40S 



TRUST AND TRUSTEE. 



TRUST AND TRUSTEE. 



403 





beneficial interest is left wholly or partially undisposed of : in which 

 case a trust of so much of the beneficial interest as is undisposed of 

 results to the settlor or his heir, if the subject be real estate, and if it 

 be personal estate, to himself or his personal representative. The 

 intention to exclude the person to whom the legal estate is given from 

 the beneficial interest may either be presumed from the circumstances 

 or actually expressed upon the instrument. Whenever, upon a con- 

 veyance or will, a trust is declared of part of the estate, and no 

 mention is made of the residue, the partial declaration is considered to 

 have been the sole object of the settlor, and the remaining interest 

 results to him or his representative. But if no trust be expressed of 

 any part of the estate, the grantee or devisee must, in the absence of 

 mala fidet on his part, be considered as beneficially entitled to the 

 whole. (2 Bro. C. C. 589 ; 1 Atk. 448.) 



A trust of the second kind arises when the estate is converted by 

 the trustee from one species of property to another, either in pursuance 

 or in breach of his duty. If the property in its original form was 

 subject to a trust, the ceitui que trust's interests cannot be affected by 

 any change in that form. Thus where trust-money haa been laid out 

 in the purchase of land, and where the rents and profits of land have 

 been laid out in the purchase of stock, the land and stock have been 

 held bound by the same equity to which the money laid out in the 

 purchase was subject. (8 Ves. 46 ; 1 Atk. 49.) In the same manner, 

 if a trustee or other person invested with a fiduciary character obtain 

 a renewal of a lease in his own name and at his own expense, the trust 

 which was annexed to the original term will attach upon the renewed 

 lease, and the trustee will be entitled only to the amount of expense 

 incurred. (11 Yes. 391 ; 1 Eden, 453.) 



The third kind of trust by operation of law arises wherever the 

 property passes from the trustee into the hands of a person who takes 

 by a derivative title. The heir, devisee, or personal representative of 

 a deceased trustee takes the property in the same character, and is 

 bound by the same equity. Where the trust estate hag passed to a 

 stranger by conveyance, if he be a volunteer, that is to say, if there 

 was no proper consideration for the conveyance, he will be bound by 

 the trust, whether he had notice of it or not. (2 P. W. 678.) If, 

 however, the grantee was the purchaser of the estate for an adequate 

 consideration, then, if he took with notice of the trust, he will be 

 bound by it, in the same manner as the person from whom he pur- 

 chased ; but a bond fide purchaser, without notice of the trust, is not 

 affected by it; and hia title, even in equity, cannot be impeached. 

 (15 Ves. 350; 2 B. & B. 318.) 



II. Of the estate and office of trustees. 



1. Of their estate. 



Whenever a trust is created, it is a general rule that a legal estate, 

 sufficient for the purposes of the trust, shall, if possible, be implied ; 

 and also that the legal estate limited to trustees shall not be construed 

 to extend beyond what the purposes of the trust require. Thus the 

 court has in many cases extended the estate, so as to make it* commen- 

 surate with the objects to be effected, and even supplied the estate 

 when it was altogether wanting. (1 Ves. 495.) On the other hand, 

 the court has frequently restricted the estate which trustees would 

 have taken by the wording of the instrument. (7 T. II. 433.) But 

 these rules, so far as they relate to devises, must now be considered 

 with reference to the 1 Viet. c. 26, by the 30th section of which it is 

 declared that where any real estate, other than a presentation to a 

 church, is devised to a trustee or executor, such devisee shall be con- 

 strued to pass the whole estate which the testator had power to 

 dispose of in the property, unless a definite term of years, absolute or 

 detenninable, or an estate of freehold, be thereby given to him 

 expressly or by implication. 



The legal estate vested in a trustee has in general the same pro- 

 perties and incidents as if the trustee were the beneficial owner. Thus 

 it is liable to curtesy, dower, and free-bench, and at the common law it 

 was subject to forfeiture to the king and escheat to the lord j but the 

 law is now altered, and the devolution of such estates is not affected by 

 the attainder or conviction of the trustee or mortgagee. The legal 

 estate in the property, whether real or personal, may be conveyed or 

 assigned by the trustee, who may likewise devise or bequeath it by his 

 will, though trust-estates will not always pass. in a will by the same 

 words as other property, and the question in each case is one of 

 presumed intention. (8 Ves. 417.) 



2. Of the general properties of the office of trustees. 

 Acceptance of the office by a trustee may either be by express 



declaration or be implied from his proceeding to perform the duties of 

 it. Xo general rule can be laid down as to what particular acts will 

 constitute an acceptance of the office by a trustee, which is a question 

 to be determined by the circumstances of the particular case : it may, 

 however, be stated generally that every voluntary interference with 

 the trust-estate will be construed as an acceptance of the trust ; and 

 that where a trustee acts ambiguously he will not be allowed after- 

 wards to take advantage of the doubt, and deny that he acted in the 

 character of trustee. (2 Ves. Jun. 678 ; 1 Ves. 552.) 



But as no one is compellable to undertake a trust, it is in the power 

 of the person appointed a trustee to renounce the office by what is 

 called a disclaimer, which, if he intend to decline the office, he ought 

 to execute without delay. A disclaimer ought to be made by deed, 

 and should purport to be a disclaimer, and not a conveyance, which, aa 



it transmits the estate, would, strictly speaking, imply a previous 

 acceptance of the trust, though instruments of this kind receive a 

 liberal construction. (2 Svvanst. 372 ; 2 M. & K. 278.) 



The general properties and qualities of the trustee's office may be 

 stated under the following heads : 



(1.) A trustee having once accepted his office cannot afterwards 

 renounce it. The only modes by which he can be released are a 

 decree of a court of equity, a power reserved on the instrument 

 creating the trust, or the consent of all the persons beneficially 

 interested in the estate. (2 Sch. and Lef. 245.) 



(2.) The office of trustee, which implies personal confidence, cannot 

 be delegated (2 Ves. 640), though a trustee may sometimes perform a 

 mere ministerial duty through an attorney or proxy. (1 Ves. 413.) 

 -_(3.) When there are several trustees, the administration of the estate 

 is vested in all ; and therefore if one refuse to act, the others cannot 

 proceed without his concurrence, and the Court of Chancery must take 

 upon itself the administration of the trust. (2 ' Eq. Ca. Ab.' 742.) 



(4.) Where one of several trustees dies, the joint office may be exer- 

 cised by the survivors. This is a consequence of the general maxim of 

 law, that though* a bare authority given to several determines by the 

 death of one, if the authority be coupled with an interest it survives. 

 (Co. Litt. 113 a, 181 b.) 



(5.) One trustee is not liable for the acts of lu's co-trustee in which 

 he has not joined, and this is equally true whether there is a proviso 

 to that effect in the settlement or not. (Bridg. 35; 18 Ves. 254.) 

 And even if a trustee joins in a receipt for money required for the 

 purposes of the trust, for the sake of conformity only, he will not 

 thereby become responsible for the application of it, though it will be 

 upon him to prove that his co-trustee was the person by whom the 

 money was received. (11 Ves. 324; 1 Ed. 147.) The rule is different 

 with respect to co-executors, each of whom has an absolute control 

 over the property, and who are therefore under no obligation to join in 

 giving receipts (Amb. 219 ; 3 Swanst. 64) ; though whenever their 

 joining together in doing any act is necessary, the same rule applies to 

 them as to other trustees. (7 Ves. 197.) But if a trustee allows 

 money to remain improperly in the hands of his co-trustee, or is cogni- 

 sant of a breach of trust committed by him, and takes no measures to 

 protect the estate, he will become himself responsible. (11 Ves. 319.) 



(6.) Trustees cannot derive any private advantage from the adminis- 

 tration of the trust, and therefore all profits made by the trustee in 

 the management of the trust estate, in whatever manner, belong not to 

 him. but to the cestui que trust. (2 M. & K. 664.) 



III. Of the duties of trustees. 



Trustees of personal estate are bound to use all due diligence in 

 getting in and reducing into possession all parts of the trust estate 

 that may happen to be outstanding at the time of the commencement 

 of the trust (1 Mad. 290), and in providing for the safe custody of the 

 property. (1 Ed. 148.) They are also bound, where trust-money 

 cannot be applied immediately, to invest it on proper security, so as to 

 render it productive to the ccttui que trust. In the absence of any 

 specific direction as to investment in the trust-deed, the rule is that 

 the trustees ought to invest in the public funds. 



Where a trust-estate consists of renewable leaseholds, it is in general 

 the duty of the trustee to provide for renewals. If there be an 

 express trust to provide for the fines out of the rents and profits, the 

 trustees should lay aside a proper proportion of the annual income for 

 the purpose. (17 Ves. 485.) If there be no express direction for 

 payment of the fines, the estate may be charged with the amount of the 

 fine, and the rule of the court is that the tenant for life and remainder- 

 man must apportion the fine between them according to the value of 

 their respective interests. (1 Bro. C. C. 440 ; 9 Ves. 560.) 



Trustees for sale, whether expressly such or by implication, have, in 

 the absence of any express restriction on their powers, the right to 

 use all reasonable discretion as to the time and manner of effecting a 

 sale. They cannot be compelled to enter into any other covenant 

 than that against incumbrances by then- own acts. The general rule 

 is, that a trustee for sale cannot become the purchaser of the trust 

 property either for himself or as agent for another ; and the ccslui que 

 trust is at liberty to set aside any such purchase, however fair, and 

 though no advantage should have been gained by the trustee. (3 Ves. 

 750.) But a trustee is not absolutely prohibited from purchasing from, 

 the cetlui que trust under certain circumstances, though the transaction 

 is at all times one of great difficulty, and looked upon with great 

 suspicion by the court. (9 Ves. 244.} Upon setting aside a purchase 

 by a trustee, the court will in general allow for all repairs and improve- 

 ments effected on the property. (11 Ves. 22(i.) The ceetui que Irutt 

 will not be entitled to relief unless he make his application within a 

 reasonable time; and if while tui juris, and with full knowledge of his 

 rights he expressly confirms the purchase, he will not be allowed after- 

 wards to set it aside. (5 Ves. 680 ; 12 Ves. 355.) 



IV. Of the powers of trustees. 



The powers of trustees are either general or special. It is impossible 

 to defin* exactly the general powers of trustees, the extent of which 

 depends in each case upon the particular circumstances of the trust- 

 estate. It may however be laid down as a general rule, that whatever 

 is compellable by suit is equally valid if done by the trustee without 

 suit (4 Ves. 36) ; though, if a suit has already been instituted for the 

 execution of the trust, wt ireby the management is taken out of tho 



