's remedy is clearly destroyed.'" parol A
release of a trust of lands has recently been held unenforceable be-
cause of the fourth section of the Statute of Frauds.''^
Releases by cestui que trust are of course subject to attack on
the ground of the lack of capacity of the cestui que trust, as, for
^

example, in the case of infancy '"' and they must be given with a
full knowledge of the facts, and without concealment or fraud, if
they are to be binding. '''
Blection
The cestui que trust may also do an act, which, while not in-
tended by him as a bar to his remedies under the trust, will be so
treated in equity because to do otherwise would be inequitable. In
such a case the beneficiary has placed himself and his opponent
in such positions that he cannot fairly ask equity to grant him the
remedy in question. Thus, the cestui que trust may have an elec-
tion between two remedies, and if he takes one he cannot thereafter
demand the other. His own conduct in taking the first remedy
has barred the second.'^* For example, if a trustee makes a void-
able sale of the trust property, the cestui has the option of accept-
ing the proceeds of such sale and treating it as valid or of seeking
to recover the res sold and avoiding the sale; and where he has
clearly shown his intention to adopt the former course, he has lost
the second remedy.'

«9 Ctocks V. Barlow, 5 Kedf. Sur. (N. t.) 406; Bearing v. Selrey, 50 W. Va.
4, 40 S. E. 478.
70 Forbes v. Forbes, 5 GUI (Md.) 29.
11 Hatcher v. Hatcher, 204 Pa. 105, 107 Atl. 660.
T2 Parker v. Hayes' Adm'r, 39 N. J. Eq. 469; Clark v. Law, 22 How. Prac.
(N. T.) 426.
Jones V. Lloyd, 117 111. 597, 7 N. B. 119; Huddleston v. Henderson, 181
T3
111.App. 176 Barton v. Fuson, 81 Iowa, 575, 47 N. W. 774 Appeal of Berry-
; ;

hill's Adm'x, 35 Pa. 245.

74 Wiswall V. Stewart, 32 Ala. 433, 70 Am. Dee. 549 Hyatt v. Vanneck, 82
;

Md. 465, 33 Atl. 972; Washburn t. Kainier, 149 App. Div. 800, 134 N. Y.
Supp. 301.
TsMarx v. Clisby, 130 Ala. 502, 30 South. 517. But such election is not
, 540 THE REMEDIES OF THE CESTUI QUE TRUST (Ch. 14

The cestui que trust may also bar hisremedy by consenting to

the alleged wrongful act in advance, or by requesting that the act
of which he now complains be done/' Thus, beneficiaries who
consent in advance to the continuance of a business by a trustee,^'
or to the making of a wrongful investment,'* may not thereafter
question the legality of the conduct of the trustee. This doctrine
was stated by Lord Eldon as follows:'* "It is established by all
the cases that if the cestui que trust joins with the trustees in that
which is a breach of the trust, knowing the circumstances, such a
cestui que trust can never complain of such a breach of trust. I go
further, and agree that either concurrence in the act, or acquies-
cence without original concurrence, will release the trustees.
* * * " And a Missouri court has stated the rule to be that "a
concurring and acquiescing cestui que trust is denied redress
against a defaulting trustee, on accouijt of any injury sustained by
the latter's misconduct at the former's request or with his ap-
proval." The court calls the basis Of the rule "waiver," rather than
estoppel, saying: "The true principle of such a decision is waiver;
the rule that where one party to a contract, or a party entitled to a
performance of a contract according to certain terms and condi-
tions, acts in such a manner as to lead the opposite party to be-
lieve strict performance of the terms will not be required, and there-
by induces the other party to act in a way that renders a strict per-
formance impossible, he is not permitted afterwards to insist on
the terms which he had waived." *'
Approval of Wrongful Act
After the breach of trust or other wrong to the cestui que trust
has been committed, he may approve or excuse the act in such a
way as to bar his remedy. Examples of the approval of wrongful
acts are frequent.'^ Thus, a cestui who joins in a petition to a
court to confirm a voidable act by a trustee will not be heard later

shown by inaction without knowledge of the right to set aside the transaction.
Branch v. Bulkley, 109 Va. 784, 65 S. B. 652.
7 8 Chirurg v. Ames, 138 Iowa, 697, 116 N. W. 865; Preble v. Greerileaf, 180
Mass. 79, 61 N. B. 808 Richards v. Keyes, 195 Mass. 184, 80 N. E. 812; New-
;

ton V. Eebenack, 90 Mo. App. 650 Town of Verona v. Peckham, 66 Barb. (N.
;

T.) 103; Sherman v. Parish, 53 N. Y. 483; Woodbridge v. Bockes, 59 App.

Div. 503, 69 N. T. Supp. 417, affirmed 170 N. T. 596, 63 N. B. 362; TJngrlch
V. Ungrich, 131 App. Div. 24, 115 N. Y, Supp. 413 ; Id., 141 App. Div. 485, 126
N. Y. Supp. 419.
11 Quimby v. Uhl, 130 Mich. 198, 89 N. W. 722.
7 8 In re Fidelity & Deposit Co. of Maryland, 172 Mich. 600, 138 N. W. 205.

7 Walker v. Symonds, 3 Swanst 1, 64.

80 Newton
Eebenack, 90 Mo. App. 650, 663, 670.
v.
81 Pope V. 339, 16 N. B. 262; Bennett v. Pierce,
Famsworth, 146 Mass.
188 Mass. 186, 74 N. E. 360; In re Armitage's Estate, 195 Pa. 582, 46 Atl.
117.
§ 126) BARBED BY ACT OB OMISSION OF CESTUI QUE TRUST 541

to question the act;*^ and, where the trustee has been guilty of
neglect of duty in delaying to bring suit, approval of the suit when
it isbrought will prevent the cestui que trust from holding the
trustee liable.*' "There is no illegality in a cestui que trust au-
thorizing an act which otherwise would be a breach of trust to-
wards himself, or in his releasing or agreeing to hold harmless his
trustee for such an act after **
it is done."
But when the cestiii que trust performs the act of approval he
must have full knowledge of the wrong which has been commit-
ted.*^ "To establish a ratification by a cestui que trust, the fact
must not only be clearly proved, but it must be shown that the
ratification was made with a full knowledge of all the material
particulars and circumstances, and also in a case like the present
that the cestui que trust was fully apprised of the eflfect of the acts
ratified, and of his or her legaLrights in the matter. Confirmation
and ratification imply, to legal minds, knowledge of a defect in the
act to be confirmed and of the right to reject or ratify it. The
cestui que trust must therefore not only have been acquainted with
the facts, but apprised of the law, how these facts would be dealt
with by a court of equity." **
The approval, ratification, or confirmation of the wrongful act
may not only be expressly given, but also impliedly, as where the
cestui que trust accepts the benefits of the wrongful act.*' Thus, a
beneficiary, who joins the trustee in a wrongful conveyance of the
trust property to a third person and thereafter takes the benefits of
such transfer, will clearly be barred from suing the trustee.**
The cestui's act may have caused the trustee to neglect his duty,
as where a beneficiary assured a trustee that he would pay the tax-
es and water rents, and as a result the trustee failed to look after
them. The cestui's act here barred his remedy against the trustee
for neglect of duty in failing to pay the taxes and water rentjs.*'

82 Richards v. Keyes, 195 Mass. 184, 80 N. B. 812.

S3 Ellig v. Naglee, 9 Cal. 683.
8* Pope V. Farnsworth, 146 Mass. 339, 344, 16 N. E. 262.
85 Luers t. Brunjes, 5 Redf. Sur. (N. Y.) 32 Smith v. Howlett, 29 App.
;

Div. 182, 51 N. Y. Supp. 1018; Smith v. Miller, 98 Va. 535, 37 S. E. 10.

8« Adair v. Brimmer, 74 N. Y. 539, 553-554.
ST Willis V. Holcomb, 83 Ohio St. 254, 94 N. E. 486; Farish
v. Wayman,
91 Va. 430, 21 S. E. 810; Trethewey v. Horton, 71 Wash. 402, 128 Pac. 632.'
But there must be knowledge of the unlawful nature of the act when the
benefits are accepted.
256.
St. Paul Trust Co.. v. Strong, 85 Minn. 1 88 N W
88 Hamilton v. Hamilton, 231 111. 128, 83 N. E. 125.
«» Vreeland v. Van Horn, 17 N. J. Eq. 137.
542 THE REMEDIES OF THE CESTUI QUE TRUST (Ch. 14

The beneficiary may make a claim which is inconsistent with a

trustand which will prevent a later enforcement of a trust. Thus,
one who has sought to obtain property as the heir of the legal title
holder will not be heard later to allege that such title holder was a
trustee for him.°"

Remedy Barred by Omissions of the Cestui Que Trust

The failure of the beneficiary to act, his delay in asserting his
rights, may This is the doctrine of "laches,"
also bar his remedy.
the following statement of which has been approved by the United
States Supreme Court "^ "But there is a defense peculiar to courts
:

of equity, founded on lapse of time and the staleness of the claim,

where no statute of limitations governs the case. In such cases,
courts of equity act upon their own inherent doctrine of discourag-
ing, for the peace of society, antiquated demands, refuse to inter-
fere where there has been gross laches in prosecuting the claim, or
long acquiescence in the assertion of adverse rights." Colorado A
court has stated that "The term 'laches,' in its broad legal sense,
:

as interpreted by courts of equity, signifies such unreasonable delay

in the assertion of and attempted securing of equitable rights as
should constitute in equity and good conscience a bar to recov-
»2
ery."
The defense of laches is independent of the statute of limitations.
The fact that a statutory period for the barring of causes of action
has been set, and that this period has not elapsed, does not prove
that the cestui que trust has not been guilty of laches. Delay for a
period far shorter than the statutory limit may be sufficient to de-
stroy the cestui's remedy."^ "Independently of any statute of lim-
itations, courts of equity uniformly decline to assist a person who
has slept upon his rights and shows no excuse for his laches in as-
serting them." »* But if the statutory period has expired there is a
strong presumption of laches."^
Laches may bar the remedy in the case of express as well as im-
plied trusts,'" but the courts are reluctant to apply the doctrine to

soWilUams v. Rlsor, 84 Ark. 61, 104 S. W. 547. See, also, Maggini v.

Jones, 223 Pa. 301, 72 Atl. 559.
»i Badger v. Badger, 2 Wall. 87, 94, 17 L. Ed. 836.
»^ Graff V. Portland Town & Mineral Co., 12 Colo. App. 106, 112, 54
Pac.
854.
»8 Nettles V. Nettles, 67 Ala. 599; Appeal of Evans, 81 Pa. 278.
»4 Speidel v. Henrlci, 120 377, 387, 7 Sup. Ct. 610,
XJ. S. 30 L. Ed. 718.
80 Taylor v. Coggins, 244 Pa. 228, 90 Atl. 633.
»6 Preston v. Horwitz, 85 Md. 164, 36 AU. 710.
 § 126) BARBED BY ACT OB OMISSION OF CESTUI QUE TRUST 543

the rights of a cestui que trust.*' Laches is a defense which must

bd pleaded."
Laches Founded on Estoppel
Various reasons have been given by the courts for the laches
principle, but at bottom they are found to be estoppel. Ewart, in
his work on Estoppel/' has approved Jacob's definition that estop-
pel is "an impediment or bar, by which a man is precluded from al-
leging, or denying, a fact, in consequence of his own previous act,
allegation, of denial to the contrary." And in a large number of
cases it has been held that there must be something beside mere
,
lapse of time in order to establish laches. The one who is sought
to be held as trustee, or some third party, must have changed his
position in reliance on the delay, or his position must have changed
from external causes.^ The definition of a learned judge has met
with frequent approval "Laches, in legal significance, is not delay,
:

but delay that works, a disadvantage to another. So long as par-

ties are in the same condition, it matters little whether one presses
a right promptly or slowly, within limits allowed by law; but
when, knowing his rights, he takes no step to enforce them until
the condition of the other party has, in good faith, become so
changed that he cannot be restored to his former state, if the right
be then enforced, delay becomes inequitable, and operates as es-
toppel against the assertion of the right." ^
Other courts have laid stress on the inability of the courts to do
complete or certain justice where long delay has occurred, and

sTFellrath v. Peoria German School 'Ass'n, 66 111. App. 77; Jenkins v.

Hammerschlag, 38 App. Div. 209, 56 N. if. Supp. 534.
98 Davis V. Downer, 210 Mass. 573, 97 N. E. 90.
99 Ewart, Estoppel, p. 4.
lEtting V. Marx (C. C.) 4 Fed. 673; Haney v. Legg, 129 Ala. 619, 30
South. 34, 87 Am. St. Kep. 81; Lasker-Morris Bank & Trust Co. v. Gans,
132 Ark. 402, 200 S. W. 1029; Chamberlain v. Chamberlain, 7 Cal. App.
634, 95 Pac. 659; Woodruff v. WilUams, 35 Colo. 28, 85 Pac. 90, 5 L. B.
A. (N. S.) 986; Evans v. Moore, 247 111. 60, 93 N. E. 118, 139 Am. St.
Rep. 302 Jones v. Henderson, 149 Ind. 458, 49 N. B. 443 Harvey v. Hand, 48
; ;

Ind. App. 392, 95 N. E. 1020 In re Mahln's Estate, 161 Iowa, 459, 143 N. W.
;

420; Cantwell v. Crawley, 188 Mo. 44, 86 S. W. 251; Hudson v. Cahoon,

193 Mo. 547, 91 S. W. 72; O'Day v. Annex Realty Co. (Mo.) 191 S. W. 41;
Van Alstyne v. Brown, 77 N. J. Eq. 455, 78 Atl. 678; Evans' Appeal, 81
Pa. 278; Bruner v. Finley, 187 Pa. 389, 41 Atl. 334; Stephens v. Dubois,
31 R. I. 138, 76 Atl. 656, 140 Am. St. Rep. 741 Ruckman v. Cox, 63 W. Va,
;

74, 59 S. E. 760; Roush v. Griffith, 65 W. Va. 752, 65 S.

E. 168; Ash v.
Wells, 76 W. Va. 711, 86 S. E. 750. "Of course, delay without neglect, or
which does not operate to the prejudice of the rights of the opposite party.
Is not sufficient to constitute laches." Norfleet v. Hampson, 137 Ark. 600,
209 S. W. 651, 653. !

2 Sttness, J., in Chase v. Chase, 20 R. I. 202, 203, 37 Atl. 804. See, also,
Ruckman v. Cox, 63 W. Va. 74, 59 S. E. 760, 762.
 544 THE REMEDIES OP THE CESTUI QUE TKUST (Ch. 14

have said that the basis of the doctrine of laches is the powerless-
ness of the courts to ascertain the truth after great lapse of time.*
Thus, a New Jersey court,* has reqently held that delay will be
"fatal when it is operative to render the court unable to feel con-
fident of its ability to ascertain the truth as well as it could have
done when the subject for investigation was recent and before the
memories of those who had knowledge of the material facts had
become faded and weakened by time." And a Pennsylvania court,
in referring to an ajttempt to establish equities on facts which oc-
curred fifty-two years before, has said * "Of the men who were
:

then in active life, and capable of being witnesses, not one in twen-
ty thousand is now living. Written documents whose production
might have settled this dispute instantly, have been, in all human
probability, destroyed, or lost, or thrown away as useless. The mat-
ter belongs to a past age of which we can have no knowledge, except
what we derive from history, through whose medium we can dim-
ly discern the outlines of great public events, but all that pertains
to men's private affairs is wholly invisible, or only visible in such a
" sort as to confound the sense and mislead the judgment." The
statement that the court will not act when it feels the delay has
been such that the truth cannot be learned is essentially based on
the idea of estoppel. The delay has caused the loss of evidence and
thus placed the party against whom the trust' is sought to be en-
forced in a disadvantageous position. The trust asserter ought to
be estopped to set up the trust.
Still other courts have placed emphasis on the thought that the
doctrine of laches is founded on the public policy of 'encouraging
repose.* This is perhaps but another way of expressing the "in-
ability to do justice" idea.
Some
courts have given a presumption of abandonment or release
as a reason for the application of the doctrine of laches.'^ Accqrd-

Badger v. Badger, 2 Wall. 87, 17 L. Ed. 836

3 ; Huntington Nat. Bank
V. Huntington Distilling Co. (0. C.) 152 Fed. 240, 248; Monroe'v. Gregory,
147 Ga. 340, 94 S. E. 219; Taylor v. Blair, 14 Mo. 437; Hendrickson v.
Hendrickson, 42 N. J. Eq. 657, 9 Atl. 742; Kellogg v. Kellogg, 169 App. Div.
395, 155 N. X. Supp. 310; Harrison v. Gibson, 23 Grat. (Va.) 212; Woods
V. Stevenson, 43 W. Va. 149, 27 S. E. 309.
* Cox V. Brown, 87 N. J. Eq. 462, 464, 101 Atl. i260.
5 Strimpfler v. Roberts, 18 Pa. 283, 299, 57 Am. Dec. 606.

6 Jewell v./ Trilby Mines Co., 229 Fed. 98,, 143 C. O. A. 374; Veltch v.
Woodward Iron Co., 200 Ala. 358, 76 South. 124; Kleinclaus v. Dutard, 147
Cal. 245, 81 Pac. 516; Sprinkle v. Holton, 146 N. C. 258, 59 S. E. 680.
7 Sanchez v. Dow, 23 Fla. 445, 2 South. 842 Newberry v. Winlock's Ex'x,
;

168 Ky. 822, 182 S. W. 949; In re Kelly's Estate, 37 Pa. Super. Ct 320;
Lafferty v. Turley, 3 Sneed (Tenn.) 157.
 ;

§ 126) BARBED BY ACT OB OMISSION OF CESTUI QUE TRUST 54E5

ing to them, after the lapse of a long period, equity presumes that
the trust has been satisfied and terminated. But this is an arbitrary
and artificial reason, and the notion of estoppel is behind it
Length of Time
The mere fact that a long period of time has elapsed between the
date of the accrual of a right and the date of the commencement of an
action to enforce the right will not alone show laches.' "It has
long since been settled by this court that mere lapse of time, short
of the period fixed by the Statute of Limitations, will not bar a claim
to equitable relief, when the right is clear, and there are fto coun-
tervailing circumstances." ' But the passage of a long interval has
led many courts to find laches without the placing of any empha-
sis on any facts of estoppel, and in some cases with little, if any
proof of change of position by others than the claimant.^" Delay
for a short period, as, for example, two years,^^ has been held tol^e
laches under certain circumstances. No rule can be set. Each case
—
must depend on its own peculiar facts on the reasons for and the
effects of the delay.
When laches are pleaded and the delay is shown, the burden then
falls on the cestui que trust to explain the delay
.^^ This he may do

8 Pryor v. Mclntire, 7 App. D. C. 417 ; Percival-Porter Co. v. Oaks, 130

Iowa, 212, 106 N. W. 626 ;Reihl v. Likowski, 33 Kan. 515, 6 Pac. 886 Cant-
;

well V. Crawley, 188 Mo'. 44, 86 S. W. 251.

»Cantwell v. Crawley, 188 Mo. 44, 57, 86 S. W. 251.
"Kansas City Southern Ry. Co. v. Stevenson (C. C.) 135 Fed. 553 (9
years); Froneberger v. First Nat. Bank, 203 Fed. 429, 121 C. C. A. 539
(40 years); Benedict v. City of New Xork, 247 Fed. 758, 159 C. C. A. 616
(17 years); Ewald v. Kierulff, 175 Cal. 363, 165 Pac. 942 (43 years); Martin
r. Martin (Del. Ch.) 74 Ati. 864 (26 years) ; Mayfield v. Forsyth, 164 111.
32, 45 N. E. 403 (31 years); Moore v. Taylor, 251 111. 468, 96 N. E. 229
(30 years); Eittenhous^ v. Smith, 255 111. 493, 99 N. E. 657 (30 years);
Cecil's Committee v. Cecil, 149 Ky. 605, 149 S. W. 965 (25 years); Slzemore
V. Davidson, 183 Ky. 166, 208 S. W. 810 (30 years); Thorne v. Foley, 137
Mich. 649, 100 N. W. 905 (45 years); Sprague v. Trustees of Protestant
Episcopal Church of Diocese of Michigan, 186 Mich. 554, 152 N. W. 996
(30 years) ;
Quairoli v. Italian Beneficial Society of Vineland, 64 N. J. Eq.
'

205, 53 Atl. 622 (20 years) Phillips v. Vermeule, 88 N. J. Eq. 5Q0, 102 Atl.
;

695 (50 years) ; Jackson v. Farmer, 151 N. C. 279, 65 S. E. 1008 (29 years)
Person v. Fort, 64 S. G. 502, 42 S. E. 594; Stlanson v. Stianson, 40 S. D.
322, 167 N. W. 237, 6 A. L. H. 280 (24 years); Spaulding v. Collins, 51
Wash. 488, 99 Pac. 306 (20 years).
" Curtis V. Lakin, 94 Fed. 251, 36 C. C. A. 222. In Cowan v. Union Trust
Co. of San Francesco, 38 Cal. App. 203, 175 Pac. 799, the period was three
years and four months.
12 Robb V. Day, 90 Fed. 337, 33 C. C. A. 84; Alexander v. Fidelity Trust
Co P C) 215 Fed. 791; Ewald v. Kierulff, 175 Cal. 363, 165 Pac. 942;
Martin v. Martin (DeL Ch.) 74 Atl. 864; Blaul v. Dalton, 264 111. 193, 106 N.
E. 196; Sackman v. Campbell, 15 Wash. 57, 45 Pac 895; Richardson v.
McConaughey, 55 W. Va. 546, 47 S. E. 287.
BOGEBT TBUSTS—35
546 THE EEMEDIES OF THE CESTUI QUE TEUST (Ch. 14

by showing that he had no knowledge of the existence of any cause

of action until very shortly before the commencement of his suit.^*
If he did not know that he had been wronged, naturally he is
charged with no negligence in failing to seek a remedy. "It has
been said that the laches which will deprive a party of claiming
equitable relief is the 'intentional failure to resist the assertion of
an adverse right' and that consequently there cannot be acquies-
cence, "without knowledge on the part of the person of the infringe-
ment of his legal rights.' " ^*
Excuses for Delay
But mere proof of ignorance is not enough to excuse delay. The
—
ignorance must have been reasonable must have existed despite
the exercise of due care to learn the facts and to protect the cestui's
rights.^" A cestui que trust cannot sit idly by and close his eyes to
what is going on around him. "One who would repel the imputa-
tion of laches on the score of ignorance of his rights must be with-
out fault in remaining so long in ignorance of those rights. Indo-
lent ignorance and indifference will no more avail than will volun-
tary ignorance of one's rights." ^° As a Pennsylvania court has re-
cently said:^^ "Laches is not excused by simply saying; 'I did
not know.' If by diligence a fact can be ascertained, the want of
knowledge so caused is no excuse for a stale claim. The test is,
not what the plaintiff knows, 'but what he might have known, by
the use of the means of information within his reach, with the vig-
"
ilance the law requires of him.'
If the cestui que trust has, throughout the period of alleged lach-

10 Stanwood v. Wishard (C. 0.) 134 Fed. 959; Bay State Gas Co. of Del-
aware V. Eogers (C. C.) 147 Fed. 557.; Huntington Nat. Bank v. Hunting-
ton Distilling Co. (C. C.) 152 Fed. 240; Eussel v. Huntington Nat. Bank,
162 Fed. 868, 89 C. C. A. 558; Haney v. Legg, 129 Ala. 619, 30 South. 34,
87 Am. St. Rep. 81; Mullen v. Walton, 142 Ala. 166, 39 South. 97; Cliff
V. Cliff, 23 Colo. App. 183, 128 Pac. 860; Anderson v. Northrop, 30 Fla.
612, 12 South. 318; Manning v. Manning, 135 Ga. 597, 69 S. E. 1126; South-
ern Bank of Fulton v. Nichols, 235 Mo. 401, 138 S. W. 881; Delmoe v.
Long, 35 Mont. 139, 88 Pac, 778; In^re Roney's Estate, 227 Pa. 127, 75 Atl.
1061; Weltner v. Thurmond, 17 Wyo. 268, 98 Pac. 590, 129 Am. St. Rep.
1113. The record of a will in a foreign state is not such notice as to cre-
ate laches. Mullen v. Walton, 142 Ala. 166, 39 South. 97.
"Mullen V. Walton, 142 Ala. 166, 172, 39 South. 97.
15 Swift V. Smith, 79 Fed. 709, 25 C. C. A. 154; McMonagle v. McGlinn
(C. C.) 85 Fed. 88; Jewell v. Trilby Mines Co., 229 Fed. 98, 143 C. C. A. 374;
Weber v. Chicago & W. I. R. Co., 246 111. 464, 92 N. E. 931; Taylor v. Cog-
gins, 244 Pa. 228, 90 Atl. 633; Redford v. Clarke, 100 Va. 115, 40 S. E.
630.
18 Redford v. Clarke, 100 Va. 115, 122, 123, 40 S. E. 630.
17 Taylor v. Coggins, 244 Pa. 228, 231, 90 Atl. 633.
 § 126) BAEEED BY ACT OE OMISSION OF CESTUI QUE TRUST 547

es, continuously asserted his rights as a beneficiary/* as, for ex-

ample, by, maintaining exclusive possession of the trust res,^° he
will, of course, be guilty of no laches. And joint possession by ces^
tui que trust and trustee rebuts the idea of laches,^" since it shows
a recognition of the interest of the beneficiary. Payment of taxes
by the cestui que trust shows an assertion of his right and militates
against laches.^^ That the land which is the subject of contention
has "been unoccupied during the period of laches is no excuse for in-
action on the part of the cestui.^^
Strong evidence in contradiction of the allegation of laches is
found in the continuous acknowledgment and fulfillment of the
trust by the trustee during the period of alleged laches. If the
trustee admits the trust and performs it, either there is no breach
or other wrong, or it is so concealed from the beneficiary that he
may reasonably remain ignorant of it.^^ Other facts excusing de-
lay ^nd rebutting the imputation of laches are family relationship
between the alleged cestui and trustee, making a settlement of dif-
ferences out of court more natural ^* a proven desire on the part
;

18 Grayson v. Bowlin, 70 Ark. 145, 66 S. W. 658; Howe v. Howe, 199

Mass. 598, 85 N. E. 945, 127 Am. St. Rep. 516.
i»Dufour V. Weissberger, 172 Cal. 223, 155 Pac. 984; Boyd v. Boyd, 163
m. 611, 45 N. E. 118 Dorman v. Dorman, 187 III. 154, 58 N. E. 235, 79
;

Am. St. Rep. 210; Flaherty v. Cramer, 62 N. J. Eg. 758, 48 Atl. 565; Hous-
ton, E. & W. T. R. Co. V. Charwaine, 30 Tex. Civ. App. 633, 71 S. W. 401.
• 20 Wright V. Wright, 242 111. 71, 89 N. E. 789, 26 L. R. A. (N. S.) 161;
Doyle V. Doyle, 268 111. 96, 108 N. E. 796; Cox v. Brown, 87 N. J. Eq. 462,
101 Ati: 260.
21 Johnson v. Bayley, 15 Vt. 595.
22 Lloyd V. Kirkwood, 112 111. 329.
23 Sternfels v. Watson (C. C.) 139 Fed. 505; Small v. Hockinsmith, 158 Ala.
234, 48 South. 541; WoodrufiE v. Jabine (Ark.) 15 S. W. 830; Kleinclaus v.
Dntard, 147 Cal. 245, 81 Pac. 516; Cooney v. Glynn, 157 Cal. 583, 108 Pac.
506; Fleming v. Shay, 19 Cal. App. 276,. 125 Pac. 761; Marshall v. Mar-
shall, 11 Colo. App. 505, 53 Pac. 617; Madison v. Madison, 206 111. 534, 69
N. E. 625; Snyder v. Snyder, 280 111. 467, 117 N. E. 465; Jones v. Hender-
son, 149 Ind. 458, 49 N. E. 443 ; Johnson v. Foust, 158 Iowa, 195, 139 N. W.
451; Relhl v. Likowski, 33 Kan. 515, 6 Pac. 886; Chadwick v. Chadwick,
59 Mich. 87, 26 N. W. 288 ; Lamberton v. Xoumans, 84 Minn. 109, 86 N. W.
894; Murry v. King, 153 Mo. App. 710, 135 S. W. 107; Gutch v. Fosdick,
48 N. J. Eq. 353, 22 Aa 590, 27 Am. St. Rep. 473 ; Carter v. Uhlein (N. J.
Ch.) 36 Atl. 956; Jones v. Haines, 79 N. J. Eq. 110, 80 Atl. 943; Laughlin
V. Laughlin, 219 Pa. 629, 69 Atl. 288; Cetenlch v. Fuvich, 41 R. I. 107, 102
Atl. 817; Miller v. Saxton, 75 S. C. 237, 55 S. E. 310; Goode v. Lowery,
70 Tex. 150, 8 S. W. 73; Nuckols v Stanger (Tex. Civ. App.) 153 S. W.
931; Hammond v. Ridley's ExTs, 116 Va. 393, 82 S. E. 102; Gentry v.
Poteet, 59 W. Va. 408, 53 S. E. 787; Campbell v. O'Neill, 69 W. Ya. 459,
72 S. E. 732.
24Delkin v, McDuffie, 134 Ga. 517, 68 S. E. 93; Madisott y. Madison,
548 THE REMEDIES OP THE CESTUI QUE TRUST ( Ch. 14

of the cestui que trust to avoid litigation ; '"^ and infancy of the
beneficiary during the period of inaction.^* The poverty of the
cestui que trust during the delay will not excuse him, for the courts
consider it possible for him to seek relief, even though he can ad-
vance no money to counsel.''^ That the cestui que trust sought
other and fruitless remedies does not excuse him from delay in
seeking the correct remedy or rebut the inference of laches.''*
If material witnesses have died during the delay of the cestui qile
trust,^" and especially if the person who the cestui claims was a
trustee has died ''' or become insane,*^ the courts will be apt to re-
gard the inaction as amounting to laches. So, too, the loss of docu-
mentary evidence during the period when the cestui que trust was
idle will operate against him *^ and if the property in question has
;

greatly increased in value,^' or the rights of third parties have- in

the meantime attached,** or if the cestui que trust has recognized

206 111. 534, 69 N. E. 625; Wright v. Wright, 242 lU. 71, 89 N. E 789, 26
L. R. A. (N. S.) 161; Snyder v. Snyder, 280 111. 467, 117 N. E. 465; Ceten-
ich V. Fuvich, 41 R. I. 107, 102 Atl. 817.
="> Pearson v. Treadwell, 179 Mass. 462, 61 N. B. 44.

2» Patrick v. Stark, 62 W. Ya. 602, 59 S. E. 606.

2 7 Naddo V. Bardon, 51 Fed. 493, 2 C. O. A. 335.

2 8 Carpenter v. M. J. & M. & M., Consolidated, 212 Fed. 868, 129 C. C. A.

388; Hotchkin v. McNaught-Collins Improvement Co., 102 Wash. 161, 172

Pao. 864.
2 9 C. H. Venner Co. v. Central Trust Co. of New York, 204 Fed. 779,

123 O. C. A. 591; Elliott v. Clark, 5 Cal. App. 8, 89 Pac. 455; Smick's

Adm'r v. Beswick's Adm'r, 113 Ky. 439, 68 S. W. 439; Streitz v. Hartman,
35 Neb. 406, 53 N. W. 215; Heinisch v. Pennington, 73 N. J. Eq. 456, 68
Atl. 233; Backes v. Crane, 87 N. J. Eq. 229, 100 Atl. 900; Coxe v. Carson,
169 N. C. 132, 85 S. E. 224; Newman v. Newman, 60 W. Va. 371, 55 S. E.
377, 7 L. R. A. (N. S.) 370.
30 Hume v. Beale, 17 Wall. 336, 21 li. Ed. 602; Hughes v. Letcher, 168
Ala. 314, 52 South. 914; Veitch v. Woodward Iron Co., 200 Ala. 358, 76
South. 124; Reese v. Bruce, 136 Ark. 378, 206 S. W. 658; Van Hook v.
Frey, 13 App. D. C. 543; Benson v. Dempster, 183 111. 297, 55 N. E. 651;
Smith's Guardian v. Holtheide, 74 S. W. 718, 25 Ky. Law Rep. 125 ; Galther
V. Galther, 3 Md. Ch. 158; Love v. Rogers, 118 Md. 525, 85 Atl. 771; Reid
V. Savage, 59 Or. 301, 117 Pac. 306; Groome v. Belt, 171 Pa. 74, 32 Atl. 1132;
Pilcher v. Lotzgesell, 57 Wash. 471, 107 Pac. 340; Smith v. Turley, 32 W.
Va. 14, 9 S. E. 46; Russell v. Fish, 149 Wis. 122, 135 N. W. 531.
81 Whitney v. It ox, 166 U. S. 637, 17 Sup. Ct. 713, 41 L. Ed. 1145.
S2 Amory v. Trustees of Amherst College, 229 Mass. 374, 118 N. B. 933.
38 Alaska Northern R. Co. v. Alaska Cent. Ry. Co., 5 Alaska, 377; Rus-
sell v. Miller, 26 Mich. 1 ; Delmoe v. Long, 35 Mont. 139, 88 Pac. 778 ; Gra-
ham V. Donaldson, 5 Watts (Pa.) 451.
8* Lady Ensley Coal, Iron & R. Co. v. Gordon, 155 Ala. 528, 46 South.
983 ; Butt v. McAlplne, 167 Ala. 521, 52 South, 420.
§ 127) REMEDY BARRED BY THE STATUTE OP LIMITATIONS 549

the legal title holder as the beneficial owner,*" there will be a strong
tendency to treat the delay of the cestui que trust as laches which
bar his remedy. In all these cases there is a basis for estoppel
'

which, it is believed, is at the foundation of all laches.

REMEDY BARRED BY THE STATUTE OF LIMITATIONS

127. Where
there are no statutes of limitations expressly applsang
to equitable causes of action, equity follows tlie law and
by analogy applies the legal statutes of limitation to equi-
table rights.
The remedies of the cestui que trust of an express trust against
the trustee may be barred by the statute of limitations, but
the statute does not run against the cestui que trust until
he has notice of a breach of the trust, a repudiation of it by
the trustee, or its termination.
The cestui que trust's remedies against third persons are subject
to the normal operation of the statute of limitations.
By the weight of authority a resulting trustee is deemed to hold
in subordination to his cestui que trust and not adversely,
imless he has repudiated the trust. The statute of limita-
tions, therefore, does not affect the cestui que trust's rem-
edy until notice of the trustee's repudiation reaches the ces-
tui que trust.
One who may be held as a constructive trustee holds wrongfully
and adversely, and the statute of limitations operates to bar
the remedy of the possible constructive cestui que trust
from the date of knowledge of the facts upon which the
constructive trust might be based.

Having observed that by rule of chancery in certain cases lapse

of time and inaction will bar the remedy of the cestui que trust, it
remains to inquire how statutory bars to the maintenance of ac-
tions have affected trusts. Legislatures have established periods
after the expiration of which actions may not be maintained. Do
these statutes expressly or impliedly affect the remedies of the ces-
tui que trust?
Express Trusts
The expression, "the statute of limitations has no application to
express trusts," is frequently found in opinions and text-books.'*

85 Higginbotliam v. Boggs, 234 Fed. 253, 148 C. 0. A. 155; Havener v.

Pipher, 109 Wis. 108, 85 N. W. 203.

30 McDonald v. Sims, 3 Ga. 383; Wlietsler v. Sprague, 224 111. 461, 79 N.
550 THE REMEDIES OF THE CESTUI QUE TEUST (Ch. 14

From this one might at first thought be led to believe that no stat-
ute of limitations would ever bar the remedy of a cestui que trust of
an express trust; that after a breach of the trust by a trustee the
beneficiary might sue at any time and would never be met by a
statutory bar. But the users of this expression have not intended
to convey any such comprehensive meaning. They have merely
meant that, so long as the express trust continued to be recognized
and enforced by the trustee, there was no running of the statute of
limitations. For example, that a trust had been in existence for for-
ty years, during all of which time the trustee had possessed the
trust property, collected the income, and turned it over to the ces-
tui que trust, would be no reason for barring the rights of the ces-
tui que trust, to the trust property. If one had had the adverse pos-
session of property for forty years, he would, of course, be entitled
to hold it as against all the world ; but the trustee in the case put

did not have adverse possession of the trust property, but had pos-
session in subordination to the rights of the cestui que trust.
Hence the statement that the statute of limitations has no applica-
tion to express trusts merely means that so long as the trust is con-
tinuing and enforced there is no cause of action in favor of the
cestui que trust and against the trustee, and the possession of the
trustee is not adverse.
When the trustee denies the trust, repudiates his obligations un-
der it, claims the trust property as his own, then of course a cause
of action arises in favor of the cestui que trust, and then the stat-
ute of limitations starts to run. It is well settled that in express
trusts, and as between cestui que trust and trustee, the statute of
limitations runs from the date when the cestui que trust has ac-
tual or constructive notice of a repudiation of the trust by the trus-
tee.*^ "As between the trustee and cestui que trust, in the case of

B. 667; Decouche v. Savetier, 3 Johns. Ch. (N. T.) 190, 8 Am. Dec. 478 (sem-
ble); Neilly v. Neilly, 23 Hun (N. Y.) 651 ; . In re Passmore's Estate, 194 Pa.
632, 45 Atl. 417; Horine v. Mengel, 30 Pa. Super. Ct. 67; Pinson v. Ivey,
1 Yerg. (Tenn.') 296; Charter Oak Life Ins. Co. v. Gisbome, 5 Utah, 319,
15 Pac. 253 ; Redwood v. Riddick, 4 Munf. (Va.) 222.
87 Cholmondeley v. Clinton, 2 Meriv. 171, 360; Oliver v. Piatt, 3 How.
333, 11 L. Ed. 622; Seymour v. Freer, 75 "D. S. (8 Wall.) 202, 19 L. Ed. 306;
Philippi V. Philippe, 115 TJ. S. 151, 5 Sup. Ct. 1181, 29 L. Ed. 336; Ray v.
United States (D. C.) 50 Fed. 166; Pinkston v. Brewster, 14 Ala. 315; Hastie
V. Aiken, 67 Ala. 313 ; McCarthy v. McCarthy, 74 Ala. 546 Holt v. Wilson,
/ ;

75 Ala. 58; De Bardelaben v. Stoudenmire, 82 Ala. 574, 2 South. 488; Alaska

Northern B. Co. v. Alaska Cent. R. Co., 5 Alaska, 304; Harris v. King,
16 Ark. 122; Wren v. Followell, 52 Ark. 76, 12 S. W. 155; Williams v.
Young, 71 Ark. 164, 71 S. W. 669; Schroeder v. Jahns, 27 Cal. 274; Miles v.
Thome, 38 Cal. 335, 99 Am. Dec. 384; Hearst v. Pujol, 44 Cal. 230; Janes
V. Throckmorton, 57 Cal. 368; Luco v. De Toro, 91 Cal. 405, 18 Pac. 866,
 ;

§ 127) BEMEDY BAREEli BY THE STATUTE OF LIMITATIONS 551

an express or direct has no applica-

trust, the statute of limitations
tion, unless the trusteehas repudiated the trust and claims the trust
estate adversely, and such repudiation and adverse claim have been'
brought to the knowledge of the cestui que trust, after the latter is
sui juris, and the connection is so wholly at an end as to indicate
that the cestui que trust is no longer controlled by the influence
proceeding from the trustee, which existed during the continuance

27 Pac. 1082; Hovey v. Bradbury, 112 Cal. 620, 44 Pac. 1077; OdeU v.
Moss, 130 Cal. 352, 62 Pac. 555; Taylor t. Morris, 163 Cal. 717, 127 Pac. 66;
Arnold v. Loomls, 170 Cal. 95, 148 Pac. 518; Lamb v. Lamb, 171 Cal. 577,
153 Pac. 913; Prouty v. Rogers (Cal. App.) 164 Pac. 901; Pearl v. Pearl
(Cal.) 177 Pac. 845; Warren v. Adams, 19 Colo. 515, 36 Pac. 604; Keaton
V. Greenwood, 8 Ga. 97; Olympia Min. & Mill. Co. v. Kerns, 24 Idaho, 481,
135 Pac. 255; Albretch v. Wolf, 58 111. 186; Wilson v. Equitable Trust Co.,
98 111. App. 81, reversed on another point in Equitable Trust Co. v. Wilson,
200 111. 23, 65 N. B. 430; Cunningham v. McKindley, 22 Ind. 149; Parks
V. Satterthwaite, 132 Ind. 411, 32 N. B. 82; Stanley's Estate v. Pence, 160
Ind. 636, 66 N. E. 51, 67 N. E. 441; Buckel v. Auer (Ind. App.) 120 N. E.
437; Cooley v. Gilliam, 80 Kan. 278, 102 Pac. 1091; Hendrick v. Eobinson's
Adm'r, 7 Dana (Ky.) 165; Bates v. Bates, 182 Ky. 566, 206 S. W. 800;
Owens V. Crow, 62 Md. 491; Second Keligious Soc. of Boxford v. Harri-
man, 125 Mass. 321; St. Paul's Church v. Attorney General, 164 Mass.
188, 41 N. E. 231; Allen v. Stewart, 214 Mass. 109, 100 N. E. 1092; Schmidt
V. Schmidt, 216 Mass. 572, 104 N. E. 474; Bice v. Merrill, 228 Mass. 279,
111 N. E. 860; O'Toole v. Hurley, 115 Mich. 517, 73 N. W. 805; Hatt v.
Green, 180 Mich. 383, 147 N. W. 593; Pitcher v. Roger's Estate, 199 Mich.
114, 165 N. W. 813 ; Smith v. Glover, 44 Minn. 260, 46 N. W. 406 Wilson
;

V. Welles, 79 Minn. 53, 81 N. W. 549; Johnston v. Johnston, 107 Minn.

109, 119 N. W. 652; Moulden v. Train, 199 Mo. App. 509, 204 S. W. 65 ; Holmes
V. DoU, 101 Neb. 156, 162 N. W. 487 Cook v. Williams, 2 N. J. Eq. 209
;

Smith V. Combs, 49 N. J. Eq. 420, 24 Atl. 9 Backes v. Crane, 8T N. J. Eq.

;

229, 100 Atl. 900; Kane v. Bloodgood, 7 Johns. Ch. (N. Y.) 90, 11 Am. Dec.
417 (semble); Merritt v. Merritt, 32 App. Div. 442, 53 N. Y. Supp. 127, af-
firmed 161 N. Y. 634, 57 N. E. 1117; Anderson v. Fry, 119 App. Div. 740,
102 N. Y. Supp. 112 WooUey v. Stewart, 169 App. Div. 678, 155 N. Y. Supp.
;

169; Jones' Ex'rs v. Person's Adm'r, 9 N. C. 269; State ex rel. Stanly v.

McGowen, 37 N. C. 9; West v. Sloan, 56 N. C. 102; Davis v. Boyden, 123
N. O. 283, 31 S. E. 492 Greenleaf v. Land & Lumber Co., 146 N. C. 505, 60
;

S.' B. 424- Bouse v. Rouse,

176 N. O. 171, 96 S. E. 986; Paschall v. Hinderer,
28 Ohio St. 568; Manaudas v. Mann, 22 Or. 525, 30 Pac. 422; Davidson
V Davidson, 262 Pa. 520, 106 Atl. 64; Houseal v. Gibbes, Bailey Eq. (S.
Ex'rs, 1 Rich. Eq. (S. C.) 91;
C.) 482, 23 Am. Dec. 186; McDonald v. May's
Armstrong's Heirs v. Campbell, 3 Yerg. (Tenn.) 201, 24 Am. Dec. 556 Grum-
;

bles V. Grumbles, 17 Tex. 472; Hunter v.

Hubbard, 26 Tex. 537; Stuart
v' Meyer (Tex. Civ. App.) 196 S. W. 615;
McBride v. Briggs (Tex. Civ. App.)
199 S. W. 341; Campbell v. Shifflett (Tex. Civ. App.) 154 S.
W. 664; Wood
V Fox 8 Utah, 380, 32 Pac. 48; Thomas v. Glendinning, 13 Utah, 47, 44
Pac. 652 ; Bigelow v. Catlin, 50 Vt. 408; Drake y. Wild, 65 Vt. 611, 27 Atl.
427- N Y Security & Trust Co. v. Tacoma, 30 Wash. 661, 71 Pac. 194;
Gar'veyV. Garvey, 52 Wash. 516, 101 Pac. 45;
Key v. Hughes' Ex'rs, 32 W.
Va 184 9 S. E. 77; Nease v. Capehart, 8 W. Ya. 95; Sheldon v. Sheldon,
552 THE REMEDIES OF THE CESTUI QUE TRUST (Ch.l4

of the trust." '* "It is well settled that, as between trustee and
cestui que trust, the statute of limitations does not operate, in cas-
es of express or direct trusts, so long as such trusts continue. But
when the trustee denies the trust and assumes ownership of the
trust property, or denies his liability or obligation under the trust
relation, in such a manner that the cestui que trust has actual, or
even constructive, notice of the repudiation of the trust, then the
statute of limitations attaches, and begins to run from that time,
for such denial or adverse claim is an abandonment of the fiduciary
character in which the trustee has stood to the property." "' Thus,
where one transfers stock to a friend to vote and collect the divi-
dends, and the transferee admits the trust when called upon for the
dividends, but fails to deliver the dividends, the statute of limita-
tions has not run against the rights of the cestui que trust because
he has not demanded an accounting for eight years. The holding of
the stock was not adverse, but was as trustee at all times.*"
Trustees Normal Possession Not Adverse
During .the continuance and recognition of the trust the posses-
sion of the trustee is the possession of the cestui que trust. There
is no adverse or hostile holding.*^ "But in express or direct trusts,
created by the contract of the parties, the statute of limitations
does not operate. In such cases the trustee takes possession and
holds for another. His possession is the possession of that other,
and there can be no adverse holding, until the trustee denude him-
self of his trust, by assuming to hold for himself, and notifies the
cestui que trust of his treachery."*" "In the nature of things,
however, the statute must act upon express technical trusts less
frequently than upon any other class, since it is only through the
breach of such a trust that it is set in motion. The statute never
runs except against a cau^se of action, and a cause of action implies,
not only the existence of a right, but such a denial of it, either ac-
tual of constructive, as puts the party entitled under a necessity to
act if he would preserve it. An open, subsisting, and acknowledg-
ed trust is not within the operation of. the statute, for, as said by

3 Wis. 699; In re McOlear's Estate, 147 Wis. 60, 132 N. W. 539; Weltner
V. Thurmond, 17 Wyo. 268, 98 Pac. 590, 99 Pac. 1128, 129 Am. St. Rep.
1113. But an action by the heir of the settlor to set aside the trust instru-
ment is judged by the date of the trust instrument. Mackenzie v. Los An-
geles Trust & Savings Bank,
39 Cal. App. 247, 178 Pac. 557.
38 Wild, 65 Vt. 611, 614, 27 Atl. 427.
Drake v.
S9 Thomas v. Glendinning, 13 Utah, 47, 56, 44 Pac. 652.
*o Hovey v. Bradbury, US' Cal. 620, 44 Pac. 1077.
*i Anderson v. Dunn, 19 Ark. 650; Huntley v. Huntley, 43 N. C. 250; How-
ard's Adm'rs v. Aiken, 3 McCord (S. C.) 467; Marr's Heir^ v. Gilliam, 1
Cold. (Tenn.) 488.
*2 Haynie v. Hall's Ex'r, 5 Humph. (Tenn.) 290, 292, 42 Am. Dec. 427.
§ 127) REMEDY BARRED BY THE STATUTE OF LIMITATIONS^ 553

Lord Redesdale, Hovenden v. Annesley, 2 Sch.

in the old case of
& Lef. 607: a trustee is in possession, and does not execute
'If
his trust, the possession of the trustee is the possession of the ces-
tui que trust; and if the only circumstance is that he does not per-
form his trust, his possession operates nothing as a bar, because
his possession is according to his title.' " "^ In numerous cases
where the disavowal of the trust was brought to the notice of the
cestui que, trust, he has been held barred by the statute.** But
where a trustee mixed trust funds with his own and lent the mixed
funds, but this wrong was not brought to the attention of the bene-
ficiary, it has been held that the lack of notice prevented the run-
ning of the statute.*"
Whether a given act is consistent with the continuance of the
trust, or indicates an intent to repudiate the trust and claim ad-
versely, is a question of fact for the determination of the court in
each individual case. A
conveyance by the trustee in violation of
the trust is clearly a repudiation of it.*° The mere payment of tax-
es by the trustee out of his own funds does not necessarily show a
claim to the property as private property.*^ Where the cestui que
trust remains in possession of the trust property, acts of the trustee
are not ordinarily construed as a repudiation of the trust, since he
has so far recognized the trust as to allow the beneficial owner pos-
session.**
Termination of Trust
Not only repudiation of the trust, but also the termination of the
trust, may start the statute of limitations running against the
claims of the cestui que trust. Thus, if the trustee effects a settle-
ment and is discharged as trustee, his possession of the trust prop-
erty, if he retains any, will be adverse to the cesl^ui que trust, and
the statute of. limitations will run against the right of the cestui
to reclaim the property, or to allege fraud or impropriety in the ac-

48 Cooper Cooper, 61 Miss. 676, 696.

V.
*4 Goodno Hotchkiss (D. C.) 23T Fed. 686 ; McGuire v. Inhabitants of
V.
Linneus, 74 Me. 344; Stanton v. Helm, 87 Miss. 287, 39 South. 457; Mantle
T. Speculator Min. Co., 27 Mont. 473, 71 Pac. 665; Congregational Society
and Church in Newington v. Town of Newington, 53 N. H. 595; Boydstun
V. Jacobs, 38 Nev. 175, 147 Pac. 447; Williams v. First Presbyteriail Soc.
in Cincinnati, 1 Ohio St. 478; Baillie v. Columbia Gold Min. Co., 86 Or.
1, 166 Pac. 965, 167 Pac. 1167; Hayes v.
Walker, 70 S. C. 41, 48 S. E. 989;
MofCatt V. Buchanan, 11 Humph. (.Tenn.) 369, 54 Am. Dec. 41; Robertson
V. Wood, 15- Tex. 1, 65 Am. Dec. 140 Felkner v. Dooly, 27 Utah, 350, 75 Pac.
;

854; Id.' 28 Utah, 236, 78 Pac. 365.

45 Watson V. Dodson (Tex. Civ. App.) 143 S. W. 329.
46 Adams v. Holden, 111 Iowa, 54, 82 N. W. 468.
*> Warren v. Adams, 19 Colo. 515, 36 Pac. 604.
48 American Mining Co. v. Trask, 28 Idaho, 642, 156 Pac. 1136; Clark t.
Clark, 21 Neb. 402, 32 N. W. 157.
 554 THE REMEDIES OP THE CESTUI QUE TRUST (Ch. 14

count.*' In the words of Finch, J.: "In the case of a direct trust
the statute will begin to run when it ends, and the trustee has no
longer a right to hold the fund or property as such, but is bound to
pay it over or transfer it discharged of the trust." °° When the
relation, of trustee and cestui que trust changes to that of debtor
and creditor, obviously the statute of limitations applicable to con-
•
tract claims will control."^ Where the death of the cestui que
trust causes the end of the trust, the holding by the trustee will be
adverse after such death, and the statute will operate against the
persons equitably entitled to the property on the death.^^ But it
has been held that the mere ending of the trust, with no account
rendered, or settlement had or demanded, does not cause the stat-
ute to run, simply because the cestui leaves the trust property with
the trustee/^
The statute of limitations does not begin to run against a re-
mainderman cestui que trust until the expiration of the precedent
estate."* Until his right to the benefits or use of the property ac-
crues, the possession of the trustee or another will not be adverse
to the remainderman cestui que trust, but will be adverse only to
the owners of the preceding interest.
What Statutes Control Equity
'The original statute of limitations,!"' which, as amended from
time to time, forms the basis for modern American legislation, was
directed to bar legal causes of action only. It did not. expressly
mention equitable rights. But courts of equity, in adjudicating
with respect to legal rights, are bound by the legal statutes of lim-
itations, and in dealing with equitable rights they have followed
the law, and applied the legal statutes of limitations to equitable
causes of action."" "But it is said that courts of equity are not
within the statutes of limitations. This is true in one respect:
They are not within the words of the statutes, because the words
\

*9 Olarke v. Bporman, 18 Wall. 493, 21 L. Ed. 904; Wellborn v. Rogers,

24 Ga. 558; Spallholz v. Sheldon, 216 N. Y. 205, 110 N. E. 431, Ann. Gas.
1917C, 1017; Starke v. Starke, 3 Kicli. (S. C.) 438; Sollee v. Croft, 7 Rich.
Eq. (S. C.) 34; Coleman v. Davis, 2 Strob. Eq. (g. C.) 334; Van Winkle v.
Blackford, 33 W. Va. 573, 11 S. E. 26.
5 Gilmore v. Ham, 142 N. Y. 1, 10, 36 N. E. 826, 40 Am. St. Rep. 554.
61 Tread well v. Treadwell, 176 Mass. 554, 57 N. E. 1016, 51 L. R. A. 190.
62 Snodgrass v. Snodgrass, 185 Ala. 155, 64 South. 594.
53 Jones V. Home Sav. Bank, 118 Mich. 155, 76 N. W. 322, 74 Am. St.
Rep. 377.
eiPritchard v. Williams, 175 N. C. 319, 95 S. E. 570; Stewart v. Con-
rad's Adm'r, 100 Va. 128, 40 S. E. 624.
66 21 James I, c. 16 (1623), as printed in 4 Chitty's Stats. (4th Ed.) 85,
5 6Holloway v. Eagle, 135 Ark. 206, 205 S. W. 113; Appeal of Kutz, 40
Pa. 90; Redford v. Clarke, 100 Va. 115, 40 S. E. 630.
§ 127) REMEDY BARRED BY THE STATUTE OF LIMITATIONS 555

apply to particular legal remedies ; but they are within the spirit
and meaning of the and have been always sp considered.
statutes,
* * * I think, therefore, courts of equity are bound to yield
obedience to the statute of limitations upon alt legal titles and legal
demands, and cannot act contrary to the spirit of its provisions.
I think the statute must be taken virtually to include courts of eq-
uity; for when
the Legislature by statute limited the proceedings
at law and provided no express limitations for pro-
in certain cases,
ceedings in equity, it must be taken to have contemplated that eqn
uity followed the law, and therefore it must be taken to have vir-
tually enacted in the same cases a limitation for courts of equity
also." °^ "In respect of the statute of limitations, equity follows
the law, and a demand that would be barred if asserted in a legal
forum will be equally barred in equity." °* In America frequently
statutes have been enacted creating limitations peculiar to trusts,
or to all equitable causes of action.'"
An adverse claim to the trust property for the statutory period
by a third person will bar both trustee and cestui que trust. Caus-
es of action against third persons for the recovery of the trust res
or for damages on account of its injury are subject to the ordina-
ry statutes of limitation, and delay or negligence by the trustee in

5 7Hovenden Annesley, 2 Sch. & Let 607, 630, 631.

v.
BsKedford Clarke, 100 Va. 115, 121, 40 S. E. 630. See, also, Kent, Ch.,
v.
in Kane v. Bloodgood, 7 Johns. Ch. 90, 113, 11 Am. Dec. 417.
6 8 In California there is a five-year statute applicable to real property

trusts (Code Civ. Proc. § 318), and a four-year statute for constructive trusts
(Code Civ. Proc. § 343; Cortelyou v. Imperial Land Co., 166 Cal. 14, 134
Pac. 981). In Iowa and Mississippi there are ten-year statutes applicable
to trusts. Percival-Porter Co. v. Oaks, 130 Iowa, 212, 106 N. W. 626; Stan-
ton V. Helm, 87 Miss. 287, 39 South. 457. In New York rights of action
under trusts are barred by a blanket section covering all cases not other-
wise provided for and creating a ten-year limitation. Code Civ. Proc. §
388. The Pennsylvania statute reads: "No right of entry shall accrue,
or actions be maintained for a specific performance of any contract for the
Bale of any real estate, or for damages for non-compliance with any such
contract, oAto enforce any equity of redemption, after re-entry made for
any condition broken, or to enforce any implied or resulting trust as to
realty, but within five years after such contract was made or such equity
or trust accrued, with the right of entry; unless shch contract shall give
a longer time for its performance, or there has been in part, a substantial
performance, or such contract, equity of redemption, or trust, shall have
been acknowledged by writing to subsist, by the party to be charged there-
with, within the same period ; Provided, that as to any one affected with a
trust, by reason of his fraud, the said limitation shall begin to run only
from the discovery thereof, or when, by reasonable diligence, the party de-
frauded might have discovered the same. * * * " 2 Purdon's Dig. (13th
Ed.) pp. 2278-2280. See Carson v. Painter, 69 Pa. Super. Ct. 490.
 ;

556 THE REMEDIES OF THE CESTUI QUE TRUST ( Ch. 14

enforcing the causes of action will operate to bar the beneficiary's

rights."" "The rule in this court, that the Statute of Limitations
does not bar a trust estate, holds only as between cestui que trust
and trustee, not between cestui que trust and trustee on the one
side and strangers on the other, for that would be to make the
statute of no force at all, because there is hardly an estate of con-
sequence without such trust, and so the act would never take place
therefore, where a cestui que trust and his trustee are both out of,
possession for the time limited, the party in possession has a good
bar against them both." '^
Resulting Trusts
Resulting trusts are created by operation of law because of a pre-
sumed intent that they shall exist. The most common example of
them is found in the case of the payment of the consideration for a
conveyance by one and the taking of the title in the name of anoth-
er, with the consent of the payor of the consideration. The ques-
tion has frequently arisen whether the statute of limitations begins
to run against the rights of the cestui que trust of a resulting trust
from the date when the trustee obtained title, on the theory of an
adverse holding from that date, or only from the date of a repudia-
tion by the resulting trustee of the trust, on the theory of a friend-
ly holding until the appearance of the contrary. Many courts have
taken a position that a resulting trustee is like an express trustee,,
that his normal position is that of a holder in subordination to the
rights of the cestui que trust, and that, from the date of the event
which makes possible the trust until the contrary appears, he
should be regarded as holding for the cestui que trust and not ad-
versely to him."'' "In such cases [those of resulting trusts] the ti-
tle to the property is generally taken in the name of the trustee,
with his knowledge and approval, and upon his recognition of the
relation thereby created. It is hardly conceivable that a trustee
should fail to recognize the trust at the time of the conveyance, un-
less he intends to deceive the beneficiary and acquire an absolute

80 Cruse v. Kidd, 195 Ala. 22, 70 South. 166, 2 A. L. E. 36; Fleck, v. EUis,.
144 Ga. 732, 87 S. E. 1055 ; Hart v. Citizens' Nat. Bank, 105 Kan. 434, 185
Pac. 1, 7 A. L. B. 933; Stoll v. Smith, 129 Md. 164, 98 Atl. 530. See §
91, ante.
81 Lord Hardwicke in Lewelltn t, Mackworth, as quoted in 2 Eq. Cases
Abr. 579.
82 Lasker-Morris Bank & Trust Co. v. Gans, 132 Ark. 402, 200 S. W,
1029; Faylor v. Faylor, 136 Cal. 92, 68 Pac. 482; In re Mahin's Estate,
161 Iowa, 459, 143 N. W. 420; Hanson v. Hanson, 78 Neb. 584, 111 N..W.
368; Crowley v. Crowley, 72 N. H. 241, 56 Atl. 190; White 7. Sheldon, 4
Nev. 280 ; Levy v. Ryland, 32 Nev. 460, 109 Pac. 905.
§ 127) REMEDY BAEEED BY THE STATUTE OF LIMITATIONS 557

title by fraud. In that event, there would be a practical disavowal

of the trust at the outset, and the statute would begin to run as in
the case of a constructive trust. But so long as the trustee recog-
nizes the trust, the beneficiary may rely upon the recognition, and
ordinarily will not be in fault for omitting to bring an action to en-
force his rights. The case then resembles an express trust of a con-
tinuing nature, and is subject to the statute of limitations in like
manner. If the trustee is in possession by permission of the cestui
que trust, the possession will be that of the latter." "^
Other courts have seemed to take the position that the attitude
of a resulting trustee is equivocal ; that it may sometimes be in sub-
ordination to the rights of tlje cestui que trust, and sometimes ad-
verse to such rights. Thus, according to these decisions, whether
the statute of limitations started to run at the time of the convey-
ance to the resulting trustee can only be told by examining the at-
titude of the resulting trustee from the date of such conveyance.
If he has throughout recognized the alleged cestui que trust as a
beneficiary, then the statute will not have commenced to run ; but
if his position has been hostile to the cestui que trust, the statute

will run from the date of the conveyance. In this class of cases fall
a number of decisions to the effect that where the resulting trustee
has recognized the trust, the statute does not run until repudia-
tion ; ** and allowing the cestui que trust to have possession rebuts
the notion of repudiation and shows a recognition of the trust by
the trustee.*" On the other hand, in other cases founded on this
theory, where there was no recognition of the trust, the statute
was held to have run from the date of acquisition of title by the result-
ing trustee.'* "It is true that the statute of limitations runs against
a resulting trust on the ground that the holding of the title in such
case is adverse to the right of the true owner. * * * In the
present case the existence of the trust has at all times been ac-
knowledged. The trustee has at all times admitted the right of the

83 Crowley v. Crowley, 72 N. H. 241, 245-246, 56 Atl. 190. See, also, L)if-

Idn V. Jakeman, 188 Mass. 528, 530-531, 74 N. E. 933.
64 Appeal of Corr, 62 Conn. 403, 26 Atl. 478; Miller v. Saxton, 75 S. C.
237, 55 S. E. 310; Cole v. Noble, 63 Tex. 432.
««McNamara v. Garrity, 106 111.. 384; Doyle v. Doyle, 268 111. 96, 108 N.
E. 796 (semble); Norton v. McDevit, 122 N. C. 755, 30 S. E. 24; SnideT v.
Johnson, 25 Or. 328, 35 Pac. S46 (semble); Clark v. Trindle, 52 Pa. '492;
Williard v. Williard, 56 Pa. 119; Henderson v. Maclay (Pa.) 6 Atl. 52; Mil-
ler V. Baker, 160 Pa. 172, 28 Atl. 648.
8 8 Currier v. Studley, 159 Mass. 17, 33 N. E. 709; Best v. Campbell, 62
Pa. 476; McNinch v. Trego, 73 Pa. 52,
558 THE REMEDIES OF THE CESTUI jQUE TRUST (Ch. 14

cestui que trust. As the reason has failed, so the rule has failed.
There has been no adverse holding." ^'
It would seem that the normal holding of one who may be made
a resulting trustee adverse until the resulting trust is established
is
by action of The resulting trust does not exist until the
equity.
cestui que trust elects to have it exist and proceeds in equity to ac-
complish that result. If the possible cestui que trust never pro-
ceeds in equity to have a resulting trust declared, the legal title
holder will continue to hold the property. No change in the nature
of his possession will occur. He will remain in possession on his
own behalf. Logically it would seem that the statute should run
from the date of the acquisition of title until the tnist is decreed
by equity. Any recognition of the resulting trust by the legal title
holder would seem properly to be of no legal effect, unless it
amounted to the creation of an express trust and satisfied the Stat-
ute of Frauds. If it were of sufficient formality to create or prove
an express trust, then it might well be held thereafter that the
statute would not run until repudiation of the trust by the trustee.
Constructive Trusts
The application of the statutes of limitation to constructive
trustsought not to be difficult. These trusts are involuntary, and
are imposed upon the trustee because of actual or presumed fraud.
They are founded upon the notion of wrongful or adverse posses-
sion. It would seem clear, therefore, that from the instant when
the constructive trustee obtains the property the statute should
run. From the date when the fraudulent act is committed there is
a cause of action, a right to have a constructive trust declared.
From that date, therefore, the statute of limitations should oper-
ate. In accordance With this theory a great majority of the Ameri-
can courts have held that the statute runs against a constructive
trust from the time when the existence of the facts on which the
trust is based became known to the cestui que trust.®* Thus,

6' Appeal of Corr, 62 Conn. 403, 408, 26 Atl. 478.

68 Am. St. Rep. 17; Curtis v.
LioLe V. Park, 135 Ala. 131, 33 South. 175, 93
Daniel, 23 Ark. 362; HoUoway Eagle, 135 Ark. 206, 205 S. W. 113; Hill-
v.
yer v. Hynes, 33 Cal. App. 506, 165 Pac. 718; Norton v. Bassett, 154 Cal.
411, 97 Pac. 894, 129 Am. St. Rep. 162; Benoist v. Benoist, 178 Cal. 234,
172 Pac. 1109; Croce v. Bazzuro, 37 Cal. App. 167, 173 Pac. 774; Cliff v.
Cliff, 23 Colo. App. 183, 128 Pac. 860; Harrison v. Adcock, 8 Ga. 68; Terry
V. Davenport, 185 Ind. 561, 112 N. E. 998; Blackett v. Ziegler, 147 Iowa,
167, 125 N. W. 874; Burch v. Nicholson, 157 Iowa, 502, 137 N. W. 1066;
Washbon v. I4nscott State Bank, 87 Kan. 698, 125 Pac. 17; Hinze v. Hinze,
76 Kan. 169, 90 Pac. 762, 12 L. R. A. (N. S.) 493 Stubbins' Adm'r v. Briggs^
;

68 S. W. 392, 24 Ky. Law Rep. 230 Blakley v. Hanberry, 137 Ky. 283,
;

125 S. W. 703; Brawner v. Staup, 21 Md. 328; Cooper v. Cooper, 61 Miss.

 ;

§ 127) REMEDY BARBED BY THE STATUTE OP LIMITATIONS 559

where a trustee has wrongfully conveyed trust property to a thh-d

person, and the latter is sought to be held as a constructive trus-
tee, the date -of the conveyance will govern ;"'' 'where a trustee
purchased the trust res at his own sale, the right to have a con-
structive trust declared arose at once, and was barted in ten years
from the date of the purchase; " and where one standing in a fidu-
ciary relation, as that of principal and agent, bought his princi-
pal's property, the statute ran against the right to have a construc-
tive trust declared from the date of the purchase.''^ Constructive
notice, or notice of facts which should have led to the discovery of
the fraud, is sufficient to start the statute running.^^ If the person
obtaining the property by fraud conceals his fraud,^^ or for any oth-
er reason, not involving negligence of the claimant, the one claim-
ing as cestui que trust of a constructive trust is ignorant of the
fraud, the statute of limitations does not operate/*
The correct rule regarding constructive trusts and the statute of

676; Smith v. Eicords, 52 Mo. 581; Ricords v. Watkins, 56 Mo. 553; Bur-
dett V. May, 100 Mo. 13, 12 S. W. 1056; Reed v. Painter, 145 Mo. 341, 46
S. W. 1089; Hudson v. Gaboon, 193 Mo. 547, 91 S. W. 72; Smith v. Settle,
128 Mo. App. 379, 107 S. W. 430 ; Marklpy v. Camden Safe Deposit & Trust
Co., 74 N. J. Eq. 279, 69 Atl. 1100; Lammer v. Stoddard, 103 N. T. 672, 9
N. B. 328; Price v. Mulford, 107 N. Y. 303, 14 N. E. 298; Mills v. Mills,
115 N. Y. 80, 21 N. B. 714 ; King v. Mackellar, 109 N. Y. 215, 16 N. E. 201
Townsend v. Crowner (Sup.) 125 N. Y. Supp. 329, affirmed 145 App. Div.
906, 129 N. Y. Supp. 1148; Hart v. Goadby, 72 Misc. Rep. 232, 129 N. Y.
Supp. 892; Roediger v. Kraft, 169 App. Div. 304, 154 N. Y. Supp. 435; Ed-
wards V. Trustees of University, 21 N. C. 325, 30 Am. Dec. 170; Wheeler
V. Piper, 56 N. C. 249; Dunn v. Dunn, 137 N. C. 533, 50 S. B. 212 Barrett
;

V. Bamber, 81 Pa. 247; In re Marshall's Estate, 138 Pa. 285,^22 Atl. 24;
Way V. Hooton, 156 Pa. 8, 26 Ad, 784; Rice v. Braden, 243 Pa. 141, 89
Atl. 877; In re Post, 13 R. I. 495; Beard v. Stanton, 15 S. O. 164; Loyd
V. Currin, 3 Humph. (Tenn.) 462; Haynie v. Hall's Ex'r, 5 Humph. (Tenn.)
290, 42 Am. Dec. 427; Haynes v. Swann, 6 Heisk. (Tenn.) 560; Kennedy v.
Baker, 59 Tex. 150; Oaks v. West (Tex. Civ. App.) 64 S. W. 1033; Briggs
V. McBride (Tex. Civ. App.) 190 S. W. 1123; Sheppard v. Turpin, 3 Grat.
(Va.) 373 ; Beecher v. Foster, 51 W. Va. '605, 42 S. E. 647
; Hovcell v. How-
ell, 15 Wis. 55; Buttles v. De Baun, 116 Wis. 323, 93 N. W. 5.
8» Smith V. Dallas Compress Co., 195 Ala. 534, 70 South. 662.
70 Hubbell V. Medbury, 53 N. Y. 98.
'iMcKean & Elk Land & Imp. Co. v. Clay, 149 Pa. 277, 24 Atl. 211;
Ackerson v. Elliott, 97 Wash. 31, 165 Pac. 899.
72 Rider v. Maul, 70 Pa. 15; Frost v. Bush, 195 Pa. 544, 46 Atl. 80;
Cooper V. Lee, 75 Tex. 114, 12 S. W. 483.
T3 Jacobs V. Snyder, 76 Iowa, 522, 41 N. W. 207, 14, Am. St. Rep. 235;
West V. Sloan, 56 N. C. 102.
1* Prewitt V. Prewitt, 188 Mo. 675, 87 S. W. 1000; Freeland v. William-
son, 220 Mo. 217, 119 S. W. 560 ;Johnson v. Petersen, 100 Neb. 255, 159
N. W. 414; Wainburzee v. Kennedy, 4 Desaus. (S. C.) 474.
560 THE REMEDIES OF THE CESTUI QUE TRUST (Ch. 14

limitations is well stated in an early Wisconsin case/" as follows:

"It follows that the cause of action set forth was barred in the life-
time of William Howell unless, as counsel supposed, it was neces-
sary that there should have been a denial of the trust before the
statute would begin to run. But that doctrine is applicable only
to express or acknowledged trusts, where the trustee has afterwards
repudiated the rights of the cestui que trust, and set up a claim to
the trust property in his own right, and not to those implied or eq-
uitable trusts which spring from the originally, wrongful and fraud-
ulent acts of the party to be charged, and which were never recog-
nized or admitted by him. It was of such express or acknowledg-
ed trusts that the court was speaking in' the case referred to, and it
would be as absurd to apply that doctrine to these implied trusts
as it would be to apply the ten years* limitation to those where a
denial of the trust has never taken place. It would>be to abrogate
the statute of limitations altogether in actions of this nature, or to
say that it was not intended to apply to them ; for as the party to be
charged has no occasion to deny the trust until called upon to exe-
cute it, which is usually done by action, and as this might be delay-
ed until after the expiration of the ten years, so it might be post-
poned for an indefinite period in the future. This was clearly not
the intention. The trust in such cases originates in a fraud, which
is in itself as complete arid absolute a denial of the rights of the in-
jufed party as it is possible to have, and every day which passes
without reparation of the injury is a continuation or repetition
of it."
Minority View
In a few cases the courts seem to have overlooked the fact that
constructive trusts are founded on adverse holding from the begin-
ning. In these cases the courts hold that constructive trusts are
on the same footing with regard to the statute of limitations as
express trusts,' ° and consequently that the statute does not run un-
til the constructive trustee has repudiated the trust.'^
; This pecu-
liar doctrine has been applied to a few cases of constructive trusts
arising out of confidential relationships,'® and to others where an
attempt was made to follow trust property.'* Of course, if there

TBHowell V. Howell, 15 Wis. 55, 58.

'«Case V. Goodman, 250 Mo. 112, 156 S. W. 698; Canada v. Daniel, 175
Mo. App. 55, 157 S. W. 1032.
'TDennison v. Barney, 49 Colo. 442, 113 Pac. 519; Schlosser v. Schlosser,
62 Colo. 270, 162 Pac. 153.
7 8 Newls v.-Topfer, 121 Iowa, 433, 96 N. W. 739; Home Inv. Co. v. Strange

(Tex.) 195 S. W. 849.

T 9 Harvey v. Bank of Marrowbone, 178 Ky. 793, 200 S. W. 28; Goodman
V. Smith, 94 Neb. 227, 142 N. W. 521.
§ 127) REMEDY BAERED BY THE STATUTE OF LIMITATIONS 561

has been a disavowal by the constructive trustee, that is, an express

statement that he declines to hold for the constructive cestui que
trust, such evidence, while not necessary to cause the statute to
run, will certainly not impede its operation.'" The view that the
statute operates alike on all trusts is thus expressed by an Illinois
court *^ "When the possession of the trust property is taken by
:

the trustee, under the trust, it, is the possession of the cestui que
trust, whether the trust be express or implied, and cannot be ad-
verse until the trust is openly disavowed or denied, and this
fact is brought home to the knowledge of the cestui que trust."
An illustration of the application of this rule is found in an
Iowa case,*^ where a woman in feeble health conveyed realty to
her stepfather upon an oral understanding that he would care for
her children. The court raised a constructive trust upon the ground
of the confidential relation, and held that, since the constructive
trustee had never repudiated the trust, the statute of limitations
had not operated to bar the rights of the cestuis que trust.
Constructive Trustee may Consent to Trust
Yet other courts have taken the position that the possession of
the constructive trustee should be treated as adverse or not, de-
pendent on whether the constructive trustee recognized the rights
of the cestui que trust. If the trustee, after committing the fraud
which gave have the constructive trust declar-
rise to the right to
ed, admitted the rights of the defrauded person and denied any in-
tention of holding, for his own benefit, these courts have held that
the statute of limitations did not run, unless and until there was a
change of attitude by the constructive trustee.'^ Thus, where, a
husband used his wife's money to buy land without her consent,
and took the title in his name, but thereafter at all times recognized
the wife's ownership of the land and made no claim to it for him-
self, an Alabama court has held that the possession of the husband

88 Young V. Walker, 224 Mass. 491, 113 N. E. 363.

81 Reynolds v.Sumner, 126 111. 58, 71, 18 N. E. 334, 1 L. E. A. 327, 9 Am.
St. Rep. g23.
8SNewis Topfer, 121 Iowa, 433, 96 N. W. 739.
V.
83 Moore Worley, 24 Ind. 81
v. Milner v. Hyland, 77 Ind. 458
; Johnson
;'

V. Eoust, 158 Iowa, 195, 139 17. W. 451; Hunnicut v. Oren, 84 Kan. 460, 114
Pac. 1059 ; Donahue v. Quackenbush, 62 Minn. 132, 64 N. W. 141 ; Donovan
V. DrlscoU, 93 Pa. 509; Preston v. Preston, 202 Pa. 515, 52 Atl. 192; Pearce
V. Dyess, 45 Tex. Civ. App. 406, 101 S. W. 549. Contra: Parks v. Satter-
thwaite, 132 Ind. 411, 3^ N. E. 82. In Nougues v. Newlands, 118 Cal. 102,
50 Pac. 386, it was held that the recognition of the constructive trust must
be by writing, if the res is real property, in order that the recognition be
effective to prevent the running of the statute.
BOGEET Trusts —36
 562 THE REMEDIES OF THE CESTUI QUE TRUST (Ch. 14

, was not adverse, though obtained fraudulently, and the ^statute had
not begun to run against the wife's rights.'*
In this class of cases fall those in which an agent takes title to
property in Ms own name, but the principal remains in possession.
Here, though the agfent be guilty of fraud which might be made the
basis of a constructive trust, yet possession by the principal
amounts to a recognition of the trust and prevents the statutory
bar from being imposed.'" "The rule, however, is different with
respect to constructive or resulting trusts; the general rule in
such cases being that the statute commences to run from the
,

time the act occurs which creates the- trust, or, in other words,
when the cestui que trust could bring an action to enforce the trust,
and that no repudiation of the trust by the trustee is necessary to
start the But to that general rule there is a
running of the statute.
well defined and recognized exception, viz., when the cestui que
trust is in possession, and the trustee has done nothing inconsistent
with a recognition of the trust, or has not asserted an adverse
claim." '' The holdings of many courtsamount substantially to a
rule that the statute of limitations commences to run against a con-
structive trust from the date of knowledge by the cestui que trust
of the act which gives rise Jo the trust, unless there is a recogni-
tion of the trust by the constructive trustee.*' The presumption is
in favor ofadverse holding. Holding in subordination to the ces-
tuique trust is abnormal and exceptional.
As with resulting trusts, so with constructive, it would seem that
the possession of the trustee should be regarded as adverse, unless
he recognizes the trust in such a way as to change his status to

J
siHaney Legg, 129 Ala. 619, -30 South. 34, 87 Am. St. Eep. 81. For
v.
a similar case, see Fawcett v. Fawcett, 85 Wis. 332, 55 N. W. 405, 39 Am.
St. Rep. 844.
80 Ackley v. Croucher, 203 111. 530, 68 N. E. 86; Franks v. Morris, 9 W.
Va. 664; Cook v. Elmore, 25 Wyo. 393, 171 Pac. 261.
86 Cook V. Elmore, 25 Wyo. 393, 171 Pac. 261, 263.
81 Martin v. Branch Bank of Decatur, 31 Ala. 115 ; Brackin v. Newman,

121 Ala. 311, 26 South. 3; Broder v. Conkliu, 121 Cal. 282, 53 Pac. 699;
Barker v. Hurley, 132 Cal. 21, 63 Pac. 1071, 64 Pac. 480; Earle v. Bryant,
12 Cal. App. 553, 107 Pac. 1018; Earhart v. Churchill Co., 169 Cal. 728,
147 Pac. 942; Wilmerding v. Russ, 33 Conn. 67; Gebhard v. Sattler, 40
Iowa, 152 Otto v. Schlapkahl, 57 Iowa, 226, 10 N. W. 651
; Manion's Adm'r
;

V. Titsworth, 18 B. Mon. (Ky.) 582; Commonwealth v. Clark, 119- Ky. 85,

83 S. W. 100, 9 L. R. A. (N. S.) 750; Harlow v. Dehon, 111 Mass. 195;
Prewett v. Buckingham, 28 Miss. 92; Mills v. Hendershot, 70 N. J. Eq. 258,
62 Atl. 542; Seitz v. Seitz, 59 App. Div. 150, 69 N. Y. Supp. 170; Stianson
V. Stianson, 40 S. D. 322, 167 N. W. 237, 6 A. L. R. 280.
§ 127) REMEDY BAEEED BY THE STATUTE OF LIMITATIONS 563

that of an express trustee. If the property involved were real

property, this recognition should meet the requirements of the
Statute of Frauds. So long as the person obtaining the property
by fraud, actual or presumed, has not made himself an express
trustee, or been made a constructive trustee by act of equity, he
holds the property adversely and for his own benefit, and the stat-
ute should operate in his favor.
 ; ; — ; ;

564 THE TERMINATION OP THE TRUST (Ch. 15

CHAPTER XV
THE TBEMINATION OF THE TRUST
128. Methods of Extinction.

METHODS OF EXTINCTION
128. The trust may end because of
(a) The natural expiration of the trust term as defined in the
trust instrument
(b) The accomplishment of its purpose;
(c) The impossibility of its execution
(d) Its destruction by the operation of the doctrine of merger
(e) The exercise of a power of revocation reserved to the settlor
or granted to another
(f) A
decree of termination upon the demand of the cestui que
trust, where the trust is passive or its purpose accom-
plished ;
(g) The sale of the trust property upon the foreclosure of a lien
arising prior to the trust.
The death of a trust party ordinarily has no effect on the life of
a trust.
By the weight of authority a cestui que trust, owning the entire
'
equitable interest in the trust res, may not call for a ter-
mination of the trust, if it is active and its purpose un-
accomplished.

Bxpiration of Trust Term

The termination of the trust does not ordinarily involve difficul-
ty. Normally the term is fixed by the trust instrument or the oral
settlement. Where the settlor states the period for which the
trust is to continue, and this period is a la^wful one, there can be
little room for contention concerning the extinction of the trust by
natural means. The trust will last till the date set and then nat-
urally cease. Thus, a period of years,^ or a life,^ may be fixed as
the trust term; or the settlor may provide that the trust shall con-

1 Watklns v. Greer, 52 Ark. 65, 11 S. W. 1019 ; In re Hanson's Estate,

159 Cal. 401, 114 Pac. SIO; Montgomery v. Trueheart (Tex. Civ. App.) 146
S. W. 284.
2 LaughUn
v. Page, 108 Me. 307, 80 Atl. 753 In re llOth St., 81 App. Div.
;

27, 81 N. I. Supp. 32; Embury v. Sheldon, 68 N. Y. 227; Dunn v. Dunn,

187 N. C. 533, 50 S. E. 212; In re WUson's Estate, 49 Pa. 241; Bearden
V. White (Tenn. Ch. App.) 42 S. W. 476.
§ 128) METHODS OF EXTINCTION 565

tinue for a period of years, unless a life expires prior to that time.*
A life may be fixed as the trust term, with a proviso that the trus-
tee may in his discretion earlier end the trust.* The settlor may
prescribe that the trust shall last during a minority,^ or until a
cestui que trust reaches a given age,* or until the marriage of a
given person.''
The happening of any one of a large number of events may be
fixed as the date of the termination of the trust as, for example, ;

the alienation of the interest of the cestui que trust,' a breach of

trust by the trustee,* the failure of the cestui to perform a condi-
tion,^" the discharge of the beneficiary from
all his debts,^^ or the
good moral conduct of the cestui que trust for seven years.^^
Instead of fixing the end of the trust himself, the settlor may
give that right to another. The trust period will not then be cer-
tain, but will be capable of being rendered certain by the exercise
of the power of termination given to the trustee, ^^ the trustee and
the cestui que trust jointly,^* the cestui que trust,^° a majority of
the beneficiaries,^® or such other party as the settlor may select.
Where the settlor nominates another to end the trust in its en-
tirety, it is a question of fact whether he also impliedly granted
the power to end the trust in part.^'
Although a settlor may not have expressly stated the trust term,
or measured it by lives, years, or similar standards, he may impli-
edly have fixed the duration of the trust by his statement of its
purpose. It is rudimentary law that a trust will last no long-er

sMcCosker Brady, 1 Barb. Ch. (N. Y.) 329.

v.
* Cutter Hardy, 48 Cal. 568;
V.
5 Kuykendall v. Zenn, 78 Md. 537, 28 Atl. 412 ; Fogarty v. Stange, 72
Misc. Bep. 225, 129 N. Y. Supp. 610; Mason v. Paschal, 98 Tenn. 41, 38 S.
W. 92.
6 Anderson v. Messinger, 146 Fed. 929, 77 C. C. A. 179, 7 L. B. A. (N. S.)

1094.
TThornqulst v. Oglethorpe Lodge Number One, 140 Ga. 297, 78 S. B.
1086; In re Eose's. Will, 156 Wis. 570, 146 N. W. 916.
8Cherbonnier v.' Bussey, 92 Md. 413, 48 Atl. 923.
9Eolfe & Bumford Asylum v. Lefebre, 69 N. H. 238, 45 Atl. 1087.
10 Short V. Wilson, 13 Johns. (N. Y.) 33.
11 In re Ames, 22 R. I. 54, 46 Atl. 47.
12 Ordway v. Gardner, 107 Wis. 74, 82 N. W. 696.
IS Schreyer v. Schreyer, 101 App. Div. 456, 91 N. Y. Sapp. 1065, affirmed
i.82 N. Y. 555, 75 N. E. 1134; In re Wilkin, 90 App, Div. 324, 86 N. Y.
Suppi 360.
1* Lipplncott V. Williams, 63 N. J. Eq. 130, 51 Atl. 467.
IS In re Stone, 138 Mass. 476.
18 Culver V. Culver, 58 Ohio St. 172, 50 N. B. 505.
"In re Columbia Trust Co., 97 Misc. Bep. 566, 163 >i. Y. Supp. 536.
566 THE TERMINATION OP THE TRUST (Ch. 15
/

than necessary for the accomplishment of its purpose. If the set-

tlor has not otherwise fixed the end of the trust, he will be deemed
to have intended that it should last till the trust purpose was at-
tained.^' Thus, a trust to collect the net income and pay it over
to a beneficiary may naturally be measured by the life of the bene-
ficiary, since the object of supporting the beneficiary would not be
accomplished until his death; ^' and a trust for a married woman,
to protect her property from her husband, may reasonably be con-
strued to last during the marriage only.^"
In some jurisdictions statutes provide that certain trusts suspend the
power of alienation, and other statutes limit the lawful period of such
suspension.''^ In these states the trust period must be carefully fixed,
in order to avoid the rules against unlawful suspension of the power of
alienation;
The rules regarding the express or implied limits of the trust
term are well stated by an Illinois court, as follows ^^ "Where a
:

testator by his will creates a trust and fixes the duration thereof,
his direction will,if not in violation of the rule against perpetuities,

be given effect and the trust will continue for the time indicated;
but where a testator does not specifically indicate the time for
which the trust is to continue, his intention must, if possible, be
determined from the entire will. Where the evident purpose of a
trust is the accomplishment of a particular object, the trust will
terminate so soon as that object has been accomplished, and the
fact that a fee is given to the trustee does not show the testator's
intention that the trust estate shall continue after the active duties
connected with the trust have been accomplished."
Accomplishment of Purpose
Not only may the trust terminate because of the expiration of
the period stated by the settlor to be the trust period, but also be-
cause the continuance of the trust would be useless. If the re-
sult sought to be reached by the establishment of the trust has
been achieved, equity will either regard the trust as ended or will
end it. Many courts have held that, on the accomplishment of
the trust purpose, the legal title of the trustee ceases ipso facto,

18 Edwards v. Edwards, 142 Ala. 267, 39 South. 82; Smitli v. Dun woody,
19 Ga. 237 ; CornweU v. Wulff, 148 Mo. 542, 50 S. W. 439, 45 L. E. A. 53;
Augustus V. Graves, 9 Barb. (N. Y.) 595; Burke v. O'Brien, 115 App. Dlv.
574, 100 K. Y. Supp. 1048; Mackrell v. Walker, 172 Pa. 154, 33 Atl. 337.
i» In re Leavitt, 8 Cal. App. 756, 97 Pac. 9it).
20 Smitli V. Metcalf, 1 Head (.Tenn.) '64.
21 Jessup V. Witherbee Real Estate &- Imp. Co., 66 Misc. Rep. 649, 117
N. Y. Supp. 276. See discussion, ante, §§ 49, 111.
22 Kohtz V. Eldred, 208 111. 60, 72, 69 N. B. 900.
§ 128) METHODS OF EXTINCTION '
567

and the person entitled to the property after the end of the trust
becomes automatically the holder of the legal title.^' Other courts
have reached the same result on a different theory by folding that
the accomplishment of the trust purpose caused the original trust
to end, and left the trustee the holder of the legal title under a
passive trust for the person next entitled.^* This latter view-
would seem more logical and less apt to produce confusion in titles
than a change of title without action or record.
"The duration of a trust depends upon the purposes of the trust.
When the purposes have been accomplished the trust ceases." "^
In Koenig's Appeal ^* a trust for a married woman had been creat-
ed and divorce had later occurred. In discussing the termination
of the trust the court said: "But if the sole purpose of the trust
was to protect the wife's estate against her husband, it is manifest
that purpose was fully accomplished when the coverture ceased.
The divorce of the parties terminated all possibility of the hus-
band's interference with the property bequeathed and devised to
the wife, as completely as his death would have done. Then why
should the trust be continued after its exigencies have been met?
It matters not what may be the nominal duration of an estate
given by will to a trustee. It continues in equity no longer than
the thing sought to be secured by the trust demands. Even a de-
vise to trustees and their heirs will be cut down to an estate for
life, or even for years, if such lesser estate be sufficient for the pur-

pose of the trust." ,

Examples of trusts terminating naturally or prematurely through

==» Comby McMiehael, 19 Ala. 747; Cherry v. Richardson, 120 Ala. 242,
v.
24 South. 570; Snell v. Payne, 78 S. W. 885, 25 Ky. Law Kep. 1836; In re
Hagerstown. Trust Co., 119 Md. 224, 86 Atl. 982; Taylor v. Richards, 153
Mich. 667, 117 N. W. 208; Shafer, 2 S'andf. Oh. (N. Y.) 293;
Bellinger v.
Peck V. Brown, 25 N. Quin v. Skinner, 49 Barb. (N. Y.)
Y. Super. Ct. 119 ;

128; Sharman v. Jackson, 98. App. Div. 187, 90 N. Y.. Supp. 469; JKahn v.
Tierney, 135 App. Div. 897, 120 N. Y. Supp. 663, affirmed 201 N. Y. 516,
94 N. E. 1095 Steacy v. Rice, 27 Pa. 75, 67 Sm. Dec. 447 Appeal of Bush,
; ;

38 Pa. 85; Appeal of Koenig, 57 Pa. 352; Appeal of Williams, 83 Pa. 377;
In re Lee's Estate, 207 Pa. 218, 56 Atl. 425; "Wilson v. Hellman, 219 Pa.
237, 68 Atl. 674; Packer's Estate, 246 Pa. 97, 92 Atl. 65; Warland v. Col-
weU, 10 R. I. 369; Temple v. Ferguson, -110 Tenn. 84, 72 S. W. 455, 100
Am. St. Rep. 791; Millsaps v. Johnson (Tex. Civ. App.) 196 S. W. 202.
2*Ringrose v. Gleadall, 17 Cal. App. 664, 121 Pac. 407; Kohtz v. Eldred,
208 111. 60, 69 N. E. 900 Gary v. Slead, 220 111. 508, 77 N. E. 234 ; Brown-
;

ing V. Fiklin's Adm'r, 12 S. W. 714, 26 Ky. Law Rep. 470; Adams v. Adams,
56 S. W. 151, 21 Ky. Law Rep. 1756; Harlow v. Cowdrey, 109 Mass. 183;
Dodson V. Ball, 60 Pa. 492, 100 Am. Dec. 586 Carman v. Bumpus, 244 Pa.
;

136, 90 Atl. 544.

25 Winters v. March, 139 Tenn. 490, 501, 202 S. W. 73.
26 57 Pa. 352, 355.
568 THE TERMINATION OP THE TRUST (Ch. 15

the accomplishment of their purposes are found in trusts for mar-

ried women where the marriage ends, either by the death of the
husband,^' or the death of the wife,''* or by divorce."' Once such
a trust is extinguished, it does not revive on the remarriage of the
cestui que trust.'" Similarly a trust to pay debts is ended by the
cancellation of the debts through other means.'^ But where a
trust was created for one who happened to be an inebriate at the
time of the commencement of the trust, but the object of the trust
did not appear to have been to guard against improvidence arising
from such habits, a change in the condition of the cestui que trust
to that of sobriety did not cause the trust to terminate.^^
The principle that achievement of purpose causes the end of a
trust is, in some states, incorporated in statutory fbrm.'*
Impossibility of Performance
The effect on private, express trusts of imperfection in the dec-
laration, or illegality or impossibility, has been previously dis-
cussed.'* the imperfection, illegality, or impossibility existed at
If
the time it was soughtto create the trust, the express trust never
comes into being. Title passes by virtue of the settlement, but the
trustee holds as a resulting trustee and not under the intended ex-
press trust. If, however, the illegality or impossibility did not ex-
ist at the commencement of the trust, but arose during its execu-
tion, a different question is presented. In this latter case the express
trust has admittedly had existence. The impossibility or illegality
which changes it into a resulting trust will therefore cause the
termination of the express trust. Such situation, therefore, pre-
sents another example of the methods by which a trust may be
extinguished. For example, if a trust is created by deed to aid
creditors named in an assignment for the benefit of creditors previ-
ously made by the settlor's husband, and the husband's assignment
is set aside after the trust created by the wife has commenced, obvi-
ously there is an impossibility. The execution of a trust auxiliary

27 O'Brien v. Ash, 169 Mo. 283, 69 S. W. 8.

2 8Liptrot V. Holmes, 1 Ga. 381.
29 In re Cornils' Estate, 167 Iowa, 196, 149 N. W. 65, L. R. a; 1915E, 762;
McNeer v. Patrick, 93 Neb. 746, 142 N. W. 283. But, if the trust is express-
ly settled to last for the life of the husband, divorce will not terminate it.
Pelton V. Macy, 124 App. Div. 367, 108 N. Y. Supp. 713.
30 Hamersley v. Smith, 4 Whart. (Pa.) 126.
81 Selden v. Vermilya, 3 N. T. 525.
82 Anderson v. Kemper, 116 Ky. 339, 76 S. W. 122.
8 3 "When the purpose for which an. express trust is created ceases, the

estate of the trustee shall also cease." New York Real Property Law (Con-
sol. Laws, c. 50) § 109.
84 See ante, § 32.
§ 128) METHODS OF EXTINCTION 5G&

to the husband's assignment has been prevented because the hus-

band's assignment has been wiped out of existence. Therefore the
original express trust ceases and the trustee holds as a resulting
trustee for the settlor. The court says "It will not be disputed,
:

we presume, that where a trust is created by deed, and the object

of such trust fails, the property conveyed by the deed reverts to
the grantor or his heirs by way of resulting trust." ^°
It has been previously shown that impossibility of performance
has a different effect in charitable trusts from that given to it in the
case of private trusts.^" Ordinarily if a charitable trust becomes
impossible of execution as directed by the settlor, equity will apply
the cy pres doctrine and carry out the settlor's intention as nearly
as possible. But in a few cases impossibility of performance has
had the effect of terminating a charitable trust. Thus, it has been
held that where the trust funds become exhausted, the charity
should be declared extinguished.'' And where the application of
the cy pres doctrine is impossible, because no other charity than
the one prescribed would approximately carry out the settlor's
ideas, the trust will be held to have failed and fund revert to the
donor.^* A few courts have held that where a settlor voluntarily
creates a charitable trust and there is a subsequent abandonment
of the charity hy the trustees, there will be a reverter.'" And in
a few states, due to the failure of the court to recognize the cy
pres rule, or for other reason, impossibility of performance has
had the effect of the destruction of the trust.*"
On the other hand, in the great majority of the cases consider-
ing the question, impossibility of carrying out the charitable trust
as originally planned has been no bar to its continuance. Thus, the
dissolution of the corporation mad.e trustee under the trust instru-
ment does not affect the life of the trust, for a new trustee may be
supplied.*^ In the absence of a clause providing for a reverter and

85 Witt V. Carroll, 37 S. C. 388, 393, 16 S. E. 130.

36 Ante, § 63.
8T Bronson v. Strouse, 57 Conn. 147, 17 Atl; 699 ; Acklin v. Paschal, 4S
Tex. 147.
38 People ex rel. Smith v. Braucher, 258 111. 604, 101 N. E. 944, 47 L. R. A.

(N. S.) 1015.

3 9 Cirun^y v. Neal, 147 Ky. 729, 145 S. W. 401 (but see, contra, Lutes v.

Louisville & N. K. Co., 158 Ky. 259, 164 S. W. 792, where the reason for the
abandonment of the premises was the necessity to convey them to a rail-
road to avoid condemnation proceedings and where other property was sub-
stituted); Cone v. Wold, 85 Minn. 302, 88 N. W. 977; Appeal of Gumbert,
110 Pa. 496, 1 Atl. 437, semble.
*o Taylor v. pogers, 130 Ky. 112, 112 S. W. 1105 Golding v. Gaither, 113
;

Md. 187, 77 Atl. 333; Pringle v. Dorsey, 3 S. C. 502.

41 Green v. Blackweil (N. J. Ch.) 35 Atl. 375; In re Orthodox Congrega-
570 THE TERMINATION OF THE TKUST - (Ch. 15

a termination of the trust in case of impossibility of performance

according to the original directions, equity will apply the property
cy pres for charitable objects as nearly like those stated by the set-
tlor as possible.*^ "Where lands have been donated and become
vested in a trustee, as herein for charitable uses, neither the donor
nor his or her heirs can ever reclaim it, and all right and interest
therein or thereto is gone forever." *^ For abuse of the charitable
trust the remedy is not a termination of the trust, but removal of
the trustee or action in equity to compel performance. From non-
use or abuse by the trustee no termination of the trust results.**
An unreasonable delay by the trustee of the charitable trust has
no effect on the life of the trust.*'*
Merger
Merger a doctrine of limited application in equity. It will not
is

operate when
injustice or the defeat of the settlor's intent would re-
sult. But where it takes effect it may terminate a trust.
The attitude of the courts toward merger as applied to trusts is
shown by an extract from a recent Iowa case,*" as follows: "Merg-
er takes place where a greater and less estate come together in
the same person, and when there is no reason for their longer ex-
istence as separate estates. The doctrine has its foundation in the
convenience of the parties interested, and therefore whenever the*
rights of strangers, not parties to the act, that would otherwise
work an extinguishment of the particular estate, require it, the two
estates will still have a separate continuance in contemplation of

tional Churchin Union Village, 6 Abb. N. C. (N. T.) 398; In re Centennial

& Memorial Ass'n of Valley Forge, 235 Pa. 206, 83 Atl. 683.
*2 Barnard v. Adams (C. C.) 58 Fed.^313 Bridgeport Public Library &
;

Reading Room v. Burroughs Home, 85 Conn. 309, 82 Atl. 582; Huger v.

Protestant Episcopal Church, 137 Ga. 205, 73 S. E. 385; Goode v. McPher-
son, 51 Mo. 126; Women's Christian Ass'n v. City of Kansas City, 147 Mo.
103, 48 S. W. 960 ;' Keene v. Eastman, 75 N. H. 191, 72 Atl. 213 Maxcy
;

V. City of Oshkosh, 144 Wis. 238, 128 IV. W. 899, 1136, '31 L. R. A. (N. S.)
787.
*3 Women's Christian Ass'n v. City of Kansas City, 147 Mo. 103, 126, 127,
48 S. W. 960.
*i Bolick V.
Cox, 145 Ga. 888, 90 S, E. 54 ; People ex rel. EUert v. Cogs-
well, 113 Cal. 129,45 Pac. 270, 35 L. R. A. 269; American Colonization Soc. v.
Soulsby, 129 Md. 605, 99 Atl. 944, L. R. A. 19170, 937 ;Sanderson v. White,
18 Pick. (Mass.) 328, 29 Am. Dec. 591 Stewart v. Franchetti, 167 App. Div.
;

541, 153 N. Y. Supp. 453; Barr v. Weld, 24 Pa. 84; In re Sellers M. E.

Church's Petition, 139 Pa. 61, 21 Atl. 145, 11 L. R. A. 282; In re Toner's
Estate, 260 Pa. 49, 103 Atl. 541; Clark v. Oliver, 91 Va. 421, 22 S. E. 175.
*5 Tainter v. Clark, 5 Allen (Mass.) 66.
48 Sherlock v. Thompson, 167 Iowa, 1, 148 N. W. 1035, 1039, Ann. Gas.
1917A, 1216.
§ 128) METHODS OF EXTINCTION 571

law." As said by a California court " "To have a union operate

:

a merger, the estates must unite in one and the same person, having
a commensurate and coextensive interest in each, with no inter-
vening interest in another. A legal estate in fee in one who has
only a partial equitable interest, or vice versa, would not merge.
* * * Wherever it would work injustice, or defeat the inten-
tion* of the donor to work a merger, the two estates will be kept
alive although they come together in one person. * * * While
merger at law follows immediately upon the union of a greater
and lesser estate in the same ownership, it does not so follow in
equity. There the doctrine is not favored and the estates will be
kept separate where the intention of the parties and justice re-
quire it."
Examples of the abolition of a trust by merger are found in the
cases where the trustee has conveyed his legal estate to the sole
cestui que trust. In such instance the separate entities necessary
to the continuance of the trust are lacking, and absolute ownership
by the grantee is the, result.*' The converse of this situation may
produce merger also. If the cestui que trust transfer to the trustee
all his interest, a merger may occur and absolute ownership by the
trustee be the outcome *" but this will not be the case if an intent
;

that merger should not take place is clearly expressed.^"

If at the commencement of the trust the sole trustees are also
the sole cestuis que trust, a merger and absolute ownership, will,
result, for there is no object in maintaining the trust.°^ But the
opposite result occurs where the sole cestui que trust was one of
several trustees at the outset, but by survival became the sole trus-
tee. In this latter case the substitution of trustees for the deceased
trustees or the supervision of the adminisfe-ation of the trust by the
court will prevent the necessity of merger and termination of the
"^
trust. As was said by a court which had this question to consider :

"When the beneficiary of an express trust becomes a sole trustee

4T Estate of Washburn, 11 Cal. App. 735, 746, 106 Pac. 415.
*8 Brooks V. Jones, 11 Mete. (Mass.) 191; Healey v. Alston, 25 Miss. 190;
Hickman v. Wood's Ex'r, 30 Mo. 199.
49 Cunningham v. Bright, 228 Mass. 385, 117 N. E. 909. But see Bronson
V. Thompson, 77 Conn. 214, 58 Atl. 692, for a case where merger did not
occur. I

6 Gray v. Beard, 66 Or. 59, 133 Pac. 791.

Biln re Selous, [1901] 1 Ch. 921. See discussion at ante, § 74. If the
sole cestui is sole trustee,merger will occur, notwithstanding a direction
that surplus income be accumulated for ten years such direction being
;i

said to be inconsistent with the absolute interest given the cestui que trust.
Odom V. Morgan, 177 N. O. 367. 99 S. E. 195.
82 Irving V. Irving, 21 Misc. Kep. 743, 745, 746, 47 N. Y. Supp. 1052.
572 THE TERMINATION OF THE TRUST (Ch. lb

for his own seems to me that the true rule

benefit, as in this case, it
to adopt is this; That the not thereby destroyed, but that
trust is
it is improper for the beneficiary to act, except by direction of the

court, guch a rule permits the intent of the testator to be fully

carried out, and is also in harmony with the long and well establish-
ed rule that a court of equity will endeavor to effectuate the inten-
tion of a testator, and, for that purpose, will not permit a trust to
fail because of the failure to appoint a competent trustee."
Where the holder of the complete legal title is also a holder of a
portion of the equitable interest, the trust is naturally not destroy-
ed. The outstanding equitable interest in others prevents such re-
sult."
Where the nature of the trust is such that all the cestuis que
trust have a right to demand a termination of the relationship,
merger of two equitable interests may place in the hands of one
person the power to demand an end of the trust. Thus, it has been
held that, where the sole cestui que trust and the sole remainder-
man convey their interests to a third party, equity may, at the re-
quest of the latter, extinguish the trust."* And a similar result
has been obtained in a case where the remainderman conveyed his
interest to the life cestui que trust.""
On the other hand, the union of the entire equitable interest in,
the hands of one person does not conclusively show a right to end
the trust. To effectuate the intent of the settlor the trust may be
continued."* If there are outstanding contingent interests, which
would be shut out by the merger, the union of the vested interests
will not cause merger."^

Death of Party
The death of settlor, trustee, or cestui que trust will not cause
the trust to terminate unless the life of one or the other has in
some way been made the measure of the life of the trust. In other
words, the death of one or all of these parties will not prematurely
end the trust, will not cut it off in advance of the time fixed by
the settlor.

53 Sherlock v. Thompson, 167 Iowa, 1, 148 N. W. 103S, Ann. Gas. 1917A,

1216.
4 BrooksV. Davis, 82 N. J. Eq. 118, 88 Att. 178.
BO In re Bloodgood, 184 App. Div. 798, 172 N. Y. Supp. 509; In re Owens'
Estate, 3 Pa. Dist. R. 331. In Lan'gley v. Conlan, 212 Mass. 135, 98 N. Hi.
1064, Ann. Cafe. 1913C, 421, a life cestui, having a half interest in remainder,
purchased the other half, and was later appointed trustee. Merger occurred.
9 In re Washburn's Estate, 11 Cal. App. 735, 106 Pac. 415; Martin v.
Pine, 79 Hun, 426, 29 N. Y. Supp. 995.
BT Wenzel v. Powder, 100 Md. 36,' 59 Atl. 194, 108 Am. St Rep.
380.
§ 128) METHODS OF EXTINCTION 573

A trust is not like an agency, where the death of the principal

revokes the relationship. The death of the settlor will, unless the
settlor's life has been made a measuring life, have no effect on the
continuance of the trust. °*
So, too, under the application of the doctrine that equity never
allows a trust to fail for want of a trustee, the death ^of the trustee
will not extinguish the trust relationship."* A substitute trustee
will be supplied. But if the powers of the deceased trustee were
personal, that is, if an intention had been expressed by the settlor
that the deceased trustee alone should exercise the powers, then
death will end the trust.*" The life of the trustee may, of course,
be made 'the measure of the trust's"' duration, expressly or by im-
plication.*^ Where the deceased trustee had the sole power to
appoint his successor and appointed none, the trust will end at the
death of the trustee."'' Where a husband is trustee for his wiTe,
the object of the trust being to protect the property from interfer-
ence by the husband during the marriage, the death of the husband
trustee naturally results in the accomplishment of the trust purpose
and indirectly causes the end of the trust.**
The death of the cestui que trust has orliinarily no effect on the
life of the trust.** His interest, if inheritable, passes to his repre-
sentatives, of goes to the succeeding cestui que trust, if provision
is made for two or more successive beneficiaries. But frequently
the settlor expressly or impliedly provides that the trust shall en-
dure only during the life, of the cestui que trust.*" In the so-called

58 Lyle V. Burke, 40 Mich. 499.

69 Williams v. McConico, 36 Ala. 22; Spence v. Widney (Cal.) 46 Pac.
463; Shillinglaw v. Peterson, 184 Iowa, 276, 167 N. W. 709.
eoHadley v. Hadley, 147 Ind. 423, 46 N. E. 823; Hinckley v. Hinckley,
79 Me. 320, 9 Atl. 897. But merely giving discretion to the trustee to de-
liver part of the principal to the cestui que trust does not show that the
trust was personal. Russell v. Hartley, 83 Conn. 654, 78 Atl. 320.
81 Fidelity Trust Co. v. Alexander, 243 Fed. 162, 156 C. C. A. 28; Brock
v. Conkwright, 179 Ky. 555, 200 S. W. 962; FarreUy v. Ladd, 10 Allen
(Mass.) 127; Barbour v. Weld, 201 Mass. 513, 87 N. E. 909; Baker v. Mc-
Aden, 118 N. C. 740, 24 S. E. 531; Appeal of Shoemaker, 91 Pa. 134.
62 Brock V. Conkwright, 179 Ky. 555, 200 S. W.' 962.
63 Coughlin v. Seago, 53 Ga. 250.
6* Slevin v. Brown, 32 Mo. 176; Mendenhall v. Walters, 53 Okl. 598, 157
Pac. 732.
65 Snodgrass v. Snodgrass, 185 Ala. 155, 64 South. 594; Bradstreet v. Kin-
seUa, 76 Mo. 63; Norton v. Norton, 2 Sandf. (N. Y.) 296; Deering v. Pierce,
149 App. Div. 10, 133 N. Y. Supp. 582 ; Ivory v. Burns, 56 Pa. 300 ; Appeal
of Stokes, 80 Pa. 337. By Acts Ind. 1915, p-. 98, unexplained absence of the
cestui que -trust for five years is regarded as equivalent to his death, and
authorizes a termination of the trust.
574 THE TERMINATION OF THE TRUST (Ch. 15

"savings bank" trusts, where A. deposits his money in a bank and

directs that the account be entitled "A., in trust for B.," the death
of B. may prevent the trust having any existence."* Unless A.
makes the trust irrevocable by notice to B., or delivery of t^ie
book, or in some similar way, the deposit will not result in the cre-
ation of a trust, unless B. survives A. Here the. death of a tenta-
tive cestui que trust prevents him from becoming a permanent ben-
eficiary.

Act of Party —Settlor

It remains, to be considered when one of the parties to the trust
may destroy it, by the mere expression of his will to do so, or
either
by calling upon equity for a decree of termination.
It has previously been shown herein that the settlor, whether the
settlement be voluntary or for a consideration, has no control over
the trust and no right to revoke it, unless he has reserved that right
in the trust instrument or declaration.*' Having created in the
beneficiaries certain rights, the settlor has no power to destroy
those rights or to demand of equity their destruction, unless such
power has been expressly provided for. If the trustee is guilty of
an abuse of the trust, the remedy is removal of the trustee by equi-
ty, on the application of a party in interest, and the settlor may
not, because of such abuse, revoke the trust, where there was no
power of revocation reserved.**
On the other hand, if there is, a reservation of the right to revoke
on behalf of the settlor, he obviously has the power to terminate
the trust, whether it was voluntarily created or not.**

88 In re United States Trust Co. of New York, 117 App. Div. 178, 102 N. Y.
Supp. 271, affirmed 189 N. Y. 500, 81 N. E. 1177.
87 bee ante, § 72; Hendrix College v. Arkansas Townsite Co., 85 Ark.
446, 108 S. W. 514; Kopp v. Gunther, 95 Cal. 63, 30 Pac. 301; Bay Bis-
cayne Co. v. Baile, 73 Fla. 1120, 75 South. 860; Biemensnlder v. Klemen-
snider, 179 111. App. 209; Von Buchwaldt v. Schlens, 123 Md. 405, 91 Atl.
466; Lovett v. Farnham, 169 Mass. 1, 47 N. E. 246; Dickey v. Goldschmidt,
60 Mii^d Kep. 258, 111 N. Y. bupp. 1025; In re Green, 103 Misc. Rep. 564,
170 N. Y. Supp. 843; Fidelity Title & Trust Co. of Pittsburg v. Graham,
262 Pa. 273, 105 Atl. 295; Rynd v. Baker, 193 Pa. 486, 44 Ail. 551; Wilson
V. Anderson, 186 Pa. 531, "40 Atl. 1096, 44 L. R. A. 542; Strong v. Weir, 47
S. C. 307, 25 S. E. 157.
88 Sickles T. City of New Orleans, 80 Fed. 868, 26 C. C. A. 204; Brower
V. Callender, 105 lU. 88.
soHidell v. Girard Life Ins. Annvuty & Trust Co., Fed. Cas. No. 6464;
Stockett V. Ryan, 176 Pa. 71, 34 Atl. 973; Yard v. Pittsburgh & L. E. R.
Co., 131 Pa. 205, 18 Atl. 874 Jennings v. Hennessy, 26 Misc. Rep. 265, 55 N.
;

Y. Supp. 833, affirmed 40 App. Div. 633, 58 N. Y. Supp. 1142; Wright v.

Clark, 81 Misc. Rep. 527, 142 N. Y. Supp. 812; Sims v. Brown, 252 Mo.
58, 158 S. W. 624; Brown v. Fidelity Trust Co., 126 Md. 175, 94 Atl. 523;
§" 128) METHODS OF EXTINCTION 575

Some courts have been inclined to extend the settlor's right of

revocation to certain cases, even though no power to revoke had
been reserved. Thus, it has been held that equity would decree a
termination of the trust at the instance of the settlor, where the
trust was not being performed and injury to both settlor and cestui
que trust was thereby occurring." The Rhode Island courts have
regarded the failure to insert a power of revocation in a voluntary
deed as prim'a facie evidence of mistake, entitling the settlor to rev-
ocation;^^ but this view has been opposed in Massachusetts.''^
If the power of revocation was omitted through fraud or mistake,
obviously according to elementary equitable principles the power
of revocation will be supplied and termination of the trust allow-
ed.'" The absence of a power of reservation, the lack of advice on
the need of such power, and surrounding circumstances showing
an expectation on the pai't of the settlor that the power would ex-
ist, are facts authorizing equity to allow revocation the court say- ;

ing': '* "That the law of the land permits any one to dispose of his
property gratuitously, if he please, when not prejudicial to the in-
terests of creditors, and that his voluntary gifts, made with full
intention and knowledge of the act, are irrevocable in equity as
well as in law, when the power to revdke is not reserved, may be
conceded. It may be admitted, also, that the mere omission of
counsel to advise the insertion of a power to revoke, will not alone
be a ground in equity to set aside a voluntary conveyance. But the
absence of such a power, and the failure of counsel to advise upon
it, are circumstances of weight when joined to other circumstances

tending to show that the act was not done with a deliberate will.
Therefore, when the facts show that the instrument was executed
without advice or reflection, and without an intention to bi'pd the
party after the reasons and motives for executing it have passfed
away, and the party is again sui juris, a court of equity will and

Gaither' v. Williams, 57 Md. 625 Ewing v. Wilson, 132 Ind. 223, 31 N. E.

;

64, 19 If. R. A. 767 Lewis v. Curnutt, 130 Iowa, 423, 106 N. W. 914,
;

70 Schriver v. Frommel, 179 Ky. 228, 200 S. W. 327.

TiAylsworth v. Whitcomb, 12 B. I. 298. But, obviously, when a deed
expressly states that the trust is irrevocable, the presumption of a mistake
in failing to insert a power of revocation is overcome. Neisler v. Pearsall,
22 R. I. 367, 48 Atl. 8, 52 L. R. A. 874. And where the purpose of the trust
was inconsistent with a power of revocation, the presumption of mistake
is overcome. Wallace v. Industrial Trust Co., 29 R. I. 550, 73 Atl. 25.
72 Sands v. Old Colony Trust Co., 195 Mass. 575, 577, 81 N. E. 300, 12
Ann Cas. 837.
73 Garnsey v. Mundy, 24 N. J. Eq. 243; Barnard v. Gantz, 140 N. Y, 249,
'
35 N. B. 430.
7* Russell's Appeal, 75 Pa. 269, 288, 289.
576 THE TERMINATION OF THE TRUST (Ch. 19

ought to relieve a& against mere volunteers, claiming without con-

sideration or a reasonable motive for continuing the donor's dis-
ability. * * * 'Pile mistake is not one simply of law. That
would be so if all the clauses and provi-
the settlor, in full view of
sions in the deed, would interpret them for himself as being in law
adequate to confer a power of revocation upon him, when in truth
the law would not so ejcpound the instrument. But in a case such as
this the mistake is one of fact, so mixed with the legal effect of the
writing, equity will use the mistake of fact as a means of i;elief."
'
In one state a statute has been recently passed allowing the set-
tlor torevoke a trust of personal property in whole or in part, up-
on the written consent of all persons beneficially interested.'''
Act of Party —Trustee
The is ordinarily a mere instrument for the execution of
trustee
the and has no control over its duration. In the absence ot
trixst,
unusual circumstances, therefore, the trustee' has no power to end
the trust or to call on chancery to end it.'* A reconveyance by
trustee to settlor has been held to have no effect bn the life of the
trust,'' and, where there is reason for the continuance of the "trust,
a transfer of the legal title from trustee to cestui que trust has
likewise been regarded as not determining the relationship." By
merely delivering to a court his resignation, the trustee cannot ex-
tinguish the trust." The failure of a trustee to sell for the bene-
fit of creditors within the time limited by the trust instrument will

not cause the trust to cease to exist.'" The change of the trust res
does not destroy the trust,*^ but where a trustee has power to alien-
ate trust property the trust is naturally ended as to the property
alienated.'^ The settlor may confer on the trustee the power to

New York Personal Property Law (Consol. Laws, c. 41) § 23; Hoskin
'0
V. Long Island Loan & Trust Co., 139 App. Div. 258, 123 N. Y. Supp. 994,
affirmed in 203 N. T. 588, 96 N. E. 1116; Whlttemore v. Equitable Trust
•Co., 162 App. Dlv. 607, 147 N. Y. Supp. 1058. ^
78 V. Cox, 95 Va. 173, 27 S. E. 834; HeisUell v. Powell, 23 W. Va. 717;
Cox
Harrigan v. Gilchrist, 121 Wis. 127, 99 N. W. 909. But if the trustee im-
properly end the trust, transfer the property to the cestuis que trust, and
take releases from them, no one has a standing In court to complain of the
destruction of the trust. Partridge v. Clary, 228 Mass. 290, 117 N. E. 332.
77 Bwing V. Warner, 47 Minn. 446, 50 N;. W. 603.
7 8 Hartley v. Unknown Heirs of Wyatt, 281 111. 321, 117 N. E. 995; Doug-

las V. Cruger, 80 N. Y. 15 (on statutory grounds).

7 Tucker v. Grundy, 83 Ky. 540.
80 Smith V. Kinney's Ex'rs, 33 Tex. 283.
81 United States v. Thurston Co., 143 Fed. 287, 74 C. C. A. 425 ; Moore v.

O'Hare, 224 Mass. 283, 112 N. E. 863.

82 Thatcher v. Wardens, etc., of St. Andrew's Church of Ann Arborj 37
Mich. 264.
§ 128) METHODS or EXTINCTION 577

end the trust;" and the failure of thp trustee to act may result in
the title to trust property being lost by adverse possession and the
trust thus extinguished.**
Act of Party —Cestui Que Triist
Whether the cestui que trust may~call
upon equity to terminate
the trust is a question not without difficulty. It has been previofis-
ly discussed to some extent under the heading of the trustee's du-
ties, in connection with the point whether the trustee should convey
to the cestui upon demand and thus extinguish the trust.*^ The
cases which have allowed the cestui que trust to extinguish the
trust may be divided into three classes. There are first those in
which the trust is passive and all cestuis que tfust have vested in-
terests, are sui juris, and unite in a demand for the termination of
the trust and the vesting of the legal title in them. These cases
present no difficulty. The courts are unanimous in granting the de-
mand of the cestuis que trust and determining the trust.*' As was
said by a Massachusetts court in deciding a case of this class: *^
"In the case before us the trustees hold the fund in question upon
a simple trust; the plaintiff is the absolute equitable owner of the
fund and its income ; he may alienate them and they can be reach-
ed by his creditors. If the testator had the intention of guarding
against his possible improvidence or misfortune, he failed to carry
his intention into effect, and thus the reason for the existence of a
trust fails,"
The second class of cases comprises those in which the ob-
jects of the trust have been accomplished and there is no benefit to

be obtained by continuing the trust. In these cases the courts

have allowed a destruction of the trust at the request of the cestuis
que trust, although the normal period of its existence had not ex-
pired.'* The settlor's intent is not violated by such determination

83 In re Spring's Estate, 216 Pa. 529, 66 Atl. 110.

84 Nelson v. Eatllff, 72 Miss. 656,. 18 South. 487.
85 Ante, § 100.
seRingrose v. Gleadall, 17 Cal, App. 664, 121 Pac. 407; Fox v. Fox, 250
111. 384, 95 N. E. 498; Eeuling's Ex'x v. Keuling, 137 Ky. 637, 126 S. W.
151; Tilton v. Davidson, 98 Me. 55, 56 Atl. 215; Root v. Blake, 14 Pick.
(Mass.) 271; Rector v. Dalby, 98 Mo. App. 189, 71 S. W. 1078; Hill v. Hill,
90 Neb. 43, 132 N. W. 738, 38 L. R. A. (N. S.) 198 Supreme Lodge, Knights
;

of Pythias v. Kutzler, 87 N. J. Eq. 342, 100 Atl. 189; McKenzie v. Sumner,

114 N. C. 425, 19 S. E. 375; Fisher v. Wister (Pa.) 25 Atl. 1015; Taylor
V. Taylor, 9 R. I. 119; Kennedy v. Badgett, 19 S. C. 591.
8 7 Sears v. Choate, 146 Mass. 395, 398, 399, 15 N. E. 78&, 4 Am. St. Rep.

320.
8 8 Coltman v. Moore, 1 MacArthur (D. C.) 197; Bowditch v. Andrew, 8
Allen (Mass.) 339; Sands v. Old Colony Trust Co., 195 Mass. 575, 81 N. E.
300, 12 Ann. Cas. 837; Donaldson v. Allen, 182 Mo. 626, 81 S. W. 1151;
Coram v. Davis, 39 Mont. 495, 104 Pac, 518; iieideman v. Sparks, 64 N.
BOGEET TETJSTS 3T
 : "

578 THE TEEMINATION OP THE TRUST (Ch. 19

of the trust, for his intent has been effectuated. It is reasonable

and equitable under such circumstances to allow the sole parties in
interest to decide for themselves whether they prefer to enjoy their
property as legal owners or indirectly through the use of a trust.
In Georgia, where trusts are limited by statute to those for the
benefit of spendthrifts and persons non sui juris, if a spendthrift
becomes thrifty and the trust is no longer needed for his protec-
tion, the trust pitrpose fails, and the cestui que trust may call for
its end.*' Where the object of a trust is the protection of the cor-
pus of the fund during the life of the first beneficiary,,-and the re-
mainderman beneficiary acquires the interest of the life beneficiary,
there is an accomplishment of purpose, and the sole party in inter-
est may call for a conveyance. In a case involving this situation a
Pennsylvania court has recently said "" "In the case now before
us, all present and future interests in the trust property having
been acquired by the remainderman, the 'thing sought to be secur-
ed,' i. e., the protection of the corpus pending the duration of the
life estates, has become unessential. Under such circumstances, it
is the right of a cestui que trust to have the legal estate of the
trustee declared terminated. * * *
In numerous other, cases where the cestui que trust and the re-
mainderman were either identical in person at the commencement
of the trust, or became so by purchase during the trust life, and the
purpose of the trust had been accomplished, extinguishment of the
trust has been allowed.®^ Upon this same principle a partial ex-
tinction of the trust has been allowed where the trust purpose as to
a portion of the cestuis que trust has been accomplished and their
interests could be severed.*'' Thus, where a portion of the trust
property was being held for the purpose of ascertaining whether a
son oi the settlor would have any afterborn children to share in the
fund, and the son died childless, it was held that the trust object

J. Eg. 374, 55 Atl. 1132; In re Wood's Estate, 261 Pa. 480, 104 Atl. 673;
Megargee v. Naglee, 64, Pa. 216; Ives v. Harris, 7 R. I. 413; Angell v. An-
gell, 28 R. I. 592, 68 Atl. 583 ; Armistead's Ex'rs v. Hartt, 97 Va. 316, 33 S.
E. 616.
ssDe Vauglin v. Hays, 140 Ga. 208, 78 S. E. 844.
80 In re Stafford's Estate, 258 Pa. 595, 598, 599, 102 Atl. 222.
»i Whall V. Converse, 146 Mass. 345, 15 N. E. 660 ; Simmons v. North-
western Trust Co., 136 Minn. 3d7, 162 N. W. 450, L. R. A. 1917F, 736;
Camden Safe Deposit & Trust Co. v. Guerin, 89 N. J. Eq. 556, 105 Atl.
189; Gloyd v. Roff, 2 Ohio Cir. Ct. R. 253; Taylor v. Ruber's Ex'rs, 13 Ohio
St. 288; Appeal of Yerkes, 2 Chest. Co. Rep. 410; In re Harrar's Estate,
244 Pa. 542, 91 Atl. 503; Thorn's Ex'r v. Thorn, 95 Va. 413, 28 S. E. 583.
82 Williams v. Thacher, 186 Mass. ,293, 71 N. E. 567; Welch v. Trustees
of Episcopal Theolo^cal School, 189 Mass. 108, 75 N. B. 139; Harlow v.
Weld (R. I.) 104 Atl. 832.
§ 128) METHODS OF EXTINCTION 579

was, as to this property, achieved and the property might be dis-

tributed to the cestuis entitled thereto, freed from the trust."'
English and Minority View
A third set of decisions have proceeded yet further in recogniz-
ing the rights of the cestui que trust. They have allowed a person
possessing the sole equitable interest in the trust property to call
for a termination of the trust, even though the triist was still ac-
tive, its natural term not completed, and the purposes of the settlor
not carried out.®* Thpse courts have declined to respect the intent
of the settlor. They have said that the sole person interested in
the property might determine for himself whether he should enjoy
the property through the medium of a trust or as Jegal owner.
This theory is exemplified by a recent Maine case *" in which the
trust was created
for the aid of certain relatives in time of need.
Obviously could not be accomplished according to the wish of
it

the settlor until the beneficiaries had died, for they might at any
time fall into need; but the court terminated the trust upon the
written request of all the beneficiaries and allowed them to divide
the property among themselves. In a similar Massachusetts case °'
the court likewise allowed the termination of the trust during the
lives of the relatives to be aided, saying: "There is no legal or
equitable objection to the granting of the relief prayed for in the
bill. For considered collectively the plaintiffs are the real and
substantial owners of the property, and it is reasonable and just
that it should be disposed of in conformity to the desire and pref-
erence in which they all unite."
If the cestui que trust is non sui juris, as, for example, an infant,
he will not be entitled to end the trust, regardless of its state, for
his act in releasing the trustee would be voidable at least."^
If the cestuis que trust demanding a termination possess vested
interests, but there is a possibility that other cestuis may come into
being, the existing cestuis que trust will not be entitled to call for
a conveyance '* and so, too, where the beneficiaries demanding an
;

83 Wayman v. FoUansbee, 253 111. 602, 98 N. jj). 21.

9* Saunders y. Vautier, 4 Beav. 115; Wharton v. Masterman, [1895] A.
C. 186 Taber v. Bailey, 22 Cal. App. 617, 135 Pac. 975 Eakle v. Ingram,
;
;

142 Cal. 15, 75 Pac. 566, 100 Am. St. "Rep. 99; Smith v. Harrington, 4
Allen (Mass.) 566; Huber v. Donoghue, 49 N. J. Eq. 125, 23 Atl. 495; Turn--
age V.Greene, 55 N. C. 63, 62 Am. Dec. 208.
90 Dodge V. Dodge, 112 Me. 291, 92 Atl. 49.
96 Smith V. Harrington, 4 Allen, 566, 568.
97 Wirth V. Wirth, 183 Mass. 527, 67 N. E. 657.
9 8 Allen V. Allen's Trustee, 141 Ky. 689, 133 S. W. 543; Battle v. Pet-
way, 27 N. C. 576, 44c Am. Dec. 59; In re Eshelman's Estate, 191 Pa. 68,
43 Atl. 201; In re Lewis' Estate, 231 Pa. 60, 79 Atl. 921; Greene v. Aborn,
10 E. I. lo'; Dial V. Dial, 21 Tex. ,529.
580 THE TERMINATION OP THE TRUST (Ch. 15

extinction of the trust and a conveyance to themselves are contin-

gent cestuis only, the court will not grant their request.*"
Majority View
Even though all the persons equitably interested in the property
join, and have vested interests and are sui juris, yet if the trust
all
is active and its purposes therefore not accomplished, they will not
be allowed to call for a determination of the trust, according to
the weight of authority in America.^ The larger number of the
courts which have considered the question respect the intention of the
testator, give him the power to restrict and define the way in which
the beneficiaries shall take the benefits of the trust property, and re-
fuse to allow the beneficiaries to elect how they shall enjoy the
property. As has been well said by the Supreme Court of Pennsyl-
vania in a recent case "It may, therefore, be regarded as settled
:
'^

that a testamentary direction to a trustee to hold, invest and man-

age the corpus of a fund for a definite period, and pay the income
therefrom at stated times to a beneficiary creates an active trust
which the statute does not execute and which will continue to be
operative and cannot be terminated until the purpose for which the
trust was created has been accomplished. The rule has its founda-
tion in the well-established principle that, within the limits of the
law, every man may do as he pleases with his own property. He_
may, therefore, dispose of it in fee, or create estates therein in dif-

89 Olsen V. Toungerman, 136 Iowa, 404J.13 N. 'VC^Busjjflil re Thistle's

Estate, 263 Pa. 60, 106 Atl. 94. J0 ^r ^
iBallantine v. Ballan'tine, 160 Fe|gfe,88 C. C. uL
109; DeLadson v.
Crawford, 93 Conn. 402, 106 Atlj^Ji^^bster v. B^Msh, 39 S. W. 411, 42
S. W. 1124, 19 Ky. Law Kep. 365; Nunn v. Peak, 1^0 Ky. 405, 113 S. "W.
493 ;Miller's Ex'rs v. Miller's Heirs and CreditorsJ^72 Ky. 519, 189 S. W.
417; Downs v. Security Trust Co., 175 Py. ,789, yiB4 S. W. 1041 Kimball v. ;

Blanchard, 101 Me. 383, 64 Atl. 645; Russeiy^. Grinnell, 105 Mass. 425;
Claflin V. Claflin, 149 Mass. 19, 20 N. E. 4|iR, 3 L. R. A. 370, 14 Am. St.
Rep. 393; Watson v. Watson, 223 Mass. ISs, 111 N. E. 904; Easton v. De-
muth, 179 Mo. App. 722, 162 S. W. 294; Robbins v. Smith, 72 Ohio St. 1,
73 N. B. 1051 Hill v. liill, 49 Okl. 424, 152 Pac. -1122
; Twining v. Glrard
;

Life Ins. Annuity & Trust Co., 14 Pliila. (Pa.) 74; Wickham v. Berry, 55
Pa. 70; Van Leer v. Van Leer, 221 Pa. 195, 70 Atl. 716 In re Shirk's Es-
;

tate, 242 Pa. 95, 88 Atl. 873; In re Stewart's Estate, 253 Pa. 277, 98 Atl.
569, Ann. Cas. 1918B, 1216; Barkley v. Dosser, 15 Lea (Tenn.) 529; Glass-
cock V. Tate, 107 Tenn. 486, 64 S. W. 715; Lanius v. Fletcher, 100 Tex.
550, 101 S. W. 1076; McNeill v. St. Aubin (Tex. Civ. App.) 209 S. W. 781;
Carney v. Kain, 40 W. Va. 758, 23 S. E. 650 Bussell v. Wright, 133 Wis!
;

445, 113 N. W. 644. In Stier v. Nashville Trust Co., 158 Fed. 601, 85
C. c!
A. 423, it is said that equity may in its discretion refuse to end a trust,"
where it is active and has an unaccomplished purpose. ' '

2 In re Henderson's Estate, 258 Pa. 510, 515, 102 Atl."

217. For a discus-
sion of the policy of this rule, see Scott, Control of Propertv bv thp npad
*-
j j e i^cau,
65 Pa. Law Rev. 632, 647.
§ 128) KETHODS OP EXTINCTI6N 581

ferent persons, or grant or devise it on such conditions or under

such restrictions as he may desire." It follows, a fortiori, that a por-
tion of the beneficiaries cannot cause the termination of a trust, the
piirpose of which is unaccomplished.'
In some states statutes forbid the beneficiaries of trusts to col-
lect and pay over the income and profits from alienating their in-
terests. These statutes have been construed to prevent the abro-
gation of such trusts by act of the cestuis que trust.* New York A
court in considering the question has said * "Whatever view may
:

be taken of the general jurisdiction of courts of equity, in the ab-

sence of any statutory or legislative policy, to abrogate continuing
trusts, created for the purpose of providing a sure support for the
widow or children of a testator, or other beneficiary, the indestruct-
ibility of Such trusts here, by judicial decree, results, we think, from
the inalienable character impressed upon them by statute. The
beneficiaries of trusts for the receipt of the rents and profits of land
are prohibited from assigning or disposing of their interest, * * *
and this provision is held to apply, by force of other sections of the
statute, to the interest of beneficiaries in similar trusts of personal-
ly* * * This legislative policy cannot, we think, be defeated
by the action of the court permitting such alienation, or abrogating
the trust."
The acquiescence or opposition of the trustee in the cestui que
trust's application for a termination of the trust is immaterial. If
the cestui has a right to the extinction of the trust, that the trustee
is hostile to such result will not deter the court from decreeing a
termination.*
The effect of a combination of two or more of the three trust
parties in applying for a termination of the trust will be determined
by the principles previously stated regarding their separate appli-
cations. Thus, since neither the settlor nor the trustee ordinarily
has a right to determine the trust, their union in an effort to that
end will likewise be unsuccessful, in the absence of a power spe-

s Gray v. Union Trust Co. pt San Francisco, 171 Cal. 637, 154 Pac. 306;

Lobdell V. State Bank of Neuvoo, 180 111. 56, 54 N. E. 157; Petition of

Thurston, 154 Mass. 596, 29 N. E. 53, 26 Am. St. Eep. 278 Smith v. Smith,
;

70 Mo. App. 448 Harris v. Harris, 205 Pa. 460, 55 Atl. 30 ; Carney v. Byron,
;

19 R. I. 283, 36 Atl. 5; Guye v. Guye, 63 Wash. 340, 115 Pac. 731, 37 L.

R. A. (N. S.) 186.
* Dale V. Guaranty Trust Co., 168 App. Div. 601, 153 N. Y. Supp. 1041,
1 Cornell Law Quarterly, 209; Patton v. Patrick, 123 Wis. 218, 101 N. W.
408." .

B Lent V. Howard, 89 N. Y. 169, 181,

e Armistead's Ex'rs v. Hartt, 97 Va. 316, 33 S. B. 616.
582 ,
THE TERMINATION OP THE TRUST (Ch. 15

cially granted or reserved.'' Hence a conveyance of the trust prop-

erty by the trustee to the and a reconveyance without men-
settlor,
tion of the trust, will not end the trust.*" The settlor, trustee, and
cestuis que trust in combination have under special circumstances
been allowed to extinguish the trust ;* and so, too, where no object
would be subserved by maintaining the trust, one person, who oc-
cupies the positions of settlor, cestui que trust, and remainderman,
may end the trust.^"
The trustee and cestuis que trust have been allowed to determine
actiye, unaccomplished trusts in jurisdictions where the policy of
the court permits the cestuis que trust to achieve the same re-
sult.^^ On the other hand, those- courts which refuse to the ces-
tuis the right to extinguish the trust, so long as its purpose remains
unaccomplished, have declined to decree an end of the trust upon
the application of both trustee and cestuis que trust.^^ Thus, in
Young V. Snow, the trust was to keep the property in repair and
to pay the income over for twenty years all the cestuis que trust
;

and the trustee united in asking equity to end the trust before the
expiration of the twenty years but the court, following the lead-
;

ing case of Claflin v. Clafiin," declined.^* Where contingent in-

terests exist, the joinder of the trustee with the cestuis que trust
will not induce the courlj to terminate the trust.^"

By Act of Third Party

Ordinarily a third party to the trust can have no power to de-
stroy the trust. However, if he be the owner of a mortgage or oth-

7 Saunders v. Eichard, 35 Fla. 28, 16 South. 679; Larimer v. Beardsley,

130 Iowa, 706, 107 N. W. 935; Kelley v. Snow, 185 Mass. 288, 70 N. E. 89;
Bwlng V. Shannahan, 113 Mo. 188, 20 S. W. 1065; Stockard v. Stockard's
Adm'rs, 7 Humph. (Tenn.) 303, 46 Am. Dec. 79.
8 Folk V. Hughes, 100 S. C. 220, 84 S. E. 713.
» Matthews v. Thompson, 186 Mass. 14, 71 N. E. 93, 66 L. E. A. 421, 104
Am. St. Eep. 550 (trust treated as surrendered by cestuis que trust by written
request by them to trustee to reconvey to settlor).
10 Eaffel V. Safe Deposit & Trust Co., 100 Md. 141, 59 Atl.
702; Cole v.
Nickel, 43 Nev. 12, 177 Pae. 409, 185 Pac. 565.
11 Armour v. Murray, 74 N. J. Law 351, 68 Atl.
164; Short v. Wilson, 13
Johns. (N. Y.) 33 (decided prior to- the Eeyised Statutes).
12 Blackburn t. Blackburn, 167 Ky. 113, 180
S. W. 48 ; In re Unruh's Es-
tate, 248 Pa. 185, 93 Atl. 1000; In re Simonin's Estate, 260 Pa. 395, 103
Atl. 927.
13 167 Mass. 287, 45 N, B. 686.
14 149 Mass. 19, 20 N. E. 454, 3 L. E. A. 370, 14 Am. St. Eep. 393.
15 Anderson v. Williams, 262 111.
308, 104 N. B. 659, Ann. Cas. 19i5B,
720; Bailey's Trustee v. Bailey, 97 g. W. 810, 30 Ky. Law Eep. 127; New-
ton V. Rebenack, 90 Mo. App. 650; Isham v. Delaware L. & W. E.
Co., 11
N. J. Eq. 227; Mauldin v. Mauldin, 101 S. C. 1, 85 S. E. 60.
 :

§ 128) METHODS OF EXTINCTION 583

er lien on the trust property, which lien existed prior

to the crea-
tion of the trust, he may, by the foreclosure of the lien, wipe the
trust res out of existence and thus terminate the trust." As was
said in a Kentucky case," where the rights of creditors of the tes-
tator and those of cestuis que trust under a will came into conflict
"The rights of the creditors to subject the property to the satisfac--
tion of the debts is superior to the rights of the devisees under the
will. They do not have to wait on the expiration of the trust by
time. If the property is sold to satisfy the debts, this removes the
authority of the trustees over it, and hence the further execution of
the trust becomes impossible, and the rights devised to the benefi-
ciaries of the trust must fail, A
judicial sale of the trust property
under an incumbrance, which was made prior to the creation of the
trust, necessarily renders the trust impossible of accomplishment."
End Presumed
In a few cases, where there has been great lapse of time since
the establishment of the trust, or gross laches in its enforcement,
equity has presumed the end of the trust.^^ Thus, where the trust
'

was for the children of the settlor during their dependency on their
father, it will be presumed to have been extinguished after thirty
years ^® and where the trust is to sell property and distribute the
;

proceeds, equity will presume that it has been closed, when four-
teen months have elapsed since the sale and part of the proceeds
are shown to have been paid out.^"

i« De Bevoise v. Sandford, 1 HofC. Ch. (N. Y.) 192 ; Marquam v. Eoss, 47

Or. 374, 78 Pac. 698, 83 Pac. 852, 86 Pac. 1.
iTMUler's Ex'rs v. mUer's Heirs and Creditors, 172, Ky. 519, 528, 529,
189 S. W. 417.
18 Jones V. Haines, 79 N. J. Eq. 110, 80 Atl. 943.
18 Bozarth v. Watts (Tenn. Ch. App.) 61 S. W. 108.
20 Holderman v. liood, 70 Kan. 267, 78 P?ic 838.
 TABLE OF CASES CITED
[the fioubes eefeb to pages]

Albright v. Albright, 328.

Alden, Matter of, 442.
Aaron B%ank ClotMng Co. v. Deegan, Aldersley v. McCloud, 305.
103. Aldersley's Estate, In re, 165.
Abbot, In re, 272, 374. Aldrich v. Barton, 421.
Abbott, In re, 286. Aldrich's Will, In re, 474.
Abbott V. Foote, 406. Aldridge v. Aldridge, 400.
Abbott V. Gregory, 246. Alemany v. Wensinger, 372.
Abell V. Abell, 376. Alexander v. Fidelity Trust Co., 536,.
AbeU v.- Brady, 413. 545.
Abernathy v. Phillips, 308. Alexander v. Springs, 344.
Abert v. Lape, 70. Alexander v. Tarns, 104.
Ackerman v. Fichter, 210. Alexander v. vWarrance, 432.
Ackerson v. Elliott, 559. Alexander County Nat. Bank v. Con-
Ackley v. Croucber, 562. ner, 20.
Acklin V. Paschal, 569. Alford V. Bennett, 155.
Adair v. Brimmer, 357, 366, 486, 541. Alford's Adm'r v. City of Stanford,
Adams v. Adams, 27, 69, 72, 75, 131, 320.
269, 270, 567. Alfred University v. Hancock, 211.
Adams v. Bobon, 229. Alger V. North End Savings Bank, 80,.
Adams v. Canutt, 64. 81.
Adams v. Guerard, 154. Allan V. Guaranty Oil Co., 317.
Adams v. Highland Cemetery Co., 255, Allen, Appeal of, 283.
282. Allen, In re, 410, 417.
Adams V. Holden, 553. Allen V. Allen, 254.
Adams v. Lambard, 407, 499. Allen V. Allen's Trustee, 579.
Adams v. Nelson, 357. Allen v. Almy, 167.
Adams V. Page, 99, 229. Allen V. Arkenburgh; 132.
Adams v. Perry, 425. Allen V. Baskerville, 46.
Adams V. Purser, 399. Allen V. Caylor, 108.
Adams Female Academy v. Adams, Allen V. Craft, 156.
448. Allen V. Everett, 315.
Adams' Estate, In re, 488, 490. Allen v. Fourth Nat. Bank, 456.
Adelman's Will, In re, 176. Allen V. Gaillard, 359.
Adleman's Will, In re, 173. Allen V. Gooding, 124.
Affleck, In re, 384, 419. Allen V. Hawley, 433.
Abrens v. Simon, 108. Allen V. McFarland, 36.
Aicardi v. Craig, 292. ,
Allen V. McKean, 450.
Ainsa v. Mercantile Trust Co. of San Allen V. Malone, 114.
Francisco, 329. Allen V. Puritan Trust Co., 453, 454,.
Ainsworth v. Harding, 143. 455, 458, 459.
Akin V. Akin, 102. Allen V. Richard, 125.
Akin V. Jones, 20. Allen V. Stevens, 173, 197, 236, 448.
Alaska Northern R. Co. v. Alaska Allen v. Stewart, 387, 551.
Cent. E, Co., 548, 550. Allen V. Trustees of Nassonlnstitute^
Albertson, In re, 375. 230.
Albrecht v. Wolf, 551. AUer V. Crouter, 63.
BOGERT TEtJSxa (585)
586 CASES CITED
[The figures refer to pages]

AlUs' Estate, In re, 350, 352, 390. Anderson v. Messinger, 565.

Allison V. Little, 283. Anderson v. Nesbit, 119.
Almy V. Jones, 212, 235. Anderson v. Northrop, 280, 334, 546.
Alsop, Appeal of, 293. Anderson v. Bobinson, 271, 277, 284,
Alterauge v. Christiansen, 114. 297.
Altlmus V. Elliott, 405. Anderson v. Smoot, 334.
Alvord V. Sherwood, 306. Anderson v. Thero, 478.
Ambrosius v. Ambroslus, 70. Anddrson v. Thomson, 448.
American Academy of Arts and .Sci- Anderson v. Walker, 457.
ences V. President, etc. of Harvard Anderson v. Williams, 582.
College, 191, 229, 270. Andrew v. Andrew, 126.
American Bible Soc. v. Pendleton, 196, Andrew v. New York Bible & Common
243. Prayer Book Soc., 241.
American Bonding Co. v. State, 405. Andrews v. Andrews, 119.
American Bonding Co. of Baltimore Andrews v. Guayaquil & Q. B. Co.,
V. Richardson, 329, 495. 310.
American Can Co. v. Williams, 20, 528. Andrews v. Hobson's Adm'r, 337, 475.
American Colonization Soc. v. Gart- Andrews v. Hurt's Adm'r, 476.
rell, 425. Andrews v. Kirk, 321.
American Colonization Soc. v. Iia- Andrews v. Lincoln, 178.
trobe, 410. Andrews v. Hice, 159.
American Colonization Soc. v. Souls- Angell V. Angell, 327, 578.
by, 171, 570. Angell V. Jewett, 404.
American Life Ins. Co. v. Van Epps, Anglo-American Savings & Loan Ass'n
374. V. Campbell, 122.
American Mining Co. v. Trask, 553. Angus V. Noble, 158.
American Nat. Bank v. Owensboro Anheuser-Busch Ass'n v. Morris, 20.
Savings Bank & Trust Co,'s Receiv- Annis v. Annis, 325.
er, 20. '
Anonymous, 9, 483.
American Security & Trust Co. v. Anson v. Townsend, 319.
Payne, 392. Anstice v. Brown, 424.
American Trust & Banking Co. v. A. O. Brown & Co., In re, 526.
Boone, 453. Apgar V. Connell, 129, 150.
Ames, In re, 565. Aplyn V. Brewer, 483.
Ames V. Scudder, 328, 412. Appel V. Childress, 315. ,

Amherst College, Trustees of, v. Hitch, Apple, In re, 399.

141. Appley, In re, 448.
Amidon v. SnoufCer, 58. Armistead's Ex'rs v. Hartt, 578, 581.
Amory v. Attorney General, 215, 307. Armitage's Estate, In re, 540.
Amory v. Green, 360, 361. Armour v. Murray, 582.
Amory v. Lord, 175, 260. Armour Fertilizer Works v. Lacy, 426,
Amory v. Lowell, 874. 440.
Amory v. Trustees of Amherst Col- Arms Ashley, 468.
V.
lege, 98, 159, 169, 548. Armstrong v. Barber, 167, 171.
Amsinck's Estate, In re, 277. Armstrong v. Douglass, 169.
Anck's Estate, In re, 46. Armstrong's Heirs v. Campbell, 336,
Anderson, In re, 360. 551.
Anderson y. Anderson, 110. Arnold v. Alden, 419.
Anderson v. Biddle, 438. Arnold v. Allen, 409.
Anderson v. Crist, 46. Arnold V. Brown, 332.
Anderson v. Daley, 464. Arnold v: Cord, 132.
Anderson v. Dunn, 552. Arnold v. HaU, 55.
Anderson v. Earle, 269. Arnold v. Loomis, 551.
Anderson v. Fry, 46, 551. Arnold v. Randall, 298.
Anderson v. Gile, l02. Arnold v. Searing, 37, 144.
Anderson v. Harrington, 56. Arnold v. Southern Pine Lumber Co.,
Anderson v. Hultberg, 113. 330, 398.
Anderson v. Kemper, 250, 276, 568. Arnold Inv. Co. v. Citizens' State
Anderson v. Menefee, 169. Bank of Chautauqua, 529, 533.
 CASES CITED 587
[The figures refer to pages]

Arnot V. Bingham, 20. Augustus V. Graves, 566.

Amtson v. First Nat. Bank, 60, 138, Aultman, Miller & Co. v. Loring, 142.
293. Austin v. Austin, 276.
Amtson v. First Nat Bank of Shel- Austin V. Central Sav. Bank of Balti-
don, 480. more, 80.
Arrowsmith v. Van Harlingen's Elx'rs, Austin V. Dean, 518.
15. Austin V. Munroe, 298.
Arthur v. Master in Equity, 365. Austin V. Shaw, 426.
Asam T. Asam, 101. Austin V. Wilcoxson, 448.
Ash V. Ash, 432. Autrey v. Stubenrauch, 447.
Ash V. Wells, 543. Avery v. Stewart, 56, 118, 127.
Ashby V. Smith, 379. Avery's Trustee v. Avery, 335.
Ashhurst, Appeal of, 184, 426. Aydelott v. Breeding, 352, 366, 417.
Ashley v. Winkley, 371, 400, 482, 488. Aylsworth v. Whitcomb, 249, 575.
Ashley's Adm'rs v. Denton, 26. Ayres v. Farmers' & Merchants' Bank,
Ashman's Estate, In re, 45, 414. 19.
Ashton V. President, etc., of Atlanta
Bank, 317, 516.
B
Babb Lindley, 474.
V.
Ashurst V. Ashurst, 167. Babbitt v. Fidelity Trust Co., 371, 374,
Ashurst V. Given, 423. 413, 417.
Asplnall V. Jones, 121. Babcock V. African Methodist Epis-
Associate Alumni, etc., v. General The- copal Zion Society, 262.
ological Seminary, 334, 536. Babcock v. Monypeny, 182.
Association for Relief of Respectable, Backes v. Crane, 247, 339, 356, 366,
Aged Indigent Females v. Beekman, 497, 548, 551.
247, 449, 450. Bacon v. Camphausen, 491, 491
Astreen v. Flanagan, 110. Bacon v. Ransom, 50.
Atkins V. Albree, 382. Bacon v. Taylor, 15.
Atkins V. Atkins, 154. Bacon's Estate, In re, 98.
Atkinson, Petition of, 81, 86, 89. Badger v. Badger, 542, 544..
Atkinson v. Beckett, 291. Badgett v. Keating, 271, 428.
Atkinson v. Greaves, 520. Badgley v. Votrain, 77.
Atkinson v. Ward, 522, 530. Baer, Appeal of, 355.
Attorney General v. Armstrong, 205, Baer v. Kahn, 328, 397.
334. Bagnell v. Ives, 321, 352.
Attorney General v. Barbour, 274. Bahin v. Hughes, 491, 494.
Attorney General v. Bedard, 247, 448, Bailey v. Bailey, 120, 264, 283, 399.
'
519. Bailey v. Dyer, 510.
Attorney General v. Briggs, 231. Bailey v. Hemanway, 126.
Attorney General v. Cock, 206. Bailey v. Hill, 257, 291.
Attorney General v. Dublin, 205. Bailey v. Moore's Ex'rs, 446.
Attorney General v. Garrison, 276. Bailey v. Rice, 273, 278.
Attorney General v. Gill, 233. Bailey v. Smith, 327.
Attorney General v. Goodell, 262. Bailey v. Wood, 61, 71.
Attorney General v. Holland, 492. Bailey Worster, 73.
v.
Attorney General v. Moore's Ex'rs, Bailey's Trustee v. Bailey, 582.
446. Baillie ,v. Columbus Gold Min. Co.,
Attorney General v. Rector, etc., of 553. '

Trinity Church, 205. Bain Brown, 33.

v.
Attorney General v. Sands, 7. Baird, Appeal of, 280.
Attorney General v. Soule, 193. Baird's Case, 274.
Attorney General v. Wallace's Devi- Baker, Appeal of, 337.
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Utwill V. Dole, 269. Baker v. Brown, 28, 444.
Disbrow, 359, 506.
Atwood V. Shenandoah Val. K. Co., Baker v.

262.
Baker v. Heiskell, 432.
Atwood-Stone Co. v. Lake County Baker v. Lafitte, 497.

. Bank, 454, 458. Baker v. Lane, 336.

Auguisola V. Amaz, 161. Baker v. McAden, 573.
 588 CASES CITED
[The figures refer to pages]

Baker y. NaU, 319. . Barker's Trust, In re, 257.

Baker v. New York Nat. Ezch. Bank, Barkley v. Dosser, 341, 580.
23, 526. Barkley v. Lane's Ex'r, 52, 422.
Baker v. Pender, 169. Barkley Cemetery Ass'n v. McCune^
Baker v. Terrell,
102, 112. 276.
Baker v. Thompson,
380. Barksdale v. Finney, 337, 507.
Baker v. Tibbetts, 299. Barnard v. Adams, 570.
Baker v. Vining, 106, 107. Barnard v. Bagshaw, 484
Baker's Estate, In re, 421. Barnard v. Gantz, 575.
Balbach v. Frelinghuysen, 19. Barnard v. Haw^s, 508.
Baldwin, In re, 384, 419. Barnard v. Stone, 335.
Baldwin v. Campfield, 102. Barned's Banking Co., In re, 23.
Baldwin v. Porter, 268. Barnes v. Century Say, Bank, 397.-
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Baldwin's EX'rs v. Baldwin, 212. Barnes v. Gardiner, 397.
Bales V. Perry, 325. Barnes v. Spencer, 111, 293.
Ball V. BaU, 432. Barnes v. Taylor, 369.
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BaUou V. Farnum, 299. Barney v. Saunders, 354, 412.
Baltimore Trust Co. v. George's Creek Barnum v. Barnum, 171. >

Coal & Iron Co., 279. Barr v. Schroeder, 69, 73.

Banfield v. Wiggin, 444. Barr v. Weld, 570.
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428. Barrette v. Dooly, 246.
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Bank of Hartford v. McDonald, 458. Barry v. Abbot, 441.
Bank of Hickory v. McPherson, 458. Barry v. Barry, 416.
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P. R. Co., 3361 Bartlet v. King, 205.
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Bank of U. S. v. Biddle, 399. Bartlett v. Nye, 256.
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Bank of Wetumpka v. Walkley, 308. Bartlett v. Sears, 167.
Bannin, In re, 357. Bartlett v. Varner's Ex'r, 512, 514.
Barbee v. Penny, 317. Bartol's Estate, In re, 347, 349, 363-
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Barbour v. Gallagher, 387. Barton v. Magruder, 109.
Barbour v. Weld, 275, 278, 573. Barton v. Moss, 122.
Barclay, Appeal of, 412. Barton v. Thaw, 169.
Barclay v. Goodloe's Ex'r, 268. Bartz V. PafC, 151.
Bardon v. Hartley, 125. Bascom v. Albertson, 197.
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v.
Barger v. Barger, 114. Baskin, Appeal of, 399.
Barker, In re, 318, 419. Baskin v. Baskin, 355.
Barker v. Barker, 277, 507, Bass V. Scott, 156.
Barker v. Hurley, 562. Bass V. Wheless, 511.
I
Barker v. McAden, 573. Bassett v. Granger, 502.
Barker y. Smiley, 281. Batcheider v. Central Nat. Bank, 455i.
 CASES CITED 589
£Tbe figures refer to pages]

Batehis v. Leask, 468. Beckett v. Tyler, 518.

Bateman v. Burr, 161. Beckwith v. Laing, 317.
Bates V. Bates. 221, 551. Beckwith v. Sheldon, 476.
Bates V. Hurd,
62, 474. Bedford v. Bedford's Adm'r, 254.
Bates Kelly, 103, 471.
V. Beebe v. De Baun, 308.
Bates V. Spooner, 167. Beecher v. Foster, 559.
Bates V. Underhill, 488. Beecher v. Wilson, 104.
Bath Savings Inst. v. Hathorn, 80. 82, Beecher v. Yale, 220, 223.
86. Beegle v. Wentz, 132.
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Batty V. Greene, 121. Beers v. Narramore, 170.
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Bauman v. Wuest, 125. Beideman v. Sparks, 577.
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Baumgartner v. Guessfeld, 109. Belcher v. Cobb, 318.
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Bayer v. Cockerill, 434. Bell T. Board of Com'rs of Lake
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Bay State Gas Co. of Delaware v. Rog- 423.
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Bazemore v. Davis, 516. 446.
Beach v. Beach, 293. Bell's Estate, In re, 276.
Beachey v. Heiple, 535, 537. Bellah, In re, 360.
Beakes Dairy Co. v. Berns, 86, Bellamy v. Bellamy's Adm'r, 336.
Beakey v. Knutson, 310. Bellevue State Bank v. Coffin, 533.
Beal V. City of Somerville, 19. Bellinger v. Collins, 122.
Beale v. Kline, 496. BeUinger v. Shafer, 567.
Beall V. Fox> Ex'rs, 196. Bellows Free Academy v. Sowles, 307.
Beam v. Patterson Safe Deposit & Bemmerly v. Woodard, 420.
Trust Co., 365. Bemmerly v. Woodward, 499.
Beaman's Estate, In re, 83, 85. Benbrook v. Yancy, 138, 139.
Bean v. Bean, 511. Benedict v. New
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Bean v. Com, 31. Bennalack v. Richards, 161.
Bear v. Koenigstein, 108. Bennett v. Bennett, 75, 269.
Beard v. Beard, 45, 410. Bennett v. Chandjer, 407.
Beard v. Stanton, 559. Bennett v. Garlock, 428.
Bearden v. White, 564. Bennett v. Harper, 138, 139.
Beardsler, Appeal of, 284. Bennett v. Pierce, 540.
Beardsley v. Bridgeport Protestant Or- Benoist v. Beniost, 558.
phan Asylum, 365. Benson v. Dempster, 130, 548.
Beatty v. Henry, 537. Benson v. Liggett, 478.
Beatty's Estate, In re, 489. Bentley v. Shreve, 409, 414, 477.
Eeaubien v. Hindman, 517. Benton v. Benton, 474.
Beaufort (Duke of) v. Berty, 35. Beresford v. Jervis, 208.
Beaver v. Beaver, 79. Berger v. Butler, 327.
Bechtel v. Ammon, 130. Bergmann v. Lord, 184, 440.
Beck V. Philadelphia, 219. Bermingham v. Wilcox, 333, 490, 494.
Beck V. Uhrich, 470, 512. Bernheim v. Heyman, 435.
Becker v. Neurath, 118. Bernheimer's Estate, In re, 364.
Beckett V. Bledsoe, 510. Bernstein, In re, 272.
590 CASES CITED
[Tlie figures refer to pages]

Berrien t. Thomas, 309. Black V. Caviness, 520.

Berry, In re, 249, 623. Biack V. Ltigon, 313.
Berry y. Berry's Ex'rs, 56. Blackburn v. Blackburn, 582.
Berry v. Dunham, 183. Blackburn v. Fitzgerald, 464.
Berry v. Evendon, 508. Blackburn v. Webb, 161.
Berry v. Stigall, 369, 413. Blackett v. Ziegler, 334, 558.
Berry v. Williamson, 265, 277, 433. Blackshear v. Burke, 298, 302.
Berry v. Wooddy, 155. Blaha v. Borgman, 61.
Berryhill's Adm'x, Appeal of, 539. Blair v. FoUansbee, 24.
Best V. Campbell, 557. Blair v. Hazzard, 305.
Best V. Melcon, 55. Blair V. Hennessy, 120.
Bethea v. McCoU, 360. Blair v. Hill, 22, 524.
Bethlehem Borough v. Perseverance Blaisdell v. Stevens, 518.
Fire Co., 219. Blake v. AUman, 316.
Bethune v. Beresford, 15. Blake V. Dexter, 46, 98.
Bettencourt v. Betteneourt, 507. Blake V. O'Neal, 156, 428, 537, 538.
Bettendorf Metal Wheel Co. v. P. P. Blake v. Pegram, 414, 421.
Mast & Co., 528. Blake's Estate, In re, 421.
Bettinger v, Bridenbecker, 158. Blakely, In re, 324.
Betts V. Betts, 313. Blakely v. Tisdale, 424t
Beuley v. Curtis, 434. Blakeshere v. Trustees, 53.
Beurhaus v. Cole, 252, 307. Blakeslee v. Starring, 121.
Beverley v. Miller, 417. Blakeley v. Hanberry, 558.
Bevis V. Heflin, 460. Blanchard v. Chapman, 48.
Bewick, In re, 169. Blanchard v. Taylor's Heirs, 443.
Bible V. Marshall, 448. Blanck, In re, 394.
Biddle, Appeal of, 417. Bland v. Talley, 123.
Biddle Purchasing Co. v. Snyder, 400. Blanton v. First Nat Bank of Forrest
Bier v. Leisle, 59, 131. City, 456.
Bigelow V. Catlin, 551. ^ Blasdel v. Locke, 102.
Bigelow V. Tilden, 409. Blaul V. Dalton, 545.
Biggars, In re, 82, 85, 86, 88, 89. Blauvelt v. Ackerman, 333.
Bigham v. Coleman, 501. Blauvelt's Estate, In re, 347, 363, 478.
Billlnger, In re, 310. Blewitt V. Clin, 297.
Billings V. Aspen Co., 474. Bliss V. Bliss, 50,
Billings V. Billings, 275. Bliss V. Linden Cemetery Ass'n, 223.
Billings V. Shaw, 144. Bloodgood, In re, 436, 572.
Billings V. Warren, 381, 387. Bloodgood V. Massachusetts Ben. Life
Bills V. Pease, 194, 198, 214. Ass'n, 288.
Binns v. La Forge, 441. Bloom V. Bay, 279.
Binsse v. Paige, 373. Bloom V. Wolfe, 297.
Bircher v. Walther, 119, 533. Bloomer, Appeal of, 279.
Bird v. Merklee, 197. Blundell, In re, 208, 299.
Birdsall v. Coon, 29. Blundell's Trusts, In re, 206.
Birdsall v. Hewlett, 27. Blunt V. Taylor, 98.
Birely's Estate, In re, 485. Boardman v. Mossman, 489.
Birge v. Nucomb, 46. Board of Charities & Corrections of
Birks V. McNeill, 280. City of Philadelphia v. Lockard, 184.
Birls V. Betty, 492. Board of Com'rs v. Patterson, 527.
Blsehoff V. Xorkville Bank, 454, 455, Board of Com'rs of Crawford County,
457, 458, 459. Ohio, v. Strawn, 523, 526, 527.
Biscoe V. State, 409. Board of Com'rs of Rush Co. v. Din-
Biscoe V. Thweatt, 198, 201, 205, 256. widdle, 214.
Bishop V. Bishop, 382. Board of Domestic Missions of Re-
Bishop V. Houghton, 467. formed Church in America v. Me-
Bishop V. Seamen's Bank for Saving, chanics' Sav. Bank, 83, 86.
87, 89. Board of Education of City of Albu-
Bither v. Packard, 122. / querque V. School Dist. No. 5 of
Bitzer v. Bobo, 114. Bernalillo County, 199.
 CASES CITED 591
[Tie figures refer to pages]
Board of Fire & Water C!om'rs of City Bostleman v. Bostleman, 114.
of Marquette v. Wllldnson, 523, 529, Boston V. Doyle, 321.
533. Boston Safe Deposit Co. v. Collier, 183.
Board of Foreign Missions of General Boston Safe Deposit & Trust Co. v.
Synod of Evangelical Lutheran Luke, 434.
Church V. Shoemaker, 196, 205. Bostwlck, In re, 395.
Board of Sup'rs of Adams County v. Bostwick-Gooddell Co. v. Wolff, 527.
Dale, 370. Boswell v. Cunningham, 122, 125.
Board of Trustees of M. E. Church Botsford V. Burr, 107.
South V. Odom, 71. Bouch V. Sproule, 382.
Board of Trustees of Schools for In- Boughman v. Boughman, 53.
dustrial Education in City of Ho- Bouldin v. Alexander, 273.
boken v. Hoboken, 255. Bourne v. Keane, 206, 208.
Bobb V. Bobb, 499. Bourquin v. Bourquin, 329, 407.
Bodwell V. Nutter, 104. Bowden v. Brown, 214, 230, 269.
Boerum v. Schenck, 338. Bowden v. Parrish, 75, 268.
Bogard v. Planters' Bank & Trust Co., Bowditch V. Andrews, 577.
502. Bowditch V. Bannuelos, 271, 274.
Bogart's Will, In re, 426. Bowdoin College v. M.erritt, 240, 464,
Bogert V. Perry,. 438. 474.
Bogle V. Bogle, 272. Bowen, In re, 233.
Boglen's Estate, In re, 325. Bowen v. Hughes, 104.
Bohle T. Hasselbroch, 504. Bowen V. Humphreys, 319.
Bohm V. Bohm, 118. Bowes V. Seeger, 322.
Boisseau v. Boisseau, 359. Bowie V. Berry, 150.
Bolick V. Cox, 198, 211, 570. Bowker v. Pierce, 364, 410.
BoUes V. State Trust Co., 260. Bowker v. Wells, 98.
Boiling V. Stokes, 286. Bowler v. Curler, 148.
Bolognesi & Co., In re, 523. Bowlin V. Citizens' Bank & Trust Co.,
Bond V. Dukate, 98. 183, 426.
Bond V. Lockwood, 143. Bowling V. Scales, 536.
Bone V. Cook, 492. Bowman v. Anderson, 517.
Bone V. Hayes, 144, 397, 400. Bowman v. First Nat. Bank, 20.
Bonham v.Doyle, 150. Bowman v. Long, 156:
Bonner v.Holland, 509. Bowman v. Pinkham, 359.
Bonner v. Iiessley, 276. Bowman v. Bainetaux, 485.
Book Depository of Baltimore Annual Bowman v. Secular Soc, 206.
Conference of M. E. Church v. Trus- Bozarth v. Watts, 583.
tees of Church Rooms Fund M. E. Boyd V. Boyd, 547.
Church, 427. Boyd V. De La Montagnie, 149.
Boon V. HaU, 312. Boyd V. Hawkins, 338, 409.
Boone v. Clarke, 324. Boyd V. -Mutual Fire Ass'n of Eau
Boone v. Davis, 246, 431. Claire, 38.
Boone v. Lee, 56. Boyd V. Myers, 405.
Booraem v. Wells, 511. Boyd V. Small, 433.
Booth V. Booth, 489. Boyd V. Winte, 97.
Booth V. Bradford, 294, 403, 406, 472. Boyd's Ex'rs v. Boyd's Heirs, 485.
Booth, Appeal of, 513. Boydstun v. Jacobs, 553.
Booth V. Oakland Bank of Savings, Boyer v. Decker, 285, 475. ^

80. Boyer v. Libey, 511.

Booth V. Wilkinson, 355. Boyer v. Sims, 280, 281.
Boqua v. Marshall, 29. Boyes, In re, 136.
Borchert v. Borchert, 469. Boyle, In re, 275, 375.
Boreing v. Faris, 263, 398, 497. Boyle v. Northwestern Nat. Bank, 23,

Bork V. Martin, 59, 112, 130, 131. 453, 457.

Borrow v. Borrow, 60. Boynton v. Gale, 71.
Boskowitz V. Continental Ins. Co., 422. Bozarth v. Watts, 583.
Boskowitz V. Held, 310. Brabrook v. Boston Five Cents Sav.
Bosler's Estate, In re, 413, 415, 498.
Bank, 82, 87, 90.
S92 CASES CITED
[The figures refer to pages]

Bracken r. Miller, 512. Brewster y. Galloway, 310.

Brackenbury v. Hodgkin, 62. Brewster v. Striker, 344.
Brackett v. Middlesex Banking Co., Brice v. Stokes, 489.
328, 340. Brice Trustees of All Saints Memo-
v.
Brackett Qstrander, 300.
v. rial Chapel, 229.
Brackett Seavey, 277.
v. BrickerhofC v. Wemple, 322.
Brackett's Adm'r v. Boering's Adm'r, Bridgeford v. Owen, 401.
24. Bridgeport Public Library & Reading
Brackin v. Newman, 562. Room V. Burroughs Home, 306, 570.
Bradford v. Blossom, 168. Bridgeport Trust Co. v. Bartholomew,
Bradford v. Clayton, 403. 327.
Bradford v. Eastman, 59. Bridgeport Trust Co. v. Marsh, 389.
Bradford v. Fidelity Trust Co., 380. Bridges v. Pleasants, 204.
Bradley v. Chesebrough, 532. Briggs V. Central Nat. Bank of New
Bradley v. Merrill, 518. York, 22.
Bradley Co. v. Bradley, 123, 129. Briggs V. Davis, 169.
Bradner Smith & Co. v. WUliams, 296. Priggs V. McEride, 559.
Bradshaw v. Tasker, 206. Brigham v. Peter Bent Brigham Hos-
Bradstreet v. Everson, 22. pital, 234, 238, 240, 242.
Bradstreet v. Kinsella, 573. Brindley v. Brindley, 126.
Bradstreet Schuyler, 537.
v. BrinkerhofC's Ex'rs v. Banta, 400.
Bradwell Catchpole, 486.
v. Brissell v. Knapp, 475, 537.
Bragg V. Geddes, 97. Bristol V. Bristol, 99.
Brain v. Bailey, 434. Bristow V. McCall, 438, 440.
Erainard v. Buck, 537. British America El. Co. v. Bank of
Branch v. Bulkley, 540. British N. A., 455.
Branch v. De Wolf, 352. Brittin v. Handy, 132.
Branch v. Griffin, 434. Britton v. Lewis, 421.
Brandan v. McOurley, 245. Broad, Ex parte, 23.
Brandon v. Brandon, 368. Broadhurst v. Balguy, 487.
Brandon v. Carter, 74, 269, 270. Eroadup v. Woodman, 98.
Brandon v. Robinson, 181, 182. Broadway Nat. Bank v. Adams, 183,
Brandau v. Greer, 147. 185.
Brannin v, Brannin, 118. Broatch v. Boysen, 470.
Brannock v. Magoon, 66, 77. Brock V. Conk Wright, 573.
Brannon v. May, 114, 315. Brock V. Sawyer, 446.
Bransford Realty Co. v. Andrews, Broder v. Conklin, 112, 142, 475, 562.
286. Brodie v. Skelton, 512.
Brantly v. Kee, 334. Brogden v. Gibson, 56.
Braswell v. Downs, 74, 269. Bromley v. Gardner, 510.
Braun v. First German Evangelical Bronson v. Strouse, 569.
Lutheran Church, 63, 126. Bronson v. Thompson, 335, 440, 571.
Brawner v. Staup, 558. Brook V. Chappell, 140.
Brearley School v. Ward, 184, 444. Brooke, Appeal of, 270.
Bredell v. Collier, 431. Brooke's Estate, In re, 405.
Bredell v. Kerr, 284. Brooklyn Trust Co., In re, 388.
Breeden Moore, 156, 169, 280.
v. Brooks V. Brooks, 111.
Breedlove v. Stump, 73, 271, 510. Brooks V. City of Belfast, 232.
Breit v. Xeaton, 508. Brooks V. Davis, 184, 572.
Breitenbucher v. Oppenheim, 102, 103, Brooks V. Egbert, 408.
109. Brooks V. Ellis, 124.
Bremer v. Hadley, 306. Brooks V. Fowler, 112.
Breneman v. Frank, 497. Brooks V. Jones, 571.
Brennaman v. Schell, 95. Brooks V. Petrie, 283.
Brennan, Matter of, 81. Brooks V. Raynolds, 445.
Brennan v. Tillinghast, 524. Brooks Shelton, 104.
V.
Brennan's Estate, In re, 371, 414. Brothers Brothers, 336.
v.
Brewster v. Brewster, 399. Brothersv. Porter, 508.
Brewster v. Demarest, 356j Broughton v. West, 252,
 CASES CITED 693
rnie figures refer to pagea]
Brovan v. Kyle, 454. Buck V. Lockwood, 466.
Brower v. Callender, 574. Buck V. Pike, 101.
B rower v. Osterhout, 318. Buck V. Swazey, 109, 434.
Brown, In re, 381, 526, 528. Buck V. Voreis, 118.
Brown v. Alexander, 101. Buck V. Walker, 173.
Brown V. Barngrover, 292. Buck V. Webb, 480.
Brown v. Berry, 376, 378, 395. Buckel V. Auer, 551.
Brown v. Brown,
236, 306, 365. Buckmgham v. Clark,' 139.
Brown v. Burdett, 425. Eucldey v. Monck, 205, 262.
Brown v. Columbia Finance & Trust Buckmaster v. Harrop, 60.
Co., 167. Bucknell v. Johnson, 113.
Brown v. Cowell, 147, 335, 468, 477. Buckner v. Carter, 475.
Brown v. Doane, 129. Budd V. Walker, 24.
Brown v. Uwelley, 114. Budd's Estate, In re, 203.
Brown v. Fidelity Trust Co., 574. Buell V. Buckingham, 335.
Brown v. Fletcher, 434. Buell V. Gardner, 215, 247, 449.
Brown v. Ford, 435. Buffalo, N. X. & E. R. Co. v. Lampson.
Brown v. Hall, 156. 114.
Brown v. Harris, 154. Buffington V. Maxam, 28.
Brown v. Hummel, 451. Buford V. McCormick, 514.
Brown V. Kausche, 55, 138. Buffum V. To.wn, 48.
Brown v. Kelsey, 262. Buist V. Williams, 529.
Brown v. Knapp, 27. Bulkley v. Staats, 447.
Brown V. Lambert's Adm'r, 120, 477. Bull V. Bull, 49.
Brown v. Mercantile Trust & Deposit Bull V. Odell, 260, 437.
Co., 250. BuUard v. Attorney General, 265.
Brown v. Postell, 443. Bullard V. Chandler, 327.
Brown v. Eeeder, 156. BuUen v. State of Wisconsin, 40.
Brown v. Richter, 292. Bullock V. Angleman, 466, 537.
Brown v. Silsby, 413. Bulwinkle, In re, 83, 84, 87.
Brown v. Spobr, 77, 250, 529. Bumpus V. Bumpus, 471.
Brown's Estate, In re, 198, 236. Bundy v. Bundy, 261, 263.
Brown's Lessee v. Brown, 53. Bunn V. Winthrop, 67, 69.
Brown & Co., In re, 526. Bunt, Matter of, 81, 85.
Browne y. Browne, 140. Bunting v. Ricks, 518.
Browne's Estate, In re, 48. Burbach v. Burback, 260.
Browning v. Fiklin's Adm'r, 567. Burbank v. Burbank, 247, 448.
Bruce v. Faucett, 463. Burbank v. Whitney, 256.
Bruen v. Gillet, 486. Burch V. Nicholson, 122, 558.
Bruere v. Cook, 205, 262. Burden v. Sheridan, 125.
Brumridge v. Brumridge, 486, 492. Burdeno v. Amperse, 162.
Brundage v. Cheneworth, 187. Burdett v. May, 559.
Brundage's Estate, In re, 227. Burgess v. Wheate, 431.
Bruner v. Finley, 543. Burgett V. Paxton, 512.
Brunnenmeyer v. Buhre, 448. Burgoyne v. McKillip, 479.
Brunson v. Henry, 73. Burke v. Burke, 209, 213, 221, 251, 262
Brush V. Smith, 413. Burke v. Morris, 439, 441.
Brush V. Young, 284. Burke v. O'Brien, 566.
Bryan v. Aikin, 383. Burke v. Roper, 190.
Bryan v. Bigelow, 63, 136., Burke's Estate, In re, 264, 284.
Bryan v. Duncan, 147, 335. Burks V. Burks, 44.
Bryan v. Hawthorne, 265. Burleigh v. White, 103.
Bryan v. Milby, 49. Burling v. Newlands, 319.
Bryant v. Allen, 109. Burnes v. Burnes, 51.
Bryant v. Hendricks, 124. Burnett v. Hawpe's Ex'r, 434.
Brys V. Pratt, 468. Burney v. Atkinson, 371.
Buchanan v. Hart, 283. Burney v. Spear, 410, 415.
Buchanan v. Kennard, 191, 199. Burnham, Petition of, 247, 449.
Buchanan's Estate, In re, 398. Bux-nham y. Barth, 525, 530, 533.
BOQEET Teusts 38 —
594 CASES CITED
[The figures refer to pages]

Burns v. Niagara Co., 475. Oallls V. Eidout, 536.

Bums Ross, 101.
V. Calvert v. Carter, 330.
Burr V. Boston, 219. Calvert v. Woods, 336.
Burr V. McEwen, 308, 369, 3T1, 409. Calwell's Ex'r v. Prindle's Adm'r, 315.
Burr's Ex'rs v. Smitla, 196, 199. Camden Safe Deposit & i'rust Co. v.
BurrUl v. Shell, 349. Guerin, 170, 578.
Burrls Brooks, 477.
v. Camden Safe Deposit & Trust Co. v.
Burroughs v. Bunnell, 368. Schellenger, 184, 434.
Burroughs v. Galther, 460. Cameron v. Hicks, 340.
Burt V. Wilson, 126. Cameron v. Lewis, 118.
Bush, Appeal of, 567. Cameron v. Nelson, 130.
Bush V. Bush, 433. Camody v. Webster, 469.
Bushe, In re, 412, 419. Camp V. Presbyterian Soc. of Sackets
Bushe V. Wright, 338. Harbor, 227.
Busse V. Schenck, 321. Camp V. Thompson, 188.
Bussell V. Wright, 580. Campbell v. Brannin, 445.
Butler V. Badger, 311. Campbell v. Campbell, 113, 333.
Butler V. Boston & A. R. Co., 374. Campbell v. Johnston, 474.
Butler V. Butler, 278, 357, 473. Campbell v. Mansfield, 387.
Butler V. Carpenter, 95. CampbeU v. Milter, 346, 365.
Butler V. Godley, 258. Campbell v. Napier, 401, 497,
Butler V. Hill, 267. Campbell v. Noble, 97.
Butler V. Hyland, 148. Campbell v. O'Neill, 547.
Butler V. Lawson, 470, 475. Campbell v. Pennsylvania Life Ins.
Butler V. Rutledge, 101. Co 337
Butler V. Sprague, 24. Campbell v. Shifflett, 551.
Butler V. Taggert's Trustee, 265. Campbell v. Virginia-Carolina Chemi'
Butler's Estate, In re, 380. cal Co., 460.
Butt V. McAlpine, 548. Campbell v. Weakley, 180.
Butte Hardware Co. v. Cobban, 119. CampbeU-Kawannanakoa v. Campbell,
Butterfield v. Butterfield, 104. 159.
Butterworth v. Keeler, 192. Campbell's Case, 328.
Buttles V. De Baun, 559. Campbell's Estate, In re, 36.
Butman v. Whipple, 335. Canada v. Daniel, 464, 560.
Byers v. McEniry, 131. Canda v. Totten, 60.
Byington v. Moore, 143. Cann v. Cann, 354.
Bynum v. Bostick, 424. Cannon v. Robinson, 301.
Byrne v. Byrne, 530. Cantwell v. Crawley, 543, 545.
Byrne v. Jones, 335. Cape V. Plymouth Congregational
Byrne v. McGrath, 530. Church, 464.
Byrom v. Gunn, 522. Caple V. McCoUum, 95.
Byron Reed Co. v. Klabunde, 311. Cardwell v. Cheatham, 461.
Carey v. Brown, 316.
Carey Co. v. Pingree, 297.
Carley v. Graves, 532.
Cable Cable, 464.
V. Carman v. Bumpus, 567.
Cadieux v. Sears, 509. Carmody's Estate, In re, 332.
Cady, In re, 276. Carney v. Byron, 581.
Cady Lincoln, 183, 460.
V. Carney v. Katn, 580.
Cady's Estate, In re, 276. Carozza v. Boxley, 29.
Cagwin v. Buerkle, 98, 369. Carpenter, Appeal of, 406.
Cahlan v. Bank of Iiassen County, 39, Carpenter v. Carpenter, 142, 340.
71, 77. Carpenter v. Cook, 159, 161, 470.
Cain V. Cox, 518. Carpenter v. Miller's Ex'rs, 204.
Caldwell v. Graham, 488, 493, 494. Carpenter v. M. J. & M. & M., Con-
Caldwell v. Williams, 67. solidated, 548.
Calhoun v. Burnett, 466. Carpenter v. Perkins, 385.
Calhoun v. King, 536. Carpenter v. Robinson, 518.
Calkins v. Bump, 498. Carpenter v. Soule, 150.
 CASES CITED 695
[The figures refer to pages]

Carpenteria School Dlst. v. Heath, 262. Cavender v. Cavender, 276, 347,

Carr v. Bredenberg, 276, 277. Cavin v. Gleason, 24.
Carr v. Carr, 46, 84. Cawthon v. Steams Culver Lumber
Carr v. Corning, 283. Co., 167.
Carr v. Hertz, 321. Caylor v. Cooper, 322.
Carr v. Leahy, 297. Cazzain v. Title Guarantee
Carrie
& Trust
Carnes, 510.
v. Co., 249.
Carrier, Appeal of, 413. Cearnes v. Irving, 467.
CaiTier v. Carrier, 173, 350. Cecil's Committee v. Cecil, 331, 545.
Carrier v. Heather, 142. Cecil's Trustee v. Robertson & Bro..
Carroll v. Adams, 50. 182.
Carroll v. Draughon, 517. Centennial & Memorial Ass'n of Val-
Carroll v. Smith, 246, 250. ley Forge, In re, 189, 570.
Carr's Adm'r v. Morris, 478. Central Nat. Bank v. Connecticut
Carr's Estate, In re, 347, 405, 506. Mut Life Ins. Co., 23, 433.
Carruth v. Carruth, 264, 267. Central Trust Co., In re, 24.
Carson v. Fuhs, 432, 433., Central Trust Co. v. East Tennessee
Carson v. Marshall, 336. Land Co., 37.
Carson v. Painter, 555. Central Trust Co. v. GafCney, 66.
Carstairs v. Bates, 19. Central Trust Co. v. Johnson, 413.
Carter v. Balfour Adm'r, 196, 198. Central Trust Co. of New York v.
Carter v. Gibson, 507. Egleston, 175.
Carter v. Jones, 474. Central Trust Co. of New Tork v.
Carter v. RoUand,
395. Falck, 179, 245.
Carter v. Stickland, 50. Cetenich v. Fuvich, 547, 548.
Carter v. Uhlein, 246, 474, 547. Chace v. Chapin, 520.
Carter v. United Ins. Co., 30. Chace v. Gardner, 59, 131.
Carter v. Whitcomb, 190. Chadwick v. Arnold, 123, 511, 537.
CartmeU v. Allard, 355. Chadwick v. Chadwick, 547.
Cartwrlght -& Bro. v. U. S. Bank & Chadwick v. Felt, 107.
Trust Co., 61, 73, 417. Chadwick v. Perkins, 64, ,

Caruthers v. Williams, 103. Chaffln V. Hull, 318.

Cary v. Abbot, 228. Chalk V. Daggett, 111, 520.
Cary v. Slead, 567. Chamberlain v. Chamberlain, 160, 543.
Cary Library v. Bliss, 451. Chamberlain v. Eddy, 537.
Cary's Estate, In re, 284, 399. Chamberlain v. Steams, 216, 423.
Case V. Carroll, 142. Chamberlain v. Thompson, 46.
Case V. Goodman, 560. Chamberlayne v. Brockett, 234.
Case V. Hjisse, 262. Chamberlin v. Estey, 372.
Case V. Seger, 114. Chambers v. Baptist Education Soci-
Case Threshing Mach. Co. v. Walton ety, 247.
Trust Co., 293. Chambers v. City of St. Louis, 196,
Casey v. Casey, 98, 138. 448.
Casgrain v. Hammond, 173, 175. Chambers v. Higgins' Ex'r, 308.
Caspari v. Cutcheon, 328. Chambers v. Mauldin, 277.
Cass V. Cass, 396, 399. Chambers v. Minchin, 486.
Cassagne v. Marvin, 163. Champlin v. Champlin, 111.
Cassels v. Finn, 140. Chancellor v. Ashby, 510.
Cassels v. Vernon, 498. Chancellor v. Chancellor, 355.
Cater v. Eveleigh, 303. Chandler v. Chandler, 323.
Cales V. Mayes, 283. Chandler v. Riley, 132.
Cathcart v. Matthews, 331. Chandler v. Roe, 122.
Cfitherwood v. Watson, 518. Chanslor v. Chanslor's Trustees, 143.
Catlin, Matter of, 422. . Chantland v. Midland Nat. Bank, 113.
Catron v. Scarritt Collegiate Institute, Chapin v. School Dist. No. 2, in Win-
199, 229. chester, 255.
Caugrain v. Hammond,. 175. Chapin v. Weed, 336.
(Dauhape v. Barnes, 270. Chaplin v. Givens, 268.
Cavagnaro v. Don, 333. Chapman, In re, 276.
596 CASES CITED
rnie figures refer to pages]

Chapman v. Abrahams, 103. Church of St. Stanislaus v. Algemeine

Chapman v. Hughes, 476, 515. Verein, 113.
Chapman v. Newell, 194, 223, 255. C. H. Venner Co. v. Central Trust Co.
Chapman v. Whitsett, 138. ofNew York, 548.
Chapman v. "Wilbur, 247. CifCo v. CifCo, 110.
Chapman's Ek't v. Chapman, 124, 139. Citizens' Bank of Parker v. Shaw,
Charles v. Dubose, 836. 519.
Charter Oak Life Ins. Co. v. Gisborne, Citizens' Bank of Paso Robles v.
550. Rucker,. 504.
Chase v. Chase, 447, 473, 543. Citizens' Bank & Trust Co. v. Hale,
Chase v. Currier, 444. 25.
Chase v. Darby, 388. Citizens' Loan & Trust Co. v. Herron,
Chase v. Davis, 324. 46.
Chase v. Dickey, 205, 240. Citizens' Nat. Bank v. Haynes, 20.
Chase v. Perley, 468. Citizens' Nat. Bank v. Jefferson, 347.
Chase & Baker Co. v. Olmsted, 509, Citizens' Nat. Bank v. McKenna, 75.
521, 527, 530. Citizens' Nat Bank v. Watkins, 428.
Chastain v. Smith, 125. City Bank v. Maulson, 485, 488.
Chater v. Carter, 98. City Bank of Dowagiac, In re, 523.
Chaves v. Myer, 508. City Council of Augusta v. Walton,
Cheatham v. Rowland, 369, 375. ,
285.
Cheney v. Langley, 398. City of Baltimore v. Safe Deposit &
Cherb'onnier v. Bussey, 565. Trust Co., 370.
Cherry v. Cape Fear Power Co., 434, City of Bangor v. Beal, 357.
435. City of Boston v. Robbins, 32L
Cherry Greene, 306.
v. City of Boston v. Turner, 71.
Cherry Richardson, 567.
v. City of Centralia v. U. S. Nat. Bank
Chew V. Com'rs of Southwark, 282. of Centralia, Wash., 24.
Chew V. First Presbyterian Church of City of Chicago v. Tribune Co., 332.
Wilmington, Del., 235. City of Colchester v. Lowten, 245.
Chew V. Henrietta Min. & S. Co., 315. City of Detroit v. Lewis, 369.
Chew V. Sheldon, 28. City of HuntsvUle v. Smith, 201.
Oheyney v. Geary, 428. City of Lexington v. Fishback's Trus-
Chicago Lumbering Co. v. Powell, 162. tee, 370.
Chicago Title & Trust Co. v. Zinser, City of Lincoln v. Morrison, 479, 496,
323. 524, 529, 533.
Chicago & A. Bridge Co. v. Fowler, City of Marquette v. Wilkinson, 4, 71.
474. City of Minneapolis v. Canterbury,
Ghilcott V. Hart, 167. 144.
Childs V. Childs, 308. City of Philadelphia, In re, 312.
Childs V. Waite, 264. City of Philadelphia v. Elliott, 215.
Chilvers v. Race, 70. City of Philadelphia v. Girard's Heirs,
Chirurg v. Ames, 400, 540. 226.
Chisolm V. Hamersley, 411. City of Philadelphia v. Masonic Home
Choctaw, O. & G. R. Co. v. Sittel, 400. of Pennsylvania,' 224.
Cholmondeley v. Clinton, 550. City of Richmond v. Davis, 312.
Christian v. Yancey, 269, 270. City of St. Louis v. Wenneker, 273.
Christopher v. Mungen, 292. City of St. Paul v. Seymour, 479.
Christ's Hospital v. Budgln, 97. City of Sturgis v. Meade County Bank,
Christ's Hospital v. Grainger, 234. 17.
Church V. Church, 513. Claflin V. Claflln, 343, 580, 582.
Church V. Ruland, 138, 513. Claflin Co. v. King, 292.
Church V. Shoemaker, 205. Clagett V. Hall, 481.
Church V. Sterling, 60. Clagett V. Worthington, 467, 502.
Church Extension of Methodist Epis- Claiborne v. Holland, 516.
copal Church V. Smith, 427. Clapp V. Vatcher, 119, 497.
Church of Evangelical Ass'n of North Clark V. Anderson, 276, 330, 362, 371,
America in Charles City v. Parker, 402, 414, 419, 506.
291. Clark V. Beers, 352.
 CASES CITED 597
[Tlie figures refer to pages]

Clark V. Brown, 446. Clopton V. Gholson, 298, 302.

Clark V. Clark, 80, 87, 351, 416, 472, Close V. Farmers' Loan & Trust Co..
'
553. 502.
Clark V. Crego, 447. Close's Estate, In re, 199, 222.
Clark V. Creswell, 110. Cloud V. Calhoun, 73, 74, 269.
Clark V. Deveaux, 466. Clowser v. Noland, 105.
Clark V. Fleischmann, 305. Clute V. Barron, 336.
Clark V. Frazier, 111, 252. Clute V. Bool, 437.
Clark V. Halligan, 209, 220. Clyne, In re, 399.
Clark V. Law, 539. Coate, Appeal of, 50.
Clark V. Maguire, 291. Coates V. Lunt, 269, 394.
Clark V. Oliver, 570. Cobb V. Denton, 427.
Clark V. Piatt, 409. Cobb V. Fant, 413.
Clark V. Eainey, 510. Cobb V. Knight, 508.
Clark V. St Louis A. & T. H. R. Co., Coble
V. Nonemaker, 511.
349. Coburn v. Page> 471.
Clark V. Stanfleld, 167. Cochran v. O'Hern, 432.
Clark V. Timmons, 479. Cochran v. Paris, 328, 536.
Clark V. Trindle, 557. Cochran v. Richmond & A. R. Co., 371.
Clark V. Wilson, 283. Cochrane v. Schell, 163.
Clark Sparks & Sons Mule & Horse Cocke V. Minor, 501.
Co. V. Americus Nat. Bank, 523. Cocks V. Barlow, 260, 539.
Clarke, In re, 425. Cocks V. Haviland, 489.
Clarke v. Boorman, 554. Codman v. Brigham, 238.
Clarke v. Deveaux, 336, 447, 466. Codman v. Krell, 160.
Clarke v. Inhabitants of Andover, 286. Cody V. Cody, 475.
Clarke v. Saxon, 257, 264. Coe V. Beckwith, 327.
Clarke v. Sisters of Society of Holy Coe V. Coe, 110.
Child Jesus, 45, 258. •Coe V. Turner, 469.
Clarke v. Windham, 439. Coffee V. Ruffin, 335.
Clark's Appeal, 486. Coffey V. Sullivan, 97.
Clarkson v. De Peyster, 143. Coffin V. Attorney General, 202.
Clary v. Spain, 56, 110, 257. Coffin T. Bramlitt, 355.
Clausen v. Jones, 277. Coffin V. Mcintosh, 95.
Clay V. Clay's Guardian, 113. Cogan V. McCabe, 400.
Clay V. Wood, 50. Cogbill V. Boyd, 335, 477, 497.
Clay's Adm'r v. Edwards' Trustee, 273. Coggeshall v. Coggeshall, 34.
Clayton, Case of, 522, 523. Coggeshall v. Pelton, 219.
Clayton v. Hallett, 198, 199, 212, 254. Cogswell V. Weston, 376.
Cleland v. Waters, 425. Cohen v. Mainthow, 537.
Clemens v. Caldwell, 275, 499. Cohn V. Ward, 275.
Clemens v. Heckscher, 309, 516. Colburn v. Grant, 485.
Clement v. Bralnard, 499. Cole V. Cole, 523, 527.
Clement v. Hyde, 212. Cole V. Fickett, 119.
Clemmons Cox, 511.
v. Cole V. Nickel, 582.
Clermontel's Estate, In re, 365. Cole V. Noble, 557.
Clester v. Clester, 117, 121, 149. Cole V. Stokes, 335.
Cleveland v. Hallett, 292. • Cole V. Thompson, 510.
Cleveland v. Hampden Savings Bank, Cole V. Tyson,. 151.
80, 82. Cole V. Watertown, 283.
eleven's Estate, In re, 283. Cole's Estate, In re, 295.
Clews V. Jamleson, 466. Colegrove's Estate, In re, 173.
Cliff V. Cliff, 546, 558. Coleman, In re, 435.
Clifford V. Farmer, 508. Coleman v. Bucks & Oxon Union
Clifford V. Stewart, 51. Bank, 454, 457.
Clifford Banking Co. v. Donovan Com- Coleman v. Connolly, 325,
mission Co., 467. Coleman v. Davis, 554.
Cllngman v. Hill, 120. Coleman v. Dickenson, 15.
598 CASES CITED
[The figures refer to pages]

Coleman v. McGrew, 537. Condit Bigalow, 518.

v.
Coleman v. O'Leary's Bx'r, 202, 203, Condit V.Maxwell, 403, 518.
209, 242. Condit Eeynolds, 53.
V.
Coleman's Estate, In re, 194, 218, 235, Cone v. Cone, 280, 285.
255. Cone V. Wold, 569.
Colesbury v. Dart, 460. Congdon v. Gaboon, 467.
Coleson v. Blanton, 319. Conger v. Conger, 410.
Collar V. Collar, 130, 468. Congregational Society and Church in
Collector of Taxes of Norton v. Old- Newington v. Newington, 553.
field, 219, 223, 238. Congregational Unitarian Soc. v. Hale,
College of Charleston v. Wllllngham, 205.
409. Conkling v. Roman Catholic Orphan
Collier v. Blake, 281, 436. Asylum, 204.
Collier v. Munn, 3T3. Connally v. Lyons & Co., 297.
Collins V. Donohue, 503. ,
Connecticut College for Women v. Gal-.
Collins V. Gooch, 356, 361. vert, 211.
Collins V. Lewis, 522. Connecticut Mut. Life Ins. Co. v. Stin-
Collins V. Bainey, 122. son, 336.
Collins V. Tillou's Adm'r, 130. Connecticut River Savings Bank v. Al-
Collins Adm'r v. Lofftus, 316. bee's Estate, SO, 81, 84, 85, 87, 91.
Collister v. Fassitt, 50, 379. Connecticut Trust & Safe Deposit Co.
Colmary v. Fanning, 45. V. Hollister, 178.
Colquitt V. Howard, 38. Conner v. Banks, 151.
Goltman v. Moore, 577. Conner v. Lewis, 150.
Colton V. Colton, 50. Conner v. Tuck, 515.
Colton V. Stanford, 421. Connolly v. Hammond, 338.
Colton Imp. Co. v. Bichter, 37, 144. Connolly v. Leonard, 327, 339.
Columbia Trust Co., In re, 384, 565. Conover v. Fisher, 379.
Colvin V. Martin, 426. Oonover v. Stothoff, 460.
Colyar v. Wheeler, 436. Conrad, Ex parte, 264.
Comby v. McMichael, 567. Constant v. Matteson, 405, 408.
Comegys v. State, 497, 502. Gonsterdine v. Consterdine, 484.
Cdmingor v. Louisville Trust Co., 417. Contee v. Dawson, 365.
Commercial Bank, In re, 21. Continental Nat. Bank v. Weems, 21,
Commercial Nat. Bank v. Arrostrong, 524, 529.
18, 22. Continental Oil & Cotton Co. v. B. Van
Commercial & Farmers' Nat. Bank v. Winkle Gin & Machine Works, 29.
Davis, 20. Converse Noyes, 434.
v.
Commercial & Farmers' Bank Cook V.
v. Vass, Barr, 63.
63. Cook V. Black, 52.
Commissioners of Sinking Fund v. Cook V. Doggett, 128.
Walker, 245. Cook V. Elmore, 562.
Com. V. Allen, 278, 502, 503. Cook V. Gilmore, 408.
Com. V. Bank of Pennsylvania, 537. Cook V. Kennerly, 294.
Com. V. Barnitz, 287. Cook V. Lowry, 406, 499.
Com. V. Clark, 562. Cook V. Stockwell, 416.
Com. V. Fidelity & Deposit Co. of Cook V. Williams, 551.
Maryland, 502, 503. Cooke V. Piatt, 163.
Com. V. Levi, 500. Cooley V. Gilliam, 551.
Com. V. Levy, 241. Cooley V. Kelley, 324.
Com. v. Louisville Public Library, 154, Cooley V. Miller, 145.
156. Cooney v. Glynn, 127, 547.
Com. V. Naile, 431. Coons V. Tome, 38.
Cora. V. Simpson's Trustee, 370. Cooper, In re, 405.
Com. V. Tradesmen's Trust Co., 529. Cooper V. Carter, 444.
Compher v. Brovming, 409. Cooper V. Cockrum, 447.
Compton's Will, In re, 204. Cooper V. Cooper, 114, 553, 558.
Conant v. Wright, 399. Cooper V. Day, 275, 278, 447, 477.
Conaway v. Third Nat. Bank, 280. Cooper V. Harvey, 309.
 CASES cited' 599
[The figures refer to pages]

Cooper V. Landis, 508. Cox V. Gaulbert's Trustee, 385.

Cooper V. Lee, 559. Cox V. Shelby County Trust Co., 308,
Cooper V. McClun, 446. 324.
Copeland v. Bruning, 335, 438.' Cox V. Walker, 321.
Copeland v. Mercantile Ins. Co., 33. Cox V. Wills, 49.
Copeland v. Summers, 268. Cox's Lessee v. Grant, 15.
Coram v. Davis, 577. Coxe v. Blanden, 309.
Corby v. Corby, 49. Coxe V. Carson, 548.
Corin v. Glenwood Cemetery, 223. Coyne v. Plume, 440.
Corle, In re, 168, 221. Cozzens, In re, 72.
Corlies v. Corlies' Ex'rs, 277. Cozzens' Estate, In re, 481, 488, 490,
Com V. Sims, 511, 512. 494.
Corn Exch. Bank v. Manhattan Sav. Crabb v. Young, 493.
Inst'n, 454. Crackanthorpe v. Sickles, 249.
Cornelison v. Roberts, 71. Craft V. Craft, 59, 130.
Cornell University v. Fiske, 240. Craig V. Reatty, 100.
Cornet v. Cornet, 347, 356, 363, 405, Craig V. Craig, 271, 272.
496, 499. Craig V. Hone, 260.
Cornett v. West, 276, 321, 372. Craig V. Leslie, 309.
Cornlls' Estate, In re, 568. Cram Walker, 249.
v.
Cornwell v. Orton, 428. Cramer Hoose, 105.
v.
Comwell V. Wulff, 566. Crandall v. Hoysradt, 29.
Cornvclse v. Bourgum, 395. Crane v. HearUi 340, 490.
Corr, Appeal of, 557, 558. Crane v. Moses, 354, 502.
Corse V. Leggett, 63. Crane v. Reeder, 162.
Cortelyou v. Imperial Land Co., 555. Crane's Estate, In re, 406.
Coryell v. Klehm, 537. Crane's Will, In re, 51.
Costello V. Costello, 329, 358. Crate v. Benzinger, 300, 304.
Costen, Appeal of, 335. Graver V. Jermain, 437.
Coster V. Coster, 285, 288. Crawford v. Creswell, 265.
Coster V. Lorillard, 173, 175. Crawford v. El Paso Leind Imp. Co.,
Cottam V. Eastern Counties R. Co., 305.
484. Crawford v. Ginn, 537.
Cotten V. Tyson, 374. Crawford v. Jones, 504.
Cotting V. Berry, 531. Crawford v. Manson, 102, 109.
Cottingham v. Equitable Bldg. & Loan Crawford v. Mound Grove Cemetery
Ass'n, 304. Ass'n, 252.
Cottman v. Grace, 197. Crawford v. Nies, 205, 449.
Cotton V. Graham, 409. Crawford v. Workman, 56.
Cotton V. Rand, 331. Crawford's Estate, In re, 31, 262, 375.
Coudon V. Updegraf, 265, 268, 284, 383. Cree v. Lewis, 496, 497.
Goughlin v. Seago, 573. Creed v. President, etc., of Lancaster
Coulson V. Alpaugh, 49. Bank, 101.
Court V. Bankers' Trust Co., 249. Cresap v. Brown, 280, 478, 497.
Covey V. Cannon, 523, 526, 527. Cresson, Appeal of, 219, 255.
Covington v. Anderson, 501. Cresson v. Cresson, 215.
Covington & L. R. Co. v. Bowler's Crickard's Ex'r v. Crickard's Legatees,
Heirs, 317. 264, 352.
Cowan Henika, 423.
V. Crim V. Williamson, 203.
Cowan V. Union Trust Co. of San Orinkley v. Rogers, 138.
Francisco, 545. Crissman v. Crissman, 53.
Cowdry v. Cheshire, 473. Croce V. Bazzuro, 558.
Cowee V. Cornell, 148. Crocheron v. Savage, 146.
Cowell V. Gatcombe, 486. Cromey v. Bull, 350.
Cowles V. Cowles, 101. Cronheim v. Postal Telegraph-Cable
Cox V. Arnsmann, 292. Co., 20.
Cox V. Barber, 516. Cronin v. Watkins, 316.
Cox V. Brown, 544, 547. Crooke v. County of Kings, 428.
Cox V. Cox, 576. Crooker v. Rogers, 468.
600 CASES CITED
[The figures refer to pages]

Groom v. Ocala Plumbing & Electric Currier v. Studley, 557.

Co., 182. Curtis V. Brewer, 510.
Crop V. Norton, 106. Curtis V. Daniel, 558.
Cropsey v. Johnston, 357. Curtis V. Lakin, 545.
Crosby v. Davis, 433. Curtis V. Mason, 489.
Cross, Appeal of, 104, 479, 529. Curtis V. Osborn, 365, 390.
Cross V. Petree, 339, 477. Curtis' Estate, In re, 212.
Cross V. U. S. Trust Co. of New York, Curtiss, In re, 273, 419.
159. ,
Gushing v. Blake, 432, 433.
Croup V. De Moss, 125. Gushing v. Heuston, 126.
Crouse-Prouty v. Rogers, 511. Cushmau v. Bonfield, 334.
Crow ex rel. Jones t. Clay County, Cushman v. Cushman, 277.
194, 212. Cushman v. Goodwin, 529,
Crowe V. Craig, 488. Cushney v. Henry, 269.
Crowley v. Crowley, 52, 111, 556, 557. Gutbush v. Cutbush, 302.
Crown Co. v. Cohn, 305. Cuthbert v. Chauvet, 343.
Croyle v. Guelich, 29. Cuthbert v. Eobarts, Lubbock & Co,
Cruger v. Halllday, 271, 272. 453.
Cruger v. Union Trust Co. of New Cutler V. Tuttle, 107.
York, 249. Cutler V. Winberry, 155, 165.
Cruit V. Owen, 283. Cutter V. Hardy, 161, 565.
Crum, In re, 160. Cutting, In re, 272.
Crura V. Moore's Adm'r, 537.
Crumrine v. Crumrlne, 508.
Cruse V. Axtell, 263, 283.
Cruse v; Kidd, 556. DaUey v. Kinsler, 126.
Crutchfield v. Haynes, 506. Dailey v. New
Haven, 262, 267, 284.
Culbertson v. Matson, 246. Dailey Wight, 277.
v.
Cully V. People, to Use of Dunlap, 503. Daland v. Williams, 382.
Gulp V. Price, 95. Dale V. Guaranty Trust Co., 581.
Culpepper ^at. Bank v. Wrenn, 248. Dalrymple v. Security Loan & Trust
Culross V. Gibbons, 159. Co., 293.
Culver V. Avery, 121. Dalton Hazlet, 317.
V.
Culver V. Culver, 565. Daly V.Bernstein, 269.
Culver V. Lom'poc Valley Sav. Bank, Daly V. Butchers' & Drovers' Bank, 21.
84, 262. Daly's Estate, In re, 215.
Cumberland Coal & Iron Co. v. Parish, Dalzell V. Dalzell, 113.
38. Dameron v. Gold, 463.
Cummings v. Corey, 162. Dammert v. Osborn, 159.
CunnifC v. McDonnell, 73. Dana v. Bank of United States, 245.
Cunningham v. Bank of Nampa, 316. Danford, In re, 145.
Cunningham v. Bright, 157, 186, 571. Danforth v. Oshkosh, 173, 198, 236,
Cunningham v. 'Cunningham, 329, 401. 258.
Cunningham v. Davenport, 81, 86, 87, Danner v. Trescot, 433.
88, 89. Dantzler v. Mclnnis, 298.
Cunningham v. Fraize, 398. Darby v. Gilligan, 373.
Cunningham y. McKindley, 551. D'Arcy v. Blake, 433.
Cunningham v. Pettigrew, 121. Darcy v. Kelley, 192, 214, 262.
Cimningham v. Wood, 438. Darling v. Potts, 497.
Cunningham's Will, In re, 202. Darling v. Witherbee, 156.
Curd V. Field, 461. Darling's Ex'r v. Gumming, 414,
Curd's Trustee v. Curd, 167. Darlington, Appeal of, 149.
Curdy v. Berton, 138. Darlington's Estate, In re, 480.
Curlett V. Emmons, 403. Darnaby v. Watts, 461, 490.
Curling's Adm'rs v. Curling's Heirs, Darne v. Catlett, 475.
211. Dashiell v. Attorney General, 195,
Curran v. Green, 277. Daugherty v. Daugherty, 468.
Currie v. Look, 113, 121. Davenport v. Stephens, 293.
Currier v. Johnson, 374. Davidson v. Davidson, 551.
 CASES CITED 601
[The figures refer to pages]

Davidson v. I. M. Davidson Real Es- Deering v. Pierce, 399, 573.

tate &
Inv. Co., 335. Deery v. Hamilton, 304.
Davies v. Otty, 127. .
Deering Harvester Co. v. Keifer, 532.
Davies' Elstate, In re, 265. Deese v. Deese, 111.
Davis, Appeal of, 350, 358. De Ford v. Orvis, 512.
Davis, Matter of, 83, 88, 89. Defrees v. Brydon, 292.
Davis V. Barnstable, 212. De Graffenreid v. Green, 293.
Davis V. Boyden, 551. Dehaven v. Sterrit, 102.
Davis V. Coburn, 467. De Hierapolis v. Keilly, 520.
Davis V. Dickerson, 108, 468. De Jarnette v. De Jarnette, 478.
Davis V. Dovener, 95, 519, 543. De Kay v. Hackensack Water Co., 464.
Davis V. Freeman, 460. De Koven v. Alsop, 381.
Davis V. Harman, 329. DeLadson v. Crawford, 580.
Davis V. Harrison, 313, 435. Delafield v. Colden, 374.
Davis V. Hendrix, 517. Delaney's Estate, In re, 161.
Davis V. Heppert, 428. De Lashmutt v. Teetor, 324.
Davis V. Hoffman, 477. De Laurencel v. De Boom, 138, 139.
Davis v. Hunter, 293. Delkin v. McDuffle, 124, 547.
Davis V. Las Ovas Co., 144. ^ Delmoe v. Long, 546, 548.
Davis V. Settle, 121. Delvol V. Citizen's Bank, 60.
Davis V. Simpson, 338. De Mallagh v. De
Mallagh, 118.
Davis V. Stambaugh, 126. Denegre Walker, 312, 328.
v.
Davis V. "Ward, 512, 519. Denis' Estate, In re, 159.
Davis V. Williams, 169. Denmead v. Denmead, 416.
Davis V. "Wright, 332. Dennis v. Dennis, 365, 405.
Davison v. "Wyman, 98. Dennison v. Barney, 560.
Davis' Estate, In re, 400. Dennison v. Goehring, 65, 67.
Davoue; v. Fanning, 337. Denniston v. Pierce, 260.
Dawson v. Copeland, 145. Denton v. McKenzie. 63, 132.
Dawson v. Ramser, 460. Denton v. Sanford, 361.
Day V. Devitt, 132, 475. Denton's Guardians v. Denton's Ex'rs,
Day V. Roth, 59. 463.
Day v. "Wetherby, 317. Denvjir v. Park, 371.
Day V. Wright, 145. Deobold v. Oppermann, 356.
Dayton v. Phillips, 169. Depau
Moses, 537. V.
Dayton v. Stewart, 268. De Peyster v. Clendening, 287.
Deacon Trust Co., D'Epinoix's Settlement, In re, 350.
v. St. Louis Union
171. Des Moines Ins. Co. v. Mclntire, 257.
Deaderick v. Cantrell, 478, 482, 489. Derbishire v. Home, 484.
Dean, In re, 3, 425. Derby v. Derby, 214.
Dean t. Anderson, 512. De Roboam v. Schmidtlln, 101.
Dean v. Long, 516. De Rousse v. Williams, 186, 440, 441.
Dean v. Northern Trust Co., 284. Dorr's Estate, In re, 352.
Dearing v. Selvey, 539. Derry v. Derry, 109, 519.
Deaven's Estate, In re, 264. De Rycke's Will, In re, 156.
De Bardelaben v. Stoudenmire, 550. De Silver's Estate, In re, 262.
De Bevoise v. Sanford, 583. Detwiler v. Detwiler, 111.
De Bruler v. Ferguson, 214. Detwiller v. Hartman, 220, 221, 225.
Presbyterische Kirche v.
De Camp v. Dobbins, 205, 216, 217, Deutsche
Trustees of Presbytery of Elizabeth,
255
De Caters v. Le Ray De Chaumont, 97.
338. De "V^aughn v. Hays, 578.
Deckelmann, In re, 376. De "Veaux College for Orphan & Desti-
Decker v. Directors of Poor, 440. tute Children v. Highlands Land
Co., 307.
Decker v. Union Dime Sav. Inst, 83,
85, 86. Devenney v. Devenney^ 385.
Decker v. "Vreeland, 236. Devilbiss v. Bennett, 409.
Decouche v. Savetler, 550. Devin v. McCoy, 183.
Dee V. Dee, 29. Devlin v. ,Hinman, 81, 85, 89.

Deen v. Cozzens, 275, 396. Devoe v. Lutz, 448.

602 CASES CITED
[The figures refer to pages]

Devol Dye, 73.

V. Dodge V. Williams, 198, 258, 318.
Dewey Long, 438.
v. Dodson V. Ashley, 306.
Dewey's Estate; In re, 48. Dodson V. Ball, 567.
Dexter, Appeal of, 407. Doe V. Knight, 69.
Dexter v. Getting, 265, 286. Doe V. Roe, 2S3.
Dexter v. Evans, 49. Doe ex dem. Gosson v. Ladd, 324.
Dexter v. Gardner, 232. Doe ex dem. McMullen v. Lank, 438.-
Dexter v. Harvard College, 192. Doggett V. Hart, 464.
Dexter v. Phillips, 388. Doheny v. Lacy, 148.
Dexter v. President, etc., of Harvard Dohms V. Mann, 148.
College, 211. Dolan's Estate, In re, 161.
Dial V. Dial, 579. Doll V. Doll, 111.
Dibrell v. Carlisle, 434. Doll V. Gifford, 110.
Diebel v. Smith, 122, 369. Dolph V. Cincinnati, B. & C. R. Co.,
Dlcken v. McKinley, 123. - 371.
Dickerson, Appeal of, 77, 250, Donaldson v. Allen, 577.
Dickerson v. Smith, 275. Donaldson v. Eaton &Estes,-'145.
Dickey v. Goldschmidt, 574. Donegan v. Baker & Holmes Co., 475.
Dickinson, Appeal of, 358. Donlin v. Bradley, 97.
Dickinson v. Davis, 110. Donnelly's Estate, In re, 486.
Dickinson v. Henderson, 375. Donohue, In re, 354.
Dickison v. Ogden's Bx'r, 440. Donahue v. Quackenbush, 561.
Dickson v. Allen, 387. Donovan v. DriscoU, 561".
Dickson v. Montgomery, 229. Donovan v. Griffith, 432.
Dickson v. Stewart, 132. Donovan v. Major, 379.
Diefendorf v. Spraker, 344. D'Ooge V. Leeds, 382.
Dietz, In re, 285. Doom V. Brown, 132.
DiffenderfCer v. Winder, 330, 416, 499. Doom V. Howard, 414.
Dill V. McGehee, 399. Doran v. Kennedy, 431.'
Dillard v. Dillard, 324. Doremus v.'Doremus, 510.
Dillard v. Winn, 273. Dorenkamp v. Dorenkamp, 469.
Dillingham v. Martin, 324. Dorman Balestier, 248, 475.
v.
Dillivan v. German Sav. Bank, 329, Dorman v. Dorman, 547.
397. Dorr V. City of Boston, 370.
Dillon v. Connedticut Mut. Life Ins. Dorr V. Wainwright, 263.
Co., 23. Dorrance v. Greene, 305.
Dillon V.' Farley, 510. Dorrance's Estate, In re, 413.
Dillon V. Reilly, 208. Dorsett v. Houlihan, 412.
Dillwyn v. Llewellyn, 67. Dorsey v. Tliompson, 276.
Dilworth's Lessee v. Smderling, 403, Dorsey's Ex'rs v. Dorsey's Adm'r, 15,
406. 498.
Dime Savings & Trust Co. v. Watson, Dorsey's Lessee v. Garey, 466.
167, 170. Doscher v. WyckofC, 259, 460.
Dimmick Rosenfield, 293.
v. Doswell V. Anderson, 387.
Dimond's Estate, In re, 411. Dougan v. Bemis, 114.
Dingman v. Beall, 31, 308. Dougherty, Appeal of, 299.
Dingman v. Boyle, 321. Doughten v. Vandever, 198, 223.
Disbrow v. Disbrow, 276, 294, 369, 410. Douglas, In re, 218.
Disston V. Board of Trustees of Inter- Douglas V. Cruger, 576.
nal Imp. Fund, 158. Dover v. Denne, 491, 493.
Dix V. Burford, 492. Dover v. Rhea, 98.
Dixon V. Helena Soc. of Methodist Dow V. Jewell, 108, 474.
Church of North America, 28. Dowd V. Tucker, 140.
Doane's Bx'r v. Doane, 433. Dowell V. Applegate, 512.
Dockins V. Vass, 395. Dowland v. Staley, 2.
Dockray v. Mason, 440. Downard v. Hadley, 143.
Doctor V. Hughes, 250. Downer v. Downer, 399.
Dodge V. Black, j536. Downey v. Bullock, 396.
Dodge V. Dodge, 269, 285, 323, 579. Downing v. Marshall, 165, 371, 427.
 CASES CITED. 603
[The figures refer to pages]

Downs V. Downs' Ex'r, 460. Dunn & Co., In re, 526.

Downs V. Security Trust Co., 248, 580. Dunne v. Cooke, 419.
Dowse V. Gorton, 299. Dunning v. Ocean Nat. Bank, 287.
Doyle V, Burns, 25. Dunscomb v. Dunscomb, 264.
Doyle V. Doyle, 111, 547, 557. Dunshee v. Goldbacher, 53.
Drake v. Crane, 351. Du Puy V. Standard Mineral Co., 271.
Drake v. Price, 31. Dupont V. Jonet, 59.
Drake v. Wild, 551, 552. Durand, In re, 45.
Drane v. Gunter, 272. Durand v. Gray, 441.
Draper v. Montgomery, 322. Durant v. MuUer, 428.
Dreier's Estate, In re, 403. Durant v. Ritchie, 245.
Drennan v. Agurs, 221. Durant Lumber Co. v. Sinclair &
Drennen v. Heard, 433. Simms Lumber Co., 29.
Dresser Dresser, 264.
v. Durfee, In re, 274.
Dresser Travis, 335.
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Drew V. Wakefield, 98. Durkin v. Connelly, 308.
German Savings & Loan Duval, Appeal of, 412.
'

Drinkhouse v.
Soc, 52, 84. DuvaU V. Craig, 296.
Driscoll V. Hewlett, 222. Dwinel v. Veazie, 344.
Drudge v. Citizens' Bank of Akron, 2. Dwyer v. Oahill, 284.
Drummond, In re, 426. Dye V. Beaver Creek Church, 203, 256.
Drury v. Natick, 270. Dyer, Appeal of, 63, 422.
Dryden v. Hanway, 103. Dyer v. Beach, 286.
D. Sullivan & Co. v. Ramsey, 506. Dyer v. Dyer, 101.
Dutis v. Dubs, 432. Dyer v. Riley, 485.
Duckett V. National Bank of Balti- Dyer v. Waters, 421.
more, 477. Dyett V. Central Trust Co., 154.
Duckett V. National Mechanics' Bank, Dykeman v. Jenkines, 215, 236, 255,
452, 456, 457, 459. 262.
Duckworth v. Ocean S. S. Co., 321, 493. Dykes v. McVay, 309.
Dudley v. Bachelder, 105.
Dudley v. Dudley, 109.' E
Duffill's Estate,In re, 383.
Eadie v. Hamilton, 132.
DufEord's Ex'r v. Smith, 356, 375, 401, Eagan v. Mahoney, 464.
417. Eagle Mining & Imp. Co. v. Hamilton,
Duffy, In re, 83, 87. 56.
DufCy V. Calvert, 461. Eakle v. Ingram, 579.
Duffy V. Duncan, 374. Earhart v. Churchill Co., 562.
Dufour V. Wessberger, 547. Earle v. Bryant, 562.
Dugan V. Vattier, 511. Earle v. Earle, 475, 480, 485.
Duggan V. Slocum, 212, 225, 238, 243. Earnshaw, In re, 286.
Duke of Beaufort v. Berty, 35. Earp, Appeal of, 383.
Dulin v. Moore, 169. Easterly v. Keney, 443.
DuUes' Estate, In re, 202, 216. Eastland v. Jordan, 443.
Duly V. Duly, 252. Easton v. Demuth, 424, 580.
Duncan v. Bryan, 834. Bastwick's Estate, In re, 383.
Duncan v. Jaudon, 515. Eaton v. Barnes, 44.
Dunephant v. Dickson, 184. Eaton V. Tillinghast, 247.
Dunham v. Blood, 299. Eaton V. Watts, 48.
Dunham v. LoweU, 369. Baton's Estate, In re, 99.
Dunham v. Siglin, 529. Eberhardt v. Christiana Window
Dunkerson v. Goldberg, 428. Glass Co., 337.
Dunlevie v. Spangenberg, 297. Eberhardt v. Perolin, 49.
Dunn v. Dunn, 478, 559, 564. Eccles V. Rhode Island Hospital Trust
Dunn V. Morse, 331. Co., 198, 214, 264.
Dunn V. Seymour, 316. Bckerson v. McCulloh, 132.
Dunn V. Wheeler, 334. Eckford v. De Kay, 359.
Dunn v. Zwilling, 126. Edgerly v. Edgerly, 110.
Dunn's Estate, In re, 470. Edmonds v. Crenshaw, 486.
604 CASES CITED
[The figures refer to pages]

Edson V. Bartow, 139. Emery v. Farmers' State Bank, 292.

Edwards v.Barstow, 435. Emigh V. Earling, 524, 530.
Edwards v. Culberson, 121. Empire State Surety Co. t. Carrcdl
Edwards v. Edwards, 566. County, 523.
Edwards v. Trustees of University, Enders' Ex'r v. Tasco, 51.
559. Engel, In re, 277.
Edwards Welton, 519.
v. Engel's Estate, In re, 421.
Egbert De
Solms, 440.
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Ege V. Medlar, 432. Enslen v. Allen, 332.
Egerton v. Jones, 10. Eppig, In re, 53, 209.
Eggleston v. Merriam, 395. Equitable Trust Co. v. Fisher, 282.
Eggleston v. Swartz, 173. Equitable Trust Co. v. Wilson, 551.
Ehlen v. Ehlen, 275. Erben Lorillard, 128.
v.
EUer V. CruU, 122. Erdman Kenney, 129.
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Einbecker v. Einbecker, 396. Erickson Willard, 49.
v.
Eisenberg t. Goldsmith, 102. Erisman v. Directors of Poor of Lan-
Eisenlohr's Estate, In re, 496. caster County, 394.
Eisert v. Bowen, 142. Erskine v. Whitehead, 192, 198, 229.
Eitekgeorge y. Mutual House Bldg. Eshbach's Estate, In re, 24, 68.
Ass'n,'315. Eshelman's Estate, In re, 579,
Elam V. Garrard, 475. Essex Co. V. Durant, 293.
Elder v. Elder, 395. Estabrook v. Earle, 443.
Eldredge v. Heard, 328. Estill V. Estm, 122.
Eldredge v. Mill Ditch Co., 293. Etgen, In re, 275.
Bldridge v. See Yup Co., 422. Etting V. Marx, 543.
Eldridge v. Turner, 515. Ettlinger v. Persian Rug & Carpet
Eley, Appeal of, 387. Co., 465.
Elias V. Schweyer, 275, 278. Euans v. Curtis, 110.
Eliot, Appeal of, 189, 194, 205, 215,
Euler V. Schroeder, 101.
261, 318.
Evangelical Synod of North America
Eliot V. Trinity Church, 220, 230.
V. Schoenich, 532.
Elizalde v. EUzalde, 268.
Evans, Appeal of, 542, 543.
Ellenherst v. Pythian, 448.
Evans' Estate, In re, 487.
EUert V. Cogswell, 570.
Evans, In re, 382.
Ellett V. Tyler, 119.
EUicott V. Barnes, 531.
Evans V. Evans, 399, 522.
Ellicott V. Kuhl, 522, 529.
Evans v. King, 46.
Elliott, In re, 206.
Evans v. Moore, 135, 519, 543.
Everett v. Carr, 202.
EUiott V. Armstrong, 434.
Elliott V. Clark, 548.
Everett v. Drew, 298.
Elliott V. Landis Mach. Co., 120, 511. Everett v. Everett, 113.
Ellig V. Naglee, 330, 406, 541. Everett v. Foley, 299.
Ellis V. Cary, 128.
Everitt v.l Haskins, 183.
Ellis V. Fisher, 292. Everts v. Agnes, 512.
Ellis T. Nimmo, Lloyd & Goold, 67. Everts v. Everts, 156, 162.
Ellis V. Young, 517. Evertson v. Tappen, 406.
Ellison V. Ellison, 65. Ewald V. Kienifle, 545.
Ellsworth College of Iowa Falls v. Ewalt V. Davenhill, 169.
Emmet County, 369, 428. Ewell V. Sneed, 247, 262, 449.
Elmendorf v. Lansing, 490. Ewing V. Ewlng, 118.
Elmer v. Loper, 405, 417. Ewing V. Jones, 39.
Elrod V. Cochtan, 110. Ewing V. Parrish, 466.
Elting, In re, 385, 421. Ewing V. Shannahan, 46, 279, 281, 582.
Elting V. First Nat. Bank of Biggs- Ewing V. Warner, 576.
Tille, 518. Ewing V. Wilson, 575.
Ely V. Attorney General, 227. Exter V. Sawyer, 37, 144.
Ely V. Ely, 215. Exhall Coal Co., In re, 299.
Ely V. Pike, 311, 460. Byre Everett, 469.
v.
Emans v. Hickman, 220. Eyrick Hetrick, 75, 257, 268.
v.
Embury v. Sheldon, 564. Eysaman v. Nelson, 145.
Emerson v. Galloupe, 126. Eysaman t. Nelson, 405.
 CASES CITED 605
[The figures reler to pages]

Federal Heating Co. v. CSty of Buf-

falo, 518.
Fahn v. Bleckley, 518.
Peesner v. Cooper, 127.
Fair's Estate, In re, 99, 161, 165. Fehlinger v. Wood, 299.
Fairchild v. Edson, 53, 141. Feingold v. Eoeschlein, 106, 471.
Fairehild v. Fairchild, 112. Feldman v. Preston, 298, 403, 440, 443.
Fairchild v. Rasdall, 118. Pelkner v. Dooly, 421, 553.
Falrhurst v. Lewis, 102. Fellows, Appeal of, 249.
Falls City Woolen Mills v. Louisville Fellows V. Loomis, 417.
Nat. Banking Co., 21. Fellows V. Miner, 214.
Fanning v. Main, 414. Fellows V. Mitchell, 483, 494.
FanonI, In re, 391. Fellows V. Ripley, 156.
Fargo's Estate, In re, 328. Fellrath v. Peoria German School
Farish v. Wayman, 541. Ass'n, 478, 543.
Farleigh v. Oadman, 81, 84, 85, 86, 88. Felton V. Long, 400.
Farley v. Turner, 23. Fenton^v. Hall, 31.
Farmers' Loan & Trust Co. v. Ferris, Ferchen v. Amdt, 529.
212.
Ferguson v. Robinson, 93, 117, 126.
Farmers' Loan & Trust Co. v. Fidelity
Ferguson v. Rogers, 536.
Trust Co., 456, 457.
Fernald v. First Church of Christ,
Farmers' Loan & Trust Co. v. Hall,
Scientist, in Boston, 265.
385.
Farmers' Loan & Trust Co. v. Lake Pero, In re, 395, 396.
Ferrin v. Errol, 517.
St. El. R. Co., 278.
Perris v. Van Vechten, 529.
Farmers' Loan & Trust Co. v. Maltby,
512.
Fesmire's Estate, In re, 485, 488.
Festorazzi v. St. Joseph's Catholic
Farmers' Loan & Trust Co. v. Pendle-
Church of Mobile, 210, 211.
ton, 283, 401.
Farmers' Loan & Trust Co. v. Whiton, P. G. Oxley Stave Co. v. Butler Coun-
ty, 270, 280.
381.
Farmers' & Mechanics' Nat. Ban,k v. Fidelity Title & Trust Co. of Pittsburg
King, 23, 527. V. Graham, 251, 574.
Farmers' & Mechanics' Sav. Bank v. Fidelity Trust Co. v. Alexander, 469,
Brewer, 159. 573.
Farmers' & Merchants' Bank of James- Fidelity Trust Co. v. Butler, 147.
port V. Robinson, 232. Fidelity Trust & Safety Vault Co. v.
Farmers' & Merchants' Ins. Co. v. Glover, 364.
Jensen, 155. Fidelity Trust & Safety Vault Co. v.
Farmers' & Traders' Bank v. Fidelity Walker, 443.
& Deposit Co. of Maryland, 299, 453, Fidelity & Deposit Co. of Maryland,
511. Appeal of, 365, 410.
Farnsworth v. Muscatine Produce & Fidelity & Deposit Co. of Maryland,
Pure Ice Co., 479, 521, 533. In re, 540.
Farr v. Perkins, 167. Fidelity & Deposit Co. of Maryland v.
Farrar v. Payne, 337. Husbands, 400.
Farrell v. Farrell, 469. Fidelity & Deposit Co. of Maryland v.
Farrell v. Mentzer, 125, 127. Queens County Trust Co., 456, 458,
Farrell v. Wallace, 117. 459..
Farrelly v. Ladd, 573. Fidelity & Deposit Co. of Maryland v.
Farrelly v. Skelly, 469. Rankin, 453, 511.
Farrington v. Barr, 97. Field V. Arrowsmlth, 338.
Farrington v. Putnam, 240. Field V. Biddle, 15.
Faucett v. Faucett, 338. Field V. Directors of Girard College,
Faulkner v. Hendy, 499. 451.
Fausler v. Jones, 466. Field V. Drew Theological Seminary,
Pawcett V. Faweett, 562. 205.
Fay's Estate, In re, 172, 174.
Field V. Middlesex Banking Co., 147.
Faylor v. Faylor, 556.
Field V. Wilbur, 295, 302.
Feagan r. Metcalfe, 292.
Fields V. Hosklns, 123.
Fearn v. Mayers, 403. Van Wyck's Ex'r, 204, 229.
Pifleld V.
Fearson v. Dunlop, 183.
 606 CASES CITED
[The figures refer to pages]

FiJth Nat. Bank v. Armstrong, 22. v. Rhode Island Hospital

Fitzgerald
Filkins v. Severn, 229, 422. Trust Co., 375.
Fiocchi V. Smitli, 86. Fitzgibbon v. Barry, 286, 287.
First Congregational Soc. v. Pelham, Flaherty v. Cramer, 517, 547.
498. Flaherty v. O'Connor, 33.
First Congregational Soc. in Raynham Flanary v. Kane, 101.
V. Trustees of Fund, etc., in Rayn- Flanders v. Thompson, 520.
ham, 469. Flanner v. Butler, 110.
First Denton ]Sfat. Bank v. Kenney, Fleck v. Ellis, 556.
454, 458, 459. Fleenor v. Hensley, 56, 71, 73.
First Nat. Bank v. Armstrong, 19, 21, Fleetwood, In re, 139, 206, 208.
22. Fleming v. Donahoe, 54.
First Nat. Bank v. Burns, 184, 438. Fleming v. Gilmer, 334, 399.
First Nat. Bank v. Carter, 293. Fleming v. Shay, 547.
First Nat. Bank v. City Nat. Bank, Fleming v. Wilsofi, 293, 412.
520. Fletcher v. Green, 494.
First Nat. Bank v. Dennis, 21. Flinn v. Frank, 306.
First Nat. Bank v. Dougan, 440, 444. Flocchi V. Smith, 86.
- First Nat. Bank v. Farmers' & Mer- Flood V. Ryan, 240.
chants' Nat. Bank of Wabash, 315. Florence Sewing Mach. Co. v. Zeigler,
First Nat. Bank v. Hinkle, 59. 512.
First Nat. Bank v. Lee, 306. Flowers v. Flowers, 335.
First Nat. Bank v. Littlefield, 528. Floyd V. Duffy, 56, 118.
First Nat. Bank/V. Mortimer, 437. Floyd v. Gilliam, 502.
First Nat Bank v. Nashville Trust Floyd V. Smith, 49.
Co., 184, 426, 436. Flye V. Hall, 469.
First National Bank v. National Fogarty v. Hunter, 156.
Broadway Bank, 436. Fogarty v. Stange, 565.
First Nat. Bank v. Sprague, 21. Fogarty's Estate, In re, 399.
First Nat. Bank v. Union Trust Co., Fogg V. Middleton, 30, 446.
21. Fogler's Lessee v. Evig, 15.
First Nat. Bank v. Valley State Bank, Foil V. Newsome, 306.
453, 456. Folk V. Hughes, 424, 511, 582.
First Nat. Bank v. Woelz, 188. Folk V. Wind, 417.
First Presbyterian Church in Village FoUamsbee v. Outhet, 412.
of Waterford v. McKallor, 223. FoUansbe v. Kilbreth, 365.
First Presbyterian Soc. of Town of Fonda v. Penfield, 319.
Chill V. Bowen, 422. Fonda v. Sage, 151.
First State Bank of Bonham v. Hill, Foote V. Bruggerhof, 412, 421.
457, 458. Foote v. Bryant, 113.
Fischbeck v. Gross, 368, 369. Forbes v. Forbes, 539.
Fischli V. Dumaresly, 125. Force v. Force, 264.
Fish V. Fish, 335. Ford V. Caldwell, 182.
Fish V. Prior, '250. Ford V. Dangerfield, 98.
Fishblate v. Fishblate, 248. Ford V. Ford, 149, 175.
Fisher v. Dickenson, 284. Ford V. Ford's Ei'r, 190, 222.
Fisher v. Fisher, 46, 403, 413. Ford V. Fowler, 48.
^
Fisher v. Fobes, 113. Ford V. Thomas, 227.
Fisher v. Wister, 577. Fordyce v. Woman's Christian Nat.
Fisk, Appeal of, 129, 159, 477. Library Ass'n, 212.
Fisk, In re, 378, 419. Forest V. Rogers, 60.
Fisk V. Brunette, 406. Forman v. Young, 324.
Fisk v. Patton, 101, 275. Forrest v. O'Donnell, 463.
Fltchie V. Brown, 171, 264. Forscht's Estate, In re, 48.
Fite V. Beasley, 220. Forsyth v. Wheeling, 284.
Fithian, In re, 389. Forsythe v. Lexington Banking &
Fitz Gerald v. Big Rapids, 173. Trust Co., 446.
Fitzgerald v. HoUan, 471. Fort V. Amos, 476.
 CASKS CITED 607
[The figures refer to pages]

Fort V. First Baptist Cliurch of Paris, Frazler v. St. Luke's Church, 425.
142. Frears' Estate, In re, 508.
Fortner v. Phillips, 428, 444. Fredrick v. Fredrick, 308.
Foscue V. Lyon, 346, 362, 406. Freeland v. Williamson, 559.
Fosdick V. Fosdlck, 168. Freeman v. Bristol Sav. Bank, 294.
Foss V. Sowles, 267, 278. Freeman v. Brown, 268.
Foster v. Coe, 426. Freeman v. Cook, 330.
Foster V. Elsley, 251. Freeman v. Deming, 519.
Foster v. Foster, 183. Freeman v. Maxwell, 434, 508.
Foster v. Friede, 246, 434, 447. Freerpan v. Perry, 438.
Foster v. Goree, 283. Freeman v. Russell, 474.
Foster v. JefCers, 315. Freeman v. Tompkins, 368.
, Foster V. Treadway, 110. Freeman's Estate, In re, 261.
'
Foster V. Willson, 50. French v. Calkins, 167, 179, 194, 205,
Foster's Estate, In re, 437. 215, 234, 252.
Foster's WiU, In re, 356. French v. Commercial Nat. Bank, 417.
F.ourth Nat. Bank v. Hopple, 359. French v. Northern Trust Co., 284,
Foveaux, In re, 218. 324.
Fowler, Appeal of, 428. Frethey v. Durant, 398.
Fowler v. Bowery Sav. Bank, 86. Frey v. Allen, 432.
Fowler v. Coates, 53, 325. Frick Co. v. Taylor, 121.
Fowler v. Colt, 348. Fridenberg v. Wilson, 302.
Fowler V. Gowing, 71, 364. Friedley v. Security Trust & Safe De-
Fowler v. Mutual Life Ins. Co., 302. posit Co., 280, 283.
Fowler & Lee v. Webster, 184. Friedrich v. Huth, 113.
Fox V. Fox, 64, 371, 447, 577. Prierson v. General Assembly of Pres-
Fox Gibbs, 202, 216.
V. byterian Church of U. S., 50.
Fox Peoples, 132.
V. Frisbie v. Fogg, 276.
Fox V. Tay, 485. Frith, In re, 302.
Fox V. Weckerly, 409. Fritsch, In re, 31.
Fox's Estate, In re, 219. Fritts' Estate, In re, 395.
Francis r. Cline, 114.
Fritz V. City Trust Co., 321, 322, 332.
Francis v. Gisborn, 23.
Froelich, In re, 414.
Francis v. Preachers' Aid Soc, 240. Proelich's Estate, In re, 400.
Frank v. Bingham, 21.
Froemke v. Marks, 101.
Frank v. United States Froneberger v. First Nat. Bank, 545.
Colonial &
Mortg. Co., 283. Frost, In re, 376.
Frank v. Firestone, 508. Frost V. Beckman, 512.
Frank v. Morley's Estate, 468, 478. Frost V. Bush, 559.
Frost V. Frost, 2.
Frank Clothing Co. v. Deegan, 103.
Loan & Trust Frost V. Perfield, 142.
E^ankel'v. Farmers' Co.,
Frost V. Schaekleford, 297.
394.
Fryer, In re, 483.
Frankenfield's Appeal, 355.
Fulbright v. Yoder, 47.
Franklin v. Armfield, 211, 232.
Fuller V. Abbe, 417.
FrankUn v. Colley, 113, 447.
Fuller V. Davis, 283.
Franklin v. Hastings, 212, 226, 234. Fulton V. Davidson, 498.
Franklin v. Hays, 326. F'unck's Estate, In re, 307.
Franklin Inst, for Savings v. People's Furman Fisher, 73.
v.
Sav. Bank, 321. Furman Rapelje, 478.
v.
Franklin's Adm'x v. Philadelphia, 192,
Furniss v. Furniss, 399.
215, 219. Furniss v. Zimmerman, 363.
Franklin Sav. Bank v. Taylor, 309.
Franklin Trust Co., In re, 349.
Franks v. Cravens, 469.
Franks v. Morris, 562. Gadsden's Ex'rs v. Lord's Ex'rs, 15.

Franks v. Williams, 295. GafCney's Estate, In re, 82, 86, 478.

Fraser v. Bowerman, 309. Gafney v. Kenison, 193.
Frazer, In re, 220. Gagnon v. Wellman, 193, 199, 229.
Frazier v. Jeakins, 333. Gaines v. Summers, 516, 518.
608 CASES CITED
[The figures refer to pages]

Gaither v. Gaither, 140, 548. Gemmel v. Fletcher, 140.

Gaither v. Williams, 575. General Convention of New Church
Gale V. Harby, 511. in United States v. Smith, 127.
Gale V. SuUoway, 64, 536. General Mutual Ins. Co. v. Benson,
Galland's Estate, In re, 234. 474.
Gallatian v. Cunningliam, 338. General Proprietors of Eastern Divi-
Gallego's Ex'rs v.- Attorney General, sion of New Jersey v. Force's Ex'rs,
196. 478.
Galloway v. Gleason, '310. Gentry v. Poteet, 547.
Gamble v. Dabney, 284. George v. Braddock, 213.
Gambrill v. Gambrill, 168. George v. George, 49.
Gamel v. Smith, 327. Geoghegan v. Smith, 70.
Garard v. Garard, 472. Gerety v. O'Sheehan, 106, 109.
Gardiner v. Gardiner, 382. Gerick's Bx'r v. Gerick, 203.
Gardner, In re, 49. German v. Heath, 107.
Gardner v. Rowe, 245. German-American CofCee Co. v. Diehl,
Gardner v. Whitford, 522. 399.
Garesche v. Levering Inv. Co., 305, German Fire Ins. Co. v. Kimble, 20.
319. German Land Ass'n v. SchoUer, 422,
Garfield v. Hatmaker, 439. 426.
Garland, Ex parte, 302. Gernert v. Albert, 311.
Garner v. Dowling, 269. Gerrish v. New Bedford Inst, for Sav.,
Garnsey v. Gothard, 62. 82, 84.
Gamsey v. Mundy, 575. Gerry, In re, 386.
Garrett v. Duclos, 437. Geyser-Marion Gold-Min, Co. v.
Garrett v. Rutherford, 55. Stark, 306.
Garrigus v. Burnett, 88. Gheen v. Osborn, 389.
Garrison v. Little, 199, 213, 247, 262. Gianella v. Momsen, 530.
Garten v. Trobridge, 113. Gibbes v. Smith, 276.
Garth, In re, 419. Gibbons v. Mahon, 381.
Gartside v. Gartside, 265, 276. Gibney v. Allen, 263, 265, 299.
Garvey v. Clifford, 84, 87. Gibson, Case of, 419.
Garvey v. Garvey, 551. Gibson v. Cooke, 387.
Garvey v. New Xork Life Ins. & Trust Gibson v. Foote, 105.
Co., 406. Gibson v. Prye Institute, 199, 212.
Garvey v. Owens, 369. Gidley Lovenberg, 262.
v.
Gashe v. Young, 114. Gieirsch v. Grady, 98.
Gaskill V. Gaskill, 265. Gifeord V. Bennett, 518.
Gass V. Wilhite, 195, 207. Gilbert v. Chapin, 48.
Gassert v. Strong, 335. Gilbert v. Hewetson, 122.
Gaston v. American Exch. Nat. Bank, Gilbert v. Johnson, 273.
515, 516. Gilbert v. Kolb, 363.
Gaston v. Hayden, 273, 275. GUbert v. Penfield, 310.
Gaston v. King, 143. Gilbert v. Sutliff, 329, 409, 417.
Gaston Trust, In re, 401. Gilbert v. Welsch, 355, 357. ,

Gate jDity Building & Loan Ass'n v. Gilbert's Estate, In re, 278.
National Bank of Commerce, 460. Gilchrist v. Corliss, 162.
Gates V. Avery, 297. Gilchrist v. Stevenson, 478.
Gates V. Bennett, 319. Giles V. Perkins, 18.
Gates V. McClenahan, 302. Gil key v. Paine, 3S3.
Gates V. Paul, 63. Gill, In re, 414.
Gault V. Hospital for Consumptives of Gill V. Attorney General, 202.
Maryland, 529. Gill's Heirs v. Logan's Heirs, 431.
Gaylord v. Lafayette, 57, 61, 66, 154. Gillespie v. Smith, 325.
Gay's Estate, In re, 221, 222, 283. Gillespie v. Winston's Trustee, 182.
Gebbard v. Sattler, 562. Gillett V. Bowen, 38.
Geer v. Traders' Bank of Canada, Gillick V. Jackson, 299.
162, 313. Gilman v. American Producers' Con-
Geisse v. Bealli 398. trolling Co., 29.
 CASES CITED 609
[The figures refer to pages]

Gilman v. Burnett, 230. Goodall V. New England Mut. Fire Ins.

Gilman McArdle, 40, 211.
v. Co., 369.
Gilmer's Legatees v. Gilmer's Bx'rs, Goodbar v. Daniel, 438.
220, 223, 425. Goode V. Comfort, 308.
Gllmore t. Ham, 554. Goode V. Lowery, 547.
Gilmore v. Lee, 209. Goode V. McPherson, 570.
Gilmore v. Tuttle, 363. Goodell V. Buck, 529.
Gilpatrick v. Glidden, 118, 139. Goodell V. Union Ass'n of Children's
Gilpin 7. Columbia Nat Bank, 22. Home of Burlington County, 205,
Gilruth V. Decell, 515. 224.
Girard Life Ins. & Trust Co. v. Cham- Goodfellow's Estate, In re, 225.
bers, 443. Goodman v. Smith, 560.
Girard Trust Co. v. McKinley-Lan- Goodman v. White, 37.
ning Loan & Trust Co., 412. Goodno V. Hotchkiss, 553.
Girard Trust Co. v. Paddock, 317. Goodrick v. Harrison, 147.
Girard Trust Co. v. Eussell, 219, 234, Goodrum v. Goodrum, 262.
238, 243. Goodsell v. McElroy Bros. Co., 32.
Gisbom v. Charter Oak Life Ins. Co., Goodwin v. Broadway Trust Co., 249.
252, 301. "Goodwin v. Oolwell, 472.
Giselman y. Starr, 306. Goodwin v. Goodwin, 278.
Givens v. Clem, 328. Goodwin v. McGaughey, 375, 383.
Glasgow V. Missouri Car & Foundry Goodwin v. Wilbur, 37.
Co., 157. Goss V. Singleton, 75, 268, 269.
Glass V. Hulbert, 60. Gossom's Adm'r v. Gossom, 395, 409.
Glasscock v. Tate, 580. Gosson V. Ladd, 324.
Glazier v. Everett, 288. Gordon v. McCulloh, 55.
Glenn v. Allison, 300.
Gordon v. Rasines, 20.
Glenn v. McKim, 485.
Gorham, In re, 103.
Glenn's Ex'rs v. Cockey, 498. Gorham v. Daniels, 155.
Globe Sav. Bank v. Nat. Bank of Com- Gorrell v. Alspaugh, 44.
merce, 453. Gosson V. Ladd, 324.

Glover, Appeal of, 503. Gottschalk v. Mercantile Trust & De-

Baker, 52, 202, 205, 207, 247, posit Co., 328.
Glover v.
Gottstein v. Wist, 44.
255, 285.
Glover v. Stamps, 464. Gould V. Board of Home Missions of
Gloyd V. Koiff, 578. Presbyterian Church, 256, 262.
Gloyd's Estate, In re, 419. Gould V. Lynde, 97.
Glynn v. Maxfield, 431. Gould V. Mansfield, 123.
Goad Montgomery, 306.
v. Goulden, In re, 263.
G. Ober & Sons Co. v. Cochran, 21. Goudley's Estate, In re, 347, 361.
Goble V. Swobe, 446. Goupille V. Chapnt, 467.
Godfrey v. Hutchins, 191. Govin V. De Miranda, 68.
Goelz V. Goelz, 110. Grady v. Ibach, 463.
GofC V. Goff, 123. Graff V. Castleman, 516.
Goffe V. Gofife, 262. Graff v. Portland Town & Mineral Co.,
Goherty v. Bennett, 101. 542.
Going V. Emery, 196, 202. Grafflin v. Kobh, 516.
Colder v. Brassier, 288. Grafing v. Heilmann, 81, 84, 85, 86.
Golding V. Gaither, 569. Graham v. Austin, 486, 493.
Goldman v. Cohen, 132. Graham v. Davidson, 486.
Goldschmidt v. Maier, 467. Graham v. Donaldson, 548.
Goldsmith v. Goldsmith, 58, 130, 150. Graham v. Graham, 477.
Goldrick v. Roxana Petroleum Co., 469. Graham v. Lockhart, 315.
Goldthwaite v. Ellison, 528. Graham's Estate, In re, 386.
Goldtree v. Thompson, 179. Grandjean's Estate, In re, 432.

Golson V. Dunlap, 147. Grand Prairie Seminary y. Morgan,

Golson V. Fielder, 518, 520. 211, 262.
Goncelier v. Poret, 278. Grant v. Bradstreet, 140.
Gonyer v. Williams, 20. Grant v. Saunders, 190, 214, 318.
BOGEET TUUSTS 39 —
 '

610 CASES CITED

[Tlhe figures refer to pages]

Grant v. Winona & S. W. R. Co., 31T. Gregg V. Gabbert, 280, 281, 418.
Grant Trust & Savings Co. v. Tucker, Gregory v. Bowlsby, 129, 150, 484.
263. Gregofy v. Merchants' Nat. Bank, 474.
Graver, Appeal of, 348, 404. Gregory's Estate, In re, 172.
Graves v. Dolpliin, 181. Grider v. Driver, 461.
Graves v. Graves, 59, 251. Gridley v. Gridley, 27.
Graves v. Mattingly, 297. Grieves v. Keane, 444.
Graves v. Pinchback, 472. Griffen v. Ford, 536.
Graves v. Waterman, 335. Griffin v. Cchlenk, 132.
Graves' Estate, In re, 194. Griffin v. Chase, 20.
Gray v. Beard, 97, 571. Griffin v. Graham, 195, 196.
Gray v. Board of Sup'rs of Tompkins Griffin v. Pringle, 407.
County, 527. Griffin v. Schlenk, 132.
Gray v. Chase, 438. Griffin's EX'r v. Macaulay's Adm'r, 485.
Gray v. Corbit, 183. Griffith's Estate, In re, 294.
Gray v. Emmons, 145. Griggs V. Griggs, 143.
Gray v. Fox, 356, 478. Grimball v. Cruse, 372, 414, 415.
Gray v. Gray, 110. Grimes' Ex'rs v. Harmon, 196, 230.
Gray v. Heinze, 397. Grimstone v. Carter, 511, 517.
Gray v. Hemenvyay, 382. Grist V. Forehand, 35.
Gray v. Johnston, 457, 459. Griswold v. Caldwell, 310.
Gray v. Lynch, 349, 358, 401, Griswold v. Perry, 291.
Gray v. Perry, 479. Griswold v. Sackett, 283.
Gray v. Reamer, 486, 490. Gritten v. Dickerson, 281./
Gray v. TJlrich, 511. Groel V. United Electric Co. of New
Gray v. Union Trust Co. of San Fran- Jersey, 37.
cisco, 248, 581. GrofC V. City Springs Fund & Trust
Grayson v. Bowlin-, 547. Co., 529.
Grayson v. Weddle, 142. GrofE V. Rohrer, 97.
Greagan v. Buchanan, 838. Groom v. Thompson, 400. .

Green, In re, 574. Groome v. Belt, 548.

Green v. Abom, 579. Grossman's Estate, In re, 418.
Green v. Beatty, 15. Grote V. Grote, 129.
Green v. Bissell, 306. Grothe, Appeal of, 184, 346.
Green v. BlackweU, 212, 271, 272, 273, Groton v. Ruggles, 263, 266, 267.
569. • Grout v. Van Schoonhoven, 437.
Green v. Brooks, 131, 478, 536. Groye v. Robards' Heirs, 510, 514,
Green v. Crapo, 364. Gruby v. Smith, 145.
Green v. Gaskill, 398, 470. Grumbles v. Grumbles, 551. ''

Green v. Grant, 475. Grumley v. Webb, 122, 333.

Green v. Green, 114, 512. Grundy v. Drye, 282.
Green v. Hogan, 222. Grundy v. Neal, 204, 569.
Green v. Jones, 410. Gui^rnsey v. Lazear, 185.
Green v. Otter, 334. Guesnard v. Guesnard, 167.
Green v. Winter, 295, 373, 401, 409. Guest V. Guest, 104.
Green's Adm'rs v. Fidelity Trust Co. Gueutal v. Gueutal, 158.
of Louisville, 215. Guild V. Allen, 154, 256, 262, 292.
Greene v. Borland, 284, 286. Guilfoil V. Arthur, 334.
Greene v. Dennis, 223. Guilmartin v. Stevens, 310,
Greene v. Greene, 258, 310, 375, 379. Guin V. Guin, 104, 520.
Greene v. Huntington, 389. Guion V. Melvln, 287.
Greene v. Mumford, 370. Guion V. Pickett, 283.
Greene v. Smith, 381. Gulick, In re, 419.
Greenfield v. Vason, 304. Gullck V. Bruere, 280.
Greenfield's Estate, In re, 63, 248, 417. Gulick V. Gulick, 250, 328.
Greenleaf v. Land & Lumber Co., 551. Gully V. Neville, 168.
Greenleaf v. Queen, 279. Gumaer v. Barber, 114.
Greenville Academies, Ex parte, 255. Gumbert, Appeal of, 569.
GreenvFood, Appeal of, 401. Gunby v. Alverson, 307.
 CASES CITED 611
[Tbe figures refer to pages]
Gunn V. Barrow, 293. Hall V. Farmers' & Merchants' Bank,
Gann Brantley, 337.
v. 63.
Gunter v. Janes, 161. Hall V. Glover, 497.
Guphill V. Isbell, 293. Hall V. Hall, 59.
Gutch V. Fosdick, 24, 469, 547. Hall V. Knight, 120,
Guthrie v. Hyatt, 468. Hall V. Latton, 53.
Guthrie v. Wheeler, 376. Hall V. Vanness, 511.
Guthrie's Trustee v. Akers, 384. Hall V. Williams, 183,
Guy V. Butler, 151. Hall V. Yojing, 109.
Guy V. Mayes, 309. Hall's Estate, In re, 436.
Guye V. Guye, 581. Hallam v. Tillinghast, 20.
Guyton v. Shane, 374. Hallett V, Collins, 511.
Gwin V. Hutton, 168. Halletfs Estate, In re, 523, 524, 534.
Gwynn v. Gwynn, 73. Halliday v. Croom, 187.
Halligan's Estate, Matter of, 8V83, 86.
H Hallinan v. Hearst, 286.
Hallowell Sav. Inst. v. Titcomb, 39,
Haack v. Weicken, 113. 66, 428.
Haaven v. Hoaas, 113. Hallyburton v. Slagle, 156.
Hackett's Ex'rs v. Hackett's Devisees, Halper v. Wolff, 344.
350. Halsey v. Convention of Protestant
Hackett's Trustee v. Hackett, 182. Episcopal Church, 211.
Hackley v. Littell, 426, 435. Halsted, Matter of, 488.
Hackney v. Butts, 125. Ham V. Ham, 321.
Haddock v. Perham,
502, 503. Ham V. Twombly, 139.
Haddon v. Hemingway, 162. Hambleton v. Southwest Texas Bap-
Hadley v. Forsee, 203. tist Hospital, 56.
Hadley v. Hadley, 573. Hamer v. Sidway, 24.
Haendle v. Stewart, 259. HamerSley v. Smith, 568.
Hagan t. Varney, 516. Hames Stroud, 145.
v.
Hagen v. Sacrison, 173, 199. Hamilton v. Dooly, 336, 337.
Hagenbeck v. Hagenbeck Zoological Hamilton v. Faber, 278.
Arena, 536. Hamilton v. Hall's Estate, 66,
Hagerstown Trust Co., In re, 156, 567. Hamilton v. Hamilton, 310, 541,
Haggart v. Ranney, 324. Hamilton v. Muncie, 247.
Haggin v. International Trust Co., Hamilton v. Reese, 497.
194, 198, 219. Hamilton's Estate, In re, 209, 210.
Haggin v. Straus, 284. Hamlin v. Hamlin,. 40.
Haglar v. McCombs, 419. Hamlin v. Mansfield, 156.
Hagthorp v. Hook's Adm'rs, 516, Hammekin v. Clayton, 424.
Haguewood v. Britain, 111. Hammer, In re, 86.
Haight V. Brisbin, 275. Hammerstein v. Equitable Trust Co.
Haight V. Pearson, 471. ofNew York, 165, 248.
Haight V. Boyce, 50. Hammond v. Hopkins, 338.
Halgood V. Wells, 395. Hammond v. Messenger, 30.
Haines r. Allen, 215. Hammond v. Ridley's Ex'rs, 547.
Haines v. Elliot, 277. Hampson v. FaU, 512, 518.
Haines v. -Hay, 374, 498. Hanbury v. Kirkland, 486.
Haines' Estate, In re, 179. Hance's Estate, In re, 258.
Haldeman v. Openheimer, 291, Hancock v. Ship, 434.
Hale V. Adams, 487, 491. Hancock v. Twyman, 443.
Hale T. Bowler, 183. Hancox v. Meeker, 375, 413.
Hale V. Hale, 167. Hancox v. Wall, 328.
Hale V. Nashua & L. R. R., 464. Handley v. Palmer, 201, 261.
Hale V. Windsor Sav. Bank, 453. Handley v. Pfister, 161.
Haley v. Palmer, 440. Handley v. Wrightson, 49.
Hall, In re, 351, 357, 365. Handy v. McKim, 428.
Hall V. Orabb, 432. Haney v. Legg, 543, 546, 562.
Hall V. Doran, 121. Hanford v. Duchastel, 467.
Hall V. Edwards, 112. Hankwitz v. Barrett, 29.
 612 CASES CITED >

[The figures refer to pages]

Hanna v. Clark, 372, 417. Harrison v. Harrison, 102.

Hannahs v.Hammond, 474. Harrison v. Henderson, 287.
Hanold v. Bacon, 121. Harrison v. McMeniomy, 54.
Hanridi v. Gurley, 518. Harrison v. Mock, 406.
Hanrion v. Hanrion, 113. Harrison v. Smith, 523.
Hanson v. Hanson, 114, 115, 556. Harrison v. Totten, 85, 86, 89.
Hanson v. Svarverud, 118, 130. Harrison's Estate, In re, 412.
Hanson v. Worthington, 270. Harrisons v. Harrison's Adm'x, 49.
Hanson's Estate, In re, 371, 409, 564. Hart V. Allen, 376.
Hanyes v. Carr, 202. Hart V. Cannon, 147.
Harbster's Estate, In re, 339, 341. Hart V. Citizens' Nat. Bank, 556.
Hardenburgh y. Blair, 184. Hart V. Goasby, 559.
Hardin's Bx'rs v. Harrington, 512. Hart V. Seymour, 425.
Harding v. St. Louis Life Ins. Co., Hart's Estate, In re, 351, 359, 401, 417,
310. 428, 478.
Harding v. St. Louis Union Trust Co., Harteau, In re, 419.
66. Hartley v. Hartley, 110.
Hardman v. Ryan, 129. Hartley v. Phillips, 34.
Hardy v. Hardy, 48. Hartley v. Unknown Heirs of Wyatt,
Hardy v. Mayhew, 52. 183, 576.
Hardy Yarmouth, 370.
v. Harton v. Amason, 107.
Hargadlne v. Henderson, 98. Harton v. Little, 331, 476.
Harlan v. Eilke, 111. Hartsock v. Russell, 479.
Harley v. Platts, 156. Hartung's Estate, In re, 199.
Harlow v. Cowdrey, 567. Harvard College v. Amory, 364.
Harlow y. Dehon, 562. Harvey v. Bank of Marrowbone, 560.
Harlow V. Weld, 578. Harvey v. Gardner, 75, 268.
Hamian v. Fisher, 60. Harvey v. Hand, 543.
'
Harmon v. Harmon, 120. Harvey v. Schwettman, 277, 285, 417,
Harmon v. Weston, 502.
485.
Harney v. First Nat. Bank, 520.
Harwood v. Tracy, 283.
Harper, In re, 416.
Hasbrouch, In re, 52.
Harper Perry, 142.
v.
Hasbrouck v. Knoblauch, 160.
Harrar's Estate, In re, 578.
Hascall v. King, 179.
Harras v. Harras, 132. Haskell v. Staples, 98.
Harrigan v. Gilchrist, 336, 446, 479,
Haskin, In re, 416, 417.
576.
Harrington v. Atlantic, 511- Haslam v. Haslam, 511.
Harrington v. Pier, 190, 199, 201, 215, Hassey v. Wilke, 516.
Hastie v. Aiken, 550.
230, 236.
Harrion v. Smith, 24. Hatch, Appeal of, 477, 486.
Harris v. Brown, 286, 511. Hatcher v. Hatcher, 130, 539.
,
Harris v. Cosby, 448. Hatcheson v. TUden, 15.
Harris v. Ferguy, 53. Hatfield v. Allison, 537.
Harris v. Fly, 27. Hathaway v. New Baltimore, 229, 328.
Harris v. Harris, 581. Hatheway v. Sackett, 255.
Harris v. King, 550. Hatt V. Green, 551.
Harris v. Mclntyre, 111, 517« Hatton V. Weems, 368, 395.
Harris v. Moses, 381, 383. Haug V. Schumacher, 36.
Harris v. Rucker, 261. Haught V. Boyce, 50.
Harris v. Sheldon, 404, 413. Haughwont v. Murphy, 512.
Harris v. Stone, ll9, 514. Hauk V. Van Ingen, 529.
Harris Banking Co. v. Miller, 59, 65. Haulman v. Haulman, 251.
Harrison v. Adcock, 558. Hauser v. Lehman, 486.
Harrison v. Andrews, 292. Haux v. Dry Dock Sav. Inst, 87, 89.
Harrington v. Atlantic & Pac. Tel. Co., Havana Cent. R. Co. v. Central Trust
511. Co. of New York, 458.
Harrison v. Brophy, 210. Havana Cent. R. Co. v. EJoickerbocker
Harrison v. Flelschman, 516. Trust Co., 458, 511.
Harrison v. Gibson, 544. Havenor v. Pipher, 549.
 CASES CITED 613
[The figures refer to pages]

Havens, In re, 51. Hedges v. Paquett, 38.

Haverstick v. Trudel, 470. Heermans v. Burt, 163.
Havner Land Co. v. MacGregor, 94. Heermans v. Schmaltz, 423.
Hawks' Estate, In re, 391. Hegan v. Netherland, 307.
Hawkins v. Chapman, 279. Hegeman's Ex'rs v. Roome, 204, 217.
Hawkins v. Sneed, 438. Hegstad V. Wysiecki, 113.
Hawley, In re, 46. Heidelbach v. Campbell, 479, 509.
Hawley v. Cramer, 337. Heidelbach v. National Park Bank,
Hawley v. James, 165, 173, 175. 523.
Hawley Boss, 286.
v. Hell V. Heil, 44.
Hawley V. Tesch, 471. Helnisch v. Pennington, 140, 529, 548.
Hayden v. Connecticut Hospital for Heinrich v. Helnrich, 149.
Insane, 215. Heinroth v. Griffin, 317.
Hayden v. Dannenberg, 117. Heintz v. Hoover, 161.
Hayden v. Denslow, 61. Heiskell v. Chickasaw Lodge, 240.
Hayden's Ex'rs v. Marmaduke, 327. Heiskell v. Powell, 576.
Hayes v. HaU,
338, 398. Heiss V. Murphey, 423.
Hayes v. Hayes, 470. Heitman v. Cutting, 74, 268.
Hayes v. Horton, 110. Held V. Keller, 376, 389.
Hayes v. Kerr, 496. Helfenstein's Lessee v. Garrard, 155.
Hayes v. Kershow, 67. Hellman v. Messmer, 112.
Hayes v. Martz, 172. Helms V. Goodwill, 146.
Hayes v. Pratt, 287. Hemenway V. Hemenway, 391, 393.
Hayes v. Walker, 553. Hemmerich v. Union Dime Sav. Inst,
Hayles v. Farmer, 475. 87, 464.
Haynes v. Carr, 199, 202, 252. Hemphill, Appeal of, 413.
Haynes v. Montgomery, 308, 336. Hemphill's Estate, Iii re, 413.
Haynes v. Swann, 559. : Hempstead v. Dickson, 443.
Haynie v. Hall's Ez'r, 552, 559. Henchey v. Henchey, 468.
Hays V. Gloster, 1217 Henderson v. Adams, 156.
Hays V. Harris, 201, 215. Henderson v. Bell, 167.
Hays V. Hollis, 104. Henderson v. McDonald, 268.
Hayward v. Andrews, 30. Henderson v. Maclay, 557.
Hayward v. Cain, 102. Henderson v. Murray, 148.
Hayward v. Ellis, 338. Henderson v. O'Conor, 20.
Haywood v. Ensley, 132. Henderson v. Peck, 327.
Haywood v. Wachovia Loan & Trust Henderson v. Segars, 187,
Co., 53. Henderson v. Sherman, 271, 344, 410,
Hazard v. Coyle, 410, 412. 435.
Hazard Durant, 322, 478, 497.
v. Henderson's Adm'r v. Henderson's
Hazlett V. Commercial Nat. Bank, 19. Heirs, 355.
Hazlewood v. Webster, 49. Henderson's Estate, In re, 580.
Hazzard v. Philips, 384. Hendren v., Hendren, 281.
H. B. Cartwright & Bro. v. XJ. S. Bank Hendrick v. Robinson's Adm'r, 551.
& Trust Co., 61, 73, 417. Hendrickson v. Hendrickson, 544.
H. B. aaflin & Co. v. King, 292. Hendrix College v. Arkansas Townsite
Head v. Gould, 494. Co., 313, 574.
Healey v. Alston, 571. Hendrix's Ex'rs v. Hardin, 409.
Heard v. Eldredge, 382. Henning v. Miller, 123.

Heard v. March, 322. Henriott v. Good, 460.

Hearst v. Pujol, 268, 550.
Henry v. Doctor, 286.
Heath v. Bishop, 182, 439. Henry v. Henderson, 168.
Heath V. Erie R. Co., 478. Henry v. Hilliard, 410.

Heaton, In re, 375. Henry v. Raiman, 143.

Heaton Dickson, 440, 441.
v.
Henry's Lessee Morgan, 315. v.

Heaton's Estate, In re, 383. Henshaw v. Freer's Adm'rs, 302.

HebSle's Estate, In re, 172. Henson v. Wright, 434.
Heckert, Appeal of, 409, 410.
Kenyan v. Trevino, 143.
Heppenstall v. Baudouine, 444.
Heckscher v. Blanton, 333. ;
614 CASES CITED
[The figures refer to pages]

Herbert v. Hanrick, 309. Hillyer v. Le Roy, 122.

Herbert v. Herbert, 295, 369, 375. Hilton, In re, 328.
Heroy's Estate, In re, 294, 376. Hinckleij^ v. Hinckley, 319, 573.
Herrick v. Low, 262. Hinckley's Estate, In re, 161, 196, 198,
Herrick v. Newell, 128. 201, 470.
Herron v. Comstock, 399. Hlndman v. O'Connor, 148.
Hesketh v. Murphy, 214. Hinsey v. Supreme Lodge K. of P.,
Hess V. Sandner, 76. 504.
Hess V. Voss, 142. Hinshaw v. Russell, 103, 105.
Hessen v. McKinley, 82, 85, 86. Hinze v. Hinze, 558.
Hester Hester, 365.
v. Hirsch's Estate, In re, 275, 351, 364.
Hester Wilkinson, 395.
v. Hiss V. Hiss, 63, 64, 434.
Heth V. Riclimond, 516. Hitch V. Davis, 314.
Heuser v. Harris, 201, 229. Hitch V. Stonebraker, 278.
Hewitt, Matter of, 81, 86. Hitchcock V. Board of Home Missions
Hewitt V. Green, 827. of Presbyterian Church, 205, 261.
Hewitt V. Hayes, 523, 526, 527, 529. Hitchcock V. Cosper, 24, 122, 478, 497.
Hewitt V. Plielps, 302.
Hitchcock V. Linsly, 474.
Hewitt Eankin, 433. Hitchins, Matter of, 258.
V.
Hewitt V. Wheeler School and Library, Hite V. Hite's Ex'r, 467.
Hite's Devisees v. Hite's Ex'r, 385,
222, 223, 240.
392.
Hexter v. Clifford, 186.
Hitz V. National Metropolitan Bank,
Heyward Clover, 400.
v.
268.
Heyward-Williams Co. v. McCall, 423.
Heywood's Estate, In re, 46. Hoadley v. Beardsley, 178.
Hoare v. Harris, 344.
Hickman v. Wood's Bx'r, 571. Hobart v. Andrews, 398, 466.
Hicks, In re, 522.
Hickson V. Bryan, 501.
Hobbs V. Smith, 182.
Hobson v. Hale, 159.
Hickson v. Culbert, 104, 113. Hodge V. Churchward, 28.
Hicks V. Hicks, 324. Hodge's Estate, In re, 417, 498.
HideU V. Girard Life Ins. Annuity & Hodgson V. Fowler, 125.
Trust Co., 574. Hoeffer v. Clogan, 209.
Higbee v. Brockenbrough, 184. Hoehne v. Breitkreitz, 122.
Higginbotham v. Boggs, 101, 549. Hoffman v. Beltzhoover, 185.
Higgins V. Beck, 391. Hoffman v. First Nat Bank, 19.
Higgins V. Curtiss, 337. Hoffman v. Union Dime Saving Inst.,
Higginson v. Turner, 255. 53, 77.
Highberger v. Stiffler, 146. Hoffman's Estate, In re, 365, 372.
Highland Park Mfg. Co. v. Steele, 426. Hoffman Steam Coal Co. v. Cmnber-
Hildreth v. Eliot, 283. land Coal & Iron Co., 512.
Hill V. Cooper, 496. Hoffman's Will, In re, 158.
Hill V. Fleming, 509. Hofsas V. Cummings, 159.
Hill V. Fulmer, 444. Hogan V. Jaques, 97, 440.
Hill V. Josselyn, 320. Hoge V. Hoge, 135.
Hill V. Hill, 48, 155, 262, 490, 537, 577, Hogg V. Hogg, 536.
580. Hogg's Ex'rs V. Ashe, 15.
Hill V. Hill's Ex'rs, 15. Holbrook V. Harrington, 263.
Hill V. Miles, 527, 529. Holbrook v. Holbrook, 383.
Hill V. Moors, 327. Holbrook's Estate, In re, 418.
Hill V. Peoples, 322, 326. Holcomb V. Coryell, 264, 265.
Hill V. Shoemaker, 308. Holcomb V. Kelly, 278.
Hill V. Smith, 537. Holcombe v. Holcombe's Ex'rs, 372.
Hill V. State, 478. Holden, In re, 414.
Hill V. True, 114, 448, 475. Holdea v. Circleville Light & Power
Hilles' Estate, In re, 488. Co., 305.
Hilliard v. Parker, 221, 232, Holden v. Piper, 530.
Hills V. Muskegon, 370. Holder V. Melvin, 292.
Hills V. Putnam, 327. Holder v. Western German Bank, 22,
Hillyer t. Hynes, 129, 558. "~ Holderman v. Hood, 468, 583,
 CASES CITED 615
tThe flgurea reler to pages]

Holland v. Alcock, 197, 208, 209. Horsky v. McKennan, 307.

Hollander v. Central Metal & Supply Horton v. Brocklehurst, 487.
Co., 168. Horton v. Tabitha Home, 291.
Hollenbaek v. More, 515. Hosack V. Rogers, 413.
Hollis V. HoUis, 138. Hosch' Lumber Co. v. Weeks, 321.
HoUingshead, Appeal of, 53. Hoskin v. Long Island Loan & Trust
Holloway v. Eagle, 558. Co., 576.
Hollo way McCormick, 120.
v. Hosmer y. Detroit, 219.
Holloway v. Wagle, 554. Hossack V. Ottawa Development Ass'n,
Holman v. Eenaud, 189, 274. 255.
Holmes, In re, 531. Hotchkiss V. McNaught-CoUlns Imp.
Holmes v. Bushnell, 444. Co., 548.
Holmes v. Coates, 215. Houghton V. Davenport, 520, 526.
Holmes v. Dalley, 50. Houghton V. TifEany, 183.
Holmes v. Doll, 551. Houseal v. Glbbes, 551.
Holmes v. Bring, 356. Housman, In re, 393.
Holmes v. Oilman, 530. Houseman-Spitzley Corporation v.
Holmes v. Holmes, 142. American State Bank, 114.
Holmes v. Mead, 197. Houston v. Farley, 123.
Holmes v. Walter, 153, 156, 173. Houston V. Howze, 448.
Holsapple v. Schrontz, 44, 61, 305. Houstoin, B. & W. T. R. Co. v. Char-
Holt V. Wilson, 550. waine, 547.
Holtzclaw V. Wells, 125. Hovenden v. Annesley, 553, 555.
Home v.,Pringle, 486. Hovey v. Bradbury, 551, 552.
Home Inv. Co. v. Strange, 471, 560. Howard, In re, 490, 493.
Honaker v. Duff, 183. Howard v. American Peace Society,
Honnett v. Williams, 183, 428, 433. 262.
Hooberry v. Harding, 184, 441. Howard Gilbert, 535.
v.
Hood V. Kensington Nat. Bank, 458. Howard v. Howard,
248.
Hooker v. Axford, 138, 13^, 141. Howard Fire Ins. Co. v. Chase, 369.
Hooker v. Goodwin, 376, 399. Howard's Adm'rs v. Aiken, 552.
Hooker v. Hooker, 436. Howe V. Earl of Dartmouth, 393.
Hoopes V. Mathis, 529. Howe V. Howe, 101, 103, 547.
Hoosier Mining Co. v. Union Trust Howell, In re, 404.
Co., 321. Howell v. Howell, 559, 560.
Hoover v. Donally, 511. Howison V. Baird, 476.
Hope V. Brewer, 160. Hows V. Butterworth, 114.
Hope V. Valley City Salt Co., 38. Hoye V. Hipklns, 184.
Hope Vacuimi Cleaner Co. v. Commer- Hoysradt, In re, 277, 313.
cial Nat. Bank of Independence, Hoyt V. Bliss, 212.
457. Hoyt V. Hoyt, 29.
Hopkins, Appeal of, 529. Hubbard v. Alamo Irr. & Mfg. Co.,
Hopkins v. Burr, 532. 532
Hopkins V. Crossley^ 198. Hubbard v. Burrell, 474, 508.
Hopkins v. Glunt, 51. Hubbard v. Fisher, 414.
Hopkins v. Granger, 466. Hubbard v. Goodvdn, 424.
Hopkins v. Grimshaw, 98, 167, 233. Hubbard v. Hayes, 182.
Hopkins t. Hopkins, 13. Hubbard v. Housley, 163.
Hopkins v. Stephens, 464. Hubbard v. Hubbard, 55.

Hopkins v. Upshur, 196, 199. Hubbard v. McMahon, 110.

Hopkins v. Ward, 464. Hubbard U. S. Mortgage Co., 469.
v.

Hopkinson v. Dumas, 433.

Hubbell V. Hubbell, 475.
Hopkinson v. Swaim, 180, 183. Hubbell V. Medbury, 559.
Hopping V. Gray, 334. Hubbell Trust, In re, 172. 312, 314.
Hord V. Bradbury, 317, 421. Huber v. Donoghue, 342, 579.
Hortne v. Mengel, 421, 550. Huddleston v. Henderson, 539.
Hornbeck v. Barker, 105. Hudson v. Cahoon, 543, 559.
Horhberger v. Homberger, 221. Hudson V. Wright, 480.
Hornsby v. City Nat. Bank, 188, 317. Huff V. Earl, 337.
Hornung v, Sedgwick, 179. Huffine V. Lincoln, 124.
616 CASES CITED
[The figures refer to pages]

Huger V. Protestant Episcopal Church, Huxley v. Rice, 122.

157, 427, 570. Hyatt V. Allen, 389.
Huggins V. Rider, 408, 418. Hyatt V. Argenti, 161.
Hughes V. Caldwell, 319. Hyatt V. Vanneck, 539.
Hughes V. Daly, 203.'
'

Hyde v. Holmes, 382.

Hughes V. Farmers' Savings & Bldg. Hyde v. Kitchen, 84.
Loan Ass'n, 312.
Hughes V. Fitzgerald, 46, 48.
Hughes V. Letcher, 548.
Hughes V. Williams, 295, 324. Iddings V. Bruen, 471.
Hukill V. Page, 467. Ide's Ex'rs v. Clark, 49.
HuUman v. Honcomp, 223. Iglehart v. Iglehart, 221.
Humbird, Ex parte, 384. Ihmsen, Appeal of, 349, 35S.
*Hume V. Beale, 548. Ilgenfritz v. Ilgenfritz, 110.
Hume V. Franzen, 514, 518. Illinois Steel Co. v. Konkel, 63.
Humes v. Scott, 469. Trust & Savings Bank v. First
Illinois
Humphrey v. Gerard, 443. Nat. Bank, 21, 528.
Hun V. Gary, 38. Inches v. Hill, 343.
HunneU v. Zinn, 95. Indiana I. & I. R. Co. v. Swannell, 461.
Hunnicutt v. Alabama Great Southern Indian Land & Trust Co. v. Owen, 536.
K. Co., 438, 440. Indig V. National City Bank of Brook-
Hunnicut v. Oren, 561. lyn, 21.
Hunt, Appeal of, 356. IngersoU, Appeal of, 159.
Hunt, In re, 374, 391. Ingle V. Partridge, 486.
Hunt V. Danforth, 334. Inglis V. Sailor's Snug Harbor, 52.
Hunt V. Edgerton, 192. Inglish V. Johnson, 229.
Hunt V. Freeman, 537. Ingram v. Fraley, 52.
Hunt V. Gontrum, 339, 477, Ingraham v. Ingraham, 226.
Hunt V. Hunt, 47, 428. Ingram v. Kirkpatrick, 373, 412, 413.
Hunt V. Satterwhite, 432. Inhabitants of Hadley v. Trustees of
Hunt V. Smith, 522. Hopkins Academy, 211.
Hunt V. Townsend, 21. Inlow V. Christy, 338.
Hunt's Estate, In re, 418. Innis V. Carpenter, 188.
Hunter, In re, 296, 300. Innis V. Flint, 368.
Hunter v. Feild, 95, 123. International Trust Co. v. Preston,
Hunter v. Hubbard, 551. 349, 366.
Hunter v. Hunter, 148, 340, 479, 485. Interstate Nat. Bank v. Claxton, 453,
Hunter v. Lawrence's Adm'r, 35. 454, 457.
Huntington v. Jones, 439, 441, 442. Ireland v. Bowman & Cockrell, 299.
Huntington v. Spear, 155. Iron Cliffs Co. v. Beecher, 162.
Huntington Nat. Bank v. Huntington Irvine >v. Marshall, 102, 113.
Distilling Co., 544, 546. Irving V. Irving, 571.
Huntley v. Huntley, 552. Irwin V. Monongahela River Consol.
Hurlburt's Estate, In re, 396. Coal & Coke Co., 142.
Hurst V. Weaver, 51. Irwin, Appeal of, 482.
Huse V. Den, 69. Isaac V. Emory, 422.
Hussey, Ex
parte, 274. Isham V. Delaware L. & W. R. Co., 582.
Hussey v. Arnold, 293, 301. Isler V. Brock, 498.
Hussong Dyeing Mach. Co. v. Morris, Ison V. First Nat. Bank, 506.
334, 470. Ithell V. Malone, 396, 400.
Husted V. Thomson, 466. Ives V. Beecher, 443. ^

Huston V. Dodge, 283, 284. Ives V. Harris, 434, 578.

Hutcheson v. Hodrlett, 313. Ivory V. Burns, 62, 573.
Hutchins v. Dresser, 35.
Hutchins v. Heywood, 443.
Hutchins v. Van Vechten, 55, 56, 63.
Hutchinson v. Ayres, 474. Jacks V. State, 460.
Hutchinson v. Lord, 329. Jackson, In re, 419.
Hutchinson v. Maxwell, 183, 428. Jackson v. Becktold Printing & Book
Hutchinson v. National Bank of Com- Mfg. Co., 432.
merce, 529. Jackson v. Cleveland, 97.
 CASES CITED 617
[The figures refer to pages]
Jackson v. Farmer, 545. Jenkins v. Hammerschlag, 543.
Jackson v. Hubbard, 319. Jenkins v. Lester, 473.
Jackson v. Jackson, 110, 149. Jenkins v. Walter, 355.
Jackson v. Ludeling, 38. Jenkins v. Whyte, 410, 413, 419.
JackscMi V. Maddox, 381. Jenkins v. Wilklns, 274.
Jackson v. Matthews, 323, 394. v. New York Finance Co.^
Jenklnson
Jackson v. Moore, 23. 434.
Jackson v. Phillips, 190, 213, 215, 227. Jenks V. Title Guaranty & Trust Co.,
Jackson v. Eeynoldsi 421. 442.
Jackson v. Sternbergh, 15, 122. Jenks' Lessee v. Backhouse, 279.
Jackson v. Thomson, 511. Jennings v. Coleman, 440.
Jackson v. Walsh, 336. Jennings v. Hennessy, 83, 574.
Jackson v. West, 317, 435. Jennings v. Mather, 299.
Jackson ex dem. Benson v.' Matsdorf, Jennings v. Sellick, 97.
110. Jennings' Ex'rs v. Davis, 465, 497.
Jackson ex dem. Erwin v. Moore, 62. Jensen v. Maine Eye & Ear Infirmary,
Jackson ex dem. Lansing v. Chamber- 215.
Iain, 518. Jeremiah v. Pitcher, 112, 129.
Jackson ex dran. Livingston v. Bate- Jersey Island Packing Co., In re, 442.
man, 438. Jessup v. Smith, 301, 372.
Jackson ex dem. Ten Byck v. Walker, Jessup V. Witherbee, 566.
438. Jevon V. Bush, 257.
Jackson Scjuare Loan & Sav. Ass'n v. Jewell V. Barnes' Adm'r, 251.
Bartlett, 183. Jewell V. Trilby Mines Co., 544, 546.
Jacobs V. Jacobs, 519. Jewett V. Palmer, 512.
Jacobs V. McCIintock, 283. Jewett V. Schmidt, 374.
Jacobs V. Snyder, 559. Jewett V. Shattuck, 85.
Jacobs V. Wilmington Trust Co., 323. J. I. Case Threshing Mach. Co. v. Wal-
Jacobus V. Jacobus, 354. ton Trust Co., 298.
Jacobus V. Munn, 277, 333, 418. Jimmerson v. Ferguson, 138.
Jacoby v. Jacoby, 156. Jobe V. Dillard, 184.
JafCe V. Weld, 529. Jocelyn v. Nott, 234.
James, Matter of, 67. John G. Myers Co. v. Reynolds, 444.
James v. James, 338. John M. C. Marble Co. v. Merchant's-
*

James Koscoe (Bolton) Ltd. v. Win- Bank, 98.

der, 526.
Johns V. Herbert, 478.
Jamison v. McWhorter, 311. Johns V. Johns, 328.
Jamison v. Mississippi Valley Trust Johns V. 'Williams, 537.
Co., 186. John's Will, In re, 169, 212.
Jamison v. Zausch, 268, 432. Johnson, Appeal of, 267, 275.
Janes v. Falk, 68, 71. Johnson, In re, 301, 410.
Janes v. Throckmorton, 350. Johnson v. Amberson, 71.

Janeway's Bx'r v. Green, 368. Johnson v. Bayley, 547.

January v. Poyntz, 498. Johnson v. Bennett, 308, 309.
Johnson v. Bowen, 190.
Jarboe v. Griffith, 344.
Jarboe v. Hey, 184. Johnson v. Cook, 268.
Jarrett v. Johnson, 333, 409, 416.
Johnson v. De Pauw University, 193.
Jarvis v. Babcock, 422.
Johnson v. Dougherty, 114.
Jasper v. Hazen, 467. Johnson v. Foust, 547, 561.
Jay V. Squire, 397. Johnson v. Hayward, 125.
Jefferys t. Jefferys, 67. Johnson v. Holifleld, 221.

JefiEray v. Towar, 332, 453, 515, 518, Johnson v. Johnson, 51, 109, 113, 468,.
526. 519.
Jelinek v. Stepan, 433. Johnson v. Leman, 298.
Jenckes v. Cook, 132, 406. Johnson v. McKenzie, 59.
Jencks v-. Safe Deposit & Trust Co. of Johnson v. Mayne, 256.
Baltimore, 287, 324. Johnson v. Miner, 161.
Jenison v. Hapgood, 337. Johnson v. Outlaw, 142.
Jenkins v. Baker, 85, 89. Johnson v. Petersen, 520, 559.
Jenkins v. Frink, 474. Johnson v, Prairie, 516.
618 CASES CITED
[The figures reler to pages]

Johnson RIchey, 496.

v. Jordan v. Jordan, 103, 385.
Johnson Sage, 188.
v. Jordan v. Jordan's Ex'r, 327.
Johnson v. Williams, 45. Jordan v. Jordan's Trust Estate, 386,
"
Johnson's Ex'rs v. Johnson's Heirs, 478.
479. Jordan v. Universalist General Con-
Johnston v. Eason, 307. vention Trustees, 203.
Johnston v. Jickling, 61. Jordan & Davis v. Annex Corporation,
Johnston v. Johnston, 56, 551. 37.
Johnston v. Little, 144. V. Downing, Hopkins & Co.,
Joslyn 519.
Johnston v. Redd, 440. Jourdan v. Andrews, 63.
Johnston v. Reilly, 447. Joy V. Midland State Bank, 292. ^

Johnston v. SherehoUse, 466. Judd V. Dike, 464, 498.

Johnston v. Smith, 440. Judd V. Warner, 359.
Johnston v. Spicer, 431, 432. Judge of Probate v. Jackson, 417.
Johnston's Estate, In re, 169, 170, 171, Judson V. Walker, 35.
226. Julian v. Reynolds, 319.
Jonas, Ex parte, 428. Juniper v. Batchelor, 136.
Jonathan Mills Mfg. v. Whitehurst, Justis V. English, 516.
518, 519.
Jones, Appeal of, 329, 399, 486, 488,
494.
K
Jones' Estate, In re, 333, 378, 406. Kadis V. Weil, 324, 460.
Jones, In re, 265, 273, 371, 498. Kager v. Brenneman, 281.
Jones V. Broadbent, 31. Kahn v. Tierney, 567.
Jones V. Bryant, 278. Kain V. Gibl^ney, 426.
Jones V. Clay County, 194, 212. Kain v. Humes, 297.
Jones V. Cole, 452, 501. Kaiser Waggoner, 514.
v.
Jones V. Creamer, 327. Kaiser's Estate, In re, 305, 348.
Jones V. Davis, 63. Kalbach v. Clark, 383.
Jones V. Dawson, 403, 407. Kane v. Bloodgood, 551, 555.
Jones V. Day, 413. Kane Borough Park Lands Trustees'
Jones V. Dougherty, 536. Appointment, In re, 283.
Jones V. Downs, 398. Kansas City Southern R, Co. v. Stev-
Jones V. Glathart, 519. enson, 545.
Jones V. Habersham, 205, 214, 222, 234, Kansas City Theological Seminary v.
235. Kendrick, 248.
Jones V. Haines, 547, 583. Kansas State Bank v. First State
Jones V. Henderson, 543, 547. Bank, 20, 21, 532.
Jones V. Holladay, 291. Kaphan v. Toney, 114, 281, 508.
Jones V. Home Sav. Bank, 554. Kasey v. Fidelity Trust Co., 178, 201.
Jones V. Johnson Harvester Co., 517. Katzing v. Wiegand, 114.
Jones V. Jones, 56, 156, 159, 274, 287, Kauffman v. Foster, 448, 521.
368, 369, 399, 421, 434. Kavanaugh's Estate, In re, 262.
Jones V. Jones' Ex'r, 432. Kavanaugh's Will, In re, 206, 209, 210,
Jones V. Kilbreth, 19. 236.
Jones V. Lloyd, 639. Kay V. Sca:tes, 154, 156.
Jones V. McKee, 138, 139. Kayser v. Maughan, 44.
Jones V. MafCet, 322. Keane, In re, 351, 366, 411,
Jones V. Patterson, 203. Kearney v. Kearney, 294.
Jones V. Proctor, 318. Keating v. Keating, 183, 275.
Jones T. Reest, 182. Keating v. Stevenson, 299.
Jones V. Roberts, 257. Keaton v. Greenwood, 551.
Jones V. Smith, 335, 338. Keeler v. Lauer, 167, 328.
Jones V. Stockett, 271. Keenan v. Scott, 146, 485.
Jones V. Van Doren, 58. Keene v. Eastman, 226, 570.
Jones V. Watford, 262. Keene's Estate^ In re, 265.
Jones' Adm'r v. Shaddock, 511. Keeney v. Bank of Italy, 2, 453, 458,
Jones' Ex'rs v. Person's Adm'r, 551. 523. •
'

Jordan, Ex parte, 360. Keim v. Lindley, 325.

 CASES CITED 619
[The figures refer to pages]
Keith V. Scales, 211, 258, 427. Keplinger y. Keplinger, 2, 47.
Keller, In re, 275. Kerlin v. Campbell, 219.
Keller v. Keller, 101, 319. Kern v. Beatty, 110, 117, 124.
Keller v. Washington, 24, 479. Kemochan, In re, 380, 389.
Kelley v. Snow, 39, 40, 81, 582. Kerns v. Carr, 185.
Kelley's Estate, In re, 265. Kerr v. Dougherty, 160.
Kellogg, In re, 270. Kerr v. Kirkpatrlck, 488.
Kellogg V. Kellogg, 544. Kerr v. Laird, 498.
Kellogg V. King, 317. Kerr v. White, 159, 265.
Kellogg V. White, 246. Kerrigan v. Tabb, 209.
Kellogg V. Wood, 438. Kessler's Estate, In re, 226.
Kellmn v. Smith, 132. Kessner v. Phillips, 184.
Kelly V. Anderson, 262. Kester v. Alexander, 328.
Kelly Vi Browning, 475. Ketchum v. Mobile & O. R. Co., 275.
Kelly V. Karsner, 475. Keteltas' Estate, In re, 339.
Kelly V. Love's Adm'rs, 211. Key V. Hughes' Ex'rs, 478, 551.
Kelly V. McNeUl, 56. Keyes v. Northern Trust Co., 167.
Kelly V. Nichols, 159, 191, 222, 224, Keys V. Wohlgemuth, 374.
425. Kiah V. Grenier, 163.
Kelly Parker, 39.
V. Kidd V. Borum, 261.
Kelly Payne, 151.
V. Kidd V.Cruse, 155.
Kelly's Estate, In re, 544. Kidder's Ex'rs v. Kidder, 50.
Kelsey McTigue, 287.
v. Kifener v. KifEner, 183.
Kelsey Western, 27.
v. Kilgore, Appeal of, 418.
Kelsey's Estate, In re, 414. Kilgore, Ex parte, 278.
Kemble's Estate, In re, 385. Killebrew v. Murphy, 295.
Kemmerer v. Kemmerer, Kimball v. Blanchard, 378, 580.
214, 228.
Kemp V. Macready, 392. Kimball v. Crocker, 178.
Kemp V. Porter, .73. Kimball v. De Graw, 63.
Kemper v. Trustees of Lane Seminary, Kimball v. Reding, 351, 357, 378.
247. Kimball v. Tripp, 127, 148.
Kendall v. De Forest, 477. Kimberly's Estate, In re, 199.
Kendairv. Fidelity Trust Co., 456, 458. Kincaird v. Scott, 467.
Kendall v. Kendall, 467. King V. Bushnell, 61, 282.
Kendrick v. Eay, 63. King V. Cushman, 403, 407.
Keneaster v. Erb, 317. King V. Denison, 28.
Kennard v. Bernard, 283, 287. King V. Donnelly, 75, 324.
Kennedy v. Baker, 559. King V. Irving, 444.
Kennedy v. Badgett, 577. King V.Mackellar, 363, 559.
Kennedy v. Dickey, 412, 419. King V.Merritt, 264.
Kennedy v. Fury, 15. King V. Remington, 143.
Kennedy v. Kennedy,- 110. King V. Stowell, 304.
Kennedy v. Palmer, 243. King V. Talbot, 346, 357, 358, 362.
Kennedy v. Pearson, 306, 307. King V. Townshend, 426.
Kennedy v. Winn, 75, 268, 477. King's Estate, In re, 406.
Kennedy's Heirs v. Kennedy's Heirs, King's WiU, In re, 82, 86, 88.
''
335. Kingman v. Winchell, 434.
Kennerson v. Nash, 103. Kingman Plow Co. v. Knowlton, 122.
Kent, In re, 366. Kingsbury v. Bumside, 62.
Kent V. Dunham, 193, 215, 224. Kingston, Ex parte, 453.
Kent V. Kent, 529. Kinmonth v. Brigham, 393.
Kentland Coal & Coke Co. v. Keen, Kinnaird v. Miller's Ex'r, 212.
168. Kinsey v. Bennett, 131.
Kentucky Nat Bank v. Stone, 373. Kintner v. Jones, 328.
Kentucky Wagon Mfg. Co. v. Jones & Kip v. Deniston, 485.
Hopkins Mfg. Co., 452, 501. Kipp V. O'Melveny, 291.
Kenworthy v. Levi, 310, 461. Kirby v. State, 478.
Keofoed v. Thompson, 148. Kirby's Will, In re, 437.
Keogh v. Noble, I6I5 Kirkman v. Wadsworth, 279.
620 CASES CITED
[Tbe figures refer to pages]

Kirten v. Spears, 537. Kuykendall v. Zenn, 565.

Kitteridge v. Chapman,
512, 519. Kyle V. Barnett, 143,
Kittinger's Estate, In re, 285.
Klatt V. Keuthan, 488.
Kleinclaus v. Dutard, 544, 547.
ICluender v. Fenske, 519. Lacey, Ex parte, 142.
Klugh V. Seminole Securities Co., 331. Lackland v. Davenport, 265.
Klumpert v. Vrieland, 214, 226, 243. Lackland v. Walker, 212, 229, 307.
Knapp, In re, 532. La Cotts V. La Cotts, 132.
Knapp V. Marshall, 498. Ladd V. Judson, 441, 443.
KnatchbuU v. Hallett, 534. Ladd V. Ladd, 265, 322.
Knefler v. Stireve, 440. Ladd V. Pigott, 410, 413.
Kneisley v. Weir, 529. Ladd V. Smith, 502.
Knight V. Knight, 47, 409. Lady Ensley Coal, Iron & R. Co. v.
Knight V. Leary, 113. Gordon, 548.
Knight V. Loomis, 287. Lafferty v. Turley, 544.
Knight V. Reese, 15, 498. Lafferty's Estate, In re, 413, 417.
Knight's Estate, In re, 354, 355. La Forge v. Binns, 276, 324.
Knipp V. Bagby, 297. Lagarde v. Anniston Lime & Stone
Knorr v. MiUard, 395. Co., 143.
Knorr v. Raymond, 315. Laird v. Bass, 427.
Knowles v. Goodrich, 404. Laird v. Vila, 149.
Knowles v. Knowles, 374. Lakatong Lodge No. 114, of Quaker-
Knowles v. Williams, 516. town V. Board of Education of
Knowlton v. Atkins, 428. Franklin Tp., Hunterdon County,
Knowlton v. Bradley, 355, 356, 498, 231, 286.
502. Lamar v. Walton, 502,
Knox V. Knox, 50. Lamb v. Cain, 448.
Knnst, Ex parte, 285. Lamb v. Lamb, 551.
Koblitz T. Western Reserve Univer- Lamb v. Rooney, 120.
sity, 430. Lamb v. Schiefner, 119.
Koch V. Briggs, 161. Lambert V. Morgan, 435.
Koch V. Feick, 470. Lamberton v. Pereles, 434.
Koefoed v. Thompson, 148, 538. Lamberton v. Youmans, 547.
Kcehler v. Koehler, 113, 251. Lammer v. Stoddard, 559.
Koehne v. Beattie, 288. Lamp V. Homestead Bldg.- Ass'n, 273,
Koenig, Appeal of, 567. 274.
Kohler, In re, 328. Lancaster Trust Co. v. Long, 132,
Kohtz V. Eldred, 566, 567. Lander v. Persky, 101.
Koken Iron Works v. Kinealy, 297. Landis v. Scott, 401, 497.
Kolb V. Landes, 167, 180. Landis v. Wooden, 196, 199,
Kopp V. Gunther, 574. Landon v. Hutton, 67.
Korrick v. Robinson, 529. Lane v. Black, 146.
Kortright's Estate, In re, 240. Lane v. Eaton, 427.
Koyer v. Willmon, 143. Lane v. Lewis, 276.
Kraft Neuffer, 33, 249.
V. Lane v. Wentworth, 511.
Kramph's Estate, In re, 207, 229. Lane's Will, In re, 318, 339.
Krauczunas v. Hoban, 333. Lang V. Everting, 28.
Krause v. Krause, 517, 537. Lang V. Metzger, 479.
Krauth v. Tbiele, 104. Langdon v. Blackburn, 469.
Kringle v. Rhomberg, 514. Langley v. Conlan, 572.
KroU V. Coach, 118. Lanigan v. Miles, 52, 55.
Kronheim v. Johndon, 245. Lanius v. Fletcher, 159, 580.
Kronson v. Lipschitz, 154. Lanning v. Com'rs of Public Instruc-
Krouskop V. Krouskop, 127. tion of City of Trenton, 284.
Krug Mercantile Trust & Deposit Lannon's Estate, In re, 210.
V.
Co. of Baltimore City, 384 Lansburgh v. Parker, 485.
Kunci V. Kunci, 111. Lansing v. Chamberlain, 518.
Kutz, Appeal of, 554. Lantry v. Lantry, 129.
 CASES CITED 621
[The figures refer to pages]

Lape's Adm'r v. Taylor's Trustee, 278, Lee V. Albro, 307,

404. Lee V. Enos, 293.
liarimer v. Beardsley, 582. Lee
V. Fox, 35.
Larisey v. Larisey, 101. Lee
V. Kennedy, 85.
Larkln v. Wikoff, 231, 328. Lee
V. Gates, 156, 426.
Larkin & Metcalf, In re, 528. Lee
V. O'Donnell, 168.
liarmon v. Knight, 118. Lee
V. Kandolph, 264.
Laroe v. Douglass, 485. Lee
V. E. H. Elliott & Co., 104.
Lasker-Morris Bank ,& Trust Co, v. Lee
V. Simpson, 466.
Gans, 102, 498, 543, 556. Lee's Estate, In re, 567.
Lasley v. Delano, 61. Lee's Lessee v. Tieman, 15.
Lasley's Bx'r v. Lasley, 535. Leggett V. Dubois, 424.
Lass V. Sternberg, 337. Leggett V. Grimmett, 283.
Late Corporation of the Church of Leggett V. Perkins, 163.
Jesus Christ of Latter-Day Saints v. Legniti v. Mechanics & Metals Nat.
U. S. 228, 229. Bank, 24.
Lathrop v. Hampton, 479, 506. Lehman v. Lewis, 125.
Lathrop v. Gilbert, 479. Lehman v. Rothbarth, 499,
Lathrop v. Pollard, 335. Lehmann v. Rothbarth, 498.
Lathrop v. Smalley's Ex'rs, 277, 362, Lehnard v. Specht, 466, 519.
410, 498. Lehrling v. Lehrling, 95.
Lathrop v. White, 512. Leigh V. Barry, 483, 494.
Latimer v. Hanson, 327, 499. Leigh V. Harrison, 183.
Latrobe v. Baltimore, 369. Leigli V. Laughlin, 428.
Latrobe v. Tiernan, 321. Leipier v. Hoffman, 537.
Latshaw v. Western Townsite Co., 255. Lejee's Estate, In re, 53.
Lattan v. Van Ness, 83, 85, 86. Leland y. Hayden, 382.
Laughlin v. Laughlin, 547. Leman v. Whitley, 96.
Laughlin v. Page, 279, 428, 564. Lembeck v. Lembeck, 378.
Laun V. Kipp, 330. Lemmond v. Peoples, 158.
Laurel County Court v. Trustees of Lennartz v. Popp's Estate, 510.
Laurel Seminary, 486. Lennon's Estate, In re, '190.
Lauterbach v. New Tork Inv. Co., 39. Lent V. Howard, 343, 373, 581.
Lavender v. Lee, 292. Leonard, In re, 31.
Law V. Law, 110. Leonard v. Barnum, 400.
Law's Estate, In re, 354, 355. Leonard v. Burr, 233.
Lawrence, In re, 385. Leonard v. Haworth, 263.
Lawrence v. Lawrence, 70, 250, 279, Leonard v. Pierce, 400.
426. Lepage v. McNamara, 229,
Lawrence v. Prosser, 220. Lerow v. Wilmarth, 369.
Lawson v. Cunningham, 309, 350. Leroy v. Norton, Ml.
Lawson v.Lawson, 126. Lescaleet v. Rickner, 104.
Lawton v. Lawton, 350. Lesesne v. Cheves, 359.
Leach v. Cowan, 399, 409. Leslie v. Leslie, 63, 64.
Leach v. Leach, 147. Lessee of Paine v. Mooreland, 518.
Leader v. Tierney, 447. Lester v. Stephens, 426.
Leake v. Benson, 440. Letcher's Trustee v. German Nat.
Leake v. Watson, 461. Bank, 275, 278.
Learned v. Tritch, 510. Levara v. McNeny, 142.
L-eamed v. Welton, 321. Levin v. Ritz, 257.
Leary v. Corvin, 108. Levy v. Brush, 126.
Leavitt, In re, 419, 566. Levy V. Hart, 246.
Le Baron v. Barker, 298. Levy V. Levy, 241, 254.
Le Blanc, In re, 24. Levy V. Ryland, 108, 335, 556.
Le Breton v. Superior Court, 472. Lewellin v. Mackworth, 556.
Lecroix v. Malone, 281. Lewis V. Broun, 146.
Lednum v. Dallas Trust & Savings Lewis V. Brown, 319.
Bank, 273. Lewis V. Curnutt, 39, 71, 73, 158, 575.
Ledrlcb, In re, 335. Lewis V. Equitable Mortg. Co., 510.
622 CASES CITED
[The figures refer to pages]

Lewis V. Gaillard, 229. Lockhart v. Beilly, 484, 494.

Lewis V. Helm,
145. Lockridge v. Mace, 168.
Lewis V. Hill, 309, 338. Loder v. Hatfield, 27, 28.
Lewis V. liusk, 242. Loften V. Whitboard, 111,
Lewis V. Nobbs, 484, 491, 494. Logan V. Aabel, 511.
Lewis' Adm'r v. Glenn, 274. Logan V. Brown, 59, 130.
Lewis' Estate, In re, 258, 579. Lomax v. Pendleton, 498.
Libby v. Frost, 73. London's Estate, In re, 349.
Lich V.LicB, 431. Long V. Blackall, 166.
Lichtenstadter, In re, 46. Long V. Fuller, 119.
Lide V. Paris, 558. Long V. King, 104.
Liesemer v. Burg, 265. Long V. Long, 110, 309.
Lightfoot V. Davis, 120. Long V. Simmons Female College, 311.
Lightfoot V. PoLndexter, 199, 219, 236, Long's Adm'rs v. Steiger, 114.
262. Long Island Loan & Trust Co., In re,
Lilly V. Tobbein, 256. 405.
Lincoln v. Alexander, 36. Longley v. Hall, 412.
Lincoln v. Wright, 487. Longmire v. Pilkington, 35.
Lincoln Sav. Bank v. Gray, 516. Longstreth's Estate, In re, 272.
Lincoln Soc. of Friends v. Joel, 510. Longwith v. Riggs, 395.
Lindheim v. Manhattan Ry. Co., 463. Loomer v. Loomer, 167, 170, 171.
Lindley, Ex parte, 423. Lord V. Comstoek, 344.
Lindsay v. Harrison, 183. Lord r. Lord, 27.
Lindsay v. Kirk, 421. Lorenz v. Weller, 276, 405.
Lindsay v. Lindsay's Adm'rs, 15. Loring v. Blake, 168.
Lindsey v. Bates, 151. Loring v. Brodie, 310, 518.
Lindsey v. Rose, 184. Loring V. Hildreth, 69, 71.
Lines v. Darden, 48, 49. Loring v. Palmer, 423.
Linsley, In re, 494. Loring v. Salisbury Mills, 407.
Linsley v. Strang, 332, 338. Loud V. Winchester, 319, 368, 374,
Linsly v. Bogert, 417. 397, 418.
Linton v. Brown's Adm'rs, 68. Louisville, N. A. & O. R. Co. v. Hub-
Linton's Estate, In re, 431. bard, 412.
Lionberger v. Baker, 520. Louisville Trust Co. v. Morgan, 299.
Lippincott v. Williams, 565. Louisville Trust Co. v. Warren, 410.
Lippitt V. Thames Loan & Trust Co., Louisville & N. R. Co. v. Boykln, 511.
21. Lounsbury v. Purdy, 105.
Liptrot V. Holmes, 568. Lounsbury v. Trustees of Square Lake
Lister v. Weeks, 275. Burial Ass'n, 221, 236.
Litchfield v. White, 329, 493. Love V. Braxton, 510.
Littig V. Vestry of Mt. Calvary Protes- Love V. Rogers, 548.
tant Episcopal Church, 80, 85, 86. Lovato V. Catron, 464.
Little V. Chadwick, 528, 530. Lovejoy v. Potter, 150.
Little T. City of Newburyport, 191, Lovell v. Brlggs, 147.
192. Lovell v. Felkins, 142.
Little V. Colman, 52. Lovell V. Nelson, 463.
Little V. Little, 369, 375. Lovering v. Worthington, 168.
Little V. Willford, 198, 204. Lovett V. Famham, 248, 574.
Litzenberger, Matter of, 486. Lovett V. Taylor, 44, 97, 126.
Livermore v. Aldrich, 102. Low V. Marco, 438.
Livermore v. Livermore, 305. Lowe V. Jones, 529.
Livesey v. Jones, 193. Lowe V. Montgomery, 275.
Livingston v. Bateman, 438. Lowe V. Morris, 405, 410.
Lloyd V. Brooks, 77. Lowell V. Lowell, 107.
Lloyd v. Kirkwood, 547. Lowndes v. City Nat. Bank of South
Lloyd V. Woods, 101. Norwalk, 453, 456, 458, 459, 460.
Lobdell v. State Bank of Neuvoo, 581. Lowrie, Appeal of, 404.
Locke V. Cope, 403. Lowry's Lessee v. Steele, 432.
Locke V. Farmers' Loan & Trust Co., Lowson V. Copeland, 339.
250. Loyd V. Currin, 559.
 CASES CITED 623
[The figures refer to pages]
Lucas V. Donaldson, 280. McCampbell v. Brown, 466.
Lucas V. Lockhart, 49. ( McOandless v. Warner, 62, 536.
Lucht V. Behrens, 298. McCann v. Taylor, 445.
Lucia Mining Co. v. Evans, 508. McCants v. Bee, 336, 519.
Luco v.'De Toro, 550. McCarthy v. McCarthy, 550.
Ludington v. Patton, 147, 332, 335. McCarthy v. Provident Institution for
Ludlam v. Holman, 422. Savings, 252.
Ludlow V. Flournoy, 315. McCartin v. Traphagen, 494.
Ludlow V. St John's McCartney v. Bostwick, 113, 439.
Rector, etc., of
Qhurch, 423. McCartney v. Fletcher, 55.
Luers v. Brunjes, 541. McCartney v. Eidgway, 250.
Lufkin V. Jakeman, 111, 557. McOarty v. McCarty's Ex'rs, 15.
Lugar V. Lugar, 433. McCaskill v. Lathrop, 510.
Lukens, Appeal of, 413, 497. McCauseland, Appeal of, 412, 497.
Lummus v. Davidson, 438, 440. McClanahan's Heirs v. Henderson's
Lummus Cotton Gin Co. v. Walker, Heirs, 334, 406.
529. McClane's Adm'x v. Shepherd's Ex'x,
Luntz V. Greve, 432. 421.
Luquire v. Lee, 324. McClear's Estate, In re, 5S2.
Lurie v. Sabath, 53. McClellan v. Board of Review of -Jo
Luscombe v. Grigsby, 142, 466, 511. Daviess County, 370.
Luscombe's Will, In re, 53. McClellan v. McCleUan, 57, 61, 62, 63,
Lusk, Appeal of, 336. 257.
Lutes V. Louisville & N. R. Co., 569. McClelland v. Myers, 510.
Lutey V. Clark, 119. McClenahan v. Stevenson, 96.
Lutz V. Hoyle, 56. McClernan v. McClernan, 265.
Luxon V. Wilgus, 347. McCloskey v. Bowden, 404.
Lycan v. Miller, 400. McCloskey v. Mcdoskey, 127.
Lyddane v. Lyddaue, 312. McOlung V. Colwell, 102.
Lyford v. Laconia, 99. McOoU V. Fraser, 532.
Lyle V. Burke, 33, 34, 268,573. McColl Weatherly, 35.
V.
Lynch v. Herrig, 104, 113. McOollister v. Bishop, 354.
Lynch v. Soutli Congregational Parish McCoUister v. Willey, 95, 477.
of Augusta, 229. MeComb V. Frink, 497.
Lynch's Will, In re, 51. McConnell v. Day, 283.
Lynde v. Lynde, 392. McCook V. Harp, 375.
Lynde's Estate, In re,, 252. McCord V. Ochiltree, 203.
Lynn v. Lynn, 154. McCormick, In re, 374.
Lyon, In re, 241. McCormick v. Cooke, 111.
Lyon V. Foscue, 405. MIcCormick v. McCormick's Adm'r,
Lyon V. Safe Deposit & Trust Co., 292. 529.
Lyon's Estate, In re, 510. McCormick Malin, 145.
v.
Lyons v. Bass, 123, 124. McCormick Provident Life
v. & Trust
Lyons v. Bradley, 166. Co. of Philadelphia, 319.
Lytle's Ex'r v. Pope's Adm'r, 73. McCormick Harvesting Mach. Co. v.
Yankton Say. Bank, 20.
M McCosker v. Brady, 428, 565.
McCoy V. Anderson, 464.
Mabie v. Bailey, 80, 82, 85, 86, 88, 90,
91, 497.
McCoy V. Horwitz, 358.
McAdoo Sayre, .398.
V.
McCoy V. Houck, 183.
McAfee Green, 308, 426.
v.
McCoy V. Inhabitants of Natlck, 222.
McAllister v. Com., 355.
McCoy V. McCoy, 44, 164, 466.

McArthur v. Gordon, 62, 479. McCrea V. Purmort, 469.

McAuley v. Wilson, 229. McCrea v. Yule, 434.
McBreen, 432. McCreary v. Gewinner, 63.
McBreen v.
McBride v. Briggs, 551. McCreary v. McCreary, 113.

McBride v. Elmer's Ex'rs, 262. McCreary v. Robinson, 184.

McBride v, Mclntyre, 268, 398, 400, McCreery v. First Nat. Bank, 331.
475 498.
Maccubbin v. Cromwell's Ex'rs, 74,
270, 331, 485.
McCailum's Estate, In re, 413.
G24 CASES CITED
[Tlie figures refer to pases]

McCulIoch V. Tomkins, 400, 417, 537. Mclntire's Adm'rs v. City of Zanes-

McCulloch V. Valentine, 432. ville, 350.
McCullough's Ex'rs v. McOuUougli, Mcintosh V. Charleston, 255.
347, 348, 361. Mclntyre v. Mclntyre, 123.
McCurdy v. McCallum, 48. Mclntyre v. Williamson, 297.
McCurdy v. Otto, 161. Mclntyre & Co., In re, 526.
McOutchen v. Konsh, 479. Mack V. Champion, 433.
McDaniel v. Baskervill, 474. Mackay v. City and County of San
McDaniel v. Peabody, 517. Francisco, 370.
McDermott v. Eborn, 188. McKean v. Elk Land & Imp. Co. v.
McDevitt v. Bryant, 317. Clay, 559.
Macdonald v. .^tna Indemnity Co., McKee V. Downing, 475.
371. McKee V. Weeden, 412.
McDonald v. Carr, 111. McKenna v. O'Connell, 276.
McDonald v. May's Ex'rs, 551. McKennan v. Pry, 471. j
McDonald v. Shaw,
306. / Mackenzie Los Angeles Trust
v. &
McDonald v. Sims, 549. Savings Bank, 331, 552.
McDonogh v. Murdoch, 255. McKenzie v. Sumner, 577.
McDougall V. McDougall, 149. MacKe'nzie v. Trustees of Presbytery
McDowell, In re, 32, 321, 359, 420. of Jersey City, 234, 449.
l>IcDowell V. Caldwell, 403.
McKeon, In re, 277.
McDowell V. McDowell, 140. McKeown's Estate, In re, 180, 383, 385.
MacDowell's Will, In re, 192. Mackersy v. Kamsays, 20, 22.
Macduff, In re, 217, 218.
McDuffie V. Mclntyre, 35.
McKibben v. Diltz'S Ex'r, 471.
McDufEe V. Montgomery, 50. McKie V. Clark, 419.

McElveen v. Adams, 59, 248. McKiernan v. McKiernan, 369.

McElwain v. Hildreth, 388. McKim V. Blake, 501.

McEvoy V. Boston Five Cents Sav. McKim V. Doane, 502.
Bank, 40.
McKim V. Glover, 366.
McFall V. Kirkpatrick, 74, 157, 270, McKim V. Hibbard, 497.
292, 428. McKimmon v. Rodgers, 441.
Macfarlane v. Dorsey, 440. McKinley v. Irvine, 399.
McFerran v. Fidelity Trust Co., 328. McKinney's Estate, lu re, 349, 413.
McGee v. McGee, 110. Macklanburg v. Griffith, 498.
McGee Wells, 109.
v. McKnatt v. McIOiatt, 335.
McGill V. Chappelle, 95. McKnight v. McKnight, 341.
McGill V. Young, 395. McKnight's Ex'rs v. Walsh, 417, 499.
McGillivray, In re, 273, 275. Mackrell v. Walker, 566.
McGinn v. ShaefCer, 336. McLain v. School Directors of White
McGinness v. Barton, 59, 130. Tp., 60.
McGlnnis v. McGinnis, 110. McLatchie, In re, 486.
McGlade, Appeal of, 240. McLaughlin v. Fulton, 529.
McGovern v. Bennett, 297. McLaurie V. Partlow, 62, 480.
McGowan v. McGowan, 106, 107. McLean v. Macdonald, 319.
McGraw's Estate, In re, 240. McLean v. Nelson, 75', 262, 268.
MacGregor v. MacGregor, 349, 506. McLellan v. McLean, 138, 139.
McGregor-Noe Hardware Co. v. Horn, McLenegan v. Yeiser, 165.
440, 441. McLeod v. Evans, 532.
McGuire v. Devlin, 475. McLeran v. Melvin, 334.
McGuire v. Inhabitants of Linneus, McLouth V. Hunt, 391.
553. McMonagle v. McGlinn, 546.
McGuire v. Nugent, 334. McMullen v. Lank, 438.
McHardy v. McHardy's Ex'r, 157, 398. McMurray v. Montgomery, 488.
McHenry v. Jewett, 537. McNair v. Montague, 277. '

McHugh V. McCole, 210, 229.

2104, McNamara v. Garrity, 557.
Mcllvain v. Hockaday, 221. McNamara v. McNamara, 515.
Mclnemy v. Haase, 173. McNeer v. Patrick, 568.
Mclntire v. Hughes, 67. McNeil V. Gates, 118.
Mclntire v. Linehan, 501. McNeill V. St Aubin, 580.
 CASES CITED 625
[Tbe figures refer to pages]
McNinch v. Trego, 557. Mann v. Anderson, 389.
McNish V. Guerard, 288. Mann v. Benedict, 475.
McParland v. Larkin, 147. Mann v. Butler, 474.
McPherrin v. Fair, 143. Mann v. Day, 366, 368, 371.
McPherson v. Cox, 276. Mann v. McDonald, 148.
McRaeny v. Jolmson, 320. Mannhardt v. Illinois Staats-Zeitung
McRarey v. Huff, 122. Co., 274, 321.
McStay Supply Co. v. Stoddard, 453. Manning v. Manning, 112, 546.
McTigue V. McTigue, 432. Manning v. Manning's Ex'rs, 373.
McVey v. McQuality, 517, 537. Manning v. Plppen, 123.
McWaid v. Blair State Bank, 510. Manning v. ^heehan, 327.
McWilliams v. Gough, 165, 267, 284. Manning's Estate, In re, 304.
Macy V. Williams, 81, 83, 84, 85, 86, Mansfield v. Wardlow, 308, 310, 516.
87, 89. Manson v. Felton, 35.
Madison v. Madison, 547. Mantle v. Speculator Min. Co., 553.
Madison Trust Co. v. Carnegie Trust Manufacturers' Nat. Bank v. Conti-
Co., 477. nental Bank, 19, 22.
Mad Biver Nat. Bank of Springfield Marble v. Whaley, 465.
V. Melhom, 21. Marble Co. v. Merchant's Bank, 98.
Madsen v. Madsen, 110. March v. Romare, 283.
Maffet V. Oregon & C. R. Co., 280. Marchbanks v. Banks, 512.
Maffltt y. Read, 421. Marie M. E. Church v. Trinity M. E.
Magglni v. Jones, 542. Church, 61.
Magill V. Brown, 205, 212, 219. Markel v. Peck, 493.
Maginn v. Green, 409. Markey v. Markey, 83.
Magner v. Crooks, 185. Markley v. Camden Safe Deposit &
Magnolia Park Co. v. Tinsley, 510. Trust Co., 150, 559.
Magraw v. Pennock, 312. Marks v. Loewenberg, 7.
Magruder v. Drury, 410. Marks v. Semple, 413, 477.
Mahan v. Mahan, 67. Marquam v. Ross, 583.
Mahan Schroeder, 75.
v. Marr Marr, 335.
v.
Mahin's Estate, In re, 543, 556. , Marx's Heirs v. Gilliam, 344, 552.
Mahorner v. Harrison, 101. Marriott v. Kinnersley, 486, 492.
Makeever v. Yeoman, 113. Mars V. Gilbert, 229.
Makin's Estate, In re, 363. Marsden's Estate, In re, 276.
Malady v. McEnary, 112. Marsh v. Keogh, 85, 86, 88, 89.
Malim v. Keighley, 47. Marsh v. Marsh, 410.
Malin v. Malm, 62, 317. Marsh v. Marsh's Ex'rs, 399.
Mallon's Estate, In re, 275. Marsh v. Reed, 312.
Mallory v. Clark, 318, 406. Marshall, In re, 386.
Mallory v. Mallory, 282. Marshall v. Fisk, 155.
Mallott V. Wilson, 270. Marshall v. Lister, 520.
Malone v. Buice, 304. Marshall v. McDermitt, 520.
Malone v. Kelley, 147. Marshall v. Marshall, 547.
Malone v. Malone, 466, 504. Marshall v. Stephens, 335.
Maltble v. Olds, 117. Marshall's Adm'r v. Marshall, 71.
Maltz V. Westchester County Brewing Marshall's Estate, In re, 559.
'
Co., 143. Marshall's Trustee v. Rash, 441, 444.
Manaudas t. Mann, 551. Marsteller, Appeal of, 413.
Mandel v. Fidelity Trust Co., 435. Marston v. Marston, 409.
Mandell v. Fulcher, 445. Martin y. Baird, 63.
Manderson, Appeal of, 303. Martin v. Bowen, 520.
Mangan v. Shea, 434. Martin v. Branch Bank of Decatur,
Mangold v. Adrian Irr. Co., 37. 562.
Manheim v. Woods, 145. Martin v. Davis, 434.
Manierre v. Welling, 36. Martin v. Fix, 512, 516.
Manion's Adm'r v. Titsworth, 562. Martin v. Funk, 77, 84, 86.
Manley v. Fiske,|48. Martin v. Granger, 510.
TManley v. Hunt, 293. Martin v. Kansas Nat. Bank, 458.
BoGEBff TEUSTS iO —
626 CASES CITED
[The figures refer to pages]

Martin v. Lincoln, 56. Matthews v. Ward, 319, 431.

Martin v. Martin, 80, 83, 86, 113, 498, Mattison Mattison, 184, 280.
v.
545. Mattocks V. Moulton, 363.
Martin v. Moore, 46. Maught V. Getzendanner, 203.
Martin v. Pine, 572. Mauldin v. Armistead, 252.
Martin v. Thomas, 111. Mauldin v. Mauldin, 309, 582.
Martin's Estate, In re, 276, 395. Mavrich v. Grier, 311.
Martin & Garrett v. Mask, 29. Maxcy v. City of Oshkosh, 191, 255,
Martzell StaufEner, 469.
v. 570.
Marvel v. Marvel, 131. Maxwell v. Finnie, 276.
Marvel v. Wilmington Trust Co., 156. Maxwell v. Vaught, 443.
Marvin v. Brooks, 33, 34, 398. Maxwell v. Wood, 52.
Marvin v. Smith, 246. May V. Baker, 443.
Marvin Titsvrorth, 165.
v. May V. May, 117, 274, 276.
Marx V. Clisby, 472, 539. May's Estate, In re, 412.
Marx V. McGlynn, 424, 429. Maydwell v. Maydwell, 276.
Maryland Casualty Co. v. Safe Deposit Mayer v. Citizens' Bank of Sturgeon,
& Trust Co. of Baltimore, 323. 454.
Maryland Grange Agency v. Lee, 183. Mayer v. Galluchat, 373.
Mask V. Miller, 284. Mayer v. Kane, 111.
Mason v. Bank of Commerce, 306. Mayer v. Wilkins, 438.
Mason V. Bloomington Library Ass'n, Mayfield v. Forsyth, 545.
212, 221, 228, 283. Mayfleld v. Kilgour, 290, 318.
Mason v. Martin, 337. Mayfield v. Turner, 515.
Mason v. Mason, 315. Maynard v. Columbus, 299.
Mason v. Mason's Ex'rs, 260, 474. Maynard v. Woodward, 212.
Mason v. Paschal, 565. Maynard, Case of, 143.
Mason v. Perry, 193. Mayor of Colchester v. Lowten, 245.
Mason v. Pomeroy, 304. Mayor, etc. of Baltimore v. Stirling,
Mason v. Rhode Island Hospital Trust 370.
Co., 183. Mayor, etc. of City of Philadelphia v.
Mason v. Whitthorne, 355. Elliott, 215.
Mason's Estate, In re, 123. Mazelin v. Kouyer, 273.
Mason's Ex'rs v. Trustees of Metho- Mazzolla V. Wilkie, 511.
dist Episcopal Church at Tuckerton, Meach v. Stone & Perry, 60.
212. Mead v. Chesbrough Bldg., 478.
Masonic Education & Charity Trust v. Mead v. McLaughlin, 334.
City of Boston, 193. Mead v. Robertson, 138, 139.
Massachusetts General Hospital v. Meador v. Manlove, 138.
Amory, 284. Meadows v. Marsh, 327.
Massey v. Alston, 504. Mebane v. Mebane, 317.
Massey v. Fisher, 23. Mechanics' Bank, In re, 277.
Massey v. Hutnington, 66. Medical College Laboratory v. New
Massie v. Watts, 472. York University, 119.
Masters v. Mayes, 101, 511. M. E. Bunn & Co., In re, 526.
Mathew v. Brise, 35. Mee V. Gordon, 46.
Mathews v. Heyward, 311. Meehan's Estate, In re, 281.
Mathews v. Meek, 287. Meek v. Briggs, 172.
Mathews v. Stephenson, 301. Meek v. Meek, 129.
Mathewson v. Davis, 498, 499. Meek V. Perry, 147.
Mathewson v. Wakelee', 521. Meeks V. Meeks, 399.
Mathias Fowler, 428.
v. Meeting St. Baptist Soc. v. Hail, 212.
Matlockv. Lock, 172. Megargee v. Naglee, 578.
Matthews v. Brooklyn Sav. Bank, 81, Megrue, In re, 179, 385.
83, 85, 86. MehafEey's Estate, In re, 435.
Matthews v. Deason, 56. Meier v. Bell, 113.
Matthews v. McPherson, 403, 467. Meislahn v. Meislahn, 81, 84, 86, 89, 90.
Matthews v. Murchison, 274. Meket Smith, 114.
v.
Matthews v. Kuggles-Brise, 299. Meldahl v. Wallace, 77.
Matthews v. Thompson, 309, 582. Meldon v. Devlin, 379, 478, 490.^
 CASES CITED 627
[The figures refer to pages]

Melick V. Pidcock, 156. Meyer v. Barth, 502, 503.

Melson v. Travis, 372. Meystedt v. Grace, 533.
Memphis Sav. Bank v. Houchens, 472.
Miami County Bank v. State ex rel.
Mendel's Will, In re, 349. Peru Trust Co., 453, 455.
Mendenhall v. Walters, 447, 448, 573. Miazza v. Xerger, 125.
Mendes v. Guedella, 486, 487. Michel's Trusts, In re, 206.
Menken Co. v. Brinkley, 184. Michigan Home Missionary See. v.
Menzle's Estate, In re, 347. Corning, 356.
Mercantile Nat. Bank of Cleveland v. Michigan S. S. Co. v. Thornton, 24.
Parsons, 516, 518. Mickleburgh v. Parker, 486, 494.
Mercantile Trust Co. v^ St. Louis & S. Middleton v. Shelby County- Trust Co.,
F. E. Co., 526, 527. ' 250.
Mercer v. Buchanan, 160, 383. Midland Nat Bank of Kansas City v.
Mercer v. Coomler, 102. BrightweU, 533.
Mercer v. Safe-Deposit & Trust Co., Miggett, Appeal of, 335.
428. Mildeberger v. Franklin, 399.
Merchant's Estate, In re, 427. Miles V. Bacon, 368, 409.
Merchants' Fund Ass'n, Appeal of, 383. Miles V. Davis, 317.
Merchants Loan & Trust Co. v. North- Miles V. Ervin, 142.
ern Trust Co., 330, 348, 350, 360, 361. Miles V. Miles, 62, 154.
Merchants' Nat. Bank v. Crist, 28, 183. Miles V. Thorne, 550.
Merchants' Nat. Bank of Ft. Worth v. Milholland v. Whalen, 82, 85.
Phillip & Wiggs Machinery Co., 511. Milhous V. Dunham, 360.
Merchants' & Planters' Nat. Bank of Millar's Trustees v. Poison, 489.
Union v. Clifton Mfg. Co., 457. Miller, In re, 212, 271.
Meredith v. Citizens' Nat. Bank, 103. Miller v. Baker, 557.
Mereness v. Delemos, 101. Miller V. Ball, 60.
Merigan v. McGonigle, 80, 81, 82, 86, Miller v. Beverleys, 409, 498.
-
89, 90. Miller v. Blose's Ex'r, 110.
Merino v. Munoz, 24. Miller v. Butler, 477.
Merket v. Smith, 114, 507. Miller v. Chittenden, 196.
Merriam v.Hemmenway, 280. Miller V. Dodge, 337.
Merrick v. Waters, 142. Miller v. Hill, 53, 138.
Merrill v. American Baptist Mission- Miller v. Holcombe's Ex'r, 356.
ary Union, 233. Miller v. Knowles, 283.
Merritt v. Bucknam, 233. Miller v. London, 99.
Merritt v. Corlies, 159. Miller t. Lux, 499.
Merritt v. Jenkins, 369. Miller' V. Miller, 117, 123, 167, 281,
Merritt v. Merritt, 551. 480.
Merryoian v. Euler, 146. Miller v. Payne, 384.
Mersereau v. Bennet, 46, 421. Miller v. Porter, 190.
Mershon v. Duer, 101.
MiUer v. Proctor, 330.
"Mertens v. Schlemme, 479. Miller V. Eosenberger, 426.
Merton v. O'Brien, 28. Miller v. Safe Deposit & Trust Co. of
Meserole, In re, 413. Baltimore, 383.
Methodist Episcopal Church of New- Miller v. Saxton, 547, 557.
ark V. Clark, 162, 197. Miller v. Seaman's Bank for Savings,
Metropolis Trust & Savings Bank v. 89
Monnier, 147. Miller v. Smythe, 304.
Metropolitan Nat. Bank v. Campbell Miller v. Tatum, 198, 205.
Commission Co., 479. Miller v. Teachout, 202.
Metropolitan Nat. Bank of New York Miller v. Weston, 167.
Miller's Ex'rs v. Miller's Heirs, 580,
V. Loyd, 19.
Metropolitan Trust & Savings Bank 583.
Perry, 103. Miller's Heirs v. Antle, 132.
V.
Mettler v. Warner, 309, 336. Milloglav V. Zacharias, 129, 477.
Metzger v. Lehigh Valley Trust & Safe Mills V. Davison, 247, 435.
Deposit Co., 478, 519. Mills V. Hendershot, 562.
Meunier, Succession of, 198. Mills v. Michigan Trust Co., 395.
Meurer v. Stokes, 399. Mills V. Mills, 145, 559.
628 CASE3 CITED
[The figures refer to pages]

Mills V. Newberry, 52. Montgomery v. Wilson, 167.

Mills V. Swearingen, 365. Montjoy Laskbrook, 499.
v.
Millsaps V. Johnson, 567. Moody V. Noyes, 304.
Milmo Nat. Bank v. C!obbs, 316. Moody V. Walker, 167.
Milner v. Hyland, 561. Mook V. Akron Savings & Loan Co.,
Milton V. Pace, 156. 501.
Miner v. Pingree, 369. Moore v. Crump, 121.
Minneapolis Trust Co. v. Menage, 330. Moore V. First Nat. Bank, 522.
Minnlcb's Estate, In re, 184. Moore v. Hazleton, 35.
Minns v. Billings, 212. Moore v. Hegeman, 163.
Minor v. Rogers, 82. Moore V. Hilton, 337.
Minot V. Attorney General, 99. Moore v. Hunter, 516.
Minot V. Paine, 381. Moore v. Isbel, 324.
Minot V. Tilton, 74, 269. Moore v. McCIain, 123.
Minturn v. Seymour, 67. Moore v. McFall, 302.
Mintz V. Brock, 400. Moore v. McKenzie, 340.
Minuse v. Cox, 498. Moore v. Moore, 474.
Missouri Historical Soc. v. Academy Moody V. Noyes, 304.
of Sciepce, 212, 256. Moore v. CHare, 576.
Mitau V. Eoddan, 371. Moore v. Reaves, 433.
Mitchell V. Berry, 309. Moore v. Robertson, 477,
Mitchell V. Bilderback, 251. Moore v. Sinnott, 183.
MitcheU v. Blanchard, 508. Moore v. Taylor, 545.
Mitchell V. CarroUton Nat. Bank, 379, Moore v. Worley, 561.
447. Moore v. Zabriskie, 417.
Mitchell V. Choctaw Bank, 444. Moore's Heirs v. Moore's Devisees.
Mitchell Colby, 146.
V. 212.
Mitchell Colglazier, 112.
V. Moorman v. Crockett, 277.
Mitchell V. Dawson, 512. Moran v. Moran, 135, 203, 210.
MitcheU v. Pitner, 284. Mordecai v. Parker, 320.
Mitchell V. Mitchell, 344. Mordecai v. Tankersly, 319.
Mitchell V. Stevens, 283. Morey v. Herrick, 105, 109.
Mitchell V. Whitlock, 297. Morffew v. San Francisco & S. R. R.
Mitchell's Estate, In re, 50. Co., 161.
Mize V. Bates County Nat. Bank, 77. Morford v. Stephens, 102.
250. Morgan, In re, 275, 276.
Moeller v. Poland, 330. Morgan v. Clayton, 331.
MofEatt V. Buchanan, 553. Morgan v. Fisher's Adm'r, 516.
Moffett V. Eames, 411. Morgan v. Kansas Pac. R. Co., 463.
Moggridge v. Thackwell, 228, Morgan v. Morgan, 434.
Mohn V. Mohn, 59. Morgan v. Shields, 414.
Moke V. Norrie, 260. Morice v. Bishop of Durham, 216. "

Molk's Estate, In re, 50. Morley v. Carson, 321.

Moll V. Gardner, 438. Morris, In re, 209.
Moloney v. Tilton, 68, 511. Morris v. Boyd, 327.
Monday v. Vance, 246, 436. Morris v. Ellis, 372, 373.
Monell Monell, 486.
V. Morris v. Joseph, 120.
Moninger v. Security Title & Trust Morris v. Linton, 154.
Co., 529. Morris v. Reigel, 118.
Moniot V. Jackson, 299. Morris v. Vyse, 472.
Monroe v. Gregory, 544. Morris Wallace, 347.
v.
Monroe Trenholm, 435.
v. Morris Winderlin, 306.
v.
Monroe's Trustee v. Monroe, 434. Morris' Ex'r v. Morris' Devisees, 334.
Montague v. Hayes, 62. Morrison v. Bowman, 405.
Montfort v. Montfort, 263. Morrison v. Kelly, 283, 517.
Montgomery, In Re, 375. Morrison v. Kinstra, 529.
Montgomery v. Coldwell, 400. Morrison v. Lincoln Sav. Bank & Safe
Montgomery y. Trueheart, 292, 562. Deposit Co., 479.
 CASES CITED 629
[The figures refer to pages]

Morrison v. Smith, 146. Musselman v. Myers, 104. '

Morristown Trust Co. v. Morristown, Mutual Life Ins. Co. v. Woods, 269.
225. Myer v. Thomson, 444.
Morrow Morrow, 463.
v. Myers, In re, 364.
Morrow Saline County Com'rs, 330.
v. Myers v. Board of Education, 527,
Morse, Appeal of, 276, 399. 531.
Morse v. Hill, 337. Myers v. Hale, 463.
Morse v. Inhabitants of Natick, 222. Myers v. Jackson, 127.
Morse v. Morse, 46. Myers v. Luzerne County, 145.
Morse v. Stoddard's Estate, 284. Myers v. Myers, 60, 295, 403.
Mortimer v. Jackson, 434. Myers Co. v. Reynolds, 444.
Morton v. Barrett, 372. Myers' Estate, In re, 276, 379.
Morton v. Tewart, 62. Myers' Ex'r v. Zettle, 330.
Morton's Ex'rs v. Adams, 359, 396. Mylin's Estate, In re, 403, 410.
Morvllle V. Fowle, 205, 325.
Moseley v. Smiley, 192, 193.
Motherwell v. Taylor, 104.
N
Mott V. Morris, 204. Naddo V. Bardon, 548.
Moulden v. Train, 46, 59, 62, 551. Nagle V. Conrad, 293, 339.
Moultrie v. Wright, 109. Nagle V. Von Rosenberg, 357.
Mount V. Mount, 400. Nagle's Estate, In re, 417.
Mount Tuttle, 160, 243.
V. Naglee's Estate, In re, 263.
Mt. Morris Co-op. Bldg. & L. Ass'n v. Nance v. Nance, 346, 362, 363.
Smith, 344. Nanheim v. Smith, 467.
Muckenfuss v. Heath, 417. Napton r. Hunt, 278.
Mucklow V. Fuller, 492. Narcissa's Ex'r v. Wathan, 335.
Mueller, Matter of, 81, 87. Nash V. Bremner, 136.
Northwest Loan & Nashville Trust Co. v. Weaver, 293.
Muhlenberg v.
Trust Co. 529. Nathan's Estate, In re, 276.
Muir's Ex'rs v. Howard, 182. National Butchers' & Drovers' Bank v.
Mulford V. Minch, 337, 338. Hubbell, 19, 20.
Mullanny v. Nangle, 285. National Butchers' & Drovers' Bank v.
Wilkinson, 21.
Mullen V. Walton, 546.
National Exch. Bank v. Beal, 22.
MuUer, In re, 395, 497, 498. National Mahaiwe Bank v. Barry, 120.
MuUer v. Benner, 35. National Surety Co. v. Manhattan
Mullin V. MuUin, 119, 475. Mortg.Co., 363.
Mulrooney v. Irish-American Sav. & Nauman v. Weidman, 222.
Bldg. Ass'n, 130. Neafie's Estate, In re, 276.
Mumford, In re, 479. Neal V. Bleckley, 463.
Mumford v. Murray, 485, 498. Neale, Appeal of, 424.
Mundy v. Vawter, 306. Nease v. Capehart, 469, 551.
Munro v. Allaire, 338. Neathery v. Neathery, 106, 107.
Munroe v. Whitaker, 264. Nebraska Power Co. v. Koenig, 120,
Murdock, In re, 450. 334.
Murphey v. Cook, 165. Neeb's Estate, In re, 180.
Murphy v. Carlin, 50. Neel's Estate, In re, 180, 385.
Murphy v. Clayton, 480. Neel's Ex'r v. Noland's Heirs, 113.
Murphy v. Farmers' & Merchants' Neely v. Rood, 529.
Bank, 120. Nefe, Appeal of, 330.
Murphy Chair Co. v. American Radi- NefC's Ex'rs v. NefC's Devisees, 36.
ator Co., 317. • Nehawke Bank v. IngersoU, 453.
Murphy's Estate, In re, 216. Neill V. Keese, 109.
Murray v. Ballou, 516. Neilly v. Neilly, 550.
Murray v. Feinour, 366. Neilson v. Blight, 15, 71.
Murray v. Finster, 512. Neilson v. Lagow, 425.
Murray v. Miller, 163, 197. Neisler v. Pearsall, 575*
Murray v. Ray, 45. Nellis V. Rickard, 258.
Murry v. King, 335, 434, 547. Nelson v. Davis, 434.
Muscogee Lumber Co. t. Hyer, 409. Nelson v. Howard, 398, 468.
630, CASES CITED
[The figures refer to pages]

Nelson v. Nelson, 110. Neyens v. Hossack, 29.

Nelson v. RatlifE, 57,7. Neyland v. Bendy, 53, 334.
Neresheimer v. Smyth, 472. Niblack v. Knox, 332.
Nesbit V. Lockman, 146. NiccoUs V. Niccolls, 40.
Nesbitt V. Onaway-Alpena Til. Cb., Nichols, Appeal of, 366.
121. Nichols V. Eaton, 183.
Nesbitt Stevens, 62, 63, 64.
V. Nichols V. Emery, 158, 161.
Nesmith, In re, 403. Nichols V. Newark Hospital, 229,
Nestal V. Sehmid, 135. Nichols V. Nichols, 259.
Nester v. Gross, 143. Nicholson v. McGuire, 497.
Nettles V. Nettles, 542. Nickels v. Clay, 95.
Nevitt V. Woodbum, 317, 368. Nickels v. Philips, 276.
New V. NicoU, 298, 404. Nickerson v. Van Horn, 444.
Newark Aqueduct Co. v. Joralemon, Niles, Matter of, 490.
516. Niles V. Mason, 173, 175.
Newberry v. Winlock's Ex'x, 544. Nilson's Estate, In re, 199, 229.
Newcomb t. Brooks, 142, 332, 337. Nixon V. Nixon, 292.
-Newcomb v. Masters, 155. Nixon's Estate, In re, 272.
Newcomb v. Paige, 370. Nixon State Bank v. First State Bank
Newcomb V. St. Peter's Church, 205. '
of Bridgeport, 20.
Newell V. Hadley, 510, 515. Noble. V. Learned, 58, 158.
New England Lodge No. 4, F. & A. Nobles V. Hogg, 356.
M. V. Weaver, 343. Noe V. Christie, 317.
New England Sanitarium v. Inhabit- Noe V. Kern, 49, 50.
ants of Stoneham, 191, 192. Noe V. Roll, 113.
New England Trust Co. v. Eaton, 390, Nolan V. Garrison, 63.
393. Nolan V. Nolan, 188. ,

Newhall Wheeler, 435, 469.

v. Nonotuck Silk Co. v. Flanders, 21, 530.
New Haven ^rust Co. v. Doherty, 363. Norfleet v. Hampson, 543.
Newis V. Topfer, 129, 148, 504, 560, Norling v. Allee, 299.
561. Norman v. Hill, 308.
New Jersey Title Guarantee &
Trust Norman's Ex'x v. Cunningham, 432.
Co., In re, 410. Norris v. Frazer, 139.
New Jersey Title Guarantee & Trust Norris v. Hall, 309.
Co. V. Parker, 248. Norris v. .Johnston, 184.
Newman v. Newman, 335, 474, 548. Norris v. Kendall, 121.
Newman v. Schwerin, 399. Norris v. Loomis, 215, 229.
Newman v. Shreve, 330. North American Trust Co. t. Chap-
Newport Trust Co. v. Chappell, 182, pell, 325.
323. North Carolina Corporation Commis-
Newport Trust Co. v. Van Rensselaer, sion V. Merchants' & Farmers' Bank,
381. 20.
New South Bldg. & Loan Ass'n v. Northcraft v. Martin, 132.
Gann, 70. Northern Cent. Dividend Cases, In re,
Newton v. Hunt, 428, 436. 383.
Newton v. Jay, 435. North Troy Grade Dist v. Troy, 321.
Newton v. Nutt, 35. Nortin, In re, 450.
Newton V. Rebenack, 396, 417, 540, Norton v. Bassett, 558.
582. Norton v. McDevit, 557.
Newton v. Taylor, 119. Norton v. Norton, 573.
New York Cent. & H. E. R. Oo. v. Norton v. Phelps, 302, 303.
Cottle, 293. Norton v. Ray, 467.
New York Dry Dock Co. v. Stillman, Norvell v. Hedrick, 309.
163, 165. Norwood V. Harness, 354.
New York Life Ins. & Trust Co., In Nottage, In re, 224.
re, 364. Nougues V. Newlands, 561.
New York Life Ins. & Trust Co. v. Noyes v. Blakeman, 301, 436.
Baker, 391. Nuckols V. Stanger, 547.
New York Security & Trust Co. v- Nunn V. Peak, 580.
Tacoma, 551. Nunn V. Titche-Goettinger Co., 184.
 CASES CITED 631
[The figures refer to pages]

Nutt V. Morse, 81, 83, 84. Olcott V. Bynum, 107.

Nutt V. State, 274. Olcott V. Gabert, 44, 325.
Nyce's Estate, In re, 481. Olcott V. Maclean, 373.
Olcott V. Tope, 107.
Old Dominion Copper Mining & Smelt-
o ing Co. V. BIgelow, 37, 144, 333.
Oaks V. West, 120, 514, 559. Old Nat. Bank v. German-American
Oatway, In re, 524. Bank, 22.
O'Beirne v. Allegheny & K. R. Co., 464. Old's Estate, In re, 352, 405, 419.
Ober & Sons Co. v. Cochran, 21. Olive V. Olive, 277.
Oberlender v. Butcher, 517. Oliver v. Piatt, 506, 508, 510, 513, 550.
Obermiller v. Wylie, 343, Olmstead, in re, 272, 368.
Obert V. Bordlne, 463. Olsen V. Youngerman, 580.
Obert V. Hammel, 337. Olsonv. Lamb, 142, 409.
Oberthier y. Stroud, 102. Olympia Min. Co. v. Kerns, 551.
O'Brien, Ex parte, 283. O'Malley v. Gerth, 299.
O'Brien v. Ash, 568. O'Neal V. Borders, 169.
O'Brien v. Bank of Douglas, 71, 73, O'Neii v. Epting, 468.
262.
O'Neil V. Greenwood, 46.
O'Brien v. Battle, 283.
O'Neill V. O'Neill, 111, 508.
O'Brien v. Gill, 113.
Opening of 110th St., In re, 314, 564.
O'Brien v. Jackson, 297, 298.
Opplger V. Sutton, 409.
O'Brien v. Williamsburgh Sav. Bank,
Orb V. Coapstick, 519.
86.
Ochiltree v. Wright, 485.
Ordway v.Gardner, 565.
O'Connor
Orear v. Farmers' State Bank & Trust
v. Irvine, 113.
Co., 103, 126.
O'Day V. Annex Realty Co., 132, 543.
Oree v. Gage, 319. ,
Odd Fellows' Beneficial Ass'n of Col-
McKiernan, 51.
umbus V. Person, 354. O'Riley v.

Odell V. Moss, 551. Ormiston v. Olcott, 361, 485.

Odell V. OdeU, 178. O'Rourke v. Beard, 422.
Orphan Asylum Society v. McCartee,
O'Dell V. Rogers, 142.
OdeU's Estate, In re, 406. 536.
Odom V. Morgan, 571. Orr V. Perky Inv. Co., 118.
O'Donnell, Matter of, 307. Orr V. Yates, 283.
O'Donnell v. McCord, 108. Orth V. Orth, 138.
O'DonneU White, 107.
v.
Orthodox Congregational Church In
Oehler v. Walker, 537. Union Village, In re, 569.
O'Fallon v. Tucker, 325. Ortman v. Dugan, 169.
Offenstein v. Gehner, 478. Osborne, In re, 384.
Offutt V. Divine's Ex'r, 394, 414. Osborne v. Gordon, 290.
Offutt V. Jones, 264, 307. Osgood V. Eaton, 434.
Ogden, Appeal of, 424, 426. Osgood" V. Rogers, 205.
Ogden, Petition of, 220, 223. Ostheimer v. Single, 104, 123.
Ogden V. Allen, 375.
Otier V. Neiman, 336.
Ogden V. Larrabee, 26. Otis v. Beckwith, 77.
Ogden V. Ogden, 432. Otis v. McLellan, 168.
Ogilby V. Hiekok, 264. Otis V. Otis, 519.
Ogle's Estate, In re, 172. Otjen V. Frohnach, 54.
Oglesby t. Durr, 444. O'Toqle v. Faulkner, 299.
,,
Oglesby v. Wilmerdmg, Morris
.
&„ O'Toole V. Hurley, 551.
Mitchell,^ 55. Otterback v. Bohrer, 169, 171.
O'Gorman v. Crowley, 378. Otto V. Schlapkahl, 562.
O'Gorman v. JoUey, 76. Ould V. Washington Hospital, 191, 215.
O'Hara, In re, 277. Overby v. Scarborough, 169.
O'Hara's Will, In re, 139. Overseers of Poor of Norfolk v. Bank
O'Hare v. Johnston, 171, 183. of Virginia, 508, 529.
Ohio Oil Co. V. Daughetee, 312, 537. Overseers of Poor of Richmond Coun-
Oklahoma Nat. Bank v. Cobb, 61. ty V. Tayloe's Adm'r, 448.
Olcott V. Baldwin, 416, 419, 420. Owen V. Reed, "291.
 632 CASES CITED
[Tbe figures refer to pages]

Owenes v. Owenes, 245. Parker v. May, 247, 448.

Owens V. Cowan's Heirs, 269. Parker v. Parker, 435, 468.
Owens V. Crow, 551. Parker v. Sears, 265.
Owens V. Williams, 496. Parker v. Seeley, 386.
Owens' Estate, In re, 572. Parker
v. Straat, 506.
Owings, Case of, 139. Parker's Adm'r v. Parker, 400.
Owings V. Rhodes, 379. Parkes v. Burkhart, 123.
Oxley Stave Co. v. Butler County, 270, Parkhill v. Doggett, 288, 414, 434.
280. Parkhurst v. Ginn, 375.
Parkhurst v. Hosford, 122.
Parkman v. Suffolk Savings Bank for
Seamen, 80, 90.
Pabst V. Goodrich, 361. Parks V. Parks, 112.
Padflc Natr Bank v. Wiiidram, 186, Parks
V. Satterthwaite, 551, 561.
250.
Parmenter v. Barstow, 299.
Pack V. Shanklin, 229. Parmenter v. Homans, 474.
Packard v. Illinois Trust & Savings Parnall v. Parnall, 51.
Bank, 313. Parrish v. Parrish, 121, 129.
Packard v. Kingman, 301. Parry's Estate, In re, 300, 403.
Packard v. Old Colony R. Co., 46. Parsons v. Boyd, 324, 342.
Packard v. Putnam, 63. Parsons V. Jones, 276.
Packer v. Johnson, 434. Parsons v. Lyman, 399.
Packer's Estate, In re, 567. Parsons v. Winslow, 369.
Pacific Nat. Bank v. Windram, 186. Partridge v. Cavender, 184.
Padfield v. Padfield, 65. Partridge v. Chapman, 519.
Page V. Boynton, 372. Partridge v. Clary, 576.
Page V. Gillett, 321. Paschall v. Hinderer, 551.
Page V. Marston, 398. Passaic Trust & Safe Deposit Co. v»
Page V. Naglee, 334. . East Ridgelawn Cemetery, 327.
I
Page V. Page, 103, 110. Passmore's Estate, In re, 550.
Page V. Stubbs, 142. Patrick v. Patrick, 409.
Page's Ex'r v. Holman, 499. Patrick V. Stark, 548.
Paget V. Stevens, 472. Patrick's Estate, In re, 401, 417.
Pain V. Farson, 103. Pa. Title & Trust Co. v. Meyer, 457.
Paine v. Mooreland, 518. Patten v. Chamberlain, 62.
Paine v.Sackett, 344. Patten v. Herring, 184.
Paisley, Appeal of, 399. Patten v. Moorfe, 512.
Palethorp's Estate, In re, 225. Patterson v. Booth, 332.
Palmer v. Chicago, 292. Patterson v. Humphries, 50.
Palmer v. Dunham, 412. Patterson v. Johnson, 268, 295.
Palmer v. Schribb, 51. Patterson v. Northern Trust Co., STL.
Palmer v. Stevens, 434. Patterson v. Vivian, 385.
Palmer v. Union Bank, 212. Patteson v. Horsley, 501.
Palms V. Palms, 173, 179. Patton V. Beecher, 126, 127.
Palms' Adm'rs v. Howard, 145. Patton V. Cone, 414.
Parish of Christ Church v. Trustee's Patton V. Patrick, 165, 581.
of Donations & Bequests for Church Paul'v. Fulton, 512.
Purposes, 205. Paul V. Wilson, 301.
Park's Estate, In re, 387. Paull V. Oliphant, 334.
Parker v. Allen, 272. Pavlovich v. Pavlovich, 109.
Parker v. Ames, 376, 414. Payne v. Avery, 145.
Parker v. Carpenter, 444. Payne v. Payne, 432.
Parker v. Converse, 324. Peabody, In re, 110.
Parker v. Day, 373. Peabody v. Burri, 142.
Parker v. Hayes' Adm'r, 539. Peabody v. Kent, 160.
Parker v. Hill, 413. Peabody v. Tarvell, 506.
Parker v. Johnson, 385. Peabody's Estate, In re, 242.
Parker v. Jones' Ad'mr, 528. Peak V. Ellicott, 23, 531.
Parker v. Kelley, 273, 274. Peake v. Jamison, 421.
 CASES CITED 633
[The figures refer to pages]

Pearce v. Dill, 457. People V. Stockbrokers' Bldg. Co., 163.

Pearce v. Dyess, 104, 561. People ex rel. Brewster v. Barker, 370.
Pearce v. Pearce, 180. People ex rel. Collins v. Donohue, 503.
Pearce v. Twichell, 317. People ex rel. Elbert v. Cogswell, 570.
Pearl v. Pearl, 74, 551. People ex rel. Safford v. Washburn,
Pearson y. Haydel, 529. 399.
Pearson v. McMillan, 502. People ex rel. Smith v. Braucher, 569.
Pearson v. Pearson, 131. People's Bank of Madison, Ind., v. De-
Pearson v. Treadwell, 548. weese, 440.
Pease v. National Lead Co., 32, People's Savings Bank v. Webb, 80, 81,.
Peck V. Brown, 567. 82, 89.
Peck Scofleld, 80, 81, 83.
V. People's Trust Co. v. Flynn, 437.
Peckham v. Newton, 358. People's Trust Co. v. Harman, 434.
Peer v. Peer, 64, 102, 110. Pepper v. Stone, 36.
Pegge V. Skynner, 257. Pepper v. Walling, 74.
Pell V. Mercer, 217. Percival-Porter Co. v. Oaks, 496, 545,
Pelton V. Macy, 568. 555.
Pendleton v. Fay, 518. ' Perin v. Carey, 255.
Pendleton v. Whiting, 15. Perkins, Appeal of, 372, 412, 414.
Penfield v. Skinner, 448. Perkins v. McGavock, 271.
Penfleld v. Tower, 159, 173. Perkins" Will, In re, 223.
Peninsular Sav. Bank v. Union Trust Perkinson v. Clarke, 113.
Co., 444. Perrin v. Lepper, 397, 401.
Penn v. Fogler, 120, 357. Perrine v. Newell, 300, 407, 435.
Pennell v. DeflEell, 534. Perrine v. Perrine, 435.
Penn-Gaskell's Estate, In re, 392.Perronneau v. Perronneau's Ex'rs, 350.
Penniman v. Howard, 305. Perry y. McHenry, 106.
Pennington v. Metropolitan Museum Perry v. Tuomey, 208.
of Art, 328. Person v. Fort, 545.
Pennington v. Smith, 511. Peter v. Carter, 448.
Pennock's Estate, In re, 48, 49. Peters v. Rhodes, 536.
Pennoyer v. Wadhams, 153, 199, 258. Peterson v. Parnum, 438.
Pennsylvania Co. for Ins. on Lives v. Peth V. Spear, 214.
Franklin Fire Ins. Co., 480. Petrain v. Kiernan, 517.
Pennsylvania R. Co. v. Duncan, 463. Petrie, In re, 356, 363.
Pennsylvania Title & Trust Co. v. Petrie v. Myers, 510.
Meyer, 457. Pettingill v. Pettlngill, 406.
Penny v. Croul, 173, 219, 236, 262. Pettit's Estate, In re, 179.
Penrose's Estate, In re, 233. Pettus V. Sutton, 497.
People V. Bank of Danville, 20, 529. Petty V. Moores Brook Sanitarium,
People V. Barker, 369. 188.
People V. Bordeaux, 536. Petzold V. Petzold, 113.
People V. Braucher, 205, 230, 247, 449. Pharis v. Leachman, 479.
People V. Byron, 36. Phelps y. Morrison, 512.
People V. California Safe Deposit & Phelps V. Bobbins, 100.
Trust Co., 509, 523. Philadelphia Baptist Ass'n y. Hart,
People V. City Bank of Rochester,^ 20, 195, 196.
23. Philadelphia Nat. Bank v. Dowd, 21.
People V. Cogswell, 192, 247, 448. Philadelphia Trust, Safe-Deposit &
People V. Coleman, 369. Ins. Co., Appeal of, 383.

People V. Equitable Life Assur. Soc. Philadelphia, W. & B. R. Co. y. Cowell,

38.
of United States, 399.
People V. Feitner, 369. Philbrook y. Delano, 97.
People V. Meadows, 17. Philip Carey Co. v. Pingree, 297.
People V. Norton, 284. Philippi V. Philippe, 550.
People V. Petrie, 283. Philips V. Bury, 450.
People V. Powers, 48, 216. Phillips v. Burton, 365, 416, 496.
People V. Schaefer, 59, 135, 138. Philips V. Crammond, 424.
People V. Shears, 500. Phillips T. Frye, 67.
634 CASES CITED
[The figures refer to pages]

Phillips V. Grayson, 183. Plumas County Bank v. Bank of Hide-

Phillips V. Harrow, 172, 255. out, Smith & Co., 20.
Phillips V. Heldt, 221, 236. Plumb V. Cooper, 101.
Phillips V. Herron, 169. Plumb V. Crane, 317.
Phillips V. Hines, 119. Plumer v. Reed, 124.
Phillips V. Insley, 334. Plumley v. Plumley, 286.
Phillips V. Overfield, 114, 529. Plummec v. Gibson, 394.
Phillips V. Phillips, 47, 48, 103. Plum Tree Lime Co. v. Keeler, 44.
Phillips V. South Park Com'rs, 62. Plunkett V. Le Huray, 444.
Phillips V. Vermeule, 545. Plymouth 'V. Jackson, 451.
Phillips Academy v. King, 202, Poage V. Bell, 340, 463.
Phillpotts V. Blasdel, 319. Podhajsky's Estate, In re, 82.
Phinizy v. Few, 506. Poland V. Beal, 304.
Phinizy v. Wallace, 167. Polk V. Boggs, 61.
Phipps V. Willis, 145. Polk V. Linthicum, 276.
Phoebe v. Black, 464. Polkowitz V. Nash, 501.
Phoenix v. Livingston, 412. Pollard V. Lathrop, 417.
Physic's Estate, In re, 285. Pollard V. McKenney, 129.
Pickering v. Coates, 424. Pollock V. Pollock, 106.
Pickering v. De Eochemont, 474. Pomroy v. Le\yis, 269.
Pickering Shotwell, 213.
v. Pond Creek Coal Co. v. Runyan, 167,
Pichoir's Estate, In re, 161. 168.
Pickler v. Plckler, 104. Ponder v. McGruder, 320.
Pierce, Matter of, 81, 83.
Pondir v. New Tork, L. B, & W. R.
Co., 400.
Pierce, Petition of, 215, 284.
Pool v. Dial, 340.
Pierce v. McKeehan, 29.
Poole V. Brown, 399.
Pierce v. Pierce, 50, 109.
Poole V. Oliver, 110.
Pierce v. Weaver, 273.
Poole V. Union Trust Co., 375, 384.
Pierson v. Phillips, 529.
'
Pooler V. Hyne, 172.
Pierson v. Pierson, 56. Poor V. Bradbury, 51.
Pietsch V. Marshall & Ilsley Bank, 165. Pope V. Farnsworth, 540, 541.
Pietsch V. Milbrath, 37. Pope V. Patterson, 331.
Pike V. Baldwin, 460. Pope's Ex'r v. Weber, 295.
PUcher v. Lotzgesell, 548. Porter v. Anglo & London Paris Nat.
Plm V. Downing, 490. Bank, 527.
Plndall V. Trevor, 511. Porter v. Bank of Rutland, 262.
Pine V. White, 330. Porter v. Doby, 154, 433.
Pinkston v. Brewster, 550. Porter v. Douglass, 112.
Pinney v. Fellows, 109. Portland & H. Steamboat Co. v. Locke,
Pinnock v. Clough, 104. 529.
Pinson v. Ivey, 254, 550. Post, In re, 309, 559.
Pioneer Mining Co. v. Tyberg, 120. Post V.Hover, 36.
Piper, Appeal of, 273. Post V.Ingraham, 399.
Ptper V. Moulton, 221, 255. Post V. Moore, 50.
Pirkey v. Grubb's Ex'r, 255. Potter, In re, 411.
Pitcher v. Rogers' Estate, 468, 551. Potter vi Hodgman, 310.
Pitney, In re, 284. Potter V. Porter, 396.
Pitt v. Petway, 337. Potter V. Potter, 464.
Pittock V. Pittock, 101. Potter V. Ranlett, 306.
Pitts V. McWhorter, 438. Potter V. Thornton, 205.
Pittsburgh Nat. Bank of Commerce v. Potts, Petition of, 276, 368, 395.
McMurray, 24. Potts V. Philadelphia Ass'n for Relief
Pltzer v. Logan, 287. of Disabled Firemen, 215.
Piano Mfg. Co. v. Auld, 21, 523, 532. Poulet V. Johnson, 95.
Plant V. Plant, 336. Powell T. Adler, 125.
Pleasants v. Wilson, 318. Powell V. Missouri & Arkansas Land
Plitt V. Yakel, 183. & Min. Co., 527.
Plum V. Smith, 317. Powell V. PoweU, 142.
 CASES CITED 635
[The figures refer to pages]

Powell V. Yearance, 137, 140. Price V. Taylor, 443.

Powell's Will, In re, 262. Price's Estate, In re, 274, 276.
Power V. First Nat. Bank, 22. Prichard v. Prichard, 327. ,

Powers V. Provident Institution for Primeau v. Granfleld, 497, 504, 531.

Savings, SO. Primitive Methodist Church v. Homer,
Pownal V. Myers, 366. 317.
Prall V. Hamil, 518. Prince v. Barrow, 264.
Pratt V. Clark, US. Prince de Beam v. Winans, 156, 338,
Pratt V. Commercial Trust Co., 453. 477.
Pratt V. Griffin, 45. Prindle v. Holcomb, 398, 502.
Pratt V. Boman Catholic Orphan Asy- Pringle v. Dorsey, 569.
lum, 204. Printup V. Patton, 111.
Pratt V. Thornton, 406. Prinz V. Lucas, 299.
Pratt V. Trustees of Sheppard & Enoch Pritchard v. BrowA, 517.
Pratt Hospital, 51, 52. Pritchard v. Williams, 447, 554.
Pratt's Estate, In re, 421. Pritchltt V. Nashville Trust Co., 383.
Pray, Appeal of, 346, 358, 366. Proctor V. Heyer, 327.
Pray v. Hegeman, 179. Prondzinski v. Garbutt, 506.
Preachers' Aid Soc. of Maine Confer- Proprietors of Church in Brattle
ence of Methodist Episcopal Church Square v. Grant, 233.
V. Rich, 198. Proseus v. Porter, 83, 84.
Preble v. Greenleaf, 540. Prouty V. Edgar, 309.
Premier Steel Co. v. Yandes, 414. Prouty V. Rogers, 551.
Presbyterian Board of Foreign Mis- Prudden v. Lindsley, 318.
sions V. Culp, 202. Pryor v. Davis, 478.
Presbyterian Congregation v. Johns- Pryor v. Mclntire, 545.
ton, 464. Puckett V. Benjamin, 108.
Prescott V. Jenness, 132. Pugh's Heirs v. Bell's Heirs, 336.
Prescott's Estate, In re, 410. Pujol V. McKinlay, 471.
President, etc., of Harvard College v. Pulitzer v. Livingston, 171.
Society for Promoting Theological PuUis V. PuUis Bros. Iron Co., 268.
Education, 448. PuUis V. Somerville, 499.
Presley v; Rodgers, 440. Pumphry v. Brown, 109.
Preston v. Horwitz, 542. Purcell's Estate, In re, 49.
Preston v. Preston, 561. Purdy V. Johnson, 339, 397, 400.
Preston v. Safe Deposit & Trust Co., Purdy V. Lynch, 482, 485, 486.
305 327. Putnam v. Lincoln Safe Deposit Co.,
Preston v. Walsh, 254, 537. 46.
Preston v. Wilcox, 274, 276, 277, Pyle V. Henderson, 817.
Prettyman v. Baker, 205. Pyle v. Pyle, 275.
Prevo V. Walters, 510.
Prevost V. Gratz, 53.
Prewett v. Buckingham, 562.
Quackenboss v. Southwick, 273, 276.
Prewett v. Land, 328.
Qualroli v. Italian Beneficial Society
Prewitt V. Morgan's Heirs, 333. of Vineland, 545.
Prewitt v. Prewitt, 506, 559.' Quay's Estate, In re, 387.
Price V. Dawson, 24. Quimby v. Quimby, 225.
Price V. Estill, 537. Quimby Uhl, 540.
v.
Price V. Hicks, 109. Quin Skinner, 567.
V.
Price v. Kane, 110. Quinn's Estate, In re, 400.
Price V. Krasnoff, 317, 510.
Price V. Long, 307.
Price V. Maxwell, 211, 212.
R
Price V. Methodist Episcopal Church, Rabb V. Flenniken, 511.
291. Rabel v. Griffin, 23.
Price V. Mulford, 559. Racek v. First Nat. Bank of North
Price V. Nesbit, 338. Bend, 188.
Price V. Price, 494. Rader v. Stubblefield, 214.

Price V. Beeves, 132. Raffel V. Safe Deposit & Trust Co.,

Price V. School Directors, 212, 250. 582.
636 CASES CITED
[The figures refer to pages]

Ragsdale v. Eagsdale, 140. Reed's Ex'rs v. Reed, 316.

Rahway Sav. Inst. v. Drake, 371. Reeder v. Antrim, 172.
Raiford v. Eaiford, 409. Reeder v. Cartwright, l5.
Kainey v. Laing, 205. Reeder v. Lanahan, 307.
Bains v. Rainey, 368. Reeder v. Reeder, 46, 264, 305,
Eainsford v. Rainsford, 496. Rees V. Egan, 125.
Raleigh v. Fitzpatrick, 537. Reese v. Bruce*, 548.
Raiey v. Umatilla County, 212. Reese v. Ivey, 284.
Ralston v. Easter, 403, 417, 488, 490. Reeve v. Strawn, 103.
Rambo v. Armstrong, 29. Reeves v. Evans, 519.
Rambo v. Pile, 80, 85, 87, 89, 90. Reeves v. Howard, 148.
Ramirez v. Smith, 517. Reeves v. Reeves, 204. )

Ramsden v. O'Keefe, 119. Regan West, 265.

v.
Rand v. Farquhar, 300, 301. Reich's Estate, In re, 372, 417.
Randall v. Constans, 63, 165. Reichenbach v. Quin, 208.
Randall v. Dusenbury, 301. Eeichert v. Missouri & I. Coal Co.,
Randall v. Gray, 277. 267, 280, 288.
Randolph, In re, 330, 333, 352, 356. Reid, In re, 348, 349.
Randolph v. East Birmingham Land Reid V. Reld, 62, 498,
Co.,^308, 311. Reid v. Savage, 548.
Randolph v. Read, 153. Reidy v. Small, 248.
Rankin v. Barcroft, 257. Reiff V. Horst, 244.
Rankin v. Harper, 110. Reigart v. Ross, 286.
Rankin's Estate, In re, 294. Reihl V. Eikowski, 545, 547,
Rankine v. Metzger, 261. Reilly v. Conrad, 288, 344.
Ransdel v. Moore, 63, 138. Reilly v. Oglebay, 336.
Rantz V. Dale, 46. Reimensnyder v. Gans, 240.
Eanzau v. Davis, 154, 371.
Reinach v. Atlantic &
G. W. R. Co.,
Raski V. Wise, 396. 464.
Ratcliffe v. Sangston, 322, 324.
Reios V. Mardis, 29.
Rathbun v. Colton, 294, 409.
Reitz V. Reitz, 113.
Ratigan v. Ratigan, 61.
Reizenberger v. Shelton, 102.
Ratliff V. Elwell, 101.
Reminger v. Joblonski, 103.
Ratliff's Ex'rs v. Com., 182.
Rawlings v. Adams, 432. ,
Rensselaer & S. R. Co. v. Miller, 404,
407.
Ray V. Simmons, 81, 83, 84, 89.
Ray V. U. S., 550. Resor v. Resor, 111.
Reuling's Ex'x v. Reuling, 577.
Raybould, In re, 300.
Raymond v. Harris, 437. Revel V. Albert, 123.
Raymond v. Tiffany, 444. Reynolds, In re, 442.
Raynes v. Eaynes, 480. Reynolds v. JEtna Life Ins. Co., 511.
Raynolds v. Hanna, 439. Reynolds v. Lynch, 476.
Rea V. Steamboat Eclipse, 434. Reynolds v. Reynolds, 134.
Read v. Williams, 422. Reynolds v. Sumner, 561.
Reade v. Continental Trust Co., 466. Reynolds v. Thompson, 45.
Reardon v. Reardon, 428, 538. Reynolds v. Title Guaranty Trust Co.,
Eebesher v. Rebesher, 120. 37.
Rector v. Dalby, 154, 577. Rhoads v. Rhoads, 343, 395.
Rector v. Hutchison, 537. Rhode Island Hospital Trust Co. v.
Red Bud Realty Co. v. South, 400, Benedict, 213.
529. Rhode Island Hospital Trust Co. v.
Redfield Redfield, 27.
v. Bradley, 384.
Redford v. Clarke, 460, 546, 554, 555. Rhode Island Hospital Trust Co. v.
Redmond v. Redmond,
168. Noyes, 389.
Redwood v. Riddick, 467, 550. Rhode Island Hospital Trust Co. v.
Reed, In re, 351, 361, 366, 499. Olney, 199.
Reed v. Harris, 464. Rhode Island Hospital Trust Co. v.
Reed v. Mcllvaln, 171. Peck, 169.
Reed v. Munn, 443. Rhode Island Hospital Trust Co. v.
Reed y. Painter, 559. Peckham, 381, 384.
 CASES CITED 637
[Tbe figures refer to pages]

Bhode Island Hospital Trust Co. v. Riley's Estate, In re, 379.

Town Council of Warwick, 269. Rines v. Bachelder, 471.
Rhodes v. Green, 512. Ringe v. Kellner, 50.
Rhodes v. Maret, 335. Ringgold V. Ringgold, 337, 409, 485,
Rhymer, Appeal of, 2q9. 497, 499.
Rice V. Braden, 559. Ringrose v. Gleadall, 155, 567, 577.
Rice V. Dougherty, 44. Riordan v. Schlicher, 435, 443.
Rice V. Halsey, 348. Ripley, In re, 258.
Rice V. Merrill, 371, 551. Kipiey V. Brown, 192, 238.
Rice V. Rice, 120, 319. Ripley v. Seligman, 514.
Rice Stix Dry Goods Co. v. W. S. Al- Rische v. Diesselhorse, '126.
brecht & Co., 138. Rist's Estate, In re, 421.
Rice's Will, In re, 371. Rittenhouse v. Smith, 545.'
Richards v. Church Home for Orphan Ritter v. Couch, 223.
& Destitute Children, 262. Rives V. Larence, 132.
Richards v. Crocker, 64. Rizer v. Perry, 203.
Richards v. Keyes, 540, 541. Roach's Estate, In re, 356, 399.
Richards v. Merrimack & C. R. R. R., Roach's Ex'r v. Hopklnsville, 219.
443. Robb V. Day, 545.
Richards v. Parsons, 56. Robb V. Washington & JefCerson Col-
Richards v. Pitts, 147. lege, 39, 40, 77, 159, 160, 163, 436.
Richards v. Rote, 284. Robbins ,v. Boulder County Com'rs,
Richards v. Seal, 488. 228.
Richards v. Wilson, 59, 248, 255. Robbins v. Robbins, 61, 112.
Richardson, Ex parte, 302. Robbins v. Smith, 580.
Richardson, In re, 301. Robert, Ex parte, 265.
Richardson ^. Adams, 140. Robert V. Tift, 304.
Richardson v. Essex Institute, 194, Roberts, Appeal of, 62,
212, 219, 270, 426. Roberts v. Broom, 480.
Richardson v. Haney, 512. Roberts v. Hale, 301.
Richardson v. Inglesby, 45. Roberts v. Hall, 445.
Richardson v. McConaughey, 545. Roberts v. Mansfield, 506.
Richardson v. Morey, 346, 379. Roberts v. Moseley, 268.
Richardson v. Mounce, 488. Roberts v. N. Y. El. R. R. Co., 452.
Richardson v. MuUery, 219, 269. Roberts v. Roberts, 284, 338.
Richardson v. New Orleans CofCee Roberts v. Stevens, 183.
Co., 18. Roberts' Will, In re, 385, 413.
Richardson v. Richardson, 474. Robertson v. De Brulatour, 259, 261.
Richardson v. Stodder, 432. 3^1, 410.
Richardson v. Van Auken, 396. Robertson v. Howerton, 61.
Richardson's Adm'rs v. Spencer, 332. Robertson v. Johnston, 181.
Richmond v. Arnold, 273. Robertson v. McCarty, 85, 86.
Richelieu Hotel Co. v. Miller, 529. Robertson v. Robertson's Trustee, 352,
Richtman v. Watson, 192.
478.
Ricks V. Reed, 510. Robertson v. Sublett, 477.
Ricords v. Watkins, 559. Robertson v. Wood, 553.
Riddle v. Cutter, 250. Robinson, In re, 269.
Ridenour v.. Wherritt, 268. Robinson v. Adams, 463.
Rider v. Maul, 559. Robinson V. Appleby, 80, 83, 85, 86,
88.
Rldgely V. Gittings, 416.
Ridgely v. Carey, 15. Robinson v. Bonaparte, 168.
Ridley v. Dedman, 352, 360, 361. Robinson v. Cogswell, 53, 277.
Riechauer v. Born, 50. Robinson v. Crutcher, 262.
Riemensnider v. Riemensnlder, 574. Robinson v. Cruzen, 132.
Rienzi v. Goodin, 186. Robinson v. Denson, 140.
Riggs V. Cragg, 389. Robinson v. Harkin, 491.
Riggs V. Palmer, 120. Robinson V. Ingram, 306.
Riker v. Leo, 197. Robinson v. Mauldin, 446.
Riley V. Cummings, 516, Robinson v. Robinson, 305, 480.
638 CASES CITED
[The figures refer to pages]

Bobinson v. Springfield Co., 438 Ross V. Hegeman, 95.

Robinson v. Tower, 410, 507. Ross V. Hendrix, 517.
Robinson v. Woodward, 530. Rotch V. Emerson,' 202, 219.
Robinson's Trust, In re, 380. Rothaug's Estate, In re, 277.
Robinson's WUl, In re, 202, 214, 226, Rothenberger v. Garret, 262.
426. Rothschild v. Dickinson, 343, 410.
Robison v. Carey, 467. Rothschild v. Goldenberg, 272.
Robison v. Codman, 432. Rothschild v. Roux, 437.
Robles V. Clarke, 470. Rothschild's Assigned Estate, In re,
Roca V. Byrne, 24. 409.
Roche George's Ex'r, 74, 77.
V. Roug V. Haller, 175.
Roche Roche, 126.
V. Rouse v. Rouse, 333, 551.
Rochefoucauld v. Bonstead, 127. Roush V. Griffith, 543.
Rochester Trust Co. v. White, 95. Rousseau v. Call, 66.
Roekafellow v. Peay, 433. Rowe, In re, 409.
Rockwood T. School Dist. of Brook- Rowe V, Bentley, 356.
line, 521. Rowe Rand, 33, 34.
V.
Rodbard v. Cooke, 484, 491. Rowe Rowe, 269.
V.
Roddy T. Roddy, 52. Rowland v. Haddock, 319, 498.
Rodney v. Shankland, 246, 446. Royal y. Royal, 418.
Roe V. Doe, 255, Ro.vail's Adm'r v. McKenzie, 485.
Roediger v. Kraft, 559. Royer's Estate, In re, 227, 229.
Rogan Walker, 103.
V. Rozell V. Vansyckle, 58.
Roger's Estate, In re, 49. . Rua V. Watson, 516.
Roger Williams Nat. Bank v. Groton Ruann Coates, 57.
v.
Mfg. Co., 297. Rubey Barnett, 31.
v.
Rogers v. Colt, 434. Ruckman v. Cox, 543.
Rogers v. Daniel!, 468. Rudd V. Van der Hagan, 5L
Rogers v. Donnellan, 109. Ruddick v. Albertson, 425.
Rogers v. Murray, 104. Rudolph, Matter of, 83.
Rogers v. Penobscot Min. Co., 150, Rue V. Meirs, 464.
474. Rugely V. Robinson, 181.
Rogers v. Rea, 279, 284. Ruggles V. Merritt, 131.
Rogers v. Rogers, 54, 250, 259. Ruhe V. Ruhe, 122.
Rogers v. ScarfC, 517. Runk V. Thomas, 399.
Rogers v. Tyley, 309. Runnels v. Jackson, 105.
Rolfe & Rumford Asylum v. Lefebre, Rush V. McPherson, 132.
233, 306, 565. Rush y. Mitchell, 519.
Rolikatis v. Lovett, 142. Rush V. South Brooklyn Sav. Inst, 85,
Roller V. Catlett, 284. 87.
Rollins V. Marsh, 35. Rusling V. Rusling, 24.
Rollins V. Merrill, 222. Russel V. Huntington Nat. Bank, 546. i

Romaine v. Hendrickson's Ex'rs, 337. Russell, Appeal of, 575.

Roney's Estate, In re, 546. Russell V. Allen, '211.
Rong V. Haller, 159, 173. Russell V. Bruer, 56.
Rooker v. Rooker, 518. Russell T. Fish, 53, 548.
Roosevelt v. Carow, 70. Russell V. Grinnell, 580.
Roosevelt v. Roosevelt, 346. Russell V. Hartley, 327, 573.
Root V. Blake, 577. Russell V. Hilton, 163.
Root V. Yeomans, 369. Russell V. Jackson, 139.
Rosa V. Hummel, 95. Russell V. Miller, 548.
Roscoe (Bolton) Ltd. v. Winder, 526. Russell V. Milton, 444.
Rose V. -Hayden, 125. Russell v. Stinson, 151.
Rose y. Rose, 257. Russell V. U. S. Trust Co. of New
Rose V. Treadway, 124. York, 50.
Rose's Will, In re, 565. Russell V. Webster, 40.
Ross V. Ashton, 444. Russell's Patent, In re, 251.
Ross V. Conwell, '412. Rutherford v. Carpenter, 140.
Ross V. Davis, 119. Rutherford v. Ott, 371.
 CASES CITED 639
[The figures refer to pages]

Rutherford Land & Improvement Co. Salisbury v. Clarke, 97.

V. Sanntrock, 280. Salisbury v. Slade, 163.
Rutherfurd v. Myers, 399. Sallee v. Chandler, 335.
Rutledge's Adm'r v. Smith's Ex'rs, 139. Salter v. Salter, 268.
Ryan v. Ashton, 145. Saltonstall v. Sanders, 217.
Ryan t. Bibb, 319. Sam V. Ludtke, 24.
Ryan v. Dox, 132. Sampson v. Mitchell, 312.
Ryan v. Lofton, 61. Sanchez v. Dow, 544.
Ryan v. Williams, 126. Sander's Heirs v. Morrison's Ex'rs,
Ryder v. Loomis, 150. 280.
Ryder v. Lyon, 46. Sanders v. Houston Guano Co., 304.
Ryder v. Ryder, 126. Sanderson v. White, 199, 247, 327, 570.
Ryland Banks, 434.
v. Sandlin v. Bobbins, 188.
Rynd Baker, 574.
v. Sands V. Old Colony Trust Co., 249,
Rywolt's Estate, In re, 209. 575, 577.
Sandusky v. Sandusky, 202, 205, 247.
Sanford v. Hamner, 122.
Sanford v. Sanford, 281.
Saar v. Weeks, 122. Sanford's Estate, In re, 161.
Sackman v. Campbell, 545. San Francisco Nat. Bank v. American
Sacramento Bank v. Alcorn, 161. Nat. Bank, 22.
Sacramento Bank v. Montgomery, 172. Sanger v. Bourke, 344.
Sadler, Appeal of, 519. Sangston v. Gordon, 426.
Safe-Deposit & Trust Co. v. Cahn, 511. Sangston v. Hack, 268.
Safe Deposit & Trust Co. v. Diamond Sansom v. Ayer & Lord Tie Co., 46.
Nat. Bank, 458. Santa Marina Co. v. Canadian Bank
Safe Deposit & Trust Co. v. White, 383. of Commerce, 453, 458.
Safe Deposit & Trust Co. of Baltimore Sargent v. Baldwin, 248.
V. Independent Brewing Ass'n, 183. Sargent v. Cornish, 220, 255.
Safford v. Rantoul, 280. Sargent v. Eureka Spund Apparatus
St. Catherine's Cemetery v. Fidelity Co., 512.
Trust Co., 55. Sargent v. Sargent, 390.
St. James Church v. Wilson, 228. Sartor v. Newberry Land & Security
S_t. James .Orphan Asylum v. Shelby, Co., 409.
226. Satterfield v. John, 274.
St. John V. Andrews Institute for Satterthwaite's Estate, In re, 265, 281.
Girls, 238. Saunders v. Edwards, 154.
St. John V. Dann, 445. Saunders t. Harris, 74.
St. Joseph Mfg. Co. v. Daggett, 512, Saunders v. Richard, 334, 335, 336, 510,
513. 582.
St. Leger, Appeal of, 145. Saunders v. Schmaelzle, 328.
St. Louis & S. P. R. Co. T. Johnston, Saunders v. Vautier, 237, 342, 579.
18. Savage v. Bumham, 163.
St. Luke's Hospital v. Barclay, 537. Savage v. Gould, 276, 363.
St. Mary's Church of Burlington v. Sawtelle v. Witham, 283.
Stockton, 461. Sawyer, Appeal of, 267.

St. Mary's Hospital v. Perry, 268.

Sawyer v. Dearstyne, 212.
St. Michael's Church, In re, 247.
Sawyer v. Issenhuth, 143.
St. Nicholas Bank v. State Nat. Bank,
Sayles v. llbbitts, 434.

22. Sayre v. Sayre, 322.

St. Paul's Church v. Attorney General, Sayre v. Townsend, 106, 107.
Sayre v. Weil, 81, 453.
237 551.
Kittson, 356. Sayre's Will, In' re, 425.
St. Paul Trust Co. v.
St. Paul Trust Co. v. Strong, 330, 336, Scadden Flat Gold-Min. Co. v. Scad-
498, 499, 541. den, 150.
Thornberry, 50. Scallan v. Brooks, 83, 86.
Sale V.
Schaefer, In re, 380, 386, 390, 416.
Salem Capital Flour Mills Co. v. Stay-
ton Water-Ditch & Canal Co., 423. Schafer v. Olson, 20.
Salisbury v. Bigelow, 305. Schaffer v. Wadsworth, 360.
€40 CASES CITED
[The figures refer to pages]

Schehr v. Look, 284. Scoville V. Brock, 358.

Scheib v. Thompson, 359. Scribner v. Meade, 123.
Schell, In re, 410. Scrivens v. North Easton Sav. Bank,
Schenck v. Barnes, 186, 428. 39, 83, 84.
Sclienck v. Ellingwood, 309. Scudder v. Burrows, 421.
Schenck v. Schenck, 281. Seabrook v. Grimes, 45.
Schenck v. Wicks, 511. Seacoast R. Co. v. Wood, 122, 143,
Schenectady Dutch Church v. Veeder, Seaman v. Harmon, 250, 433.
157. Sears, In re, 264.
Schermerhom v. Cotting, 173, 175 Sears v. Attorney General, 192.
Scherrer's Estate, In re, 446. Sears v. Chapman, 211.
Schierloh v. Schierloh, 106, 109. Sears v. Choate, 577.
Schiffman v. Schmidt, 340. Sears v. Cunningham, 48,
Schlereth v. Schlereth, 175. Sears v. Hardy, 475.
Schley, In re, 380. Sears v. Russell, 331.
Schlosser v. Schlosser, 560. Second East Dulwich Soc, In re, 487,
Schluter v. Bowery Savings Bank, 257. 491. '

Schmidt V. Schmidt, 551. Second Nat. Bank of Columbia v.

Schneider v. Hayward, 421. Cummings, 19i
Schneider v. Schneider, 148. Second Religious Soc. of Boxford v.
Schneider v. Sellers, 510. Harriman, 551.
Schnerlnger v. Schnerlnger, 124. Second Unitarian Society in Portland
Schoch, Appeal of, 421. V. Woodbury, 470.
SchoUe V. SchoUe, 338. Second Universalist Church of Stam-
School Directors v. Dunkleberger, '464. ford V. Colegrove, 381.
School Trustees v. Kirwin, 527, 529. Security Bank of New Xork v, Calla-
Schouler, Ex parte, 264. han, 434.
Schouler, In re, 209, 425. Security Co. v. Snow, 323.
Schrager v. Cool, 118. Security Trust Co. v. Merchants' &
Schreyer v. Schreyer, 70, 77, 250, 268, Clerks' Sav. Bank, 310.
565. Security Trust Co. v. Rammelsburg,
Schriver v. Frommel, 297, 409, 575. 381.
Schroeder v. Jahns, 550. Security Trust & Safe Deposit Co. v.
Schroeder v. Woodward, 314. - Farrady, 71.
Sehuler v. Post, 185. Security Trust & Safe Deposit Co. v.
Schuler v. Southern Iron & Steel Co., Martin, 434.
474. Security Trust & Safe Deposit Co. v.
Schultz, Appeal of, 136. Ward, 288.
Schultz V. Scott, 56. Seda V. Huble, 427.
Schumacher v. Draeger, 292. Sedgwick's Curator v. Taylor, 395.
Schur, Apjfeal of, 148. See, In re, 528.
Schuster v. Crawford, 317. Seefried v. Clarke, 49.
Schuyler v. Littlefield, 521, 526, 527. Seely v. Fletcher, 437.
Schwartz, In re, 165. Seely v. Hills, 326.
Schwartz v. Gerhardt, 473. Seger v. Farmers' Loan Trust Co., &
Schwarz v. Wendell, 335, 409. 378.
Schwebel v. Wohlsen, 447. Self V. Krebs, 306.
Scott V. Calladine, 110. Seilert v. McAnally, 35.
Scott V. Freeland, 337, 338. Selter's Estate v. Mowe, 529.
Scott V. Gallagher, 514, 517. Seitz v. Seitz, 562.
Scott V. Gittings, 431. Selby v. Case, 67.
Scott V. Harbeck, 85. Selden v. Vermilya, 163, 165, 568.
Scott V. Jones, 32. Seligman v. Sellgman, 349.
Scott V. Ocean Bank in City of New Selleck, In re, 404, 498.
York 19, Sellers M. E. Church's Petition, In re,
Scott v. Rand, 274, 275. 570.
Scott Trustees of Marion Tp., 356.
V. Sells V. Delgado, 269, 284.
Scott West, 179.
V. Selous, In re, 571.
Scott's Estate, In re, 397. Selwyn & Co. v. Waller, 144.
 CASES CITED 641
[The figures refer to pages]

Sentill V. Robeson, 432. Sherman v. Parish, 540.

Servis v. Nelson, 472. Sherman v. Richmond Hose Co., 227,
Sessions v. Doe ex dem. Reynolds, 448. Sherman v. Skuse, 184, 444.
Seven Corners Bank, In re, 21. Sherman v. White, 833.
Sewall V. Roberts, 250. Sherrill v. Shuford, 409.
Seymour, In re, 204. Shield V. B. S. Adkins &
Co., 56.
Seymour v. Freer, 550. Shields v. Jolly, 196, 199, 262.
Seymour v. McAvoy, 183. Shields v. McAuley, 138.
Seymour v. Sanford, 49. Shields V. Thomas, 521.
Shackleford v. Elliott, 431. Shields' Estate, In re, 348.
Shacklett v. Ransom, 308. Shillinglaw v. Peterson, 323, 573.
Shaeffer's Estate, In re, 293. Shippey v. Bearman, 61.
ShafEer v. Fetty, 476. Shipton Norrid, 319.
v.
Shaffer's Estate, In re, 375. Shirk's Estate, In re, 580.
Shakeshaft, Ex parte, 484. Shlrkey v. Kirby, 311.
Shanahan v. Kelly, 198, 210. Shirley v. Shattuck, 372, 510.
Shanks v. Edmondson, 506. Shoemaker, Appeal of, 573.
Sharman v. Jackson, 567. Shoemaker v. Board of Com'rs of
Shattuck's "Will, In re, 193, 200. Grant County, 254.
Shaw V. Bernal, 111. Shoemaker Hinze, 16.
v.
Shaw V. Bridgers, 305. Shoemaker Smith, 109.
v.
Shaw V. Canfield, 321. Shoe & Leather Nat. Bank v. Dix, 300.
>Shaw V. Cordis, 391. Shope V. Unknown Claimants, 426.
Shaw V. Devecmon, 368. Shopert v. Indiana Nat. Bank, 527.
Shaw V. Paine, 283. Short V. Wilson, 565, 582.
Shaw V. Shaw, 102. Shortz V. Unangst, 324.
Shaw V. Ward, 425. Shotwell V. Mott, 262.
Shotwell V. Stickle, 110.
Shawnee Commercial & Savings Bank
Shrader v. Shrader, 101, 114.
V. Miller, 37, 144.
SheafC's Estate, In re, 344.
Shrewsbury v. Hornby, 206. ,

Shriver v. Montgomery, 179.

Sheaffer's Estate, In re, 287, 293.
Shuey v. Latta, 363.
Sheedy V. Roach, 158. Shunk, Appeal of, 413.
Sheehan v. Sullivan, 53. Shute V. Hinman, 479.
Sheet's Estate, In re, 287.
Shyrock v. Waggoner, 257.
Sheffield v. Cooke, 376.
Sickles V. New Orleans, 574.
Shelby v. Crelghton, 336.
Siedler v. Syms, 168, 171.
Sheldon v. Chappel, 425. Siemon v. Schurck, 112.
Sheldon t.- Sheldon, 551. Signs V. Bush's Estate, 113.,
Shelton v. Harrison, 104, 154. Silliman v. Gano, 477.
Shelton v. Homer, 290. Silver King Consol. Min. Co. of Utah
Shelton v. Jones' Adm'x, 284. V. Silver King Coalition Mines Co.
Shelton v. King, 183. of Nevada, 397.
Shepard v. Abbott, 34. Silvers v. Canary, 267.
Shepard v. Meridian Nat. Bank, 284. Simmons v. Dlnsmore, 516.
Shepard v. Shepard, 395. Simmons v. McKinlock, 286.
Shepherd v. Darling, 330. Simmons v. Northwestern TruSt Co.,
Shepherd v. Harris, 486. 578.
Shepherd v. McEvers, 271, 511. Simmons v. Oliver, 362, 478.
Shepherd v. Todd, 309. Simmons Richardson, 463.
v.
Shepherd v. White, 110, 319. Simmons' Ex'r v. Hunt, 198, 203.
Sheppard v. Turpin, 559. Slmonds v. Simonds, 156i
Sherburne v. Morse, 447. Simonin's Estate, In re, 582.
Sherley v. Sherley, 55. Simons v. Southwestern R. Bank, 516.
Sherlock v. Thompson, 570, 572. Simons' Will, In re, 395.
Sherman v. Baker, 210, 221. Simpson, Appeal of, 399.
Sherman v. Congregational Home Mis- Simpson v. Corder, 47.
sionary Soc, 215. Simpson v. Simpson, 161, 245.
Sherman v. Havens, 183. ' Simpson v. Waldby, 22.
Sherman v. Lanier, 333, 363. Simpson v. Welcome, 205.
BoGEET Trusts—41
 642 CASES CITED
[The figures refer to pages]

Sims V. Brown, 574. Smith V. Hewlett, 541.

Sims V. Sims, 156. Smith V. Keteltas, 295, 376.
Simson v. Klipstein, 317. Smith V. Kinney's Ex'rs, 576.
Sinclair v. Gunzenhauser, 434. Smith V. Lansing, 272, 389.
Sinclair v. Jackson ex dfem. Field, 325. Smith V. McWhorter, 156.
Singleton v. Cuttino, 323. Smith V. Metcalf, 566.
Singleton v. Lowndes, 356, 417. Smith V. MiUer, 336, 337, 404, 541.
Sinnott v. Moore, 159, 183. Smith V. Moore, 343.
Sisemore v. Pelton, 104. Smith V. Orton, 447.
Sizemore v. Davidson, 545. Smith V. Pettigrew, 486.
Skaben v. Irving, 104. Smith V. Pond, 217.
'
Skeen v. Marriott, 154, 244. Smith V. Portiand, 317.
Skehill V. Abbott, 105, 108. Smith V. Ricords, 559.
Slade V. Patten, 168, 171. Smith V. Robinson, 352, 395, 400.
Slater v. Oriental Mills, 529, 534. Smith V. Security Loan Trust Co.,&
Slater v. Rudderforth, 156. 156.
Slater v. Slater, 436. Smith V. Settle, 559.
Slatter v. Carroll, 474. Smith V. Smith, 54, 109, 121, 156, 317,
Slee V. Bloom, 38. 426, 447, 478, 581.
Sleeper v. Iselin, 511. Smith V. Speer, 81, 84.
Slevin v. Brown, 156, 573. Smith V. Strahan, 102.
Sloan V. Birdsall, 426. Smith V. Thomas, 497.
Sloan V. Sloan, 73. Smith V. Towers, 1,83.
Sloan's Estate, In re, 383. Smith V. T^ownsend, 233."
Sloane v. Cadogan, 76. Smith V. Turley, 104, 548.
Slocum, In re, 419. Smith V. Walker, 403.
Slocum V. Ames, 385. Smith V. Walser, 119.
Small V. Hockinsmith, 120, 506, 547. Smith V. Wildman, 446.i
Smalley v. Paine, 53, 448. Smith V. Witter, 434.
Smallwood v. Lawson, 396. Smith Wright, 121.
V.
Smart v. Durham, 212, 222, 232. Smith's Estate, In re, 63, 68, 71; 72,
Smick's Adm'r v. Beswick's Adm'r, 75, 87, 88, 89, 219, 220, 223, 232,
548. 276, 382.
Smisson, In re, 168. Smith's Ex'r v. Cockrell, 438.
Smith, In re, 351. Smith's Guardian v. Holtheide, 548.
Smith V. A. D. Farmer Type Founding Smitheal v. Gray, 438.
Co., 309. Smullia v. Wharton, 138, 139, 158.
Smith V. Allen, 520. Smyth V. Burns' Adm'rs, 358.
Smith T. American Nat. Bank, 466. Snead v. Bell, 29.
Smith V. Chenault, 433. Sneer v. Stutz, 265.
Smith V. Collins, 440. Snell V. Payne, 567.
Smith V. Combs, 551. Snelling v. American Freehold Land
Smith V. Cotting, 382. Mortgage Co., 316.
Smith V. Dallas Compress Co., 559. Snelling v. McCreary, 349.
Smith V. Dana, 381. Snider v. Johnson, 557.
Smith V. Darby, 448, 497. ,
Snodgrass v. Snodgrass, 421, 554, 573.
Smith V. Dunwoody, 566. Snyder v. Collier, 311.
Smith V. Floyd, 324. Snyder v. Parmalee, 467.
Smith V. Frost, 477. Snyder v. Safe-Deposit & Trust Co.,
Smith V. Fuller, 355. 324.
Smith V. Gardiner, 205. Snyder v. Snyder, 61, 547, 548.
Smith V. Gibson, 375. Snyder v. Toler, 50.
Smith V. Glover, 551. Snyder's Adm'rs v. McComb's Ex'x,
Smith V. Greeley, 407. 478.
Smith V. Harrington, 579. Snyder's Will, In re, 264, 350.
Smith V. Havens Relief Fund Soc., Socher, Appeal of, 138.
189. r Society for Promoting Theological Ed-
Smith V. Haynes, 306. ucation V. Attorney General, 233.
Smith V. Hooper, 385. Society of Cincinnati, Appeal of, 448.
Smith V. Howell, 62. Soderberg v. McRae, 471,
 CASES CITED 643
[The figures refer to pages]
Soehnlein v. Soehnlein, 384. Sprague v. Woods, 71.
Sohier v. Eldredge, 294, 376, 38& Spreckel's Estate, In re, 292.
Sollee V. Croft, 337, 554. Spring V. Hight, 110.
Somers v. Craig, 283. Spring's Estate, In re, 577.
Sommers v. Beunett, 334. Springer v. Arundel, 424.
Sorrells v. Sorrells, 510. Springer v. Berry, 257.
Sortore v. Scott, 478. Springs v. Hopkins, 156, 250.
Soulard's Estate, In re, 46, 158. Sprinkle v. flayworth, 135.
South End Alining Co. v. Tinney, 121. Sprinkle v. Holton, 544.
South End Warehouse Co. v. Lavery, Stafford, In re, 355.
314. Stafford v. American Missionary
Southern Bank of Fulton v. Nichols, Ass'n, 274.
111, 546. Stafford v. Stafford, 132.
Southern Cotton Oil Co. v. ElUotte, Staff ord's_ Estate, In re, 578.
.527, 530. Stainback v. Junk Bros. Lumber &
Southern Nat. Life Ins. Co. v. Ford's Mfg. Co., 520.
Adm'r, 435,
440, 441. Staines v. Burton, 236.
Southern Pac. R, R. Co. v. Doyle, 428. Stahl V. Stahl, 129, 371, 537.
Southern K. Co. v. Glenn's Adm'r, 410, Stahl V. Stevenson, 124.
414, 498. Stall V. Cincinnati, 460.
Souverbye v. Arden, 69. Stamford Trust Co. v. Mack, 294.
Souza V. First Nat. Bank of Hanford, Standish v. Babcock, 523, 530.
58. Stanley v. Colt, 451.
Sowers v. Cyrenius, 284. Stanley v. Thornton, 182.
Spalding v. Shalmer, 483. Stanley's Estate v. Pence, 496, 497,
Spallholz V. Sheldon, 554. 551.
Spangler v. York Co., 375. Stanly v. McGowen, 232, 551.
Spangler's Estate, In re, 376, 414. Stanton v. Helm, 553, 555.
Sparhawk v. Allen, 142. Stanwood v. Wishard, 546.
Sparhawk v. Sparhawk, 275. Stapleton v. Brannan, 188.
Sparrow v. Sparrow, 182. Stapyleton v. Neeley, 327.
Spatz's Estate, In re, 478. Starbuck v. Farmers' Loan & Trust /

Spaulding v. Collins, 55, 545. Co., 252.

Speakman v. Tatem, 339, 399. Starcher Bros. v. Duty, 169.
Speed V. St. Louis, M. B. T. E. Co., Stark, Appeal of, 372.
155. Stark's Estate, In re, 478.
Speer v. Colbert, 252. Stark's Will, In re, 179.
Speidel v. Henrici, 542. Starke v. Starke, 554.
Speight V. Gaunt, 481. Starkweather v. Jenner, 308, 336.
Spencer, In re, 101. Starr, In re, 371, 404.
Spencer v. Clarke, 468. Starr v. Minister & Trustees of Starr
Spencer v. Lyman, 460. Methodist Protestant Church, 233.
Spencer v. Richmond, 130, 440. Starr t. Selleck, 213.
Spencer v. Spencer,' 374, 375, 416, 485. Starr v. Starr Methodist Protestant
Spencer v. Weber, 306, 347. Church, 168.
Spence v. Widney, 573. Starr v. Wiley, 276, 537.
Spengler v. Kuhn, 284. Starr v. Wright, 245.
Spering, Appeal of, 38. State V. Ausmus, 275.
Sperry v. Farmers' Loan & Trust Co., State V. Bank of Commerce, 22, 479,
249. 521, 523.
Spokane County v. First Nat. Bank, State V. Banks, 502, 503.
479, 523. State V. Bruce, 532.
Spooner v. Lovejoy, 53. State V. Fleming, 278.
Spradling v. Spradllng, 101, 110. State V. Foster, 524, 525, 530.
Sprague v. Moore, 434. State V. Gerard, 214.
Sprague v. Smith, 299. State V. Graham, 502.
Sprague v. Sprague, 154. / State V. Griffith, 196.
Sprague v. Trustees of Protestant Ep- State V. Guilford, 485, 486.
iscopal Church of Diocese of Michi- State V. Higby Co., 255.
gan, 98, 545. State V. Howarth, 499, 502.
644 CASES CITED
[The figures refer to pages]

State V. Hunter, 502. Stevens, In re, 387, 390.

State V. Illinois Cent. B. Co., 398. Stevens v. Bagwell, 245.
State V. Johnson, 145. Stevens v. Bosch, 317.
State V. Merrill, 334. Stevens v. Burgess, 265. '

State V. Piatt, 408. Stevens v. Fitzpatrick, 44.

State V. President, etc. of Bank of Stevens v. Hince, 443.
'Maryland, 245. Stevens v. Home Ins. Co., 325.
State V. Superior Court, 472. Stevens v. Melcher, 304.
State V. Thresher, 501. Stevens v. Meserve, 361.
State V. Toledo, 255. Stevens' Estate, In re, 262, 394.
State V. Warren, 196. Stevenson v. Evans, 169.-
State V. Willard, 3T0. Steward v, Hackler, 95.
State Bank v. Macy, 443. Steward v. Traverse City State Bank,
State Bank of Bay City v. Chapelle, 331.
162. '
Stewart, In re, 257, 348.
State Bank Stewart
of St. Johns v. McCabe, v. Chadwick, 537.
453. Stewart v. Conrad's Adm'r, 554.
State Bank of Winfleld v. Alva Secu- Stewart v. Coshow, 168, 223.
rity Bank, 528. Stewart v. Franchetti, 202, 281, 570.
State ex rel. Hindman v. Eeed, 15. Stewart v. Greenfield, 515.
State ex rel. Jones v. Jones, 147. Stewart Harris, 335.
v.
State ex rel. Stanly v. McGowen, 551. Stewart Pettus, 324.
v.
State Nat Bank v. First Nat. Bank, Stewart v. Phelps, 385.
20. Stewart's Adm'r v. Carneal, 338.
State Sav. Bank v. Thompson, 526. Stewart's Estate, In re, 157, 199, 203,
State to Use of Napton v. Hunt, 278. 212, 490, 580.
Staub V. Williams, 184. Stianson v. Stianson, 545, 562.
Steacy v. Rice, 567.i Stier v. Nashville Trust Co., 580.
Stead, In re, 140. Still V. Ruby, 257.
Stearly, Appeal of, 413, 497. Stirk's Estate, In re, 139.
Stearns v. Newport Hospital, 255, 394. Stitzer v. Whittaker, 318.
Stearns v. Palmer, 464. Stock's Ex'x v. Stock's Ex'r, 15.
Stebbins v. Lathrop, 269. Stockard v. Stockard'^ Adm'rs, 582.
Steele v. Clark, 24. Stockert v. Dry Dock Sav. Inst., 83,
Steele v. Lowry, 69. 88, 89.
Steele's Estate, In re, 161, 179. Stockett V. Ryan, 574.
Steere v. Steere, 61.
'

Stockton V. Ford, 142.

Stelglitz V. Attorney General, 243. Stockwell V. Stockwell's Estate, 396,
Stein V. National Bank of Commerce, 400.
248. Stoddard v. Smith, 516.
Stein V. Safe Deposit & Trust Co. of Stoepel V. Satterthwaite, 203,
Baltimore, 323, 328. Stokes, Appeal of, 573.
Steinbeck v. Bon Homme Min. Co., 336. Stokes V. McKibbin, 432.
Steinke v. Yetzer, 306. Stoll V. Smith, 556.
Steinmetz's Estate, In re, 432. Stoller V. Ooates, 507, 532.
Steinway v. Steinway, 409, 474, 475. Stone, In re, 565.
Stell, Appeal of, 485. Stone V. Bishop, 87.
Stephens v. Dayton, 169. Stone V. Bradlee, 388.
Stephens t. Dubois, 543. Stone V. Burge, 114.
Stephens Louis Union Trust Co., Stone
v. St. V. Clay, 352.
103. Stone V. Farnham, 417.
Stephens' Ex'rs v. Milnor, 375. Stone V. Fowlkes, 472.
Sterling, In re, 278. Stone V. Griffin, 270.
Sterling v. Gregory, 374. Stone Hackett, 65, 250.
V.
Sterling v. Ives, 183, 394. Stone Hinton, 387.
V. .

Sterling v. Sterling, 334. Stone V. Kahle, 359, 516.

Sterling v. Tantum, 468. Stone V. King, 65, 70, 73, 74.
Sternberg & Co. v. Lehigh Val. E. Co., Stone V. Middleton, 55.
29. Stong's Estate, In re, 494.
Sternfels v. Watson, 547. Storm V. McGrover, 107, 114.
 CASES CITED 645
[The figures refer to pages]

Storrs V. Burgess, 169. Sutro's Estate, In re, 193.

Storrs V. Flint, 343. Suydam v. Dequindre, 73, 446.
Storrs V. Wallace, 518. Swan V. Produce Bank, 516.
Storrs Agr. School v. Whitney, 234, Swartswalter's Account, In re, 417. •

235, 270. Swartz Duncan, 309.

V.
Story V. Palmer, 260. Swasey v. American Bible Soc, 214,
Stott V. Milne, 299. 223.
Stoutenburgh v. Moore, 287. Swearuigham v. StuU's Ex'rs, 15.
Stover V. Webb,
327. Sweeney v. Sampson, 201, 213.
Stowe V. Bowen,
485^ Sweet V. Jacocks, 334.
Strasner v. Carroll, 132. Sweigart v. Frey, 389.
Stratton v. Edwards, 63, 315. Swift V. Craighead, 147, 335.
Stratton v. McKinnie, 52, 435^ Swift V. Smith, 546.
Stratton v. Stratton's Adm'r, 452, 501. Swift V. State Lumber Co., 317.
Straut, Matter of, 316. Swift V. Vermont Mut. Fire Ins. Co.,
Straw, Petition of, 283. 369.
Strayhorn v. Green, 264. Swift V. Williams, 519.
Streater's Estate, In re, 306, 460. Switzer v. Skiles, 330.
Streitz v. Hartman, 548. Swoope V. Trotter, 518,
Strickler's Estate, In re, 274, 275. Sydnor v. Palmer, 423.
Striker v. Daly, 323, 324. Sykes v. Kruse, 336.
Strimpfler v. Roberts, 102, 156, 544.
Stringer v. Montgomery, 61.
Stringer v. Yonng, 184. Taber v. BaUey, 508, 579.
Strobel's Estate, In re, 265. Taber Zehner, 59.
v.
Strong, Appeal of, 201, 214. Tabernacle Baptist Church v. Fifth
Strong V. Doty, 247, 449. Ave. Baptist Church, 334.
Strong V. Dutcher, 336, 347, Taft V. Decker, 343.
Strong V. Weir, 574. Taft V. Smith, 346, 347, 363.
Strother v. Barrow, 199. Taft V. Stow, 536.
Strout v.. Strout, 169. Tainter v. Broderick Land & Inv. Co.,
S,tuart V. Easton, 219. 96.
Stuart V. Meyer, 551. Tainter v. Clark, 570.
Stubbins' Adm'r v. Briggs, 558. Talbot v. Milliken, 380.
Stubinger v. Frey, 146. Talbot V. Talbot, 70, 158.
StuU V. Harvey, 340. Talbott V. Barber, 519.
Stump V. Warfleld, 435. Talcott V. American Board Com'rs foi
Sturgis, In re, 243. /
Foreign Missions, 60.
Sturtevant v. Jaques, 59. Talley v. Ferguson, 436.
Sturtevant v. Sturtevant, 126. T. A. Mclntyre & Co., In re, 526.
Suarez v. De Montigny, 308. Tanner v. Hicks, 151.
Suit V. Creswell, 276. Tappan v. Deblois, 196, 427.
Sullivan v. Babcock, 159. Tarbert v. Rollins, 447.
Sullivan v. Fant, 56. Tarbox v. Grant, 69, 252.
Sullivan v. Latimer, 286. Tarbox v. Tarbox, 120, 346, 403.
SuUivan v. Lattinier, 511. Tarrant v. Swain, 433.
Sullivan v. McLenans, 109. Tate V. Woodyard, 247, 306.
Sullivan v. Ross' Estate, 398. Tatem v. Speakman, 477.
Sullivan & Co. v. Ramsey, 506. Tatum V. McLellan, 335.
Summers v. Higley, 426. Taylor, In re, 486, 491.
Summers v. Moore, 101. Taylor v. Astor Nat. Bank, 456.
Sunderland v. Sunderland, 110. Taylor v. Blair, 544.
Supreme Lodge of Portuguese Frater- Taylor v. Brown,
292.
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526. Taylor v. Clark, 311.

Supreme Lodge, Knights of Pythias Taylor v. Coggins; 542, 546.

Taylor v. Columbian University, 213.
V. Rutzler, 577.
Susmann v. Toung Men's Christian Taylor v. Crosson, 98, 169.
Ass'n of Seattle, 199. Taylor v. Davis, 34, 296, 298.
 646 CASES CITED
[The figures refer to pages]

Taylor v. Denny, 371, 372, 410. Thistlethwaite, In re, 251.

Taylor v. Fox's Ex'rs, 120, 138. Thom's Ex'r v. Thorn, 414, 419, 578.
Taylor v. Harwell, 439, 441. Thomas v. Bowman, 315.
Taylor v. Huber's Ex'rs, 578." Thomas v. Glendinning, SSI, 552.
Taylor v. James, 250. Thomas v. Goodbread, 132.
Taylor v. KeUey, 123. Thomas v. Gregg, 380, 383.
Taylor v. Lowenstein, 150. Thomas v. Harknqss, 468.
Taylor v. Morris, 551. Thomas v. Merry, 59, 130.
Taylor v. Mulllns, 121. Thomas v. Newburgh Sav. Bank, 84,
\ X Taylor v. Kichards, 567. 88, 90.
Taylor v. Roberts, 485. Thomas v. Scruggs, 479, 485, 494.
Taylor v. Rogers, 569. Thomas v. Thomas, 168, 409.
Taylor v. Taylor, 369, 577. Thomas v. Walker, 438.
Taylor v. Thompson, 97. Thomassen v. Van Wyngaarden, 30.
Taylor v. Watkins, 262. Thompson, Appeal of, 528, 529.
Teal V. Pleasant Grove Local Union Thompson v. Adams, 53.
No. 204, 2, 46. Thompson v. American Optical Co.,
Tecumseh Nat. Bank v. Russell, 119. 299.
Teegarden v. Lewis, 332. Thompson r. Childress, 278.
Teel V. Hilton, 31. Thompson v. Conant, 156.
Teele v. Bishop of Derry, 205. Thompson v. Finch, 487.
Teeter v. Veitch, 475. Thompson v. Ford, 319.
Teller v. Hill, 156. Thomson v. Gloucester City Sav.
Temple v. Ferguson, 157, 567. Inst., 20.
Templeton v. Bockler, 2. Thompson v. Hale, 283. .

Ten Broeck v. Fidelity Trust & Safety Thompson v. Hart, 163.

Vault Co., 416. Thompson v. Hartllne, 113, 469.
Tenbrook v. Brown, 150. Thompson v. Hicks, 488.
fen Eyck v. Walker, 438. Thompson v. McKay, 161.
^
Tennant v. Tennant, 135. Thompson v. Ilemsen, 463.
Tenney v. Simpson, 63. Thompson v. Thompson, 2, 119, 274.
Terrill v.Mathews, 490. Thompson v. Village of Mecosta, 315.
Terry v. Davenport, 558. Thompson's Estate, In re, 87, 383, 414,
Terry v. Smith, 263. 417, 499.
Tesene v. Iowa State Bank, 458, 460. Thompson's Ex'r v. Brown, 230.
Tetlow V. Rust, 121. Thomson v. American Surety Co. of
Tevis V. Doe, 438. NewYork, 502, 503.
Tevis V. Steele, 281. Thomson v. Peake, 496.
Texas Moline Plow Co. v. Kingman Thomson v. Thomson, 104.
Texas Implement Co., 529. Thomson's Estate, In re, 383.
Thackara v. Mintzer, 184. Thomson's Ex'rs v. Norris, 217.
Tharp v. Fleming, 451. Thornburg v. Macauley, 285.
Thatcher v. Candee, 271, 322. Thorne v. Foley, 545.
Thatcher v. St. Andrew's Church of Thornquist v. Oglethorpe Lodge No. 1,
Ann Arbor, 162. 565.
Thatcher v. Thatcher, 381. Thornton v. Franklin Square House,
Thatcher Wardens, etc., of St. An-
v. 215.
drew's Church of Ann Arbor, 72, Thornton v. Harris, 283, 313.
74, 576. Thornton v. Howe, 206.
Thaw V. Gaffney, 169. Thorp V. Lund, 73, 199, 218, 224, 248,
Thaw's Estate, In re, 378. 327.
Thayer v. Dewey, 346, 360, 361, 362. Thorp V. McCullum, 337.
Thayer v. Wendell, 300. Thouron's Estate, In re, 414.
Thellusson v. Woodford, 177. Threthewey v. Horton, 541.
Thiebaud v. Dufour, 265. Throckmorton v. Throckmorton, 520.
Thiede v. Startzman, 146. Thruston v. Blackiston, 466.
Thleme v. Zumpe, 36, 293. Thum V. Wolstenholme, 504.
Thieriot, In re, 277. Thurston, Petition of, 581.
Thistle's Estate, In re, 580. Tibbetts v. Tomkinson, 327.
 CASES CITED 647
[The figures refer to pages]
Tidball's Estate, In re, 412. Town of Verona v. Peckham, 540.
Tidd V. Lister, 341. Townsend v. Allen, 159.
Tierney v. Fltzpatrick, 81. Townsend v. Crowner, 559.
Tierney v. Wood, 245. Townsend U. S. Trust Co., 385, 392.
v.
Tierney 's Estate, In re, 222. Townsend v. Wilson, 310, 311.
Tietjen, In re, 387. Townsend's Estate, In re, 264.
Tiffany v. Clark, 260, 308. Townshend v. Frommer, 165, 246.
Tiffany v. Munroe, 394. Trabue v. Reynolds, 264.
Tift V. Mayo, 435. Tracy v. Gravois R. Co., 413.
Tilden v. Fiske, 272. Tracy v. Strong, 388.
Tilden v. Green, 197. Trani v. Gerard, 299.
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Tillott, In re, 397.
Trask v. Sturges, 276.
Tillson V. Moulton, 435.
Travelers' Ins. Co. v. Caldwell, 533.
Tilton V. Davidson, 183, 577.
Treacy v. Powers, 496.
Tinkham v. Heyworth, 20,
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Tinkler v. Swaynie, 127.
Treadwell v. Treadwell, 554.
Tippett V. Brooks, 146.
Tredwell v. Tredwell, 314.
Tipton V. Powell, 470. Tremmel v. Kleiboldt, 432.
Titcomb v. Morrill, 97, 126. Trenton Banking Co.
Title Guarantee & Trust Co.
v. McKelway,
v. Haven, 143.
34.
Trenton Society for Organizing Chari-
Title Ins. & Trust Co. v. IngersoU, 496.
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Titus V. Weeks, 437.
Tobin V. Tobln, 112. & Safe Deposit Co. v.
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Tod, In re, 380, 384, 477.
Trethewey v. Horton, 541.
Todd, In re, 411.
Trim's Estate, In re, 214.
Todhunter v. Des Moines, I. & M. B.
Troll V. Carter, 56, 127.
Co., 172.
Toland v. Toland, 161. Trotter v. Blocker, 424.
Tolland County Mut. Fire Ins. Co. v. Trotter v. Lisman, 441, 442.
Underwood, 445. Troutman v. De Boissiere Odd Fel-
lows' Orphans' Home & Industrial
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360.
Toner's Estate, In re, 570. Troy & North Carolina Gold Min. Co.
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Torrey v. Toledo Portland Cement Co., True Real Estate Co. v. True, 435.
37. Truesdale v. Philadelphia Trust, Safe
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Towle v. Doe, 168. Trustees, of M. E. Church of New-
etc.,

Towle V. Mack, 372, 511. ark V. Clark, 173.

Towle V. Nesmith, 270. Trustees of Academy of Richmond
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Towles V. Towles, 110. 370.
Townley v. Sherborne, 481, 483. Trustees of Amherst College v. Ritch,
Town of Eastchester v. Mt Vernon 139, 447.
Trust Co., 456. Trustees of Associate Reformed
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Town of Montpelier v. Bast Montpe- Trustees of Auburn Academy v.
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[Tbe figures refer to pages]

Trustees of Elizabeth Speers' Memo- Tyler v. Mayre, 259, 280.

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Board of Education of Richmond,
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Trustees of Methodist Episcopal of u
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Trustees of South Newmarket Metho- Union Stockyards Nat. Bank v. GU-
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Tunstall v. Wormley, 276. U. S. V. Thurston Co., 576.
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Turner v. Fryberger, 309.
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S. Fidelity

Turner v. Hoyle, 516.

Bankfor Savings, 458, 459.
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U. S. Fidelity & Guaranty Ca v. Un-
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'

Turnure v. Tumure, 328.

U. S. Fidelity & Guaranty Co. v. U.
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Turton V. Grant, 407. U. S. Fidelity & Guaranty Trust Co.
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 CASES CITED 64»
[The figures refer to pages]

U. S. Trust Co. of New York v. Wood, Veazie v. Forsaith, 294, 375, 379.
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V.

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[The figures refer to pages]

Waldstein v. Barnett, 147. Wardens of Beaufort County v. Ger-

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V.
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Ward V. Conklin, 39, 148. Watson V. Erb, 123, 124.
Ward V. Dortch, 274. Watson V. Kennard, 443.
Ward V. Funsten, 417, 475. Watson V. Payne, 154.
Ward V. Marie, 188. Watson V. Pitts, 319.
Ward V. Shire, 417. Watson V. Sutro, 515, 516. >

Ward V. Waterman, 161. Watson V. Thompson, 114, 522.

Ward's Estate, In re, 277, 419. Watson V. Wagner, 529.
 CASKS CITED 651
[The figures refer to pages]

Watson V. Watson, 580. Wells' Estate, In re, 384, 390, 391.

Watt V. Watt, 113. Wells, Fargo & Co. v. Robinson, 122.
Watts V. Howard, 375. Wells-Stone Mercantile Co. v. Ault-
Watts V. McCloud, 53. man. Miller & Co., 300, 302.
Watts V. Newberry, 530. Wells-Stone Mercantile Co. v. Grover,
Way V. Hooton, 559. 298.
Way's Trusts, In re, 68, 72. Welscher's Estate, In re, 417.
Wayman v. Follansbee, 579. Welsh V. Brown,
417.
Weakley v. Barrow, 307, 460. Welsh V. Davis, 299.
Weakley v. Meriwether, 417. Weltner v. Thurmond, 496, 546, 552.
Weaver v. Emigrant, etc., Sav. Bank, Wemyss v. White, 183.
82, 86, 88. Wentworth v. Wentworth, 168.
Weaver v. Fisher, 398. Wenzel v. Powder, 186, 435, 572.
Weaver v. Spurr, 158. West, In re, 28.
Weaver v. Van Akin, 436, 476. West V. Bailey, 31, 265.
Webb V. Hayden, 153. West V. Biscoe, 477.
Webb V. Vermont Cent. R. Co., 464. West V. Fitz, 46.
Webb's Estate, In re, 66. West V. Raymond, 146.
Webber v. Clark, 515, 516. West V. Robertson, 359.
Webber Hospital Ass'n v. McKenzie, West V. Sloan, 551, 559.
215. West V. White's Estate, 75, 76.
Weber v. Bryant, 217. West's Estate, In re, 156.
Weber v. Chicago & W. I. E. Co., 546. Westcott V. Edmunds, 344.
Weber v. Richardson, 515, 519. Westerfleld, In re, 348, 365.
Weber Weber, 82, 85, 89, 91.
v. Westerfield v. Kimmer, 104.
Webster v. Bush, 580. Westerfieid v. Rogers, 481, 485.
Webster v. Morris, 193, 213, 223, 242. Western German Bank v. Norvell, 20,
Webster v. Pierce, 355. 527.
Webster v. Sughrow, 222. Western R. Co. v. Nolan, 342, 463.
Webster v. Wiggin, 212, 215, 235. Western Union Tel. Co. v. Boston
Wedekind v. Hallenberg, 374. Safe-Deposit & Trust Co., 374.
Weed, In re, 263. Westphal. v. Heckman, 126.
Weed's Estate, In re, 368, Westphal v. Williams, 121. '
Weekly v. Ellis, 103. West Texas Bank & Trust Qo. v. Mat-
Weeks, In re, 243. lock, 371.
Weeks v. Cornwell, 163. Wesver v. Emigrant, etc., Savings
Weeks v. Frankel, 259, 260, 324. Bank, 88.
Weer v. Gand, 34, 44. Wethered v. Safe Deposit & Trust Co.,
Weetjen v. Vibbard, 463. 375
Weiderhold v. Mathis, 369, 410. Wetherell v. O'Brien, 529.
Weiland v. Townsend, 283. Wetmore v. Brown, 409.
Weisel v. Cobb, 412, 478, 497. Wetmore v. Parker, 197.
Weiss V. Haigbt & Fr^ese Co., 479. Whalen v. Ruegamer, 297.
Weiss V. Heitkamp, 105, 126. Whaley v. Whaley, 114.
Welch In re, 285, 287. Whall V. Converse, 578.
Welch y. Allen, 46. Whallen v. Kellner, 284, 286.
Welch V. Boston, 292, 370. Wharton v. Masterman, 237, 579.
Welch V. Henshaw, 70. Whatley v. Oglesby, 460.
Welch V. Polley, 529. Whayne v. Davis, 475. '

Welch V. Trustees of Episcopal Theo- Wheatcraft v. Wheatcraft, 275.

logical School, 578. Wheaton v. Batcheller, 327.
Wellborn v. Rogers, 554. Wheaton v. Dyer, 511.
Weller v. Noffsinger, 184. Wheeler v. Brown, 464.
Welles V. Cowles, 35. Wheeler v. Hall, 125.
Welling's Estate, In re, 417. Wheeler v. Kidder, 110.
Wellington v. Heermans, 77. Wheeler v. Kirtland, 107.
Wells V. German Ins. Co. of Freeport, Wheeler v. Perry, 263, 352.
74, 269. Wheeler v. Piper, 559.
Wells v. Heath, 233. Wheeler v. Reynolds, 126.
Wells v. McCall, 424. Wheeler Vj Willard, 142.
652 CASES CITED
[The figures refer to pages]

Wheeler's Estate, In re, 337. Widmayer v. Widmayer, 274.

Wheelock v. American Tract Soc, 162. Widener Fay, 414, 419.
v.
Whelan v. Reilly, 169, 262, 283. Wiegand v. Woerner, 274, 277, 369,
Whetsler v. Sprague, 549. 371, 374, 413.
WMtaker v.McDowell, 324. Wiener's Estate, In re, 416.
Whitaker v. Whitaker, 67. Wieters v. Hart, 357, 366.
Whitcomb's Estate, In re, 51. Wiggins, In re, 275. '

White V. Carpenter, 106. Wiggins V. Burr, 277.

White V. Commercial & Farmers' Wiggs V. Winn, 63.
Bank, 21. Wiglesworth v. Wiglesworth, 482, 486,
White V. Oostigan, 537. 487.
White V. Ditson, 410. Wilberding v. Miller, 381.
White V. Fitzgerald, 57, 61, Wilce v. Van Arden, 99, 252.
White V. Glover, 308. Wilcox, Appeal of, 285.
White V. Hall, 295. Wilcox, In re, 168.
White V. Hampton, 284. Wilcox V. Attorney General, 99.
White V. Kavanaugh, 438. Wilcox V. Gilchrisl^ 422.
White V. McKenzie, 59, 131. Wilcox V. Hubbell, 39, 250.
White V. Newark, 214. Wilde V. Smith, 49.
Wliite V. Eankin, 396, 401. Wilder v. Hast, 371, 413.
White V. Eice, 162, 255, 427. Wilder v. Haughey, 433.
White V. Sheldon, 105, 556. Wilder v. Ireland, 156.
White V. Sherman, 333, 357, 366, 477, Wildey v. Robinson, 419.
499. Wiley, In re, 496.
White V. Watkins, 321. Wiley V. Morris, 403.
White V. White, 269, 469. Wilhelm v. Folmer, 318.
White V. Williams, 435. Wilkin, In re, 378, 565.
White's Ex'r v. White, 185, 444, Wilkinson v. May, 154.
Whitecar's Estate, In re, 348. Wilkinson v. Wilkinson, 508.
Whitehead, In re, 264. Willard v. Willard, 81, 82.
Whitehead v. Draper, 411, 413. Willats V. Bosworth, 61, 127.
Whitehead v. Whitehead, 281, 282, 284, Willets, In re, 412, 420.
351, 352, 413. Willets V. Willets, 48.
Whitehouse v. Bolster, 138. Willett's Estate, In re, 477.
White lick Quarterly Meeting of Williams, Appeal of, 274, 426, 567.
Friends v. White Lick Quarterly WilUams, In re, 47, 185, 436.
Meeting of Friends, 215. Williams v. Bond, 280, 419.
Whitelock v. Dorsey, 327. Williams v. Brooklyn Sav. Bank, 86,
White River Lumber Co. v. Clark, 286. 88, 90, 91.
Whitesel v. Whitesel, 49. Williams v. Cobb, 357.
Whiteside v. Whiteside, 417. Williams v. Committee of Baptist
Whiting V. Gould, 62, 104. Church, 51.
AVhitney v. Fox, 548. Williams v. Gushing, 266.
Whitney v. Hay, 118. Williams v. Davison's Estate, 148
Whitney v. Martine, 363. Williams v. First Presbyterian Soc. la
Whitney v. Phoenix, 385. Cincinnati, 46, 553.
Whitney's Estate, In re, 179. Williams v. Fullerton, 293.
WTiitson V. Whitson, 375. Williams v. Gardner, 323.
Whittaker v. Whittaker, 472. Williams v. Gideon, 267.
Whittemore v. Equitable Trust Co., Williams v. Haskin's Estate,
71.
249, 576. Williams v. Herrick, 169.
Whittingham v. Schofleld's Trustee, 50, Williams v. Honeycutt, 56.
375, 385. Williams v. McConico, 573.
Whittle V. Vanderbilt Min. & Mill. Co., Williams v. Milton, 370, 385.
520. Williams v. Moliere, 279.
Wickham v. Berry, 341, 580. Williams v. Mosher, 413.
Wickham v. Martin, 520. Williams v. Neill, 56.
Widman v. Kellogg, 521, 524, 529. Williams v. Nichol, 27.
Widmayer, In re, 399. Williams v. Oconomowoc, 198, 236.
 CASES CITED 653
[The figures refer to pages]

Williams T. Palmer, 147. Wilson V. Welles, 405, 551.

Williams v. Powell, 147. Wilson V. WUson, 15, 276, 278, 281.
Williams v. Eisor, 542. Wilson's Estate, In re, 564.
Williams v. Sage, 249, 447, Wiltbank, Appeal of, 383.
Williams v. Smith, 185, 368. Wimbish v. Montgomery Mut. Bldg. &
Williams v. Thacher, 578. Loan Ass'n, 150.
Williams v. Thorn, 184, 185. Winans v. Winans' Estate, 113.
Williams v. Vreeland, 138, 139. Winder v. Scholey, 135, 138, 139, 141.
WiUiams v. Wager, 105. Windmuller v. Spirits Distributing
Williams v. Williams, 196, 197, 359. Co., 357, 478.
WUliams v. Windolph v. Girard Trust Co., 39.
Worthington, 49, 50.
Williams Young, 550.
v. Windsor Trust Co., In re, 311.
Williams Nat. Bank v. Groton Mfg. Windsor Trust Co. v. Waterbury, 340.
Co., 297. Windstanley t. Second Nat. Bank, 522.
WUliamsburgh Trust Co., In re; 417. Winn V. Dillon, 143.
Williamson v. Field's Ex'rs, 310. Winona & St. P. B. Co. v. St. Paul &
Williamson v. Grider, 277, 311, 396. S. C. R. Co., 121.
Williamson v. Suydam, 273. Winslow V. Baltimore & O. R. Co., 321.
Williamson v. Wilkins, 342. Wlnslow V. Minnesota & P.' R, Co., 318.
Williamson v. Yaget, 77. Winslow V. Rutherford, 184.
Williard v. Williard, 557. Winslow V. Stark, 269.
Williford v. Williford, 142. Winters v. March, 567.
Willis V. Alvey, 262. Winters v. Winters, 511.
Willis V. Braucher, 350. Winthrop Co. v. Clinton, 184.
Willis V. Clymer, 372, 400, 404. Wirth V. Wirth, 579.
Willis V. Curtze, 444. Wisconsin Universalist Convention v.
Willis V. Holcomb, 541. Union Unitarian & Universalist Soc.
Willis V. Rice, 147. of Prairie du Sac, 277.
Willis V. Sharpe, 302. Wisdom V. Wilson, 305.
Willis V. Smyth, 84, 85, 86, 88.
Wistar's Estate, In re, 413.
Willis V. Willis, 105. Wister, Appeal of, 416.
Wills V. Maddox, 167. Wiswall V. Stewart, 333, 406, 539.
Wills V. Nehalem Coal Co., 37. Witherington v. Herring, 250.
Wills V. Wood, 146. Withers v. Jenkins, 70.
Wilmer v. Philadelphia & Beading Witmer, Appeal of, 347.
Coal & Iron Co., 314. Witt V. CarroU, 569.
Wilmerding v. McKesson, 356, 488. Witte V. Storm, 142.
Wilmerding v. Russ, 562. Wittemore v. Equitable Trust Co., 249.
Witter, V. Dudley, 517.
Wilmes v. Tiernay, 210.
Wittfleld V. Forster, 161.
Wilmington Trust Co. v. Jacobs, 324.
Wilmoth V. Wilmoth, 50. Wlttingham v. Schofield's Trustee, 375.
Witzel V. Chapin, 84, 86.
Wilson, Appeal of, 389.
Wilson V. Anderson, 39, 574.
Woddrop V. Weed, 301, 318.
Wilson V. Biggama, 409. Wolf V. Pearce, 64.
Wilson V. Castro, 119. Wolfe V. Croft, 27, 28.

Wilson V. Doster, 519. Wolfe V. Hatheway, 167, 170.

Wolfe's Estate, In re, 365.
Wilson V. Equitable Trust Co., 551.
Wilson V. First Nat. Bank, 190, 201,
Wolfman v. Webster, 444.
Wolford V. Herrington, 129, 132.
211, 236.
Wilson V. Fridenberg, 302.
Women's Christian Ass'n v. Kansas
City, 231, 570.
Wilson V. Hellman, 567.
Wilson V. Jones, 56.
Wood, In re, 169.

Wilson V. Kennedy, 399.

Wood V. Augustine, 309.
Wilson V. Odell, 179.
Wood V. Cox, 28.
Wilson V. Pennock, 324.
Wood V. Fox, 551.
Wilson V. Russ, 535. Wood V. GriflBn, 168.

Wilson V. Snow, 268, 280. Wood V. Kice, 428.

Wilson V. Towle, 282. Wood V. McClelland, 184.

TVilson V. Warner, 56, 110. Wood V. Paul, 248.
654 CASES CITED
[The figures refer to pages]

Wood V. Eabe, 118, 150. Wright V. Young, 126.

Wood V. Stafford, 504. Wright's Estate, In re, 383.
Wood V. Vandenburgh, 221. Wrightsman v. Rogers, 105, 108.
Wood V. Wood, 149, 159, 350, 352, 366. Wulbem v. Timmons, 528.
Wood's Estate, In re, 578. Wulff Roseville Trust Co., 293.
V.
Woodard v. Wright, 300, 878, 403, 407. Wyble T. McPheters, 446.
Woodbery v. Atlas Realty Co., 284. Wylie V. Bushnell, 277, 330, 397, 420,
Woodbridge v. Bockes, 259, 436, 540. Wylle V. White, 182, 440.
Woodbury v. Hayden, 28. Wylly V. Collins, 303.
Wooddell V. Arizona, 500. Wynn v. Sharer, 112.
Wooden v. Kerr, 421. Humberston, 397. Wynne T.
Woodgate v. Fleet, 173. Wynne
v. Tempest, 487, 491.
Woodley v. Holley, 354. v. Warren, 478. Wynne
Woodroof V. Hundley, 213. Wyrick v. Week, 514.
Woodruff V. H. B. Claflin Co., 319. Wyse T. Dandridge, 160.
Woodruff V. Jabine, 547.
Woodruff V. Marsh, 238.
Woodruff V. New York, L. B. & W. R.
Co., 371, 414.
Yale College's Appeal, 254, 267.
Woodruff V. Snedecor, 412.
Yard y. Pittsburgh & L. E. B. Co., 424,
574.
Woodruff V. Williams, 543.
Yates T. Big Sandy R. Co., 464.
Woodruff V. Woodruff, 264.
V. Thomas, 503.
Woodrum v. Washington Nat. Bank, Yates
Yates V. Yates, 283, 324.
506.
Woods V. Bell, 277. Yeamans v. James, 145, 146.
Yeiser v. U. S. Board & Paper Co., 37.
Woods V. Stevenson, 544.
Yellowstone County v. First Trust &
Woodward v. Camp, 70.
Savings Bank, 522, 532.
Woodward v. Dain, 328. Yerkes, Appeal of, 578.
Woodward v. James, 259.
Yerkes v. Crum, 146.
Woodward v. Stubbs, 154.
Yerkes v. Richards, 301.
Woodward v. Woodward, 110, 432.
Yetman v. Hedgeman, 105.
Woodwlne v. Wordrum, 460.
Wooldridge Planter's Bank, 288.
v.
Yokem v. Hicks, 258.

Woolf V. Barnes, 397, 463.

Yonge V. Hooper, 335.
Yost V. Critcher, 406.
WooUey v. Stewart, 551.
Young, In re, 376, 414.
Woolmer's Estate, In re, 100. Young Barker, 271, 419.
V.
Worcester City Missionary Soe. v. Me-
morial Church, 349.
Young V. Brown, 56.
Young V. Cardwell, 77, 267, 268.
Work Work, 114.
V.
Young V. Holland, 54, 56.
Wormley v. Wormley, 471.
Young T. Hughes, 448.
Worrell, Appeal of, 358.
Young V. McNeill, 315.
Worth V. McAden, 485. Young V. Murphy, 145.
Worthy v. Johnson, 336. Young V. St. Mark's Lutheran Church,
Wotton, In re, 364.
232.
Wren v. Followell, 550. Young V. Snow, 434, 582.
Wright V. Blinn, 394.
Youilg T. Walker, 561.
Wright V. Caney River R. Co., 299.
Young V. Weed, 520.
Wright V. Chilcott, 406.
Young V. Young, 66, 324.
Wright V. Clark, 574. Young Men's Christian Ass'u v. Horn,
Wright V. Conservative Inv. Co., 317. 175.
Wright V. Dame,466. Younger v.Moore, 159.
Wright V. Keasbey, 292. Youst V. Martin, 512.
Wright V. Leupp, 184.
Wright V. Miller, 428. .

Wright V. O'roville Gold, Silver & Cop-

per Min. Co., 38. Zabrlskle v. Morris & E. R. Co., 280.
Wright V. Pond, 422. Zabriskie's Bx'rs v. Wetmore, 284.
Wright V. Wilson, 308. Zeckendorf v. Steinfeld, 333.
Wright V. Wright, 547, 548. Zelmbar v. Spillman, 296.
Wright V. Yates, 113. Zelgler v. Hughes, 146,
 CASES CITED 655
[The figures refer to pages]
Zeisweiss v. James, 206, 225. Zimmerman v. Harmon, 337.
Zerega, In re, 285. Zimmerman v. Makepeace, 464.
Ziegler, In re, 280. Zion Church of Evangelical Ass'n of
Ziegler's Estate, In re, 411. North America In Charles City v.
Zimmer v. Sennott, 29. Parker, 291, 317.
Zimmerman v. Anders, 196. Zunkel t. Colson, 334.
Zimmerman v. Fraley, 360, 366. Zuver V. Lyons, 515.
 INDEX
[THE FIOUBES BEFEB TO PAGES]

A
ACCEPTANCE,
By trustee and beneficiary not ordinarily prerequisite to complete trust, 73.
Of trust by trustee, necessity of, 267.

ACCOUNTING,
Charges against trustee, 401.
Credits to trustee, 402.
Duty of trustee to make, 396. '

Effect of, 421.

Practice on, 399.
When unnecessary, 421.
ACCUMULATIONS,
Rule against, as affecting validity of purpose of private trusts, 176.
As applied to charitable trusts, 236.

ACTIONS,
Necessity of making cestui party, 315.
Power of trustee to maintain, 319.
When cestui que trust may sue, 462.

ACTIVE TRUST,
Definition of, 152.
Liability of interest of cestui for debts, 439.
Statutory systems regarding validity of purpose, 160.
Validity of purpose, 157.
ADMINISTRATION OF TRUST,
Power of cestui to control, 535.
ADMISSIONS,
By trustee do not bind cestui, 315.
AGENCY,
Distinguished from trust, 32-34.
AGENTS,
Whether trustees as to money collected, 23.

ALIENATION,
Of interest of cestui que trust, 433.

ALIQUOT PART,
EfCect of part payment of consideration in cases of resulting trusts, 105.
AMORTIZATION FUND,
Duty of trustee to create, 390.
ANNUITIES,
How divided between capital and income, 388.
BoGBKT Teusts—42 (657)
658 INDEX
[The figures refer to pages]

APPLICATION OF PURCHASE PRICE,

No duty to see to, 460.
APPOINTMENT,
Of new I
trustee, necessary parties, 286.
Who may apply for, 285.
Of successor trustees, 282.
Of trustee, originally, 263.
APPROVAL,
By cestui as barring rjemedy, 540.
ASSIGNMENT,
Ot chose in action distinguished from trust, 29, 30.

ATTACHMENT,
Of interest of cestui que trust, 443.

B
BAILMENT,
Distinguished from trust, 25, 26.
BANK DEPOSIT^,
When express trusts created by, 78.
BANKRUPTCY,
Rights of assignee of cestui, 442.
BANKS,
Duties of with resi)ect to fiduciary accounts, 452.

BENEFICIARY,
See cestui que trust.
BONA FIDE PURCHASER,
Trust property cannot be recovered from, 509.
What is notice, 515.
Who is, 511, 519.

BOND,
Actions against sureties on trustee's, 501.
When trustee must give, 264.

BURDEN OP PROOF,
Regarding identification in following trust res, 521.

c
CAPITAL AND INCOME,
Duty of trustee toward wasting property, 393.
Duty of trustee where securities purchased at a discount, 392.
Duty where securities purchased at premium, 390.
How annuities divided, 388.
How compensation of trustee paid, 414.
How dividends divided, 389.
How on sale of trust property divided, 385.
profits
How rents divided, 388.
Trustee's right to use principal for payments to beneficiaries, 394.
Which pays expenses of trust, 875.
Wtilch receives corporate dividends, 379.
 INDBX 659
[The figures refer to pages]
CEMETERY LOTS,
Trusts for upkeep of as valid charities, 220.
CESTUI QUE TRUST,
Acceptance of trust by him presumed, 73.
Acts of barring his remedies, 538.
Approval of breach as barring remedy, 540.
Attachment of interest of, 443.
Consent to breach as barring remedy, 540.
Creditor's rights against, 437.
Effect of bankruptcy of, 442.
Execution against interest of, 442.
Gamishment of interest of, 443.
Incidents of Ixis rights, 430.
Judgment creditor's bill against, 441.
Nature of rights of, 427.
Necessity of, 422.
Need not have notice of trust in order that trust be complete, 71.
Release by as barring remedy, 539.
Remedies of, barred by act or omission of cestui, 538.
Barred by laches, 542.
Barred by Statute of Limitations, 549.
By whom enforced, 462.
Conditions precedent to cestui's remedy, 470.
Control of trust administration, 535.
Following trust property, increased assets theory, 531.
Following trust res, degree of identification required, 527.
Holding trustee criminally liable, 499.
In what court, 466.
Liability of trustee's surety, 501.
No recovery of trast res from bona fide purchaser, 509.
Parties to actions, 473.
Personal liability and a lien, 504.
Of inactive trustee for default of active cotrustee, 481.
Of third person, 501.
Of trustee, 476.
Of trustee for acts of third persons, 480.
Or recovery of trust res, 505.
Recovery of interest from trustee, 495.
Of res, burden of proof and presumptions, 521.
What is notice, 515.
Of res,or its substitute, 508:
Remedy at law need not be exhausted in order to allow procedure
in equity, 469.
Statute of Limitations as applied to constructive trusts, 558.
"Venue of actions, 472.
Who is purchaser under bona fide purchaser rule, 519.
Rights of, against banks who aid in breach, 452.
Against the trustee, 445.
Against third persons, 451.
Against third persons joining with trustee in breach, 452.
Alienation, 433.
Curtesy in, 432.
660 INDEX
[The figures refer to pages]

CESTUI QUE TRUST— Continued,

Dower in, 433.
Escheat, 431.
Homestead in, 433.
Incidents of his rights, 430.
Inheritable, 431.
In personam or in rem, 427.
Liability for cestui's debts, 437.
None that purchaser see to application of purchase money, 460.
Rule in Shelley's Case as applied to, 433.
To demand a conveyance, 342.
To enforce the trust, 446.
To terminate trust, 577.
Rights of creditors against where trust is spendthrift, 445.
When entitled to possession, 341.
When nature of trust prevents subjection of his Interest to debts, 444.
Who may be, 424.
CHARITABLE TRUSTS,
Aid of sport not charity, 224.
Animals, aid of a charity, 218.
"Benevolent" as equivalent to "charitable," 216.
Care of inanimate objects not charity, 224.
Cemetery lots, 220.
Class must not be too small, .192.
Conflict of laws as affecting, 242.
Cy pres doctrine, 225.
Definition of, 15^, 189.
Effect of partial invalidity of purpose, 241.
Effect of Statute of Charitable Uses, 194.
Eleemosynary purposes as valid charitable purposes, 214.
For educational purposes, 211.
Gifts for masses, 208.
How restricted by rule against remoteness of vesting, 231.
Monuments, 220.
Motive of settlor not important, 194.
Must be for benefit of unascertained persons, 192.
Must not be for mixed private and public purpose, 193.
Must tend to improvement of mankind, 191.
Need not be for benefit of poor, 191.
Noncharitable purposes, 223.
Patriotic purposes as charitable, 220.
"Philanthropic" as equivalent to "charitable," 217.
Power of legislature over, 451.
Public improvements as constituting charity, 218.
Religious purposes, 204.
Restrictions on creation of through incapacity of trustee to take, 239.
On the creation of through statutes prohibiting exclusion of certain
relatives, 241.
On creation of through statutes regarding time of gift, 240.
i
Rights of visitor regarding, 450.
Right to enforce, 448.
Rule against accumulations as applied to, 236.
Rule against undue restraints on alienation, as applied to, 235.
 INDEX 661
[The figures refer to pages]

CHARITABLE TRUSTS—Continued, -

Satisfaction of mere whim not charity, 224.

Status of in various states, 196.
Trustees of may act by majority vote, 321.
When void for indefiniteness of purpose, 200.
COLLECTION OF NEGOTIABLE PAPER,
"Whether dabt or trust created, 18-23.
COMMISSIONS,
From what source paid, 414.
How computed in case of plural trustees, 418.
How computed where trustee is also executor, 419.
How lost or waived, 416.
Of trustee, how fixed and computed, 409.
Right of trustee to in general, 407.
Trustee not entitled to in England, 408.
COMPENSATION,
Of trustee, right to in general, 407.

CONFIDENTIAL RELATION,
As basis for constructive trust, 129.

CONFLICT OF LAWS,
As affecting charitable trusts, 242.
As affecting trust purpose, 159.

CONSENT,
By cestui as barring remedy, 540.
CONSIDERATION,
Necessary to render enforceable agreements to create trusts or incomplete
trusts, 66.
Not necessary to creation of trust, 65.

CONSTRUCTION OF TRUST,
'
No right to in settlor, 246.

CONSTRUCTIVE TRUST,
Based on breach of oral promise to sell land and account for pro-
ceeds, 130.
Confidential relation between promisor and promisee, 129.
Direct transfer from principal to fiduciary, 144.
Secret profits obtained by fiduciary, 141.
Breach of contract to buy land as basis for, 125.
Contract to hold real property in trust as basis for, 126.
Oral agreement to buy at judicial sale and hold for promisee as basis,
131.
Defined, 92, 116.
Miscellaneous implied trusts, 150.
Not controlled by Statute of Frauds, 118.
Statute of Limitations as applied to, 558.
Violation of parol promise made to secure gift by will or Intestacy as
basis for, 133.
Violation of voidable promise as basis for, 122.
When based on actual fraud, 121.
When based on other grounds than fraud, 118.
662 INDEX
[The figures refer to pages]

CONTEAOT,
Distinguished from trust, 40--i2.
Of trustee, creditor's right to indemnity, 301.
Exclusion of personal liability, 300.
How far binding on trust estate, 296.
Sometimes binds trust estate, 301.
CONTRACT TO BUT LAND,
At judicial sale, breach of as basis for constructive trust, 131.
Breach of as basis for constructive trust, 125.
CONTRACT TO CONVEY OR DEVISE LAND,
Breach of as basis for constructive trust, 123.

CONTRACT TO HOLD REAL PROPERTY IN TRUST,

Breach of as basis for constructive trust, 126.

eONTRACT TO SELL LAND AND ACCOUNT FOE PROCEEDS,

Breach of as basis for constructive trust, 130.

CONVEYANCE,
When cestui may demand from trustee, 342.

CORPORATIONS,
Promoters and oflBeers of distinguished from trustees, 36-38.

COTRUSTEES,
Duty to act after warning of breach by cotrustee, 489.
Duty to supervise cotrustee's work, 487.
Hold as joint tenants, 320.
Liability of inactive trustee for default of active cotrustee, 481.
Liability of joint and several, 478.
Necessity for joint possession, 483.
Power of parties to trust to control inactive trustee's liability, 492.
CREATION,
See Constructive Trust; Express Trust; Resulting Trust.
CREDITORS.
Of cestui que trust, power to take his interest, 437.
Eights where trust is spendthrift, 445.
Of trustee, when entitled to benefit of his right of indemnity against
estate, 301.

CRIME,
Misconduct of trustee as, 499.
CUETESY,
In interest of cestui que trust, 432.
No right to in estate of trustee, 281.

CT PEES,
Doctrine applied to charitable trusts, 225.

D
DEATH,
Of trustee, effect, 279.
Of trust party not ground for termination of trust, 572.
DEBT,
Distinguished from trust, 16-24.
 INDEX 663
[The figures refer to pages]

DEFINITIONS,
Active trust, 152.
Cestui que trust, 1, 4.
Charitable trust, 152, 189.
Constructive trust, 92, 116.
Express and implied trusts, 43, 44.
Implied trusts, 92.
Passive trust, 152.
Private trust, 152.
Resulting trust, 92.
Settlor, 1, 3, 4.
Spendthrift trust, 180.
Trust, 1, 2.
Trustee, 1.
Trust property, 1.
DEVISE,
Secured by parol promise to hold or convey, basis for constructive trust,
133.
DISCOUNTS,
Duty of trustee when securities purchased at, 392.
DISCBETIONART POWERS,
May not be delegated, 325.
DIVIDENDS,
How divided between life tenant and remainderman, 389.
When paid to life tenant and when to remainderman, 379.
DOWER, •

In interest of cestui que trust, 433.

None in estate of trustee, 281.
DUTIES OF TRUSTEE,
General standards of skill and honesty, 329.
Investments, 345.
Within what time, 353.
Regarding possession and custody of trust property, 338.
To act solely in interest of beneficiary, 332.
To execute the trust, 331.

E
EDUCATION,
Trust for the benefit of, as valid charitable trust, 211.
ELEEMOSYNARY PURPOSES,
Valid as purposes of a charitable trust, 214.
ENFORCEMENT OF TRUST,
By Attorney General in case oi charities, 448.
By cestui que trust, 446.
No right to in settlor, 246.

EQUITABLE CHARGE,
Distinguished from trust, 26-23.
6G4 INDEX
[Th6 figures refer to pages]

EQUITY,
Development of chancery in America, 14, 15.
Enlargement of trustee's powers by court, 328.
Power over trust investments, 349, 351.
Supervision of trustee's powers by, 326.
When remedy of cestui que trust is in, 466.
Where separate court of, 5.
ESCHEAT,
As to interest of cestui que trust, 431.
Of trustee's estate, 293.
When trustee dies without heirs, 281.
EVIDENCE,
Amount necessary to establish resulting trust, 95.
Character and amount necessary to show express trust, 53, 54.

EXECUTION,
Against interest of cestui que trust, 442.
EXECUTOR,
Distinguished from a trustee, 30-32.

EXPENDITURES,
Costs of actions, 373.
For agents and servants, 371.
Legal services, 371.
Necessary to collect trust property, 368.
Nebessary to upkeep of trust property, 369.
Source of payment, 375.
Taxes, 369.
To carry on trust business, 371.
To discharge trust debts and interest, 368.
What trustee is justified in maiklng, 367.

EXPRESS TRUST,
Acceptance by trustee and cestui que trust not necessary to creatloa
of, 73.
Burden of proof as to creation, 53-54.
Consideration not necessary to creation of,' 65.
Creation by precatory words, 47-52.
Creation of, 43-91.
As affected by Statute of Wills, 64.
Disposition of trust instrument necessary to creation of, 68.
Disposition of trust property necessary to creation of, 75.
Formalities necessary to creation,, 54r-65.
Language must certainly declare trust, 52, 53.
Language necessary to creation, 44^54.
Notice not necessary to show creation of, 71.
Statute of Limitations as applied to, 549.
When created by deposit in bank, 78.
EXTINCTION OF TRUST,
Methods of, 564.
 INDEX 665
[The figures refer to pages]

F
FIDUCIAEIES,
Direct transfer to from principal as basis for constructive trusts, 144.
Secret profits obtained by, as basis for constructive trust against, 141.
FIDUCIARY ACCOUNTS,
Duties of banks regarding, 452,
FOLLOWING TRUST FUNDS,
Rules regarding, 508.
FRAUD,
Conclusively presumed where fiduciary obtains secret profit while acting
for beneficiary, 141.
Fraudulent purpose as vitiating trust, 187.
Rebuttable presumption of, in case of direct transfer from principal to
fiduciary, 144.
When actual fraud is basis for constructive trust, 121.
When voluntary transfer in trust is presumed fraudulent, 187.

G
GARNISHMENT,
Of interest of cestui que trust, 443.

GIFT,
~ By will or intestacy as basis for constructive trust, when secured on oral
promise to hold or convey, 133.
GUARDIANSHIP,
Distinguished from trust, 34, 35.

H
HOMESTEAD,
In interest of cestui que trust, 433.'

I
IDENTIFICATION,
Necessary to allow tracing trust assets, 527.
ILLEGAL DECLARATION OF TRUST,
When it gives rise to resulting trust, 98.
IMPERFECT DECLARATION OF TRUST,
When it gives rise to resulting trust, 98.
IMPLIED TRUSTS,
Miscellaneous, 150.
IMPOSSIBILITY OF PERFORMANCE,
As terminating trust, 568.

IMPROVEMENTS,
To trust property, powers of trustee, 294.

INDEFINITENESS,
As ground for holding charitable trust void, 200.
INFORMATION,
Right of cestui to receive, 397.
G66 INDEX
[The figures refer to pages]

INTEREST,
How divided between life tenant and remainderman, 389.
Liability of trustee for, 495.
INVESTMENTS,
Consent of cesttii to unlawful investment, 365.
Deposits in bank, 353.
Duties of trustee regarding, 345.
Duty of trustee to change, 364.
Foreign, not approved, 360.
Government securities, 363.
In real estate not allowed, 359.
In trade or business not allowed, 357.
On personal security not allowed, 356.
On real property security, approved, 362.
Power of equity over, 349, 351.
Power of settlor to control, 348.
Kailroad bonds, 363.
Statutory regulation of, 352.

J
JUDGMENT CREDITOR'S SUIT,
Against cestui que trust. 441.

L
LACHES,
As barring remedies of cestui que trust, 542.
^ Basis of is estoppel, 543.
What constitute, 545.

LAW,
When remedy of cestui que trust is at, 467.

LEASE,
Power of trustee to, 312.

LEGISLATURE,
Power of over charitable trusts, 451.

LIEN,
Of cestui que trust on trust res or its substitute, 504.

LOUISIANA,
Trusts in, 7.

M
MASSACHUSETTS TRUST,
Use of as substitute for business corporation, 157.
MASSES,
Gifts for as valid charitable trusts, 208.

MERGER,
As ground for determining, trust, 570.
Where trustee and beneficiary are same person, 258.
MINISTERIAL POWERS,
May be delegated, 325.
 INDEX 667
[The figures refer to pages]

MISTAKE,
As a basis for constructive trusts, 118.
MODIFICATION OF TRUST,
No right in settlor, 248.
MONEY PAID FOR SPECIAL PURPOSE,
Whetlier liolder a trustee, 23, 24.
MONUMENTS,
'
Trusts for erection or care of, as charities, 220.
MORTGAGE,
Power of trustee to, 310.
MURDERER,
When he will be charged with constructive trust as to property acquired
by his crime, 120.

N
NOTICE,
To trustee binds cestui que trust, 315.
What is, under bona fide purchaser rule, 515.
NOTICE OF TRUST,
Not necessary to show creation of trust, 71.

o
OMISSIONS,
Of cestui que trust, as barring remedies, 542

PARTICIPATION IN BREACH OF TRUST,

Rights of cestui in case of, 452.

PARTIES,
To actions to enforce trust, 473.

PASSIVE TRUST,
Definition of, 152.
How affected by Statute of Uses, 153.
Interest of cestui of liable for debts, 437.
Present effect of in America, 154.
PAYMENT OF CONSIDERATION,
When it gives rise to resulting trust, 100.

PAYMENTS TO BENEFICIARIES,
Rules regarding, 377.
PERPETUITIES,
Rule against remoteness as affecting purpose of private trusts, 165.
Rule against remoteness of vesting as applied to charitable trusts, 231.
Rule against suspension of power of alienation as affecting validity of
purpose of private trusts, 171.
Rule against undue suspension of the power of alienation as applied to
charitable trusts, 235.
668 INDEX
[Tbe figures refer to pages]

POSSESSION,
Of trust property, duties of trusted regarding, 338.
Right of trustee to, 293.

POWER,
Distinguished from trust, 35, 36.
POWERS OF TRUSTEE,
As affected by peculiarity of trustee's status, 320.
Classified, 289.
Concerning custody of trust res, 293.'
Discretionary may not be delegated, 325.
Discretionary powers, 290.
Estate of trustee, 291.
General powers, 290.
In trust, 290.
Ministerial may be delegated, 325.
Miscellaneous implied powers, 318.
Must act as a unit, 321.
Regarding improvements, 294.
Regarding repairs, 294.
Sale, details of, 308.
When chancery may direct, 307.
Special powers, 290.
Successor trustees, 322.
Supervision of exercise of, by court, 326.
Surviving trustees, 324.
Title is joint, 320.
To bind estate by torts, 296.
In contract, 296.
Statutory provisions, 304.
To lease trust property, 312.
To maintain actions, 319.
To mortgage, 310.
To represent beneficiary, 314.
To sell trust property, 305.
PRECATORY WORDS,
Creation of express trusts by, 47-52.
PREMIUMS,
Duty of trustee to create amortization fund
' when securities purchased
at, 390.

PRESUMPTIONS,
In following trust funds, 521.

PRIVATE TRUST,
Definition of, 152.

PROFITS,
Secret, as basis for constructive trust against fiduciary, 141.
When paid to life tenant and when to remainderman, 385.

PROMOTERS AND OFFICERS OP CORPORATIONS,

Distinguished from trustees, 36-38.
 / INDEX 669
[Tbe flgures refer to pages]

PURCHASER,
From trustee, no duty to see to application of purchase price, 460.
Who is, under bona fide purchaser rule, 519.
PURPOSE,
Accomplishment of as terminating trust, 566.
Conflict of laws regarding validity of, 159.
Effect of fraudulent purpose, 187.
Effect of trust having valid and also invalid purpose, lj;9.
For what purposes active trusts may. be created, 157.
How affected by rule against undue suspension of power of alienation, 171.
How restricted by rule against remoteness, 165.
Indefiniteness of, as ground for holding charitable trust void, 200.
Massachusetts trust, 157.
Partial invalidity as affecting charitable trust, 241.
Present effect of passive trust in America, 153.
Trusts classified as to, 152.
Validity of as affected by rule against accumulations, 176.
Validity of purpose as affected by statutes, 160.
Validity of spendthrift trusts, 180.
Validity of trusts for charity, 189.

R
REIMBURSEMENT,
Right of trustee to, upon accounting, 403.

RELEASE,
By cestui que trust, 539.

RELIGION,
Encouragement of as basis for valid charitable trust, 204.

REMAINDERMEN,
Conveyance to by trustee not necessary, 344.
REMEDIES,
Of cestui que trust, against trustee's sureties, 501.
Barred by act or omission of cestui, 538.
Barred by omissions, 542.
Barred by Statute of Limitations, 549.
Cannot recover property from bona fide purchaser, 509.
Conditions precedent, 470.
Control of trust administration, 535.
Following trust property, must identify specific res, 527.
In what court, 466.
Parties to actions, 473.
Personal UabiUty and a lien, 504.
Personal liability of third person, 501.
Personal liability of trustee, 476.
Personal liability or recovery of trust res, 505.
Recovery of res or Its substitute, 508.
Venue of actions, 472.
When barred as tO resulting trust by Statute of Limitations, 556.
When barred by Statute of Limitations as to constructive trust, 558.
When he may sue, 462.
670 INDEX
[The figures refer to pages]

REMOVAL OF TRUSTEE,
Costs, 278.
Grounds for, 274.
How accomplished, 273.
Necessary parties to application, 278.
Who may make application for, 278.
RENTS,
How divided between capital and income, 388.
REPAIRS,
To trust property, powers of trustee, 294.
REPRESENTATION,
Of beneficiary by trustee, 314.
RESCISSION,
As a basis for constructive trusts, 119.
RESIGNATION,
By trustee, how accomplished, 271.
RESULTING TRUST,
Amount of consideration paid, 105.
As affected by statutes, 111.
Defined, 92.
Effect of relationship between payor of consideration and grantee, 109.
Payment of consideration for conveyance to another, 100.
Source of consideration paid, 102.
Statute of Limitations as applied to, 556. /

Time of payment of consideration, 103.

Underlying principle of, 94.
Use of trust funds for purchase of property, 113.
Voluntary conveyance as creating, 96.
When arising from imperfect or illegal declaration of trust, 98.
REVOCATION OF TRUST,
No right in settlor unless reserved, 248.
RULE AGAINST REMOTENESS,
As applied to charitable trusts, 231.
How it affects trust purpose, 165.

S
SALE,
When trustee has power to sell trust property, 305.
SAVINGS BANK TRUSTS,
When created, 78-91.
SETTLOR,
May control method of filling vacancies In trusteeship, 282.
No right to construction of trust, 246.
No right to enforcement of trust, 246, 447.
No right to modify trust in absence of power reserved, 248.
No right to reconveyance from trustee, 344.
No right to revoke trust in absence of power reserved, 248.
Power to terminate trust, 574.
Qualifications of, 244.
Right to control Investments, 348.
 INDEX 671
[The figures refer to pages]

SHBLLEX'S CASE,
Eule in, applied to interest of cestui, 433.
SPENDTHRIFT TRUSTS,
Effect of on rights of cestui's creditors, 445.
Validity of, 180.
STATUTE OF CHARITABLE USES,
Purpose and effect of, 194.

STATUTE OF FRAUDS,
As affecting oral promises to take rejil property and convey, 134.
Constructive trusts not controlled by, 118.
Nature of writing required to prove express trusts, 56, 57, 61-64.
No application to resulting trusts, 95.
Oral evidence, 63, 64.
Oral trusts in realty voidable only, 60.
Regarding creation of express trusts, 54t-64.
When it does not apply to creation of trusts, 57-60.
STATUTE OF LIMITATIONS,
As applied to constructive trusts, 558.
As applied to express trusts, 549.
As applied to resulting trusts, 556.
As bar to cestui que trust, 549.

STATUTE OF USES,
As affecting passive trusts, 153.
Effect of, 12-14.
^•Reasons for adoption of, 10-12.
Text of, 11, 12.

STATUTE OF WILLS,
As affecting creation of express trusts, 64.
As affecting oral promises to take by will and hold or convey, 134.

STATUTORY RESTRICTIO>fS,
As affecting validity of purpose, 160.

STOLEN PROPERTY,
When proceeds of may be held under constructive trust, 120.

SUBJECT-MATTER OF TRUST,
Recovery of by cestui que trust, 508.
Right of trustee to custody of, 293.
What may be, 251.
SUCCESSOR TRUSTEE,
Power to exercise authority of predecessor, 322.

SUPERVISION, *

By court of trustee's exercise of powers, 326.

SURETIES,
Liability of to cestui que trust, 501.

SUSPENSION OF POWER OF ALIENATION,

How rule against affects purpose of private trusts, 171.
Rule against, as applied to charitable trusts, 235.
672 INDEX
[The figures refer to pagesj

TERMINATION OF TRUST,
By accomplishment of trust puiTpose, 566.
By act of cestui que trust, 577.
By act of settlor, 574.
By act of third party, 582.
By death of party, 572.
By expiration of trust term, 564.
By merger, 570.
By the trustee, 576.
Due to impossibility of performance, 568.
End presumed, 583. '

Methods of, 564.

TORTS,
Of trustee, make him personally liable, 296.
TRACING TRUST FUINTDS,
Rules regarding Identification, 520.
TRANSFER OF POSSESSION,
What necessary to creation of express trust, 76.
TRANSFER OF TITLE,
What necessary to creation of express trust, 75.
TRUST,
Who may enforce, 446.
'TRUSTEE,
Acceptance of trust by, 267.
Acceptance of trust by him presumed, 74.
Actions by, necessity of making cestui party, 315.
Administrator with the will annexed does not usually succeed trus-
tee, 286.
Admissions of do not bind cestui, 315.
Alien as, 257.
Appointment of ori^nally, 263.
Beneficiary as, 258.
Corporations as, 253.
Costs in proceeding for removal, 278.
Cotrustees hold as joint tenants, 320.
Cotrustees must act unanimously, 320.
Creditor's right to trustee's right of indemnity, 301.
Death of, effect, 279.
Does escheat occur if he
dies without heirs, 281.
Duties of,
Accounting, charges against trustee, 401.
Commissions in case of plural trustees, 418.
Commissions of trustee where he is also executor, 419.
Compensation of trustee, 407.
Credits to trustee, 402. /

Effect of, 421. '

How commissions lost or waived, 416.
How made unnecessary, 421.
 INDEX 673
[The figures refer to pages]

TRUSTEE— Continued,
Practice on, 399.
Wliere made, 308.
Conveyance to remaindermen not necessary, 344.
Expenditures, costs of actions, 373.
For agents and servants, 371.
For legal services, 371.
For trustee's commissions, from what source paid, 414.
Necessary to collect trust property, 368.
Necessary to upkeep, 369.
Source of payment, 375.
Taxes, 369. .

To carry on business, 371.

To pay debts and interest, 368.
Wasting securities, 393.
What justified, 367.
General standards of skill and honesty, 329.
Investments, bank deposits, 353.
Consent of cestui, 365.
Duty to change, 364.
Foreign, 360.
Government securities, 363.
Guiding principles, 346.
In real estate, 359.
In trade or business, 357.
Manner of making, 347.
On personal security, 356.
Povcer of equity over, 349, 351.
Railroad bonds, 363.
Real property security, 362.
Time of, 347.
When controlled by settlor, 348.
When controlled by statute, 352.
None to reconvey to settlor, 344.
Not to buy up outstanding title, 333.
Not to deny title of cestui, 334.
Payments to beneficiaries, 377.
Annuities, 388.
Dividends, 379, 389.
Interest, 389.
Power to use principal, 394.
Profits, 385.
Rents, 388.
Securities bought at a discount, 392.
Securities purchased at a premium, 390.
Possession and custody of trust property, 338.
Regarding contracts with cestui, 334.
Regarding investments, 345.
Regarding purchases at his own sale, 336.
To account, 396.
To act solely in interest of beneficiary, 332.
To convey to cestui que trust, 342.

BOGEBT Tbtjsts—43
674 INDEX
[The figures refer to pages]

TRUSTEE— Continued,
To execute the trust, 331.
To give cestui information, 397.
To keep accurate accounts, 898.
To protect trust property, 340.
Effect of escheat on estate of, 293.
Effect of lack of, 261. •

Estate held by trustee, 291.

Failure to supervise cotrustee as breach, 487.
Government as, 253.
Grounds for removal, J74.
How removed, 273.
Inactivity after notice of threatened breach by cotrustee, 489.
Infant as, 257.
Insolvent as, 257.
Intrusting cotnistee with exclusive possession by positive act as
breach, 485.
Judgment against not lien on trust estate, 292.
and severally liable, 478.
Liability of, cotrustees jointly
Election between liability and recovery of res, 505.
For acts of third persons, 480.
For crime, 499.
For interest, 495.
Power of parties to control, 492.
Responsibility of inactive trustee for conduct of active cotrustee, 481.
Lien of for advancements, 403.
Lien of for compensation, 414.
Lunatic as, 257.
Married woman as, 257.
Must accept trust before trust can be fastened upon him, 74.
Nature of his obligation, 5.
Necessary parties in proceeding for removal, 278.
Necessity of conveyance from retiring to succeeding trustee, 287.
Necessity of giving bond, 264.
Need not have notice of trust in order that trust be complete, 72.
No curtesy in estate of, 281.
No dower in estate of, 281.
Notice to him is notice to cestui, 315.
Passively allowing cotrustee to take exclusive possession as breach, 483.
Personally liable for breach of trust, 476.
Personally liable for torts, 296.
Personally liable on contracts, 296.
Powers of, as affected by peculiarity of trustee's status, 320.
Classified, 289.
Discretionary may not be delegated, 325.
Successor trustees, 322.
Supervision of exercise by court, 326.
Surviving trustees, 324.
To maintain actions, 319.
To mortgage, 310.
Power to lease, 312.
Power to represent beneficiary, 314.
Power to sell trust property, 305.
 INDEX 675
[The figures refer to pages]
TRUSTEE-I-Contlnued,
Power to terminate trust, 576.
Qualifications of, 253.
Resignation by, 271.
Right to indemnity for damages paid for torts, 300.
Riglit to indemnity for payments made under contracts, 299.
Riglit to reimbursement for expenditures, 376.
Right to reimbursement on accounting, 403.
Trust will not fail for want of, 261.
TJnineoriwrated association as, 256.
Use of trust funds by as creating resulting trust, 113.
"Vacancies in trusteeship, how filled, 282.
When he may sue, 462.
Who may apply for removal, 278.
TRUST INSTRUMENT,
What disposition of it necessary to show creation of trust, 68.
TRUST PROPERTY,
Disposition of necessary to creation of trust, 75.
TRUSTS,
Before the Statute of Uses, 9, 10.
History of in early American law, 14-15.
Origin of, 6-9.

u
UNDUE INFLUENCE,
As a basis for constructive trusts, 119.
USES,
Before the Statute of Uses, 9, 10.
Origin of, fi-9.

V
VACANCIES,
In trusteeship, power vof equity, 282.
VENUE,
Of actions to enforce the trust, 472.

VISITOR,
Of eleemosynary corporation, rights of, 450.
VOIDABLE PROMISE,
Violation of as basis for constructive trust, 122.
VOLUNTARY CONVEYANCE,
As creating a resulting trust, 96.

WASTING PROPERTY,
W
Duty of trustee toward, 393.
WILLS,
Distinguished from some instruments creating trusts, 38, 39.

WEST PUBUSHINO CO., PBJKTEBS, ST. FACI., UIKK.

 HERBERT D. U\UB£

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