is not limited to the one does not authorize him to invest in In Massachusetts and some other states a certain latitude has prevailed, and trustees may buy the stocks of banks and manufacturing and insurance corporations.8 In mortgage loans, the loan should in no case be greater than two-thirds of the valuation, and in some cases the mortgage should not exceed 50 per cent of the valuation. In each state the local law and usage should be ascertained and in case of doubt the court should direct. § 418. The Trustees' Control of the Property In the usual trust the trustees are entitled to the possession of the property and the legal title is in the trustees. As the legal owners, they can sue and be sued. If the property were corporate stocks, the trustee would attend meetings, and vote, and could be elected a director of the company. He would pay all taxes. It would be the duty of a trustee to hold both real and personal property in his name as trustee and all deeds, bonds, mortgages, stock certificates, and other evidences of value, should be kept as careful men of business keep their papers, in a secure safe, or in a safety deposit box. If the trust involves the care of real estate, houses, stores, or farms, these should be cared for and looked after as careful business men look after such property of their own, in many cases by the selection of prudent and trustworthy agents or managers skilled in the particular line. § 419. Trustee's Duty to Make an Income It is the duty of a trustee to make a safe income for the beneficiary. If he delays unreasonably to do this, he may be Matter of Hall, 164 N. Y. 199. Hunt Appellant, 141 Mass. 516. charged with interest. It is not clear how much dilatoriness will be tolerated. A year has been allowed and an executor must still be allowed that period. It is doubtful if a presentday court would in any case let a trustee be so slack. The supreme court made a trustee pay interest for all the time that the fund was idle in excess of three months. That period would probably be the usual rule as to principal. Accruals from rent, dividends, etc., could not be invested so readily and more time would be allowed. Usually in cases of this kind, the trustee is charged simple interest at the legal rate, and more if he had used the fund for his own purpose and had made more. He is not to profit from his dealings with the trust fund. In a few cases compound interest is charged. If a trustee were directed to accumulate income and failed to make the investment, he might be charged compound interest. It is rarely, however, that more than simple interest is charged. REVIEW QUESTIONS 1. What is the duty of a trustee? If he gives the trust property the same care and attention as he gives his own, will it be satisfactory? How should he care for funds? 2. May a trustee delegate his duties to another? When may he act through agents? What is his duty in this particular? What things must he decide himself? 3. What is the rule as to the trustee making a personal profit from the trust? In case a trustee did use his position for personal profit, what would be the penalty? If several trustees are concerned, what is the rule? 4. What is the first duty of trustees? What should be done when the trust property consists of claims against others? What should be done by an executor? What is a trustee's duty as to selling property? 5. Why must trust property be kept separate? If the trustee mingles trust property with his own, what is the effect? 6. What should the creator of the trust positively specify? What is the rule as to converting real into personal property? What is done when the will is not clear? What powers has a court of equity? What should be done when trust property is depreciating? 7. What is the rule where specific directions are given? What is the rule when there are no directions? What are the usual rules for trustees' investments? What is the rule as to investments out of the state? As to personal loans? As to using funds in business? What effect has unanimous consent of beneficiaries to a violation of the rules? 8. In Massachusetts, what is the rule? In mortgage loans, what is the rule? 9. What right would a trustee have as to stocks? In whose name should property be held and business transacted? How should valuable instruments be kept? How should real estate be cared for? 10. What is the trustee's duty as to making income? If he is dilatory what is the penalty? When may compound interest be charged? CHAPTER XLVIII RIGHTS OF BENEFICIARY § 420. Right to Information and Accounting It should be understood by both trustee and beneficiary that all papers, records, and data, bearing on the trust, the trust property, and the income therefrom, are to be kept by the trustee, and that the beneficiary has the right at any reasonable time to inspect, look over, and take copies of any of these data. The beneficiary also has the right to have his attorney or his accountant examine, inspect, and make copies of them. Further, "a trustee or an executor is bound to keep clear, distinct and accurate accounts. If he does not, all presumptions are against him, and all obscurities and doubts are to be taken adversely to him." 1 If the trustee enters such accounts in his private books, he will nevertheless have to produce these books; and the same holds good even if he has entered the accounts in the books of a firm of which he is a partner. Much feeling arises at times in the settlement of estates and the administration of trusts, because the legatees or cestuis que trust do not understand the situation or the necessary limitations under which executors and trustees work, and it is worth taking some considerable trouble and pains to make the whole business intelligible to them and to make such reports and statements as are made, understandable by those most concerned. When the beneficiaries evidently misunderstand, they should be encouraged to get the aid of a professional 1 Perry on Trusts, § 821. accountant or an attorney or some capable business friend, to look into the whole matter and see that it is all straight. In all trust relations, the beneficiary may have an accounting ordered where there is any reason for suspicion or any failure to allow inspection or to make satisfactory reports and state ment. In all cases where there are trust relations, a court of equity will, wherever it seems advisable, order an accounting, going back as far as may be necessary to show all the dealings with the trust property. The only difficulty in such case is the expense and trouble incident to the procedure. § 421. Right to Restrain Injurious Action The cestui que trust may have an injunction issued to restrain the trustee from proceeding with any unauthorized action, if such action will result in irremediable damage. A court of equity will, in a proper case, issue such restraining order as the particular situation demands. In a case requiring such action, stockholders may restrain directors from taking unlawful action. § 422. Right to Have Trustees Removed A cestui que trust has the right to have the trust property managed by honest, capable trustees, and if a trustee is not capable, or refuses to act, or deals with the trust fund for his own benefit, or fails to pay over the income as directed, or becomes interested adversely to the beneficiary, or if there is any other good cause for change, a bill or petition for his removal and the appointment of another will be received and acted upon if the case against the trustee is proved. This is a regular court proceeding, and the offending trustee must be duly notified and have the opportunity to file an answer and to be heard in opposition, which means that a formal trial must be had. If there is danger that the trust property will |