may be called at any time, and the certificate holders may amend any and all of the articles of the association, except in three particulars, not essential to the substantial control of the association or the management of the property thereof. In article II it is provided that: "The trustees shall have the power to contract and carry on in the name of and for the association any business which could be lawfully conducted or carried on by an individual, and, in the conduct of such business, may use and invest any funds of the association and shall have full general power and authority to buy, sell, pledge, mortgage, grant, convey and exchange property of every description, real, personal or mixed," etc. Suppose at one of their meetings provided for in article XI, the certificate holders should pass a resolution amending article II, line 1, by striking out the word "trustees" and substituting in lieu thereof the words "certificate holders," the trustees would be practically stripped of their control and operation of the enterprise. In article XXI it is provided that "the trust here created shall terminate at the expiration of 21 years after the death of the last survivor of the above named trustees," etc. If in one of their said meetings the certificate holders should pass a resolution amending the said article, so that the trust should terminate forthwith, the trustees would be powerless and the trust would come to an end. The trustees have no vote in such matters, nor have they, so far as the facts before me disclose, any capital of their own in the enterprise to protect. It is evident that the power of control of the management is in the certificate holders, and may at any time be exercised by them, notwithstanding any opposition the trustees might offer. The certificate holders are associated together by the terms of the creative instrument. The association is therefore a partnership, and not a trust. Does it thereupon follow, as contended by the defendant, that the names of the certificate holders should be added as parties plaintiff, one of whom, it is alleged, is a citizen of New Jersey, which fact ousts this court of jurisdiction? It should be noted that the association is a partnership, the certificate holders themselves being the partners, and not, as defendant seemed to think, partners with the trustees, who are not certificate holders. There is, therefore, no trust here, and strictly speaking no trustee. The so-called trustees represent the certificate holders. The certificate holders are principals, and the trustees, the plaintiffs, are their mere "managing agents.' By whatever name, however, they are designated, there can be no doubt that they have full authority to represent the certificate holders and bind them in all transactions touching the property. It will be recalled that by article II the "trustees" "have full general power and authority to buy, sell, pledge, mortgage, grant, convey, and exchange property of every description, * * and do all things necessary to the conduct of the business which they may undertake." It is further provided in article IV that "the trustees shall be deemed the absolute owners of all the property of the association and both the legal and equitable title to all such property shall be vested absolutely in them. * The defendant in all his dealing with the plaintiffs, has regarded and accepted them as accredited authoritative agents of the certificate holders, with full power to deal as they pleased with the property con tributed by said certificate holders. That the present plaintiffs are the proper parties plaintiff in a suit in equity in New Jersey touching said property was decided in the case of Simson et al. v. Klipstein, 88 N. J. Eq. 229, 102 Atl. 242. The parties plaintiff and defendant were the same in that case as in the instant case and the same questions which are raised here as to proper parties were raised there, and decided against the defendant. In view of the powers conferred upon the so-called trustees or "managing agents" by the articles of the association, the recognition by the defendant of their full and unquestioned authority of the association, and the decision of the Court of Chancery of New Jersey holding that the plaintiffs are the proper parties plaintiff in a suit touching said property, I am of the opinion that Simson and Hunter are proper parties plaintiff, and have full power and authority to represent the certificate holders in this proceeding. * * * The defendant may have 20 days, after the entry of order, within which to answer. WILLIAMS et al. v. INHABITANTS OF MILTON. (Supreme Judicial Court of Massachusetts, 1913. 215 Mass. 1, 102 N. E. 355.) LORING, J. These are four petitions for the abatement of taxes assessed upon the plaintiffs as trustees of the Boston Personal Property Trust. The Boston taxes were assessed on the theory that the property held by the plaintiffs under that trust was partnership property to be assessed under St. 1909, c. 490, pt. 1, § 27, in Boston where the partnership (if there was a partnership) had its place of business. The other taxes were assessed upon the theory that the property held by the plaintiffs under that trust was held by them as trust property the income of which was payable to another person and was to be assessed under St. 1909, c. 490, pt. 1, § 23, cl. 5. It has been contended in effect if not in terms that whatever may be its true character the trust for the purposes of taxation was a partnership. Doubtless the Legislature might provide that a trust which was not a partnership should be treated as a partnership for the purposes of taxation. But it has not done so. What the Legislature has done is to provide (1) that "personal property held in trust by an executor, administrator or trustee, the income of which is payable to another person, shall be assessed to the executor, administrator or trustee in the city or town in which such other person resides, if within the commonwealth," and if he resides out of the commonwealth, in the place where the trustee resides (St. 1909, c. 490, pt. 1, § 23); and (2) that "partners, whether residing in the same or in different cities or towns, may be jointly taxed under their firm name, in which their business is carried on, for all the personal property employed in such business, except ships or vessels" (St. 1909. c. 490, pt. 1, § 27). That is to say, the Legislature has provided that the right to tax property as trust or as partnership property depends upon the real character of the property taxed. Under these enactments of the Legislature there is no room for holding that property which is in reality not partnership property can be taxed as partnership property. The right to tax property as trust or as partnership property depends upon what the character of the property taxed really is. * * This brings us to the question of the character of the Boston Personal Property Trust. It is plain that it is a trust and not a partnership. By the terms of the indenture of trust the property contributed by the certificate holders, or that bought with money contributed by them (the original trust property could be acquired in both ways by the terms of the indenture of trust), was to be held by the trustees in trust to pay the income to the holders of the certificates, and on the termination of the trust to divide the trust fund or the proceeds thereof among them. The certificate holders are throughout called "cestuis que trustent." The certificate holders, or "cestuis que trustent," are in no way associated together, nor is there any provision in the indenture of trust for any meeting to be held by them. The only act which (under the trust indenture) they can do is to consent to an alteration or amendment of the trust created by the indenture or to a termination of it before the time fixed in the deed. But they cannot force the trustees to make such alteration, amendment or termination. It is for the trustees to decide whether they will do any one of these things. All that the certificate holders or "cestuis que trustent" can do is to give or withhold their consent to the trustees taking such action. And the giving or withholding of consent by the cestuis que trust is not to be had in a meeting, but is to be given by them individually. As we have said, no meeting of the cestuis que trust for that or any other purpose is provided for in the trust indenture. The trustees of the Boston Personal Property Trust have a right to sell the trust securities and reinvest the proceeds, and also a limited power to borrow on the security of the trust property. The certificate holders, or "cestuis que trustent," as they are called in the trust deed, have a common interest in precisely the same sense that the members of a class of life tenants (among whom the income of a trust fund is to be distributed) have a common interest, but they are not socii, and it is the trustees, not the certificate holders, who are the masters of the trust property. The sole right of the cestuis que trust is to have the property administered in their interest by the trustees, who are the masters, to receive income while the trust lasts, and their share of the corpus when the trust comes to an end. It has been urged by the learned counsel for the city of Boston that these certificate holders or "cestuis que trustent" are in effect carrying on the business of buying and selling securities through the trustees as managing agents or directors, and he refers to two facts which (he argues) bear him out in that contention, namely: (1) That the trustees on April 1, 1911, had on hand undivided income to the amount of $51,516.93, and a "surplus capital" amounting to $488,566.35. By the terms of the trust the trustees are authorized to set aside from time to time such portion of the net income as shall not be required for dividends for a "surplus fund," which surplus fund may be subsequently used by them in their discretion in payment of dividends. It appears that the face value of the outstanding certificates is $2,090,500. The surplus fund of undivided income therefore amounts to about 21⁄2 per cent, of the corpus of the fund. The surplus capital of $488,566.35 is about 2312 per cent. of the face value of the outstanding certificates. That is not an extraordinary increase in the value of the corpus of the trust fund during a period of 18 years. But this contention brings out a fact in addition to those already re ferred to, which shows that the Boston Personal Property Trust is not a partnership, but a trust, and nothing but a trust. When persons engage as partners in buying and selling stocks, bonds and other securities for their mutual profit, the gains made by purchases and sales are profits of the partnership, divisible as such among those entitled to the profits of the partnership. In the case of a trust, on the other hand, any gain made by a change of investments is an accretion belonging to the corpus of the trust fund and belongs to those who own the corpus of the fund. Such gains become part of the corpus as much as the original money contribution to the trust fund. On them the certificate holders or "cestuis que trustent" are entitled to income while the trust lasts, and to their share of them (because they are included in the corpus of the trust fund) when the trust ends and there is a distribution of the corpus among the cestuis que trust. That is the way in which the trustees of the Boston Personal Property Trust have dealt with gains made by changes of investment of the securities of that trust. That is to say, the trustees have treated gains from sales of securities not as profits of a partnership organized to buy and sell stock for a profit, but as gains on a change made in the investments of a trust fund. * * * There is nothing in the trust deed of the Boston Personal Property Trust which is in any way different from a trust under a will except that there are no limitations over and the interests of the cestuis que trust are represented by transferable and transmissible certificates. Up to this time we have not alluded to the declaration in the indenture of trust here in question that it was the intention of the parties to it to create a trust and not a partnership. It is what the parties did that is decisive. If there had been doubt as to what they did, what they intended to do would have been a matter entitled to some consideration in determining what they did. * In the Boston Personal Property Trust the property is the property of the trustees, to be managed for the benefit of the certificate holders, but to be managed by the trustees and not by the certificate holders. There is no association of or among the certificate holders. The rights of the certificate holders are limited to each receiving his share of the income of the trust investments during the continuance of the trust and his share of the corpus of the trust when the trust comes to an end. It is in every respect an investment trust and nothing more. It follows (1) that the property held by the plaintiff as trustees of the Boston Personal Property Trust was not taxable as partnership property, and that in the petition brought by them against the city of Boston they are entitled to an abatement; and (2) that their property was taxable as property held in trust, the income of which was payable to another, and the taxes assessed by the assessors of the city of Waltham and by the assessors of the inhabitants of Milton and of Brookline were properly assessed, and that the petitions against those municipalities should be dismissed. It is so ordered. 1. THEMSELVES Partner's Interest in Specific Partnership Property. 2. What Constitutes Partnership Property. 3, What Constitutes Partnership Capital. 4. Acquisition and Transfer of Partnership Realty. 5. 6. Partner's Interest in the Partnership. 7. Sharing of Profits and Losses. 8. Partner's Right to Repayment of Contributions. 9. Partner's Right of Indemnity. 10. Partner's Right to an Accounting. 11. Fiduciary Relation of Partners. 12. Partner's Right to Participate in Management. 13. Partner's Right to Information. 14. Partner's Right to Remuneration for Services. SECTION 1.-PARTNER'S INTEREST IN SPECIFIC Uniform Partnership Act, Section 24. The property rights of a partner are (1) his rights in specific partnership property, (2) his interest in the partnership, and (3) his right to participate in the management. Uniform Partnership Act, Section 25. (1) A partner is coowner with his partners of specific partnership property holding as a tenant in partnership.1 1 Lewis' Note to Section 25(1).—One of the present principal difficulties in the administration of the law of partnerships arises out of the difficulty of determining the exact nature of the rights of a partner in specific partnership property. That the partners are co-owners of partnership property is clear; but the legal incidents attached to the right of each partner as co-owner are not clear. When the English courts in the seventeenth century first began to discuss the legal incidents of this co-ownership, they were already familiar with two other kinds of co-ownership joint tenancy and tenancy in common. In joint tenancy, on the death of one owner his right in the property passes to the other co-owners. This is known as the right of survivorship. The incident of survivorship fits in with the the necessities of partnership. On the death of a partner, the other partners, and not the executors of the deceased partner, should have a right to wind up partnership affairs. See clause (d), infra. The early courts, therefore, declared that partners were joint tenants of partnership property; the consequence being that all the other legal incidents of joint tenancy were applied to partnership co-ownership. Many of these incidents, however, do not apply to the necessities of the partnership relation and produce most inequitable results. This is not to be wondered at. because the legal incidents of joint tenancy grew out of a co-ownership of land not held for the purposes of business. The attempt of our courts to escape the inequitable results of applying the legal incidents of joint tenancy to partnership has produced very great confusion. Practically this confusion has had more unfortunate effect on substantive rights when the separate creditors of a partner attempt to attach and sell specific partnership property than when a partner attempts to assign specific partnership property not for a partnership purpose, but for his own purposes. The Commissioners, however, believe that the proper way to end the con |