Imágenes de páginas
PDF
EPUB

relations of a statutory trust company will be considered wholly apart from its other business and that insolvency or dissolution will work a cessation of its trusteeship. While death of an individual trustee does the same thing, his insolvency does not, nor should corporate insolvency unless there is also a taking possession of its property. The Wisconsin court also observed in the course of its discussion that: "Of course, upon taking possession the commissioner of banking holds all the property and business of the corporation, including trust property, for a reasonable time until new trustees can be appointed to take charge of and execute the various trusts. And while he so holds the trust property, it is his duty to conserve and protect it as far as possible until new trustees can be appointed." The court here was merely indicating what could be done in a sort of interregnum when there would be possession taken as where an individual trustee dies and his executor or administrator takes possession.

Just here it seems to me is an important distinction between an individual trustee and a corporate trustee, so far as title and successorship are concerned, which I will discuss hereinafter.

The fact that one of the features of a statutory trust company is that it is a fiduciary is strongly stressed in a late Missouri case, where its engagement virtually was to act as trustee of another corporation. The court said: "The hazards of such a venture are altogether repugnant to the purposes for which the Missouri Company was formed, which included the handling and investing of the money of others, executing trusts under deeds and wills, acting as guardians of infants and insane persons, and guaranteeing the fidelity of persons holding places of

public or private trust; all requiring the maintenance of a high standard of credit and stability on the part of that company. It is impossible to escape the conclusion that the purchase of the Kansas Company's stock was beyond the powers of the Missouri company." This view indicates that the fiduciary character among its powers affects, as a matter publici juris, the private contractural powers of the corporation.

996

In a Kentucky case there is a discussion relating particularly to a trust company as an administrator, but the reasoning covers its fiduciary relation in all respects. It is important as showing that the interests of distributors of an estate are apart from that of the trust company and are not governed by the principle that knowledge by an officer where he is acting adversely to the corporation is not notice to the corporation. The court said: "Necessarily it (the corporation) acts only through its official boards. It must be held to contract with all entrusting to it such business, that it will select men of prudence, judgment, honesty and reasonable skill in these places; and that they will bring to the discharge of their duties to these estates not only their skill, but that whatever knowledge they may have wherever and whenever obtained, will be used to protect these interests exactly as if they were acting personally as such administrators or trustees."

The principle here decided goes to the very heart of the question of like responsibility of corporate trustees to that of individual trustees. Indeed, if these statutory trust companies could be thought to acquire any real title

6. Richard Hanlon M. Co. v. Mississippi Valley Trust Co. (1913), 251 Mo. 553, 158 S. W. 359.

7. Germania S. V. & Trust Co. v. Driskill (1902), 23 Ky. L. Rep. 2050, 66 S. W. 610.

to fiduciary property in their hands and thus make the principle as to notice above alluded to apply, the interrelations between their trust business and their other business would become such that their liability as trustees would become a delusion and a snare and personal delinquency of their officials constitute in many cases a sure defense.

What the court further says on this subject is so very admirable that it ought to be reproduced, which I do as follows: "In the state of case in hand the administrator, i. e., the trust company, can only have such knowledge as is in the brain of its officials or in the records that its servants have made for it. The administrator's caution is the caution exercised by these officials. Its conscience is their conscience. It will not be heard to say, therefore, that it has selected negligent, or even rascally officials, who took up other duties so incompatible with their obligations to the administrator that they could not give the estate the full benefit of either their sagacity, their prudence, their judgment or their knowledge of affairs vitally affecting the trusts committed to them." The company therefore, was held affected by the knowledge of its president of a fraud he had perpetrated on another company making it insolvent thereby and unreliable as a place of deposit by the company of money belonging to the estate held by it as administrator.

A New Jersey case is an excellent illustration of the fact that, if a trust company acts in another than a fiduciary capacity, the principle to which I have referred, viz. that knowledge possessed by an officer acting in the perpetration of a fraud will not be imputed to the

8. Camden S. D. & Trust Co. v. Lord (1904), 67 N. J. Eq. 489, 58 Atl. 607.

corporation in whose behalf he is acting, will not be applied.

A New Hampshire case refers to discretion by a trust company as to deposit by a trust company of funds it held as trustee and shows that it was excused as to loss in securities back of the fund deposited just as would have been excused any other trustee.

§ 19. Ultra Vires as Affected by Fiduciary Power in a Corporation. As lending aid to the view that corporate trustees are held to a more restricted construction of their powers a New York case,10 speaking directly on the same lines as the Missouri case supra11 intimated, said, in effect that questions of ultra vires were treated very differently when they concerned merely a corporation organized for business or trading purposes than where they occupy a fiduciary position. Speaking of trust companies it was said their "powers and purposes are primarily fiduciary. Their primary work is of a trust capacity and to a large extent they take the place of individual administrators,. executors, guardians, committees, receivers and trustees. They receive appointment from the courts in trust capacities without giving a bond. * **The courts, in considering the effect of ultra vires acts have always recognized the distinction between business and trading corporations and corporations whose purposes are largely fiduciary."

Further along this case says: "The legislature intended and the public interests demand that trust companies shall be confined not only within the words, but

9. Tucker v. Hampshire Trust Co., (1897), 69 N. H. 187, 44 Atl. 927. 10. Gause v. Commonwealth Trust Co. (1909), 196 N. Y. 134, 89 N. E. 476, 24 L. R. A. (N. S.) 967.

11. Richard Hanlon M. Co. v. Mississippi Valley Trust Co. (1913), 25 Mo. 551, 158 S. W. 359.

also within the spirit of the statutory provision which declares that a corporation shall not possess or exercise any corporate powers not given by law or not necessary to the exercise of the powers so given." This case was later expressly confirmed by that court."

13

The fact that a trust company is acting ultra vires will not affect the validity of any trusts committed to it.' Equity never permits a trust to fail for lack of a qualified trustee. If a trustee named cannot act, the court will appoint some one else.'

13

That a trust company may not "take advantage of its own wrong" by itself pleading ultra vires has been held in a Missouri case,1 and the principle of estoppel has been applied to prevent one who had made a note to a corporation as administrator from defeating recovery on the ground that the corporation was not authorized to act as administrator.15

751.

12. Davidge v. Guardian Trust Co. (1911), 203 N. Y. 331, 96 N. E.

13. Fitchie v. Brown (1908), 211 U. S. 321, 53 Law. Ed. 769, 30 S. Ct. Rep. 515; Dean v. Northern Trust Co. (1913), 259 Ill. 148, 102 N. E.

244.

14. First National Bank v. Guardian Trust Co. (1905), 187 Mo. 494, 86 S. W. 109, 70 L. R. A. 79; see, also, Creditors' Claim & Adjustment Co. v. Northwest Loan & Trust Co. (1914), 81 Wash. 247, 142 Pac. 670.

15. Union Bank & Trust Co. v. Wright (1900) (Tenn.), 58 S. W. 755; but see Continental Trust Co. v. Peterson (1906) (Neb.), 107 N. W. 786, where it was held that the appointment of a corporation as an administrator was a mere nullity and subject to collateral attack.

« AnteriorContinuar »