CHAPTER XLIII TRUSTEES § 384. Appointment of Trustees Trustees are appointed by various means. Some of these are as follows: I. By deed or declaration of trust. 2. By will, in which case they are called "testamentary trustees." 3. By agreement. 4. By the court. 5. By implication of law. 6. By self-perpetuating boards. 7. By the exercise of the power of appointment. When a voluntary trust is created by deed or declaration of trust, the creator names the trustees in the instrument. The creator should know beforehand that the proposed trustees will accept. The same or greater caution should be exercised in naming a trustee in a will, because in case the trustee declines the appointment, the testator cannot appoint another. In appointing trustees as a business arrangement, the same care should be used as in naming directors for a new corporation-men must be chosen who are interested and who have some knowledge and skill in the conduct of the particular busi ness. A man may make himself a trustee by declaration of trust made or published, or by delivery of the income from the estate which he holds as intended trustee, to the beneficiary in pursuance of the trust. The court will appoint a trustee where a trust may fail for lack of a trustee, or where a named trustee refuses to serve or has died, or where a vacancy from any cause exists and no other means have been provided for filling the vacancy. In all matters pertaining to testamentary trusts, the court of probate exercises jurisdiction and appoints trustees to fill vacancies. In other trust matters, a court of equity would exercise the power to appoint needed trustees. In all cases where a trust is implied, it involves the appointment of a trustee who may not disclaim or resign, but is forced to act. (See Chapter XLV, "Implied Trusts.") Where a trust is to endure for some long period, as when a charity or educational organization is founded, the board of trustees is often given the power of filling vacancies as they occur. The result is a self-perpetuating board. (See § 389.) Where the creator or testator provides a method of filling vacancies as they occur, the power must be exercised by the persons and in the precise method prescribed. (See § 390.) § 385. Rules for Appointing Trustees In appointing trustees, courts of equity will in general be guided by the following rules: 1. The court will try to carry into effect the wishes of the creator of the trust, so far as these are indicated in the instrument creating the trust or can clearly be inferred from it. 2. The court will not appoint a trustee in the interest of some of the beneficiaries or a trustee who was not desired by the testator, or one who is opposed to the interests of some of the beneficiaries. A trustee should look equally after the interests of all and should not be biased for or against any member or class of members of his cestuis que trust. 3. The appointment will be made to promote and make the trust most effective, and to carry the trust into execution is the main purpose of the appointment. § 386. Acceptance or Disclaimer No man can, by any express trust, be made a trustee against his will. Even if he has promised to act as a trustee, he may refuse if he finds that he cannot undertake the responsibility. If a trustee does not mean to accept, he should disclaim positively in writing so that there shall be no doubt as to his attitude. A trust may in some cases be disclaimed in open court by counsel. A trusteeship created by deed or declaration of trust should have an acceptance clause as part of the instrument, and this, signed by the trustees, would make the best possible evidence of acceptance. Where a trust is created by will, an executor and trustee will accept by qualifying and acting as executor. In most states of the Union, executors and trustees are required to give bond before acting. Where this is the case, the filing of a bond would be an acceptance, and failure to give bond would be a disclaimer. If there were no statutes as to bond, the probating of the will by the executor and trustee would be an acceptance of the trust. If there is no formal acceptance of a trust, acceptance may be presumed from acts of the appointee. Oral evidence of what a trustee has said or done or admitted may be used to prove his acceptance. If an appointee does anything in regard to the trust property, it will be evidence of acceptance. If, in any trust, funds or property are transferred to the trustee with his acquiescence, this would be evidence of acceptance. A trustee will not take title to the property unless he expressly or impliedly accepts the office tendered him. § 387. Executors Acting as Trustees If a testator intends to appoint a person both executor and trustee under his will, he should make it clear, for the offices may be so distinguished that acting as executor might not make him trustee. If by the terms of the will the executor is to keep the property or a portion of it as trustee, his bond as executor will hold as security for his conduct as a trustee until he takes over the property as trustee and gives bond in that capacity. Whenever the will distinguishes between the duties of the executor and the subsequent duties as trustee, there should be a separate bond given, even though the same person was both executor and trustee. In some states it is required that where the same persons are executors and trustees under the will, they should settle and render final account as executors before they assume their duties as trustees. Under some circumstances, the trustees are entitled to compensation distinct from, and in addition to, their fees as executors. (See § 461.) § 388. Removal or Resignation After a trustee has accepted he is held to the performance of his duties until his office is terminated, which may be in any one of the following ways: 1. Removal by a court having jurisdiction. 2. Resignation by permission of court or by concurrence of all interested. 3. Discharge and substitution by the method, if any, indicated in the instrument creating the trust. 4. By death. The courts will remove a trustee and appoint a successor where there is negligence, bad faith, or want of capacity. The courts will not act hastily in such matters, and are justified in using their sound discretion. The courts will remove trustees where there is a real danger that the trust funds will be lost or placed in jeopardy. Bankruptcy would not disqualify an executor or a trustee nor affect the trust estate in his hands, and his discharge in bankruptcy does not release him from his obligations under the trust. Also in this country trustees are required in most cases to give bond for the security of the trust fund. In some cases, however, insolvency is a good reason for removal or resignation. There are many cases where it is better for all concerned to accept a trustee's resignation and allow the court to substitute someone else. A trustee has no right to resign and it may be done only with the permission of the court or by the consent of all the cestuis que trust, assuming that they are all capable and of age to consent. The proceedings for removal would have to be conducted by competent counsel and all persons interested would have to receive notice. It may be a troublesome and costly proceeding. It is possible for the creator of a trust to provide for the removal or the resignation of a trustee or trustees and for the appointment of others. This subject is discussed in the next sections. § 389. Self-Perpetuating Boards of Trustees In the case of charities and of educational and altruistic trusts, it is common to provide that vacancies as they occur shall be filled by the remaining members of the board, so that in effect the trustees are self-perpetuating. There are advantages in this plan and also grave disadvantages. It may in most cases be better to provide that certain outside bodies interested in the general purpose, should elect at least a portion of the board, and fill vacancies as they occur. Every well-drawn instrument, creating trusts intended to continue for any considerable time, should contain authority and power for any of the trustees to relinquish the trust, as well as provisions for filling vacancies occasioned by resig |