like a noble ship on the broad bosom of the deep sea of the principles of right and justice, whose application it seeks to assist. What is good and worthy of permanence in trust company laws has been developing from the experience of various states. It is advocated that this experience be eventually crystallized into one code, and that to this end new legislation in each state should strive to conform its trust company laws as nearly as possible to a standard in matters of organization, powers, restrictions and safety. By this means trust companies everywhere will increasingly attract that confident reliance, which easily understood and known laws create. § 3. Outline of Trust Company Functions and Plan of Treatment in This Book. The practical division of a typical trust company's activities, in its widest scope, is as follows: (1) Banking: (a) Commercial. (b) Savings. (2) Fiduciary services to both individuals and corporations: (a) Trustee under agreement or declaration of trust. (b) Agent or Attorney in fact. (c) Depositary of Escrows. (d) Depositary of other papers and property. (g) Receiver and Assignee. (3) Fiduciary services to individuals: (b) Executor or Administrator. (c) Guardian, Committee or Conservator. (b) Trustee for Voting Trusts. (e) Transfer agent. (g) Guarantor and underwriter of securities. However useful the above division may be from a business point of view, it cannot be strictly followed in a legal treatise. The legal questions affecting trust companies, which it is the purpose of this book to discuss, are those which differentiate their legal status from that of individuals conducting like businesses. There are many cases in which trust companies figure, in their various capacities, in such a way as not to vary the ordinary rules of law. Discussion of these cases properly belongs in books devoted to banking, trustees, wills, insurance, receivers, contracts, corporations, etc., and is therefore excluded from this work. A process of elimination by which the subject could be reduced to the legal topics that may properly be called "trust company law" and as such are exclusive of problems not affected by this form of organization, has required an arrangement which merely approaches the practical division of activities above outlined. CHAPTER II Definition of "Trust Company"-Protection of Names In § 4. Fiduciary Companies Defined. A corporation is, in essence, but an agency to do or carry on something for the benefit of its stockholders. this way there is created between them and the managing officers of the corporation, a relation approaching that of a trust. Technically, however, it amounts to little more than an obligation by an employe to perform service in and about his employment. The services he can perform, whether of a manual nature, or in the exercise of judgment and discretion, belong, potentially, to those shareholders and stand the same as property in his hands, for which he should fairly account. This situation is in no wise different in essence from that of principal and agent, which, technically, is not a trust relation, because thereby, though manual possession may change, legal possession does not. When we get away from the ordinary corporation, as a principal for its shareholders and bring in others who resort to it, we reach the fiduciary rela tion it is my purpose to consider in this work, but there are considerations intervening, still, which may militate against this. Take for example a banking corporation that sets up to accept money of depositors and pay it out on checks. The courts hold that here arises the relation of debtor and creditor. Take again, a common carrier, a warehouseman, a storage company, and there is bailment with liabilities of bailee differing according to fixed principles in the law of contract. What then are the kinds of corporations which represent the relation of which it is intended to speak? Generally it may be said they are those which take the places of individual trustees as known to courts of equity. In addition they include the performance of other duties, the obligations in law, attaching to which are as well defined as some of the things above spoken of. For example, the duties of executors, administrators, guardians, curators and the like. § 5. "Trustee Company" in England. In England a fiduciary company is called a "Trustee Company" and it has been defined to be "A company incorporated by statute and authorized by special act to undertake the duties of executors, administrators and trustees for pecuniary reward.” In this case distinction is discussed between the powers of ordinary trustees and trustee companies, in investing the funds of a trust, and the court concluded that the section, claimed to refer to investments, in fact referred only to deposits. The trustee company, therefore, was held to the same rule of 1. Perpetual Executors, etc., Ass'n v. Swan (1898), A. C. 763, 764, 67 L. J. P. C. 141, 79 L. T. R. N. S. 148, 14 L. T. R. 587. liability in investment of funds as an ordinary trustee; that is to say, to "investments in real or Government securities." It is to be noted that "Trustee Company" is, as such companies are, specifically named under what is called the "Trustee Act, 1890" of England. § 6. Statutory Trust Company in America. But in this country the phrase "trust company" seems not so confined. It has been said that "The enumeration of the forms of transaction, which may be regarded as germane to the purposes of the modern. trust company, is by no means a simple task. If we consider the problem from the standpoint of the variety of transactions in which, as a matter of common knowledge, that class of corporations currently engage, 'Trust company' might almost be regarded as nomen generalissimum for financial and promoting companies.' " The question in this case being one of tax on gross receipts, it was held the sources of the receipts would not be particularly considered, but these sources were in "all kinds of business which fairly fell within the powers usually found in their (trust company) charters or currently conducted by them." The question of the meaning of the phrase "trust company" was more directly involved where it was claimed that the title "an act concerning trust companies," did not under constitutional limitation include nor express any object of legislation respecting safe deposit and trust companies. The court recites the history 2. State v. Central Trust Co. (1907), 106 Md. 268, 67 Atl. 267. |