tion of a bond. This act speaks of no bond being "required from any trust company incorporated under this act." The court held that "when they came under this law they surrendered their powers and authority derived under their original incorporation," and must comply with the local act before acting in any fiduciary capacity.

§ 136. Foreign Trust Company Qualifying as Executor by Giving Bond and Appointing Agent for Service of Process with Respect to a Particular Estate. Upon petition by executors of a New Jersey estate to the Court of Chancery of New Jersey, for the appointment of a new trustee in the place of a Pennsylvania trust company appointed by the will, the vice-chancellor held:20

"The question propounded is not whether this court will appoint this corporation as a trustee, but whether it will say that the trustee selected by the testator shall be set aside, and the trust committed to another, upon the single ground that the trustee is a foreign corporation. It is said, in support of the petition, that this court will have no jurisdiction over the trustee or over the fund, should they be paid over to the foreign corporation. It is also said that that corporation has no right to execute the trust within this state. I see no difficulty in providing for the retention of jurisdiction sufficient to secure the execution of the trust; for the corporation tenders itself ready to give security for the due performance of its trust in this state. Nor do I see that the execution of the trust cannot be performed by the corporation. The duties of the trustee consist merely in the paying over of sums of money which can be either paid in Pennsylvania or in this state.

20. In re Satterthwaite's Estate (1900), 60 N. J. Eq. 347, 47 Atl. 227.

My conclusion is that the Guaranty Trust & SafeDeposit Company shall execute and file a bond, made to the chancellor of the state of New Jersey, with a New Jersey corporation, qualified to act as sureties, as surety; which bond, in addition to the ordinary conditions of such a bond, shall contain a condition that, whenever an order shall be served upon the foreign corporation to account before the orphans' court of Burlington county, the court of chancery, or the prerogative court of this state, it will obey such order by filing its account, and by producing any and all vouchers or securities in its possession, belonging to such trust estate, before said court, or before a master appointed by the said court, to make and state an account of the same, and obey all orders of the said court in respect of said trust; also that the New Jersey corporation so signing as surety shall be the agent of the trustee to receive and accept service of all notices and orders in respect of said trust."

§ 137. Effect of Non-compliance by Trustee upon Validity of the Trust. Restrictive legislation upon the rights and powers of foreign trust companies. go to the qualification of the company to accept and perform the trust in question and do not affect the validity of the instrument as a whole. Equity never allows a trust to fail for want of a qualified trustee, and it will not hold a trust invalid because the trustee is in default. These general principles have been applied in several cases where trust companies acting as mortgage trustees have failed to comply with foreign corporation laws."1 In such cases, the proper remedy is removal of the disqualified trustee, and the appointment of a new trustee

21. Hervey v. Illinois Midland Ry. Co. (1884), 28 Fed. 169; Farmers' Loan & Trust Co. v. Chicago & M. P. R. Co. (1895), 68 Fed. 412; Morse v. Holland Trust Co. (1900), 184 Ill. 255, 56 N. E. 369. See also Martin v. Bankers' Trust Co. (1916), Ariz., 156 Pac. 87.

under provision in the trust deed, or in the absence of such provision, by the court.

22

§ 138. Jurisdiction over Fund Held by Domestic Trust Company under a Will Proved in a Foreign State. In an action 23 brought in the Supreme Court of New York by the Farmers' Loan & Trust Company of New York for a judicial settlement of its accounts as trustee under the will of a resident of South Carolina, which had been probated in that state, it was held by the Appellate Division, First Department, that:

"The trust fund and its administration being here, the trustee being a corporation of this state, and the court having obtained jurisdiction of the parties, it may properly exercise jurisdiction and direct how the fund shall be distributed and its decree, when complied with by the plaintiff, will relieve it from further liability. (Cross v. U. S. T. Co., 131 N. Y. 330.)"

24

The case thus cited involved an action brought to have a testamentary deposition held invalid as violating the rule of New York against perpetuities. The will of a resident of Rhode Island, which was probated in that state, appointed a New York trust company as trustee of certain personal property for the benefit of residents of New York. The principal point decided in the case was that as the will was valid according to the laws of Rhode Island, an action was not maintainable in New York to have it declared invalid. With relation to the capacity of the trustee, the court remarked:

"It may be doubted whether the corporate powers

22. Morse v. Holland Trust Co. (1900), 184 Ill. 255, 56 N. E. 369; Farmers' Loan & Trust Co. v. Lake St. El. R. Co. (1898), 173 Ill. 439, 51 N. E. 55.

23. Farmers' Loan & Trust Co. v. Ferris (1901), 67 N. Y. App. Div. 1, 73 N. Y. Supp. 475.

24. Cross v. United States Trust Co. (1892), 131 N. Y. 330, 30 N. E. 125, 15 L. R. A. 606, 27 Am. St. Rep. 597.

conferred upon the trustee in this case are broad enough to authorize it to execute a trust created as this was. (Laws 1853, ch. 204; Laws 1863, ch. 60.) But though that question has come in, incidently, on the argument, it is not properly before us. This is not an action to remove the trustee. There is no allegation in the complaint that it is incompetent to act and no relief is asked on that ground. There is no finding or request to find on that subject. The want of corporate capacity in the trustee to act would not be fatal to the trust. The proper court would not allow the trust to fail because the trustee is disabled, but would appoint a new one."

139. Restrictive Statutes not Retroactive. Prohibitions against foreign trust companies holding or disposing of property in a trust capacity apply only to property acquired or business transacted subsequent to their enactment.25 A contrary construction of such laws would render them confiscatory and in contravention of the Fourteenth Amendment to the Federal Constitution, forbidding the deprivation of property without due process of law.26

§ 140. Service of Process upon Director of Foreign Trust Company. In an action " brought in New York against a foreign trust company, as executor and trustee under the will of a resident of Washington, D. C., it appears that summons was served upon a director of the trust company in New York. Of this the court said:

"The service is sought to be sustained by virtue of

25. Fidelity Trust Co. v. Washington Oregon Corporation (1914), 217 Fed. 588; Chicago Title & Trust Co. v. Bashford (1904), 120 Wis. 281, 97 N. W. 940.

26. Chicago Title & Trust Co. v. Bashford (1904), 120 Wis. 281, 97 N. W. 940.

27. Hansen v. American Security & Trust Co. (1913), 159 N. Y. App. Div, 801, 144 N, Y. Supp. 839,

the provisions of Section 1836a of the Code of Civil Procedure, which appear to give our courts jurisdiction in actions by or against a foreign administrator or executor. Service on one of the directors of the appellant, however, is only authorized by Section 432, subd. 3, of the Code of Civil Procedure, which provides that it may be so made if a designation of a person upon whom service may be made, filed by the corporation pursuain to the provisions of Section 16 of the general corporation law is not in force, or, if the person so designated or an officer specified in subdivision 1 of that section cannot be found the exercise of due diligence, and 'the corporation has property within the State, or the cause of action. arose therein.'

No attempt was made to show that the defendant had any property in the State, and the plaintiff failed to satisfy the court that the cause of action arose in New York. The motion to vacate the service was granted.

28

§ 141. Continuance of Authority of Agent for Service of Process after Withdrawal from State. In Yeomans v. Minnesota Title Insurance & Trust Co.," it appears that a Minnesota trust company, having its principal place of business in Minneapolis, sold mortgages through an agent in Boston, whom they compensated by commission. Upon the representation of this agent that it was necessary from a legal point of view, the trust company filed in the office of the commission of corporations for the commonwealth of Massachusetts an "Appointment of Attorney for the State of Massachusetts" and a "Foreign Corporation's Certificate." The question in the case was whether the trust company could be sued in Massachusetts by a citizen of New York after

28. (1895), 67 Fed. 282.