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§ 361. It is the rule in this country to allow a trustee compensation from the trust estate unless he has been guilty of fraud or negligence. Barney v. Saunders,* 16 How., 535,
S 362. O., the assignee of a claim against the Mexican government, supposing his titlegood, collected the amount of the claim, but it afterwards appeared that his title was bad. Held, that he must be considered as a trustee holding the fund for the owners, and was en. titled to compensation from the fund for his services and expenses in securing it, and in defending suits brought by third parties against him to recover it. Willianis v. Gibbes, * 20 How., 535.
§ 363. A trustee may convey bis own interest though the assignment may not convey the interests of his cestui que trust. Piatt v. Oliver, 3 McL., 27.
$364. To insure trust property.- A trustee, though having no personal interest in the trust property, may, although there is no obligation on him so to do, insure it to its full value. Insurance Co. v. Chase, 5 Wall., 509.
S 365. To submit interest of cestni qne trust to arbitration. If a trustee who has procured insurance upon property held by him in trust be empowered by the cestui que trust to adjust the amount of the loss and sue for its recov ry, he may refer to arbitration the question as to the amount due on the policy, and an award pursuant to the submission binds the cestui que trust. Brown v. Hartford Fire Ins. Co.,* 11 Law. Rep. (N. S.), 726.
$366. Where a trustee appointed by will with puwer to make partition of lands does not in making the partition give bis personal attention to the division of the property, but by agreement with one of the heirs submits it to the arbitrament of disinterested persons, it is nevertheless valid, as it is confirmed and carried into effect by the execution of the trustee of the requisite indenture for that purpose. Phelps v. Harris, 11 Otto, 370.
$367. Power to sell - How construed.- A trustee with power of sale for holders of rail. road bonds has a right to decide whether parties asking a sale have sufficient title to justify such demand. But any person interested adversely to such sale has the concurrent right of appealing to the courts for an adjudication upon the claims of those in whose behalf the trustee assumed to act. North Carolina Railroad Co. v. Drew, 3 Woods, 674.
S 368. Notwithstanding the rule that a naked power or trust must be strictly construed and literally followed, a trustee empowered to sell lands may make a conveyance in consideration of coupon bonds, such transaction being a sale within the meaning of the power. Speigle v., Meredith, 4 Biss., 120.
S 369. A trust for sale, with nothing to negative the settler's intention to convert the estate absolutely, will not authorize the trustees to execute a mortgage. Patapsco Guano Co. 2. Morrison, 2 Woods, 395.
$: 70. Where a trustee was given power to sell, held, that a mortgage given by him was of no effect as far as the trust property was concerned, although authorized by an order of the court rendered in accordance with section 2327 of the code of Georgia, which declares that "a trustee, unless expressly authorized by the act creating the trust or with the voluntary consent of all the beneficiaries, has no authority to sell or convey the corpus of the trust estate, but such sales must be by virtue of an order of the court of chancery upon a regular application to the same." Ibid.
$ 371. To purchase trust property.- A trustee cannot purchase or acquire by exchange the trust property. Wormley v. Wormley, 8 Wheat., 421.
$ 372. A purchase of trust property by a trustee is not void, but voidable. Prevost v. Gratz, * Pet. C. C., 364.
$ 373. Where property held by a trustee is taken out of his hands, he may purchase it freed from the trust of one authorized to sell it. Ibid.
§ 374. In order to sustain a sale between parties standing in a fidicuary relation to each other, it must be made to appear, first, that the price paid approximates reasonably near to a fair and adequate consideration for the thing purchased; and second, that all the information in possession of the purchaser which was necessary to enabie the seller to form a sound judgment of the value of what he sold was communicated by the former to the latter. Brooks v. Martin, 2 Wall., 70.
$ 375. The administrators of an insolvent estate sold and conveyed certain real estate pursuant to the directions of the probate court having jurisdiction, and took in payment the notes of the purchaser, op which, not being paid, judgment was entered and the land was sold on execution to one of the administrators for a fair price and without fraud on his part. Held, that he took a good title, and was not liable as trustee at suit of the heirs of the intestate. Shakely v. Taylor, * 1 Bond, 142.
$ 376. If one acting as trustee for others becomes himself interested in the purchase of the trust property, the cestuis que trust are entitled to have the sale set aside unless the trustee had fairly divested himself of the character of trustee, and the fact that the purchase was made through the intervention of a third person makes no difference. But the fact that the trustee, thirteen years after the execution of the trust and its judicial confirmation, in the face of opposition by the cestui que trust, comes into possession of the property by purchase from the purchaser at the trust sale, does not of necessity vitiate the trust sale as fraudulent. Stephen v. Beall, 22 Wall., 329.
$ 377. A trustee cannot become the purchaser of the estate or property of which he is trustee; nor can he buy an outstanding claim or title for his own benefit, and it will inure to the benefit of the cestui que trust. Lenox v. Notrebe, 2 Curt., 386. $ 378.
as buyer and seller.- A person cannot legally purchase on his own account that which his duty or trust requires him to sell on account of another, nor to purchase on account of ar oher that which he sells on his own account. Michoud v. Girod, 4 How., 509.
$ 379. A purchase, per interpositam personam, by a trustee or agent, of the particular property of which he has the sale, or in which he represents another, whether he bas an interest in it or not, carries fraud on the face of it. Ibid.
$ 350. Amount of care required of.- Where property is conveyed on a general undefined trust the trustees are bound to bring to the administration of the trust only the same care and fidelity they would exercise in their own concerns. Burr v. M'Ewen,* 1 Bald., 154.
$ 381. Must act in good faith.- Where the trustee in a marriage settlement has a power to sell and re-invest the trust property, whenever, in his opinion, the purchase money may be laid out advantageously for the cestui que trust, that opinion must be fairly and honestly ex. ercised, and the sale will be void where he appears to have been influenced by private and selfish interests, and the sale is for an inadequate consideration. Wormley v. Wormley, 8 Wheat., 421.
$ 382. Trnstees, when tenants in common.- Where several grantees in a conveyance take and hold for purposes of certain trusts, they take as tenants in common. Robinson v. Codman. * 1 Sumn., 128.
$ 383. When trustees mitst act jointly.- In the case of a strict trust, not public, all the trustees must act together unless the power to act is given to a less number either expressly or hy fair and necessary implication. Held, under the circumstances of this case, where thrte trustees were appointed to carry on an extensive business as carriers, that the three trustees need not concur, but that a majority had power to act. Sloo v. Law,* 3 Blatch., 459.
8 384. Where there were two trustees of the property of insolvents, and one of them made an assignment, but the other neither joined in it, nor assented to it afterwards, the assignment was void. Wilbur v. Almy, 12 How., 180.
$ 385. Ooe of several public officers who are trustees of a public trust, and who acts as the attorney of the others, has no implied authority to consent to a decree which will have the effect to divest the trustees of the trust estate and place its execution in other hands. Vose v. Trustees of International Improvement Fund,* 2 Woods, 647.
S 386. If there be two joint trustees with a joint power of attorney to sell, the trust cannot be executed by one alone either in the life-time of the other or after his death, Boone v. Clarke, 3 Cr. C. C., 389.
$ 387. Although in the administration of a trust where there is more than one trustee all must concur, the entire body can direct one of their number to transact business, and the acts of the one thus authorized are the acts of all and binding on all; and if within the scope of his agency he procures an insurance on the trust property, it is for the other trustees as well as himself. If he does it without authority, still it is a valid contract, which the underwriter cannot dispute, if his co-trustees subsequently ratify it; and suit brought on the policy in their names is a sufficient ratification. Insurance Co. v. Chase, 5 Wall., 509.
$ 388. Feme covert or infant as trustee.- An infant may be a trustee and be compelled to execute his trust. Especially if, after he came of age, he affirms the trust, and ratifies the acts which be did in accordance with the trust, will it be out of his power to deny that any trust ever existed. Irvine v. Irvine, 9 Wall., 617.
$ 389. A., doing business under the shelter of the name of B., a feme covert, purchased land with his own money, the title, being made to B. for his use, which land he subsequently sold as attorney in fact for B. under a power of attorney from her. Held, that the conveyance was good notwithstanding the coverture of the trustee. Gridley v. Westbrook, 23 How., 503.
$ 390. Miscellaneous.— A trustee has no power to hind, ex directo, the trust estate by promissory notes or bills of exchange, though such acts may make him personally liable. Patapsoco Guano Co. v. Morrison, 2 Woods, 395.
$ 391. It is not competent for trustees, even with the sanction of a court of equity, to divert the trust funds to the payment of any other debt than that for which such trustees hold them. Duncan v. Mobile & Ohio Railroad Co., 2 Woods, 542.
$ 392. If bonds are made "payable on or before ” the day mentioned in the condition, but the decree under which the sale is conducted does not authorize the insertion of these words, it seems that the trustees have no right to receive the money before the day; if they had, the
cestui que trust might be injured without having an opportunity of providing for his safety. Wallis v. Thornton, 2 Marsh., 422.
$ 393. But, admitting that the trustees have a right to receive the money before it is due, they have no right to discount legal interest and receive only a part of the debt. Ibid.
$ 394. A trustee appointed by a debtor to sell the mortgaged premises to the highest bidder is bound to see that the sale is fairly made, and that there is a real competition. He is as much bound to take care of the interest of the debtor as of the creditor; and if he finds sham competitors he ought not to proceed with the sale at that time, but adjourn and give a new notice. If there were no competitors at the sale and the creditor has bought the property at his own price, and recover judgment at law for the balance of the debt, the court will enjoin the judgment until the real value of the land bought in by the creditor and the circumstances of the sale shall be ascertained upon final hearing. Fairfax v. Hopkins, 2 Cr. C. C., 134.
S 395. It is the duty of a trustee, if he finds that he cannot perform the trust, to return the funds to the person from whom he received them. Accordingly where a party accepted a trust to buy railroad land with railroad bonds, at a fixed price per acre, held, that if he was unable to do so it was his duty to return the bonds, and that a sale of them for six cents on a dollar in order to obtain funds to purchase lands was a breach of trust. Kitchen v. Bedford, 13 Wall., 413.
8 396. An attorney for trustees has no implied power, although he be one of the trustees, to consent to a decree which has the effect of taking the trust out of the bands of the trustees, or of placing the execution of it, in whole or in part, in other hands; and this is specially so in a case of public trust. Vose v. Trustees of the Internal Improvement Fund, 2 Woods, 647.
$ 397. A testator in New York devised his real estate to his executor and trustee, in trust to sell and convey the same, and, having converted the real estate into money, to divide the proceeds among certain benevolent institutions. The will being silent as to the power of the executor to receive the rents and profits, held, under a state statute providing that " a devise of lands to executors or other trustees, to be sold or mortgaged, where the trustees are not also empowered to receive the rents and profits, shall vest no estate in the trustees; but the trust shall be valid as a power, and the lands shall descend to the heirs or pass to the devisees of the testator, subject to the execution of the power,” that the trust to sell and apply the moneys under the will was simply a power in trust, and that the land followed the law of descents and remained in the heirs, subject to their ownership and control until the execution of the power by the executor. Pennoyer v. Shelden, 4 Blatch., 316.
$ 398. Interest and rent, to what extent chargeable with.- Interest will not be allowed against a trustee holding a fund, when he had made no interest, if there be po laches or neglect, or use of money on his part. Cassels v. Vernon, 5 Mason, 332.
$ 399. Where property was held in trust for the former owner, and he suffered the trustees to retain it without renting it, and his widow and children held it after his death, it was held that the trustees were not chargeable with rent. Burr v. McEwen,* Bald., 154.
$ 400. When a trustee is chargable with simple interest, and when with compound. Barney v. Saunders, * 16 How., 535.
$ 401. Where a trustee, prior to the late war of the rebellion, appropriated the trust estate to his own use, and treated it from the beginning as his own, held, that he was chargeable with interest from the time he appropriated the property until the same was accounted and paid for, including the period of the war. Bourne v. Maybin, 3 Woods, 724.
$ 402. A trustee who, by the terms of his trust, is directed to invest the trust fund in productive securities, is liable to the beneficiaries for interest, even though the trust money lies idle in the bank. Nicholson v. McGuire, 4 Cr. C. C., 194.
$ 403. The estate of a husband who as trustee for his wife, she having placed moneys in bis hands to be invested, acted in utter disregard of his trust, treating the funds as his own, neither keeping nor rendering any account of his trust, may be charged with interest compounded annually on the trust funds in his possession, and no compensation should be allowed for his services as trustee. Walker v. Walker, 9 Wall., 743.
$ 404. The principles on which courts of equity charge trustees, assignees and executors with interest on trust money in their hands are that they have either used it in their own business or improperly neglected to invest it. Where there has been gross neglect the court will sometimes make annual rests and charge them with compound interest. In re Thorpe, Dav., 290.
$ 405. There were two trustees of real and personal estate for the benefit of a minor. One of the trustees was also administrator de bonis non upon the estate of the father of the minor VOL. XXVIII - 42
and the other trustee was appointed guardian to the minor. When the minor arrived at the proper age and the accounts came to be settled, the following rules ought to have been applied: 1. The trustees ought not to have been charged with an amount of money which the administrator had paid himself as commissioner. That item was allowed by the orphans' court, and its correctness cannot be reviewed collaterally by another court. 2. Nor ought the trustees to have been charged with allowances made to the guardian trustee. The guardian's accounts also were cognizable by the orphans' court. Having power under the will to receive a portion of the income, the guardian's receipts were valid to the trustees. 3. The trustees were properly allowed and credited by five per cent. on the principal of the personal estate, and ten per cent. on the income. 4. Under the circumstances of this case the trustees ought not to have been charged upon the principle of six months' rests and compound interest. 5. The trustees ought to have been charged with all gains, as with those arising from usurious loans, unknown friends, or otherwise. 6. The trustees ought not to have been credited with the amount of a sum of money deposited with a private banking house and lost by its failure, so far as related to the capital of the estate, but ought to have been credited for so much of the loss as arose from the deposit of current collections of income. Barney 1. Saunders, * 16 How., 535.
$ 406. When trust funds are mingled with his own.- A trustee is not permitted to mix his own funds with the trust funds in making loans; and when he does so he becomes debtor to the trust, and if there is a loss it is his loss and not the loss of the trust estate. Moore v. Mitchell, 2 Woods, 483.
$ 407. Where no accounts are kept.- A trustee is bound to keep clear, distinct and accurate accounts. If he does not, all presumptions are against him, and all obscurities and doubts are to be taken adversely to him. Bourne v. Maybin, 3 Woods, 724.
§ 408. For profits of trust estate.- If a trustee uses trust money in trade it is a breach of trust, and he will be charged with all the profits he has made, but if there has been any loss that must be borne by himself. In re Thorp, Dav., 290.
$ 409. A trustee is bound to account for gains made with the fiduciary estate, even though such gains are in the nature of usurious interest. Barney v, Saunders, * 16 How., 535.
$ 410. of trustee for acts of co-trustee.- If, in the regular execution of a trust, money is paid to a trustee, his co-trustee is not liable for it merely because he joined in the receipt; but if the trustee who received the money had no right to receive it, his co-trustee who joins in the receipt is considered as co-operating in a breach of trust, and will be involved in its consequences. Wallis v. Thornton, 2 Marsh., 422.
§ 411. For losses.— A. was trustee of certain property under a will, the profits to be paid to B. during life, and the remainder to plaintiffs. A. turned the property over to B., who lost it, and suit was brought against A.'s executrix, who was his wife, to reach the assets of A.'s estate in her hands, and also to satisfy a deficiency out of property conveyed to her by A., being more than a reasonable provision for her in view of A.'s liability for violating the trust, and probably intended to defeat that liability, which she understood. Held, that the bill was not multifarious, and that the executrix must respond for the property so conveyed to her, as well as for the assets of the estate. Beatty v. Hinckley.* 17 Blatch., 398.
$ 412. A trustee who, by the terms of the trust, is to keep the trust fund invested, is bound to do so, and, if he keeps a sum on deposit longer than is necessary to enable him to invest it, and loss occurs, he must bear the loss. Barney v. Saunders,* 16 How., 535. 8 413.
by receiving worthless money.- Where a trustee loans trust funds, consisting of good and lawful money, and receives in payment Confederate money worth but thirty cents on a dollar at the time it was received, and which afterwards became worthless, the entire loss must be his unless he can show that he received it under compulsion. Moore v. Mitchell,* 2 Woods, 483.
$ 414. Lack of compensation as relief from liability.— It is no defense for a trustee who has received worthless currency for trust funds loaned, that by verbal understanding with the testator he agreed to receive no compensation for his discharge of the duties of the trust, that he was to manage the business of the trust with the same care as he did his own, and that, having done so, he was relieved from liability by such agreement, notwithstanding the loss. Where a trust is created by will it cannot be modified by verbal understanding had between the trustee and the testator. Ibid.
$ 415. Vessel owners.— The owners of a vessel in a whaling voyage, where they and the crew are shareholders in certain agreed portions in the cargo, are trustees to manage and dispose of it for the benefit of all concerned. The title is in them, but the interest in the proceeds belongs to the shareholders. They are not, like common carriers for others, liable for robbery, as the property is in a large proportion their own, and there is no danger of collusion with highwaymen and pirates; but as trustees, or copartners, or directors in a company, when they are joint stockholders or depositors or private carriers, they are responsible only $ 419. Where property is received in trust and the trustee sells it and receives and appro-, priates the consideration, he is liable as agent for the proceeds if the sale is not objected to. Baker v. Root, 4 McL., 572.
for ordinary care in selecting agents and carrying the cargo. Joy v. Allen, 2 Woodb. & M., 303.
$ 416. Owners of vessels are generally responsible for the misconduct of the master committed in their business, to third persons, but are not liable to their cestuis que trust, or copartners, or joint shareholder, if using due care in selecting him. Ibid.
$ 417. Miscellaneons.- Where trustees of a public trust have been restrained, by order of the court, from disposing of any of the trust property otherwise than in strict accordance with the legislative act prescribing their duties, and the performance of such duties under the act requires the exercise of judgment and discretion, and they deny any intention to violate any injunction or decree in the cause and aver that they have not done so, they are not liable for contempt for disobedience of the decree of the court. Vose v. Trustees of the Internal Improvement Fund, * 2 Woods, 647.
& 418. A conveyance was made in trust for the use of a husband and wife for their lives, remainder to their children, with power in husband and wife to sell the property and re-invest on the same trusts. The trustee prevailed upon the husband and wife to permit him to use a sum raised on the trust property, the same being secured by a mortgage on property of the trustee in the same trusts as the original conveyance. The husband and wife were afterwards prevailed upon by the trustee to release this mortgage so that he might purchase other property which he promised to mortgage to them, but failed to execute the mortgage. Held, that he was guilty of a breach of the trust. Caldwell v. Taggart, * 4 Pet., 190.
$ 420. Where property is conveyed in trust, to be held and managed for the benefit and under the direction of the grantor, the trustees are not chargeable for any acts done with the knowledge or approval, or even to the carrying out after his death of plans made in reference to the property during his life, under the directions of such grantor. Burr v. McEwen,* Bald., 154.
$ 421. Where a trust is general for the benefit of the grantor, private sale of the trust property is permissible, and where property is fairly sold for its fair market value the trustees are not to be charged with a greater sum, though it might possibly have been obtained by taking advantage of the situation of the purchaser. Ibid.
$ 422. Where $1,000 was given to a legatee by a will, the money to be raised out of the testator's estate and paid over to the legatee; and the executor and trustee under the will, having raised the money, instead of paying it to the legatee, purchased bank stock with it; and afterwards, when called on by the legatee to account, sold the bank stock and paid over the proceeds, $1,460.34, to the duly authorized agent of the legatee, which he received as and for the $1,000 legacy, the stock having been sold with his knowledge and consent, it was held that, as there was no evidence the legatee was advised of the purchase of the bank stock, or ever assented to it, the executor had a right to sell the stock and pay over the proceeds. Until the investment was sanctioned by the legatee he had a right to claim the money; and until then, too, the executor had a right to recall or change the investment or pay over the legacy, being bound, if any profits were made by the investment, to account for them, and to make up the loss, if any, Norman v. Storer, 1 Blatch., 593.
3. Death. Discharge. Removal. New Appointment. $ 423. Death of trustee.— If a trustee dies before the execution of the trust the court has power to appoint a new trustee and to compel the performance of the trust by him, or to decree and enforce the execution of the trust through its own officers and agents, without the intervention of a new trustee. Batesville Institute v. Kaufman, 18 Wall., 151. $ 424.
estate taken by his heirs.- Where the relation of trustee and cestui que trust exists, on the death of the trustee nothing but the mere legal estate goes to his heirs. Walton v. Coulson, 1 McL., 120. $ 425.
of one of joint trustees - Power of survivor.- Upon the death of one of two joint trustees the trust does not survive to the other, unless such a provision be inserted in the deed of trust. Boone v. Clarke, 3 Cr. C. C., 389.
$ 426. A power coupled with a trust vested in two or more trustees will survive when in do way beneficial to the trustee. It is not necesssary that the trustees should have a personal interest in the trust; it is the possession of the legal estate, or a right virtute officii in the subject over which the power is to be exercised, which constitutes the interest necessary to enable the power to survive in the trustee. Lorings v. Marsh, 6 Wall., 337. § 427. A will devising property to two trustees for the benefit of testator's children pro