KFLCC Kingdom Law 2nd Ed.

1177

TRUSTEE

TRUST

attending to the registration and transfer of their stock and bonds, serving as trustee for their bond or mortgage creditors, and transact ing a general banking and loan business. See Venner v. Farmers' L. & T. Co., 54 App. Div. 271, 66 N. Y. Supp. 773; Jenkins v. Neff, 163 N. Y. 320, 57 N. E. 408; Mercantile Nat. Bank v. New York, 121 U. S. 138, 7 Sup. Ct. 826, 30 L. Ed. 895.— Trust-deed. (1) A species of mortgage given to a trustee for the purpose of securing a numerous class of creditors, as the bondholders of a railroad corporation, with pow er to foreclose and sell on failure of the pay ment of their bonds, notes, or other claims. (2) In some of the states, and in the District of Columbia, a trust-deed is a security resem bling a mortgage, being a conveyance of lands to trustees to secure the payment of a debt, with a power of sale upon default, and upon a trust to apply the net proceeds to paying the debt and to turn over the surplus to the gran tor.— Trust estate. This term may mean ei ther the estate of the trustee,—that is, the legal title,—or the estate of the beneficiary, or the corpus of the property which is the subject of the trust. See Cooper v. Cooper, 5 N. J. Eq. 9; Farmers' L. &-T. Co. v. Carroll, 5 Barb. (N. Y.) 643— Trust ex maleficio. A species of constructive trust arising out ot some tiaud, misconduct, or breach of faith on the part of the person to be charged as trustee, which ren ders it an equitable necessity that a trust should be implied. See Rogers v. Richards, 67 Kan. 706, 74 Pac. 255; Kent v. Dean, 128 Ala. 600, 30 South. 543; Barry v. Hill, 166 Pa. 344, 31 Atl. 126.— Trust fund. A fund held by a trustee for the specific purposes of the trust; in a more general sense, a fund which, legally or equitably, is subject to be devoted to a par ticular purpose and cannot or should not be diverted therefrom. In this sense it is often said that the capital and other property of a corporation is a "trust fund" for the payment of its v debts. See Henderson v. Indiana Trust Co., 143 Ind. 561, 40 N. E. 516; In re Beard's Estate, 7 Wyo. 104, 50 Pac. 226, 38 D. R, A. 860, 75 Am. St. Rep. 882.— Trust in invitum. A constructive trust imposed by equity, con trary to the trustee's intention and will, upon property in his hands. Sanford v. Hamner, 115 Ala. 406, 22 South. 117.— Voluntary trust. An obligation arising out of a personal con fidence reposed in, and voluntarily accepted by, one for the benefit of another, as distinguished from an "involuntary" trust, which is created by operation of law. dv. Code Cal. §§ 2216, 2217. According to another use of the term, "voluntary" trusts are such as are made in favor of a volunteer, that is, a person who gives nothing in exchange for the trust, but receives it as a pure gift; and in this use the term is distinguished from "trusts for value," the latter being such as are in favor of pur chasers, mortgagees, etc. 2. In constitutional and statutory law. An association or organization of persons or corporations having the Intention and power, or the tendency, to create a mo nopoly, control production, interfere with the free course of trade or transportation, or to fix and regulate the supply and the price of commodities. In the history of economic development, the "trust" was originally a device by which several corporations engag ed in the same general line of business might combine for their mutual advantage, in the direction of eliminating destructive competition, controlling the output of their commodity, and regulating and maintaining its price, but at the same time preserving their separate individual existence, and with

out any consolidation or merger. This de vice was the erection of a central committee or board, composed, perhaps, of the presi dents or general managers of the different corporations, and the transfer to them of a majority of the stock in each of the corpo rations, to be held "in trust" for the sev eral stockholders so assigning ;their holdings. These stockholders received In return "trust certificates" showing that they were entitled to receive the dividends on their assigned stock, though the voting power of it had passed to the trustees. This last feature enabled the trustees or committee to elect all the directors of all the corporations, and through them the officers, and thereby to ex ercise an absolutely controlling influence over the policy and operations of each con stituent company, to the ends and with the purposes above mentioned. Though the "trust," in this sense, is now seldom if ever resorted to as a form of corporate organiza tion, having given place to the "holding cor poration" and other devices, the word has become current In statute laws as well as popular speech, to designate almost any form of combination of a monopolistic character or tendency See Black, Const. Law (3d Ed.) p. 428; Northern Securities Co. v. U. S., 193 U. S. 197, 24 Sup. Ct. 436, 48 L. Ed. 679; MacGinniss v. Mining Co., 29 Mont. 428, 75 Pac. 89; State v. Continental Tobacco Co., 177 Mo. 1, 75 S. W. 737; Queen Ins. Co. v. State, 86 Tex. 250, 24 S. W. 397, 22 L. R. A. 483; State v. Insurance Co., 152 Mo. 1, 52 S. W. 595, 45 L. .R. A. 363; Gen. St. Kan. 1901, § 7864; Code Miss. 1892, § 4437; Cob bey's Ann. St. Neb. 1903, § 11500; Bates' Ann. St. Ohio, 1904, § 4427; Code Tex. 1895, art 976. The person appointed, or required by law, to execute a trust; one in whom an estate, interest, or power is vested, under an express or implied agreement to administer or exercise it for the benefit or to the use of another. "Trustee" is also used in a wide and per haps inaccurate sense, to denote that a per son has the duty of carrying out a transac tion, in which he and another person are in terested, in such manner as will be most for the benefit of the latter, and not in such a way that he himself might be tempted, for the sake of his personal advantage, to neg lect the interests of the other. In this sense, directors of companies are said to be "trus tees for the shareholders." Sweet. —Conventional trustee. A "conventional" trustee is one appointed by a decree of court to execute a trust, as distinguished from one appointed by the instrument creating the trust. Gilbert v. Kolb, 85 Md. 627, 37 Atl. 423.— Joint trustees. Two or more persons who are in trusted with property for the benefit of one or more others.— Quasi trustee. A person who reaps a benefit from a breach of trust, and so becomes answerable as a trustee. Lewin, Trusts (4th Ed.) 592, 638.— Testamentary trustee. A trustee appointed by or acting un- TRUSTEE.