or delivered by them." Heretofore the law has applied this rule to all persons.-See Champlin vs. Haight, 10 Paige, p. 274. CHAPTER II. TRUSTS FOR THE BENEFIT OF THIRD PERSONS. ARTICLE I. NATURE AND CREATION OF THE TRUST. III. POWERS OF TRUSTEES. IV. RIGHTS OF TRUSTEES. V. TERMINATION OF THE TRUST. VI. SUCCESSION OR APPOINTMENT OF NEW TRUSTEES. ARTICLE I. Who are trustees within scope of this Chapter. Creation of trust. NATURE AND CREATION OF THE TRUST. SECTION 2250. Who are trustees within scope of this Chapter. 2252. Trustees appointed by Court. 2253. Declaration of trust. 2254. Same. 2250. The provisions of this Chapter apply only to express trusts, created for the benefit of another than the trustor, and in which the title to the trust property is vested in the trustee; not including, however, those of executors, administrators, and guardians, as such. 2251. The mutual consent of a trustor and trustee creates a trust of which the beneficiary may take advantage at any time prior to its rescission. NOTE. "Of which the beneficiary may take advantage at any time."-Moses vs. Murgatroyd, 1 Johns.Ch., p. 119; Shepperd vs. M'Evers, 4 id., p. 136; Cumberland vs. Codrington, 3 id., p. 261; Weston vs. Parker, 12 Johns., pp. 276, 281; Neilson vs. Blight, 1 Johns. Cas., p. 205. "Prior to its rescission."-Acton vs. Woodgate, 2 Myl. & K., p. 492. appointed by Court. 2252. When a trustee is appointed by a Court or Trustees public officer, as such, such Court or officer is the trustor, within the meaning of the last section. tion of 2253. The nature, extent, and object of a trust are Declaraexpressed in the declaration of trust. trust. 2254. All declarations of a trustor to his trustees, Same. in relation to the trust, before its acceptance by the trustees, or any of them, are to be deemed part of the declaration of the trust, except that when a declaration of trust is made in writing, all previous declarations by the same trustor are merged therein. ARTICLE II. OBLIGATIONS OF TRUSTEES. SECTION 2258. Trustees must obey declaration of trust. 2262. Interest, simple or compound, on omission to invest trust moneys. 2263. Purchase by trustee of claims against trust fund. 2258. A trustee must fulfill the purpose of the trust, as declared at its creation, and must follow all the directions of the trustor given at that time, except as modified by the consent of all parties interested, in the same manner, and to the same extent, as an employé. NOTE.-Taylor vs. Tabrum, 6 Sim., p. 281; Wood vs. Wood, 5 Paige, p. 596. He has a right to disobey instructions in the same cases in which an employé might do so. Thus, although directed to lend the funds to A on his bond, he may refuse, if A becomes insolvent.-Boss vs. Godsall, 1 Y. & Coll. Ch., p. 617. 2259. A trustee, whether he receives any compensation or not, must use at least ordinary care and diligence in the execution of his trust. 8-vol. ii. Duty of trustee as to appointment of successor. NOTE. So held as to compensated trustees (Litchfield vs. White, 7 N. Y., p. 438; affirming S. C., 3 Sandf., p. 545); and so as to gratuitous trustees.-Caffrey vs. Darby, 6 Ves., p. 488. No greater degree of care is required.-Higgins vs. Whitson, 20 Barb., p. 141; Garrett vs. Noble, 6 Sim., p. 504. 2260. If a trustee procures or assents to his discharge from his office, before his trust is fully executed, he must use at least ordinary care and diligence to secure the appointment of a trustworthy successor before accepting his own final discharge. NOTE. This provision is new, and is intended to protect beneficiaries from a hasty resort to the Courts in order to shake off the responsibility of a trust, a proceeding by which they have been sometimes irremediably injured, an insolvent and reckless trustee having been appointed in place of an indolent but responsible one. Investment of money 2261. A trustee must invest money received by by trustee. him under the trust, as fast as he collects a sufficient amount, in such manner as to afford reasonable security and interest for the same. Interest, simple or NOTE. "Invest money received by him under the trust as fast as he collects a sufficient amount."-De Peyster vs. Clarkson, 2 Wend., p. 77; affirming S. C., Hopk., p. 424. "Reasonable security." Personal security is not sufficient.-Ackerman vs. Emott, 4 Barb., p. 626; Smith vs. Smith, 6 Johns. Ch., p. 281; Walker vs. Symonds, 3 Swanst., p. 2; Ryder vs. Bickerton, id., p. 80; Mills vs. Osborne, 7 Sim., p. 30; Holmes vs. Dring, 2 Cox, p. 1; Lowson vs. Copeland, 2 Bro. C. C., p. 156. Except for a reasonable time while seeking real security.-Emelie vs. Emelie, 7 Bro. P. C., p. 259; see France vs. Woods, Taml., p. 172. 2262. If a trustee omits to invest the trust moncompound, eys according to the last section, he must pay simple interest thereon, if such omission is negligent merely, and compound interest if it is willful. on omission to invest trust moneys. "Omission negligent merely."-Schieffelin vs. Stewart, 1 Johns. Ch., p. 620; Dunscomb vs. Dunscomb, id., p. 508. "But if willful."-Schieffelin vs. Stewart, p. 77. by trustee against trust fund. 2263. A trustee cannot enforce any claim against Purchase the trust property which he purchases after or in con- of claims templation of his appointment as trustee; but he may be allowed, by any competent Court, to charge to the trust property what he has in good faith paid for the claim, upon discharging the same. ARTICLE III. POWERS OF TRUSTEES. SECTION 2267. Trustee's powers as agent. 2268. All must act. 2269. Discretionary powers. powers as 2267. A trustee is a general agent for the trust Trustee's property. His authority is such as is conferred upon agent. him by the declaration of trust 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. NOTE.-L'Amoureux vs. Van Rensselaer, 1 Barb. Ch., p. 34; Coutant vs. Servoss, 3 Barb., p. 128; see act. 2268. Where there are several co-trustees, all All must must unite in any act to bind the trust property, unless the declaration of trust otherwise provides. NOTE.-Ridgely vs. Johnson, 11 Barb., p. 527; see Moir vs. Brown, 14 id., p. 39; Van Rensselaer vs. Akin, 22 Wend., p. 549. ary powers. 2269. A discretionary power conferred upon a Discretiontrustee is presumed not to be left to his arbitrary discretion, but may be controlled by the proper Court if not reasonably exercised, unless an absolute discretion is clearly conferred by the declaration of trust. NOTE.-Cowley vs. Hartstonge, 1 Dow, p. 378; Milsington vs. Mulgrave, 3 Madd., p. 491; Mortimer vs. Watts, 14 Beav., p. 616; Willis vs. Childe, 13 id., p. 117. If so exercised the Court will not interfere.Wilkes' Charity, 3 Macn. & G., p. 440; Contabadie vs. Contabadie, 6 Hare, p. 410. "Absolute discretion conferred."-See Cowley vs. Hartstonge, 1 Dow, p. 378. Indemnifi cation of trustee. Compensation of trustee. ARTICLE IV. RIGHTS OF TRUSTEES. SECTION 2273. Indemnification of trustee. 2274. Compensation of trustee. 2275. Involuntary trustee. 2273. A trustee is entitled to the repayment, out of the trust property, of all expenses actually and properly incurred by him in the performance of his trust. He is entitled to the repayment of even unlawful expenditures, if they were productive of actual benefit to the estate. NOTE.-" Expenses properly incurred in the performance of the trust."-Glover vs. Holley, 2 Bradf., p. 291; Worrall vs. Harford, 8 Ves., p. 8; Wilkinson vs. Stuart, 2 Sim. & Stu., p. 237; Webb vs. Shaftesbury, 7 Ves., p. 480; Att'y Gen. vs. Norwich, 2 Myl. & Cr., p. 407; 1 Keen, p. 700. "Unlawful expenditures productive of benefit to the estate."-Duffy vs. Duncan, 32 Barb., p. 587; see Morrison vs. Bowman, 29 Cal., p. 337; Beatty vs. Clark, 20 Cal., p. 11. 2274. 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 it directs 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 circum stances. NOTE. "Same compensation as an executor."— Meacham vs. Sternes, 9 Paige, p. 398; Wagstaff vs. Lowerre, 23 Barb., p. 209; 3 Abb. Pr., p. 411; see |