papers relating to the title, to a third person for the use and benefit of the person to whom the property might be sold. These acts are hardly consistent with the theory of an unexecuted purpose. Had the trust been created by deed to some other person than the grantor, a very different case would have been presented. In such a case the continued possession of the deed by the grantor, coupled with no other proof of delivery than such as might be presumed from the record, would have raised a serious question with respect to the legal inception of the trust. But, upon the facts of the case as they are, the settlor was the natural and legal custodian of the paper. He was himself the trustee charged with the duty of executing the trust, and the instrument which declared it was properly retained by him in his own possession. What he did was quite sufficient to evidence an executed intention to create an irrevocable trust. The act of recording the paper can hardly be explained on any other theory. It was a step taken for the purpose of advising all who might deal with him with respect to the property that he had impressed it with the trust which he had declared, and that his rights and obligations thereafter with respect to it were such as were set forth in the instru ment. Considering the reasons which usually prompt people to record their deeds, the act in this case was hardly called for as a protective measure; so that we may, with a greater degree of certainty, impute to it a purpose to furnish evidence, in a physical and permanent form, of the execution of his intention to create the trusts which the instrument expressed. That intention is to my mind further emphasized by the manner in which the declaration of trust is linked with the original purchase of the property. It is made to bear even date with the deed from Milspaugh to Moloney, which it also recites, and the inference from this is quite justifiable that the property was purchased in furtherance of the settlement and in pursuance of a preconceived plan to create it, which was consummated when the declaration of trust was executed. The previous relations between Moloney and Mrs. Blackburn, their marriage about three months after the date of the execution of the deed, and the paternal attitude which he assumed towards the plaintiff, are facts which also suggest the existence, at the time of the execution of the deed, of a motive to provide for her and her child so compelling in its character as to leave little doubt of his intention that the trust was to take effect without reservation and as a completed act.

The counsel for the defendant lays stress upon the fact that the settlor refrained from informing the beneficiaries of the existence of the trust, and apparently dealt with the property as his own. But this circumstance is shorn of whatever value it might otherwise have had when the situation of the parties towards each other is considered. Both of the beneficiaries were living with Moloney, and were being supported by him, and for a portion of the time they all occupied the premises in question together. In a certain sense, perhaps, they were thus receiving the benefits of the trust, in an indirect way to be sure, but at least to an extent which was doubtless suffi cient to satisfy a mind, not concerned with the niceties of legal obligation towards those so closely related to him, that the application

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of the income of the property to the use of the beneficiaries was sufficiently made in the support which he gave them. Why he should have concealed from them the existence of the trust it is useless to inquire. Personal peculiarities of this kind are not so infrequent as to leave us at a loss for a conjecture. Whatever may be the inference which can be legitimately drawn from this attitude which was thus assumed towards the beneficiaries of the trust, it is not sufficient to overcome the conclusion which the other facts proven in the case clearly justify, that the trust had a valid inception.

The law applicable to the case is quite well settled. In the case of Martin v. Funk, 75 N. Y. 134, the whole subject of trusts resting on the declaration of the settlor is elaborately considered. C. J., in delivering the opinion of the court, says (page 138):

Church,

"Enough must be done to pass the title, although when a trust is declared, whether in a third person or the donor, it is not essential that the property should be actually possessed by the cestui que trust, nor is it even essential that the latter should be informed of the trust. In Milroy v. Lord, 4 De Gex, F. & J. 264, Lord Chief Justice Turner, who adopted the most rigid construction of trusts, in delivering an opinion against the validity of the trust in that case, laid down the general principles as accurately perhaps as is practicable. He said: 'I take the law of this court to be well settled that, in order to render a voluntary settlement valid and effectual, the settlor must have done everything which, according to the nature of the property comprised in the settlement, was necessary to be done in order to transfer the property, and render the settlement binding upon him. He may, of course, do this by actually transferring the property to the persons for whom he intended to provide, and the provision will then be effectual, and it will be equally effectual if he transfer the property to a trustee for the purposes of the settlement, cr declare that he himself holds it in trust for these purposes, and, if the property be personal, the trust may, I apprehend, be declared either in writing or by parol.'"

In the case of Martin v. Funk a deposit was made in a savings bank by the depositor in terms in her own name in trust for another. She never informed the cestui que trust of the fact, retained the bank book in her possession, and died leaving the account open. The court upheld the transaction as a valid declaration of trust. The authority of this case has not been overthrown. Cunningham v. Davenport, 147 N. Y. 43, 41 N. E. 412. To be sure, the question of intent is always open to inquiry, and, while the presumption is that the settlor intended that which his declaration and acts naturally import, it is not a conclusive presumption, but may be rebutted by proof of other acts and circumstances which are inconsistent with the existence of any such intention. But it must be remembered that the ultimate fact to be determined in all such cases is, what was the intention of the settlor at the time of the alleged creation of the trust? and the court should be cautious in accepting subsequent acts in apparent derogation of the trust as controlling evidence of a lack of intention to give complete inception to a trust which has been explicitly stated.

In the case at bar the weight of evidence is with the plaintiff, and the establishment of the trust must be considered as quite free from reasonable doubt. But it is further contended by the defendant that, assuming the trust to have been validly created, the transfer to the defendant may be upheld as a valid execution of the power of

sale contained in the instrument. The power so reserved or conferred was a power in trust, capable of being legally and efficiently exercised only for the purposes of the trust; and while a bona fide purchaser for value taking title under such a power is not bound to see to the application of the proceeds, yet if he has knowledge of an intended conversion of the same, in whole or in part, by the trustee, or that the power is being exercised by the trustee in fraud of the trust, he is not in the position of one who purchases in good faith, and the property, notwithstanding the conveyance, still remains in his hands subject to all of the trusts which were originally impressed upon it. The difficulty with the contention of the defendant is that the proofs disclose that he did have knowledge of Moloney's intention to appropriate the proceeds of the sale in a manner which was in derogation of the trust. The agreement between them, which was carried out, was that, of the $8.000 which the defendant Tilton was to give for the property, $2,000 were to be paid by the cancellation of two notes upon which Moloney was individually indebted to Tilton, and the balance was to be paid in cash on Moloney's draft for the amount. The correspondence between them also shows that Moloney expected to use this balance for purposes quite without the purview of the trust. In fact, the statement contained in his letter of May 1, 1880, to the defendant, before mentioned, namely, "No one in our family knows of this declaration of trust of mine, and never will, if the sale is made before I die," was such a clear intimation of a malign purpose as to deprive the defendant of any refuge from the consequences of the trustee's illegal action. It is claimed by the defendant that he never actually knew of the trust or of the contents of this letter until the defect in his title was brought to his attention in 1895. It appears from the letter itself that it was sent with the title deeds when the latter were transmitted to the defendant. The package in which they were inclosed was received by a person who represented him when he was away from the city. The defendant says that, knowing the papers referred to the property, he did not examine them when informed of their arrival, and has no recollection of having read the above letter, which accompanied them; that when he had agreed to purchase the property he sent the package to his attorney with a request for advice respecting the title; that he received the response that Moloney could give a good title to the property, and that he thereupon closed the transaction.

There seems to be no doubt about the fact that the deed creating the trust was among the papers handed to the attorney, and the inference from Tilton's testimony is that the letter of May 1st was also among them, although upon that assumption it is difficult to understand why the attorney did not advise the defendant of the risk he was taking in dealing with a trustee who revealed a purpose of acting in disregard of his duties. But, if this letter was not transmitted to the attorney with the papers which it originally accompanied, the inference is fair that Tilton had separated it from the others, and the probability that he read it and knew its contents when it was received is thus increased. While I do not question

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his veracity when he says that he does not remember having read it, my conclusion is that it was read by him upon its receipt, but that he has forgotten it. As he did not entertain the idea of purchasing the property himself when it was received, its contents would not have made so strong an impression upon his mind as would otherwise have been the case had the element of personal interest been present. By whom the deed of the property under which the defendant claims was drawn does not appear. It seems unlikely that his attorney prepared it, as it is, in form, a full covenant warranty deed made by Moloney in his individual capacity, and contains no reference whatsoever, directly or indirectly, to the trust. It does appear that the transaction was closed by the parties themselves without the intervention of any attorney. The most probable explanation of the matter is that the attorney's advice was based upon the existence of the power of sale contained in the declaration of trust, but was taken by Tilton, assuming his actual ignorance of the trust deed, to mean that Moloney individually had a good title which he could convey. If this was the fact, it was certainly a most unfortunate play of cross purposes for the defendant. But, even accepting the defendant's version of the facts, they are not sufficient to relieve his title from attack. He had constructive notice of the trust from the record. He was also affected with the notice which his attorney acquired from the original deed of trust which had been placed in his hands, and he was in possession of the letter of May 1st, which accompanied the title papers. He had thus, apart from the question of constructive notice, in his own hands sources of information which would have fully revealed to him the infirmities of the title he was about to take. If he did not see fit to examine them, it was a misfortune from the consequences of which he cannot reasonably be expected to be relieved. Indeed, in taking the alternative position that the sale to the defendant may be sustained as a valid execution of the power, he must postulate the existence of the trust itself, and in so doing must logically accept the consequences of his knowledge of facts disclosing an actual or proposed violation of the trust by the trustee with whom he was dealing. Knowing, as he did, that Moloney proposed to deal with the proceeds of the sale in a manner which was in fact in contravention of the trust, he cannot avoid the legal consequences flowing from such knowledge by any plea of actual ignorance of the trust deed when he seeks to vindicate his title by claiming under it. The conclusion must be that there was no valid execution of the power.

The

The defendant has also pleaded the statute of limitations. evidence, however, shows that he was actually residing out of the state at the time of his purchase of the property, and has continued to do so down to the present time. The plea is therefore ineffectual as a bar to the action. There must be judgment for the plaintiff, with costs. If an accounting for the rents and the use and occupation of the property is also sought, the principles upon which the account is to be taken and stated will be determined on the settlement of the decision and interlocutory judgment.

Ordered accordingly.

(28 App. Div. 7.)

WARREN v. UNION BANK OF ROCHESTER et al.

(Supreme Court, Appellate Division, Fourth Department.

1. INFANTS-MORTGAGES-GUARDIAN AD LITEM.

March 26, 1898.)

The supreme court can, in a proceeding to mortgage an infant's land to pay a debt, under Code Civ. Proc. § 2348, make the attorney of the creditor the special guardian of the infant.

2. SAME.

A mortgage of an infant's land, consummated by proceedings under Code Civ. Proc. §§ 2348, 2364, is not void because the report of the special guardian under oath, required by section 2356, showed that the contract made with the proposed mortgagee was an oral one.

3. SAME-COLLATERAL ATTACK.

In the absence of proof of fraud, the decision of the supreme court, in a proceeding to mortgage an infant's land, under Code Civ. Proc. § 2348, to pay a debt, is conclusive, when collaterally assailed, though it erroneously decided that the infant owed the debt, where in fact it was due from his guardian individually.

4. SAME-ADVANCEMENTS BY GUARDIAN.

A general guardian, advancing his own money for such expenditures for the ward's benefit as the court would have approved of if an application therefor had been made, is entitled to be reimbursed from the funds realized by a mortgage on his ward's land, under Code Civ. Proc. § 2348, authorizing such mortgage to pay debts.

Appeal from special term, Monroe county.

Action by Haskell B. Warren, an infant, by Edward P. Coyne, his guardian, and the said Edward P. Coyne as general guardian of the said infant, against the Union Bank of Rochester and others. Judg. ment for plaintiff, and defendants appeal. Reversed.

The action was commenced May 21, 1896. At that time the plaintiff was an Infant of the age of 11 years. The complaint alleged that in the month of February, 1895, the plaintiff was the owner of certain real estate in the city of Rochester: that the defendant Holmes B. Stevens was his general guardian; that the guardian for some years had carried on the business of a brewer at a brewery upon the plaintiff's premises; that in carrying on the business he had borrowed money of the defendant the Union Bank of Rochester, and given promissory notes therefor signed by himself as general guardian of the plaintiff'; that the business was carried on by the guardian in the name of the infant without authority, and the debt for the money loaned was the debt of the zuardian individually, and not that of the plaintiff; that in the month of Febmary, 1895, Stevens, as general guardian, presented a petition to the supreme Fourt setting forth the existence of the indebtedness to the Union Bank in the sum of $24,500 and upward, and praying that the said real estate might be mortgaged for the payment of the debts; that such proceedings were bad that a special guardian of the infant was appointed, and thereafter, in the name of the infant, executed and delivered to one Gilman H. Perkins a mortgage upon the real estate of the plaintiff, which was duly recorded in Monroe county clerk's office, for the sum of $25,000 and interest thereon, payable one year from date. and that Perkins assigned the said mortgage to the Union Bank; that Perkins paid the special guardian the sum of $25,000, and the special guardian, after taking out certain expenses, applied the balance of the money to the payment of the debt to the Union Bank; that the proceedings to mortgage the real estate of the plaintiff were undertaken pursuant to an agreement between the said Holmes B. Stevens and the Union Bank for the purpose of discharging said inlebtedness: that Perkins paid the money to the Union Bank under an agreement that the same, or the net proceeds thereof, or what should be necessary, should be applied to discharge the debt to the Union Bank, and that the bank should refund to Perkins, who was a director and vice president of the said bank,