statute itself. So far as the creation of trusts by acts of settlors, this is but the upholding of the right of contract and the old idea of a corporation not being competent or qualified to act as trustee seems thoroughly exploded. As to this it was said by Sharkey P. J. that: "Before the statute of uses, there was a limitation of restriction as to those who could stand seized to uses; but since the passage of that statute," trusts have been adopted to supply the place of uses and the former inability to stand seized to a use no longer prevails. The general rule now is that all persons capable of confidence, and of holding real or personal property may hold as trustees. Corporations may now hold as trustees, although they could not be seized to a use before the statute.'

9916

§ 12. Right of State to Deny Certain Powers to Other Than Corporate Fiduciaries. I have no specific authority to prove that the state might require, under its police power, that no individual should be accepted as a statutory fiduciary. The power of control over decedent estates and its descent and distribution is, as said above, very ample, and its police power once vested over estates of minors and the insane is very broad. If it conceived that personal statutory fiduciaries were, on the whole, far less reliable and safe than trust companies, there would seem no obstacle to its forbidding the former. I think that the tendency of these times is so greatly towards this form of protection that it is not unlikely that we shall see many legislative enactments for its advancement in derogation of the individual fiduciary.

15. 27 Henry VIII, c. 10.

16. Sinking Fund Com'r v. Walker (1842), 6 How. (Miss.) 143, 185, 38 Am. Dec. 433.

CHAPTER IV

Qualification of Trust Company to Assume Fiduciary Functions

§ 13. Preliminary. It has been shown that a statutory trust company may exercise the powers of a fiduciary, whether according to the strict relation of trustee and cestui que trust or as the holder of funds or property belonging to or for the benefit of another where obligation and duty are defined by statute. It is seen, further, that it is not inconsistent in law, that a trust company shall be vested with other powers. In this regard they are not unlike individuals who, however otherwise occupied in the affairs of life, are not deemed unfitted for the law reposing in them all trusts of defined or discretionary duties, indeed, it might be said their experience in their own affairs is looked to, to ascertain their fiduciary fitness. Moreover an institution which serves many lines is independent of business conditions. in any single branch of commerce.

With the corporate fiduciary there is more than in the case of a personal fiduciary, an implied, if not an express, warranty of fitness, because it applies, or holds itself out, for appointment, while the other is deemed to have a trust thrust upon him. Thus an old English

case' is quoted from by our Federal Supreme Court,2 where the Lord Chancellor said: "I like not that a man should be ambitious of a trust where he can get nothing but trouble by it." Our court applied the sentiment thus expressed, notwithstanding that the American rule, as distinguished from the so-called "English Rule," allows compensation to a trustee, in the absence of provision therefor in the trust instrument. It could not be objected to a trust company that it "should be ambitious of a trust," where it only is thus because of the compensation therein.

3

§ 14. Necessity That Trust Company Should Receive Compensation. The rule is quite familiar that the contracts of surety companies in the business of furnishing indemnity bonds, are more strictly construed against them than in the cases of personal voluntary sureties, the rule strictissimi juris being held not applicable to the former. And as a corporate fiduciary is given particular power as a business agency it naturally would be deemed not only in accordance with, but in strict requirement of, public policy, that it should earn in the exercise of that power such compensation as will maintain its solvency. Such a fiduciary's duties are publici juris. Like the compensation to which a common carrier or an insurance company," it not only is entitled to charge, but may be required to charge reasonable

1. Uvedale v. Ettrick (1682), 2 Ch. Cas. 130.

2. May v. May (1897), 167 U. S. 310, 42 L. Ed. 179.

3. "Trust Estates as Business Companies," Sec. 131 and cases cited. 4. Justice v. Empire State Surety Co. (1913), 209 Fed. 105; Federal Union Surety Co. v. McGuire (1914), Ark. 163 S. W. 1171; State v. Massachusetts Bonding & Ins. Co. (1915), 91 Kan. 74, 136 Pac. 905; Lackland v. Renshaw (1914), 256 Mo. 133, 165 S. W. 314.

5. German Alliance Ins. Co. v. Lewis, supra.

compensation for its services and the risk involved. All of the things so well expressed in Re Clark as reasons for the acceptance of a statutory trust company as a surety, imply or may imply duty by the state to see to its continuing solvency.

The visitorial power is to be exercised not as to a particular estate but with regard to the qualifications of such companies engaged in the business of executing trusts. Therefore, naturally it would not permit such a company to serve without compensation and thus imperil its solvency. By like token it could demand that it charge reasonable compensation.

§ 15. Oath by Statutory Fiduciary Unnecessary. I think it generally may be stated that a trust instrument may either require or waive requirement of oath by the trustee before entrance upon his duties and it is only where an oath is required for induction into office of a statutory fiduciary that I need here consider. Generally it was said in the Girard case: "Let us proceed to the inquiry whether the corporation of the city can take real and personal property in trust. Now, although it was in early times held that a corporation could not take and hold real or personal estate in trust upon the ground that there was a defect of one of the requisites to create a good trustee, viz., the want of confidence in the person; yet that doctrine has been long since exploded as unsound and too artificial, and it is now held that where the corporation has a legal capacity to take real or personal estate, there it may take and hold it upon trust in the same manner and to the same extent as a private person may do."

6. 195 Pa. 520, 46 Atl. 127, 48 L. R. A. 587.

7. § 11, ante.

8. Vidal v. Girard (1844), 2 How. (43 U. S.) 127, 187, 11 L. Ed. 205.

9

In a Minnesota case the objection went to a corporation's inability to qualify that "it could not take the necessary oath," the Minnesota statute providing for corporations acting as guardians of estates of insane persons. The court reasons out the matter according to the holding in the Girard will case, alluding to evasion. in England of this technical difficulty by the corporation naming an agent called a "syndic" to whom letters were issued.

The "syndic" rule, however, as applied in England presents many difficulties and a sort of ratiocination as to vesting of title in the "syndic" and his dying or ceasing his connection with the corporation, all of which is inconsistent with the plain terms of statute conferring powers on trust companies. For an interesting summary of these difficulties I refer to a late English publication.10

The requirement of statutes as to the taking of oath by individual fiduciaries is after all mere machinery of the law, and would not, I think, make their appointment void, where entrance upon office is in every other respect regular. To this effect it was ruled against the contention that one was never an administrator because he did not take the oath of office at the time of his appointment and the issuance of letters of administration. The court said: "The letters issued by order of the court justified respondent in his acts as administrator, and furnished. ample protection to all parties dealing with him as such. The irregularity in the grant of the letters of administration cannot be taken advantage of in a collateral pro

9. Minnesota Loan & Trust Co. v. Beebe (1889), 40 Minn. 7, 41, N. W. 232, 2 L. R. A. 418.

10. Allen on "The Law of Corporate Executors and Trustees" (1906).