powers and liabilities of co-administrators." But, owing to the fact that co-executors and co-administrators, unlike co-trustees, have a several power over the estate, they are liable upon joint receipts under circumstances that would not render co-trustees responsible.

"An executor has, independently of his co-executor, a full and absolute control over the personal assets of the testator. If an executor join with a co-executor in a receipt, he does a wanton and unnecessary act, he interferes when the nature of the office lays upon him no such obligation, and, therefore, it was a rule very early established, that if executors joined in receipts they should be answerable each in solido for the amount of the money received." But this strict rule has been varied and relaxed in later cases.10

§ 42. Liability as Agent for Individual Fiduciaries. When a trust company acts as agent for an executor, administrator or a trustee, it assumes no direct liability to the beneficiaries, as it is accountable only to its principal, unless it knows that a breach of trust is being committed by its principal."

An agent for co-trustees should see that its authority is derived from both trustees and that payments are made to both of them.12

9. Perry on Trusts & Trustees, Sec. 425; Lewin on Trusts (12th Ed.) 304.

10. Lewin on Trusts (12th Ed.) 297.

11. Perry on Trusts & Trustees, Sec. 813, citing Brinsden v. Williams (1894), 3 Ch. 185, where solicitors who acted as agents in paying over trust money upon an investment arranged by the trustee without knowledge that the investment was unauthorized, were held not liable, and Blyth v. Fladgate (1891), 1 Ch. 337, where agents were held liable for paying over trust funds on an investment which they had notice was unauthorized. See, also, 29 Cyc. 306.

12. Leyton v. Sneyd, 2 Moore C. P. 583, 8 Tant. 532, 4 E. C. L. 263; Lee v. Sankey, L. R. 15 Eq. 204, 27 L. T. Rep. N. S. 809, 21 Wkly. Rep.

CHAPTER IX

Trust Companies as Trustees for Charities

§ 43. In General. "A 'charity' in the legal sense, may be defined as a gift to be applied consistently with existing law, for the benefit of an indefinite number of persons, either by bringing their minds or hearts under the influence of education or religion, or by relieving their bodies from disease, suffering or constraint, by assisting them to establish themselves in life or otherwise lessening the burdens of government.""

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Corporations have long been recognized as the best means for the administration of these trusts, largely because of their perpetual existence. It is ruled that any corporation may hold estates for charitable purposes "in accord with or tending to promote the purposes of its creation, although such as it might not, by its charter or by general laws, have authority itself to establish or to spend its corporate funds for." This is the situation of a trust company acting as trustee for charities. It is bound to conduct its own business for

1. Jackson v. Phillips (1867), 14 Allen 556; Carter v. Whitcomb (1908), 74 N. H. 482, 69 Atl. 779, 17 L. R. A. (N. S.) 733.

2. Taylor v. Bryn Mawr College (1881), 34 N. J. Eq. 101, citing Whiteford's Law of Char. 2; Tudor's Law of Char. Trusts. See "The Story of Trust Companies" by Perine.

3. Jones v. Habersham (1882), 107 U. S. 174, 27 L. Ed. 401.

profit, for thereby is its solvency maintained and adequate security afforded to its cestui que trustent. It cannot, therefore, expend its own funds on charitable objects, but in accordance with its charter right to act as trustee for others, it may accept the management and distribution of funds devoted to charitable purposes. The trust company's perpetual existence, its equipment and expert service, commend its employment in such a relation. Its unique position in this regard has evolved a new field for its activities, namely, "the community" trust, discussed in the following section.

§ 44. Origin and Plan of the "Foundation" or "Community Trust."

To Mr. F. H. Goff of Cleveland, Ohio, is the credit given for originating a public service theretofore unperformed. At his instance the directors of the Cleveland Trust Company on January 2, 1914, adopted a resolution creating "The Cleveland Foundation, a Community Trust." A copy of this resolution is contained in the appendix of this book. At the date of this writing the plan has been literally followed in a number of cities.* The Boston Safe Deposit and Trust Company has adopted the idea, with changes in general form and wording, in its "Permanent Charity Fund," established September 7, 1915, a copy of which is contained in the Appendix.

The purposes of the community trust are thus stated by Mr. Goff:

"To receive and to safeguard donations in trust under supervisions and regulations imposed by state legislation; to employ the principal or income, or both, for educational and charitable purposes in a broader and

4. See Trust Companies Magazine (Nov., 1915), Vol. XXI, p. 429.

more useful manner in future years than it is now possible to anticipate; to provide for specific needs stipulated by the donor; to insure the perpetuity of principal when that is desired; to lessen preventable errors of judgment in the disposal of principal and income; to guard against unwise use of income and principal by beneficiaries; and by a union of available funds to promote the civic, moral and mental welfare of the people in the widest, wisest, most economical and most efficient manner."

The most distinguishing feature of this trust is the wide discretion as to objects, enabling the trustee to meet the new conditions which no benefactor can foresee. Many charities have been rendered useless because no one had the power to change their purposes. A notable example of this is cited in the pamphlet describing the St. Louis Community Trust, namely, the Mullanphy Emigrant Fund. This was created "to furnish relief to all poor emigrants and travellers coming to St. Louis on their way, bona fide, to settle in the West." The fund is now a very large one, but the number of applicants for its assistance are small. Travelling to the West is not the difficult and expensive task that it was in the frontier days and present immigration laws keep paupers out of this country.

The "Community Trust," by its elastic provisions, would meet this situation, and in a way to make each dollar effective for "the greatest good." In the words of the pamphlet describing the Spokane Foundation, it would keep a gift or bequest “alive to the needs of the hour and change its uses and distribute its benefits wisely

5. Sec. 986 Dillon's Municipal Corporations.

and broadly in the light of advancing civilization and the deserving demands of the time."

§ 45. The Legality of "Community Trusts.' -This form of trust is apparently framed with careful regard to the limitations upon charitable bequests which the varied attacks of disappointed relatives have placed upon them. These limitations, in general, need not be noticed in this work, but the distinguishing feature of these trusts, namely, the provision for varied, broad and changing objects, deserves more particular attention. This has not as yet been directly tested with respect to the so-called "community trusts," but the principles involved have been very fully considered. Thus, where a trust company was appointed trustee of a fund, the interest of which was to be paid to a specified society, which in turn was to apply it "in distributing the Bible or Word of God to the destitute of the earth," it was held that the object was sufficiently definite to establish the validity of the trust. The trust company, in this case, had no power to select either the immediate or ultimate beneficiaries. The immediate beneficiary, i. e., the society, was named. The indefiniteness pertained to selection of the ultimate beneficiaries, namely, the "destitute of the earth." The power to select the individuals among this vast class was vested in the society. The Court said that charitable trusts "are sufficiently certain and determinate if the class of the beneficiaries be named in general outline, leaving to the trustee (the society) the discretion to select the immediate objects of the class named to be the actual beneficiaries of the bounty of the settlor of the trust." They relied upon a prior decision in which several general charitable ob

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6. Kasey v. Fidelity Trust Co. (1909), 131 Ky. 609, 115 S. W. 739.