trol of the court more closely than other classes of discretionary trusts. 4. The approval or consent of the trustees may be required to a marriage or the selection of a vocation or a plan of education. For example: "If any of my nephews or nieces should on reaching the age of eighteen desire to undertake any reasonable course of education or training, professional or otherwise, likely in the judgment of said trustees to fit them to lead useful lives, said trustees may pay their reasonable bills for tuition and board, for a period of four years, but such payments may be stopped at any time if in the judgment of said trustees the beneficiaries are not making good use of their opportunities." In such cases the judgment of the trustees cannot be controlled by the court. If, though, they paid out money wastefully and to parties who were not entitled to consideration, the court would restrain them on application of some party in interest. The court would also intervene to prevent any action clearly beyond the discretionary powers granted. A personal discretion does not, unless expressly authorized, pass to a delegated or substituted trustee. § 429. Power to Forbid Marriage It is sometimes provided that a property is to be given to a cestui que trust upon marriage with the approval and consent of the trustee. In order to make such a restriction effective, there should be a gift over in event of the marriage taking place without such consent or approval. If the possible beneficiary marry without the consent of the trustee, he or she cannot claim the gift. Most of the cases in which this power has been judicially considered are English cases, and it is not certain that American courts would follow them. An American court of equity would certainly require a trustee in any such case to exercise his power with the utmost good faith, and would relieve the cestui que trust if the trustee were arbitrary, unreasonable, or harsh.3 § 430. Court's Control of Discretionary Powers A court may interfere with the exercise of discretionary powers in the following cases: 1. Where the trustee failed to exercise discretion. 2. Where discretion was unfairly exercised. 3. Where discretion was not used in good faith to promote the end and purpose of the trust. 4. Where the trustee or his family benefited or gained by exercise of discretion. Generally, courts will not interfere to compel a trustee to exercise a purely discretionary power. It is to be assumed that the creator of the discretionary trust intended the trustee and not a court, to judge what should be done. Nevertheless, if for any selfish, fraudulent, or improper purpose, the trustee refuses to act, the courts will give a remedy to the parties injured. If he exercises his power in an unfair, dishonest, or capricious manner, the courts will give relief. It is necessarily impossible to be definite on this subject, and much would depend on the circumstances of the particular case. Courts will not, without strong reason, disturb a discretionary power, but if a trustee who was to apportion or give certain funds or property to one or more of a family of children, should die or refuse to select, the court would divide the property equally among all the possible beneficiaries. In any case where a trustee exercises a discretionary power to profit himself or his family, the courts would interfere to prevent or correct the wrong. 'Perry on Trusts, § 519. If discretionary powers are exercised in good faith, the court will not interfere. The courts will intervene only when the trustees act capriciously or dishonestly. The courts will not substitute their discretion for the discretion of the trustees unless it appears that the trustees have abused, or are likely to abuse, their discretion. If a trustee refuses to consent to a sale or a marriage, from arbitrary or interested motives, the courts may be asked to compel him to assent. § 431. How Powers Are to Be Exercised All powers must be exercised by trustees in good faith and with the care and diligence which an ordinarily prudent man would use in the management of his own affairs. His general powers may be limited by the instrument creating the trust, and if he has any special powers, they are expressed in the instrument. The intent of the testator or creator of the trust is to be gathered from the instrument, and named powers carry with them all incidental powers necessary to make the main objects effective. A trustee has power to take possession of the property and to collect all claims. To do this he has the right to bring suit, to employ counsel, and to compromise if compromise is advisable. A trustee has power to care for and manage the trust property. This includes power to lease if advisable, power to pay taxes, and to make needed repairs. In a necessary case he would have power to mortgage. If there are funds to invest, the trustee must buy such securities as the will or declaration of trust authorizes or such as are allowed by the state law or the orders of the court. If any securities held depreciate, he must sell and reinvest. If a trustee made a sale without good reason and loss resulted, he would be held responsible. If a will directed the conduct of a business for a certain time, the trustee would have authority to make all contracts necessary to the conduct of the business. REVIEW QUESTIONS 1. Distinguish between general and special powers of trustees. Distinguish between mandatory and discretionary powers. 2. What are the general powers of all trustees? How may any of these powers be limited? 3. What are the usual mandatory powers? What are the usual contingencies on which imperative action is to be taken? 4. What are the usual phrases indicating discretionary powers? If discretion as to making a gift were exercised adversely, where would the gift go? What exercise of discretion do the courts supervise most closely? In what cases has the court no control? 5. If the consent of a trustee were required to a marriage, how could it be made effective? 6. Where may a court interfere with the exercise of a trustee's discretion? 7. How should a trustee exercise his powers? What incidental powers would a trustee have? CHAPTER L A TRUSTEE'S LIABILITIES § 432. General Liability of Trustees A trustee is liable to the cestui que trust for any damage arising from the trustee's bad faith or negligence. These may be summarized as follows: 1. Liability for damage from positive bad faith: (b) Mingling trust funds with his own funds (d) Investing trust funds in his own business (e) Refusing to pay over trust funds to those entitled to them 2. Liability for negligence: (a) Leaving funds idle (b) Failing to change investments when they become unsafe (c) Not keeping trust property safe A trustee is held to the usual practice of a careful, prudent business man. When he comes short of this, by reason either of bad faith or of carelessness, he becomes liable for any resulting loss or damage. If he leaves the funds idle, he may be made to pay the interest or income that otherwise might have been earned. (See § 411.) § 433. Breach of Trust A breach of trust is any act or omission of a trustee that violates his duty to care for the trust funds or to pay over the |