Imágenes de páginas
PDF
EPUB

Similarly, a trustee is personally liable for torts committed in the course of the administration of the trust. Thus he is personally liable for injuries resulting from the condition of the trust premises.3 So, too, he is liable for injuries caused by the negligence of an agent employed by him in the course of the administration of the trust.1 In employing an agent, the trustee is a principal and not a mere intermediate agent. Other burdens also, resulting from his holding the title to the trust property, must be borne by the trustee. In the absence of a statutory provision exempting him from such liability, he is liable for unpaid subscriptions to corporate stock and is subject to the statutory liabilities imposed upon stockholders. Statutes, however, generally expressly provide that trustees shall not be personally subject to liability as stockholders, but the estates or funds in their hands shall be liable.7 Such statutes do not in general release from liability trustees who appear on the books of the company to be absolute owners of the stock. Similarly a trustee is liable for taxes."

6

3 Everett v. Foley, 132 Ill. App. 438 (1907); O'Malley v. Gerth, 67 N. J. L. 610, 52 Atl. 563 (1902); Keating v. Stevenson, 21 N. Y. App. Div. 604, 47 N. Y. Supp. 847 (1897) (semble); Boyd v. U. S. Mortgage & Trust Co., 84 N. Y. App. Div. 466, 82 N. Y. Supp. 1001 (1903) (semble); Moniot v. Jackson, 40 N. Y. Misc. 197, 81 N. Y. Supp. 688 (1903) (semble); Gillick v. Jackson, 40 N. Y. Misc. 627, 83 N. Y. Supp. 29 (1903).

4 Ballou v. Farnum, 9 Allen (Mass.) 47 (1864); Baker v. Tibbetts, 162 Mass. 468, 39 N. E. 350 (1895); Parmenter v. Barstow, 22 R. I. 245, 47 Atl. 365 (1900) (semble); Sprague. Smith, 29 Vt. 421 (1857) (semble); O'Toole v. Faulkner, 29 Wash. 544, 70 Pac. 58 (1902).

Baker v. Tibbetts, 162 Mass. 468, 39 N. E 350 (1895); O'Toole v. Faulkner, 29 Wash. 544, 70 Pac. 58 (1902). An intermediate agent is not liable for the acts of a sub-agent. Stone v. Cartwright, 6 T. R. 411 (1795).

I COOK, CORPORATIONS, 7 ed., §§ 245-246; 1 MACHEN, CORPORATIONS, § 767. The rule is the same as to stock in joint-stock companies. Mitchell's Case, L. R. 9 Eq. 363 (1870); In re Moseley Green Coal & Coke Co., Ltd., 4 DeG., J. & S. 416 (1864); Muir v. City of Glasgow Bank, 4 App. Cas. 337 (1879).

7 LORING, TRUSTEE'S HANDBOOK, 27. See, for example, U. S. REV. STATS., § 5152, providing that "Persons holding stock as executors, administrators, guardians, or trustees shall not be personally subject to any liability as stockholders; but the estates and funds in their hands shall be liable in like manner and to the same extent as the testator, intestate, ward, or person interested in such trust-funds would be, if living and competent to act and hold the stock in his own name."

8 I MACHEN, CORPORATIONS, § 769; Sherwood v. Illinois Tr. & Sav. Bank, 195 Ill. 112, 62 N. E. 835 (1902); Converse v. Paret, 228 Pa. 156, 77 Atl. 429 (1910). But see Burgess v. Seligman, 107 U. S. 20 (1882).

La Trobe v. Mayor, etc. of Baltimore, 19 Md. 13 (1862); AMES, Cases on Trusts, 2 ed., 279. By statute, taxes are sometimes payable at the place of residence of the

When the trustee has discharged a liability incurred in the due course of the administration of the trust, ordinarily he has a right to be reimbursed.10 If, however, he was not authorized to incur the liability, he has generally no right to reimbursement." Thus, if an executor, or trustee, carries on the business of the testator without authority, he has no right to reimbursement for discharging liabilities in contract or in tort incurred in carrying on the business.12 But where the trustee has acted in good faith and has in fact enriched the trust estate, he is sometimes allowed reimbursement, not for the full amount he has expended, but for the amount by which the estate has been enriched.13 So, too, he has no right to reimbursement if he incurs and discharges a liability for a tort which is the result of his own neglect or wilful wrong and for which he is therefore personally to blame; but he has a right to reimbursement if he was not personally to blame for the commission of the tort.14 If the trustee has misappropriated assets of the trust estate or has in any other manner committed a breach of trust, so that he is indebted to the estate, his liability to the estate may be set off against his claim for reimbursement.

Normally, the trustee is reimbursed out of the income from the trust estate. In rendering his accounts, he credits himself with the expenditures he has made, and he is not bound to pay over any of the income to the cestui que trust until he has been reimbursed. He pays over only the net income. Where the income, however, is not sufficient, he may have reimbursement from the corpus of the trust estate. He is not bound to surrender the estate until his claims are satisfied. He has, in other words, a right to reimbursement, and a lien on both the income and the corpus of the trust estate to secure that right.15 His claim therefore takes

cestui que trust and, when the trustee is a non-resident, payable by the cestui que trust. See Watson v. Boston, 209 Mass. 18, 95 N. E. 302 (1911).

10 POMEROY, EQUITY JURISPRUDENCE, 3 ed., § 1085.

11 Winslow v. Young, 94 Me. 145, 47 Atl. 149 (1900); Loud v. Winchester, 64 Mich. 23, 30 N. W. 896 (1897).

12 Luchtv. Behrens, 28 Oh. St. 231 (1876); Parry's Estate, 244 Pa. 93, 90 Atl. 443 (1914).

13 Ex parte Chippendale, 4 DeG., M. & G. 19 (1853).

14 Benett v. Wyndham, 4 DeG., F. & J. 259 (1862); In re Raybould, [1900] 1 Ch. 199; In re Hunter, 151 Fed. 904 (1907).

15 LEWIN, TRUSTS, 12 ed., 795; Stott v. Milne, 25 Ch. Div. 710 (1884); Livingston

precedence over the claims of the cestui que trust and of the creditors of the cestui que trust against the trust estate."

16

The trustee may at the time of the creation of the trust agree with the settlor to forego the right to reimbursement. If the settlor shows an intention to subject a part only of the trust estate to the risk of loss and the trustee accepts the trust under such circumstances he is precluded from claiming reimbursement out of any other assets. Thus it has been held that if a testator leaves a business to his executor or trustee and directs that it be carried on, he presumptively shows an intention to subject to the risk of loss only the assets already employed in the business, and the executor or trustee has no right to reimbursement from any other assets.18 But this presumption is overcome when the language of the will evinces an intention to subject the whole estate of the testator to the risk of loss.19

If the trust estate is insufficient to reimburse the trustee who has discharged a liability properly incurred in the administration of the trust, may the trustee obtain his reimbursement from the cestui que trust personally? In a number of cases it has been held that he may. When the settlor is himself the cestui que trust a contract to reimburse the trustee may easily be spelled out; from the request to the trustee to act as such and to incur liabilities as such, a promise to reimburse him may naturally be inferred.20 But the decisions have gone further and have allowed the trustee reimbursement from the cestui que trust personally, even where

v. Newkirk, 3 Johns. Ch. (N. Y.) 312 (1818); Woodard v. Wright, 82 Cal. 202, 22 Pac. 1118 (1889); Perrine v. Newell, 49 N. J. Eq. 57, 23 Atl. 492 (1892).

16 Williams v. Allen, 32 Beav. 650 (1863); In re The Exhall Coal Co., 35 Beav. 449 (1866); Dodds v. Tuke, 25 Ch. Div. 617 (1884); Perrine v. Newell, 49 N. J. Eq. 57, 23 Atl. 492 (1892).

17 Gillan v. Morrison, 1 DeG. & Sm. 421 (1847). See Ex parte Chippendale, 4 DeG., M. & G. 19, 52 (1853).

18 Ex parte Garland, 10 Ves. 110 (1804); Burwell v. Mandeville's Ex'r, 2 How. (U. S.) 560 (1844); Smith v. Ayer, 101 U. S. 320 (1879); Fridenburg v. Wilson, 20 Fla. 359 (1883); Wilson v. Fridenburg, 21 Fla. 386 (1885). Cf. M'Neillie v. Acton, 4 DeG., M. & G. 774 (1853); Lucht v. Behrens, 28 Oh. St. 231 (1876).

19 Blodgett v. American National Bank, 49 Conn. 8 (1881); Moore v. McFall, 263 Ill. 596, 105 N. E. 723 (1914); Willis v. Sharp, 113 N. Y. 586, 21 N. E. 705 (1889); Davis v. Christian, 15 Gratt. (Va.) 11 (1859).

20 Balsh v. Hyham, 2 P. Wms. 453 (1728); Phené v. Gillan, 5 Hare 1 (1845); Ex parte Chippendale, 4 DeG., M. & G. 19 (1853). See Fraser v. Murdoch, 6 App. Cas. 855 (1881).

the latter is not the settlor, and where it would be impossible to spell out any contract.21 In Hardoon v. Belilios 22 a firm of stockbrokers placed certain shares, not fully paid, in the name of the plaintiff, their employee. The brokers subsequently assigned their beneficial interest in the stock to a syndicate which transferred its interest to the defendant. The plaintiff requested the defendant to take the shares out of the plaintiff's name, but the defendant refused. The corporation became insolvent and the plaintiff was compelled to pay several calls on the stock, and brought suit against the defendant to recover the sums he had thus been obliged to pay. The trial court non-suited the plaintiff. It was held by the Judicial Committee of the Privy Council that the non-suit was improper. The court said:

"The plainest principles of justice require that the cestui que trust who gets all the benefit of the property should bear its burdens unless he can show some good reason why his trustee should bear them himself. The obligation is equitable and not legal, and the legal decisions negativing it, unless there is some contract or custom imposing the obligation, are wholly irrelevant and beside the mark. Even where trust property is settled on tenants for life and children, the right of their trustee to be indemnified out of the whole trust estate against any liabilities arising out of any part of it is clear and indisputable. Where the only cestui que trust is a person sui juris, the right of the trustee to indemnity by him against liabilities incurred by the trustee by his retention of the trust property has never been limited to the trust property; it extends further, and imposes upon the cestui que trust a personal obligation enforceable in equity to indemnify his trustee."

This obligation of the cestui que trust to reimburse the trustee is one arising on equitable principles out of the relationship between the parties. The profits, if any, go to the cestui que trust; the losses, if any, should be borne by him rather than by the trustee, provided the trustee was not to blame for causing the losses. The obligation of the cestui que trust to reimburse the trustee is analogous to the obligation of a principal to reimburse his agent, and bears some resemblance to the obligation of a principal to reimburse his surety, although it is held that the obligation of the

21 Hardoon v. Belilios, [1901] A. C. 118.

22 [1901] A. C. 118.

cestui que trust is not enforceable in an action at law.23 If there are several cestuis que trust, their personal obligation to reimburse the trustee is enforced against them in proportion to their respective interests in the trust estate.24

Of course no one can be made a cestui que trust against his will, and if the intended cestui que trust disclaims, he cannot be held personally liable; 25 but if he accepts the beneficial interest, he cannot, by an assignment, terminate his obligation to indemnify the trustee against claims arising, even though not maturing, while he holds the beneficial interest. 26 One who is not sui juris cannot be subjected to any personal liability by virtue of his ownership of the beneficial interest.27 It has been held that the trustees of an unincorporated club have no right to reimbursement from the members of the club.28 The reason given by the court was that a club is not an association for gain and that it would be contrary to the understanding of all concerned if the members were to be held to liability beyond the payment of their dues. Doubtless the parties do not contemplate profit or loss; but if there is any profit, it goes to the members and not to the trustees. And why should not the trustees, if they have acted properly in incurring a loss, shift that loss to those for whose benefit they were acting?

As has been shown, the trustee has a right, after he has discharged a liability properly incurred in the administration of the trust, to be reimbursed therefor. But he has a better right than this. He has a right of exoneration, — a right not to be compelled to discharge such a liability out of his own private property.2 In the case of In re Blundell,30 the court, Stirling, J., said:

29

23 Sayles v. Blane, 14 Q. B. 205 (1849). Similarly, a trustee cannot bring an action at law against the cestui que trust for compensation for his services. Hazard v. Coyle, 26 R. I. 361, 58 Atl. 987 (1904).

24 Matthews v. Ruggles-Brise, [1911] 1 Ch. 194.

25 Hardoon v. Belilios, [1901] A. C. 118, 123 (semble).

26 Matthews v. Ruggles-Brise, [1911] 1 Ch. 194.

27 Hardoon v. Belilios, [1901] A. C. 118, 127 (semble).

28 Wise v. Perpetual Trustee Company, Ltd., [1903] A. C. 139. See 3 COL. L. REV. 407; 17 HARV. L. REV. 141; 19 L. QUART. REV. 386. Cf. Stikeman v. Flach, 175 N. Y. 512, 67 N. E. 1090 (1903), reversing s. c., 58 N. Y. App. Div. 277, 68 N. Y. Supp. 1011 (1901). The trustees are entitled to a reimbursement from the club property. Minnitt v. Lord Talbot, L. R. Ir. 1 Ch. 143 (1876).

29 In re National Financial Co., L. R. 3 Ch. 791 (1868); Hobbs v. Wayet, 36 Ch. Div. 256 (1887). See also In re Richardson, [1911] 2 K. B. 705.

30 40 Ch. Div. 370 (1888).

« AnteriorContinuar »