UNIVERSITY 
 
 OF CALIFORNIA 
 
 LOS ANGELES 
 
 SCHOOL OF LAW 
 LIBRARY
 
 <A
 
 Declarations of Trust as 
 
 Effective Substitutes 
 
 for Incorporation 
 
 BY JOHN H. SEARS, OF THE ST. LOUIS BAR 
 
 AUTHOR OF "SEARS ON CORPORATIONS IN 
 MISSOURI" and "THE FEDERAL CORPORA- 
 TION TAX ANNOTATED" 
 
 1911 
 COUNSELORS PUBLISHING COMPANY 
 
 Saint Louis, Missouri
 
 \9|l 
 
 Copyright, 1911 
 
 by 
 
 JOHN H. SEARS 
 
 All rights reserved
 
 DECLARATIONS OF TRUST AS EFFECTIVE SUB- 
 STITUTES FOR INCORPORATION. 
 
 "MASSACHUSETTS LAND TRUSTS." 
 
 1. Introduction. 
 
 2. Comparison of Corporate Attributes and those of 
 Trust Estates. 
 
 3. Advantages of the Trust Method over Incorpora 
 tion. 
 
 4. Form of Declaration of Trust formed to hold Real 
 Estate. 
 
 5. Form of Declaration of Trust formed to handle 
 Personal Property. 
 
 1. Introduction. — The decision of the United States 
 Supreme Court in the consolidated case of Eliot v. Freeman 
 et ah, and Maine Baptist Missionary Convention v. Cot- 
 ting et al., 31 Sup. Ct. Rep. 360 (1911), holding that the so- 
 called Massachusetts Trusts are not subject to the Federal 
 excise tax on corporations, has emphasized the importance 
 of this method of conducting business as compared with 
 incorporation. The laws of Massachusetts do not permit 
 of incorporation for the purpose of holding or dealing in 
 real estate, except by special charter, and as special char- 
 ters are difficult to secure, the best legal talent was soon im- 
 pressed into the service of devising a means of affording 
 the usual advantages belonging to a corporation without the 
 authority of any legislative act. A method of placing the 
 property in the hands of trustees, who held the legal title 
 and issued certificates, similar to shares of stock, to the
 
 cestuis qui trust, showing the interest owned by each, pos- 
 sessed nearly all the advantages desired. Its efficiency was 
 soon appreciated. At first applied to real estate, they 
 became and are still known as the "Massachusetts Land 
 Trusts. ' ' Their advantages so appealed to others in Mas- 
 sachusetts who were acquainted with them that they 
 applied them to the holding of personal property, and 
 a declaration of trust for this purpose, known as "The Mas- 
 sachusetts Electric Companies," is set forth in this book. 
 We understand that this instrument was drawn by Richard 
 Olney, one time Attorney General and later Secretary of 
 State of the United States. As these trusts are effected 
 under the common law, it is apparent that organizers out- 
 side of Massachusetts may profit by the examples afforded. 
 Increasing restrictions and regulations imposed upon cor- 
 porations invite attention to methods other than corporate. 
 Several of the States provide for the organization of "joint 
 stock companies and associations," in addition to incorpora- 
 tion. 
 
 Pennsylvania, Act of June 2, 1874 ; 
 Virginia, Act of March 2, 1875 ; 
 Michigan, Compiled Laws, 1897, Ch. 160 ; 
 New Jersey, General Statutes, 1896, p. 2240 ; 
 Ohio, General Code, 1910, Sec. 8059 ; 
 New York, "Joint Stock Association Laws," Con- 
 solidated Laws of N. Y. (1909), p. 1873-1876. 
 
 While these joint stock companies have an artificial 
 eniny, they do not provide against individual liability as 
 uoes incorporation. They possess some of the character- 
 istics of corporations and some of the characteristics of co- 
 partnerships. However, they are organized under enabling 
 statutes which enlarge the privileges possessed at common 
 law, and they are, therefore, subject to State regulations, 
 which may be equally burdensome to those imposed upon 
 corporations. An organization under the common law, 
 with no special privilege or franchise from legislative 
 authority, is the organization that can do the same acts as
 
 an individual, with no further restrictions than are placed 
 upon individuals. Such an organization is afforded by the 
 declarations of trust herein set forth. 
 
 2. Comparison of Corporate Attributes and those 
 of Trusts. — A comparison of the usual corporate advan- 
 tages and the method of equaling or approaching them, 
 arrived at in the declarations of trust for this purpose, will 
 be noted as follows : 
 
 Advantages of Incorpora- 
 tion. 
 
 Corresponding Provision 
 in Trust Agreements. 
 
 1. Continued Exist- 
 ence. 
 (Perpetual or a certain 
 number of years.) 
 
 1. The trust continues 
 for twenty years after the 
 death of the last surviving 
 original subscriber. This 
 prevents violation of the 
 rule against perpetuities. 
 The agreement provides 
 that the death of a share- 
 holder merely entitles his 
 legal representatives to a 
 new certificate. The share- 
 holders have no right to call 
 for partition or division of 
 the property. 
 
 Limited Individual 
 Liability. 
 
 2. The liability of the 
 shareholders to the organ- 
 ization for assessments is 
 limited by the terms of the 
 agreement. As to third par- 
 ties, the trustees are re- 
 quired to provide in their 
 contracts that only prop- 
 erty in their hands as trus- 
 tees shall be answerable.
 
 Hussey v. Arnold et al., 185 
 Mass. 203 (1904). 
 
 Whether there is an indi- 
 vidual liability for torts 
 and implied contracts is ap- 
 parently undecided at this 
 writing ( October, 1911 ) . 
 This, however, would not 
 be important, except in case 
 of insolvency of the organ- 
 ization. 
 
 3. The ease with which 
 the owners of shares of 
 
 STOCK MAY DISPOSE OF 
 THEM BY WILL, SALE, OR 
 OTHERWISE. 
 
 3. The trustees issue cer- 
 tificates for the number of 
 shares to which each is en- 
 titled. These certificates 
 have a par value, entitle the 
 holder to one vote for each 
 share, and are transferable 
 on the books of the trustees. 
 
 4. The safety and con- 
 venience OF REGULAR MEET- 
 INGS AND OF CONDUCTING 
 BUSINESS THROUGH THE AU- 
 THORITY OF A BOARD OF DI- 
 RECTORS OF LIMITED AND DE- 
 FINED POWERS. 
 
 4. The shareholders meet 
 annually, and they have 
 such special meetings as 
 may be necessary. The 
 shareholders, at such meet- 
 ings, fill vacancies in the 
 number of trustees, and 
 may depose any or all of 
 the trustees and elect oth- 
 ers. The trustees have ex- 
 clusive management ; under 
 the terms of the trust, they 
 may borrow money and 
 mortgage the assets, and 
 perform other acts, prac- 
 tically the same as directors 
 of a corporation.
 
 5. Bringing and defend- 5. Same rules as to par- 
 ing litigation in the cor- ties and procedure at law 
 torate name and entity. and in equity as are ap- 
 plicable to all trust estates. 
 
 6. Broad powers. Hold- 6. The powers of such 
 ing Companies, etc. an organization may be 
 
 broader than most corpora- 
 tions, as it may provide for 
 whatever any individual 
 may do. Ownership of 
 stocks in incorporated com- 
 panies may be provided for. 
 
 3. Advantages of the Trust Method Over Incorpora- 
 tion. 
 
 1. Taxation peculiar to corporations, as, for example, 
 Federal excise tax (Eliot v. Freeman et al., 31 Sup. Ct. Kep. 
 360) and state organization and franchises taxes are 
 avoided. 
 
 2. Keports required of corporations need not be filed. 
 
 3. The trustees do not have to comply with the foreign 
 corporation laws of various States. 
 
 4. There is no legal obligation to maintain the capital 
 and refrain from paying dividends out of capital. 
 
 5. As shares of stock in corporations are personal 
 property in the hands of the owner, there are often two 
 taxes on the same property, first against the corporation 
 and then against the owner of the stock. A cestui qui 
 trust, under these trust agreements, has merely an equita- 
 ble interest in the property. 
 
 6. The interests of cestuis qui trust are well pro- 
 tected by courts of equity. The power to secure informa- 
 tion as to the actions of the trustees and the status of the 
 trust fund is, no doubt, superior to the rights and remedies 
 of stockholders in corporations. 
 
 7. Dissolution may be effected without formalities re- 
 quired of corporations.
 
 4. Form of Declaration of Trust Formed to Hold 
 Real Estate. 
 
 AN AGREEMENT AND DECLARATION OF 
 TRUST made by the subscribers, this 14th day of April, 
 1894, for the purpose of purchasing certain real estate 
 known as the Tremont House Estate and an adjoining prop- 
 erty situated on Tremont and Beacon Streets and Tremont 
 Place, in Boston. 
 
 1. The trustees under this agreement are authorized 
 as such trustees to purchase said estates and any existing 
 leases thereto, and to proceed to the erection of a new build- 
 ing as soon as practicable, and may as such trustees make 
 all necessary contracts and agreements for such purchase 
 and for such new building, including any agreement they 
 may think advisable for straightening or altering bounda- 
 ries, and may if they deem expedient for the adjustment of 
 boundaries acquire additional adjoining estates or release 
 portions of the trust estate, and may make leases of the 
 property or any part thereof held by them on such terms as 
 they may think best, but they shall make no lease for a term 
 of more than five years or for an annual rent of more than 
 |10,000, unless authorized by vote of the shareholders, ex- 
 cept that they may make a lease of certain portions of said 
 building to one tenant for the term of not more than twenty 
 years and at an annual rental of not less than $24,500. 
 After the new building is completed the trustees shall incur 
 no debt or liability except such as may be incidental to the 
 management of the property held by them, and then only 
 for an amount not exceeding in the aggregate at any one 
 time $20,000. The trustees shall have no power to bind the 
 shareholders personally (and in every written contract they 
 shall enter into reference shall be made to this declaration 
 of trust), and the person or corporation contracting with 
 the trustees shall look to the funds and property of the trust 
 for the payment under such contract or for the payment of 
 any debt, mortgage, judgment, or decree, or of any money 
 
 8
 
 that may otherwise become due or payable by reason of the 
 failure on the part of said trustees to perform such con- 
 tracts in whole or any part, and neither the trustees nor the 
 shareholders present or future in this company shall be 
 personally liable therefor. 
 
 2. The title of the trustees shall be ' ' Trustees of the 
 Tremont Building/' and any property conveyed to them 
 under that description shall be held by them in trust under 
 this agreement. 
 
 3. The trustees shall give receipts for installments on 
 subscriptions when paid, and on the payment of the last in- 
 stallment shall issue certificates in exchange for such re- 
 ceipts in shares of $100.00 each for each $100.00 paid. Such 
 receipts and certificates shall be transferable only on the 
 books of the trustees upon surrender thereof, all install- 
 ments due having first been paid and the acceptance of a 
 receipt or certificate shall make the person named therein a 
 party to this agreement. The term "shareholder" used in 
 this agreement shall mean holder of record of a receipt or a 
 certificate. 
 
 4. Interest at the rate of 4 per cent per annum and all 
 taxes and assessments shall be added to the cost of the 
 building and paid semi-annually to the subscribers from 
 the date of their respective payments of subscriptions until 
 the substantial completion of said building. The cost of 
 said building shall also include 1 per cent on the amount of 
 subscriptions procured by Alexander S. Porter and T. Den- 
 nie Boardman (which shall be paid to them for their serv- 
 ices and expenses in promoting this enterprise and procur- 
 ing subscriptions to this agreement) and also 1 per cent on 
 the gross amount of rental on any lease negotiated by them 
 at the lower floor and basement of said building, and also 
 a reasonable compensation to be paid the trustees for their 
 services rendered during construction. 
 
 5. The trustees shall have a reasonable compensation
 
 after construction of building;, and shall make such divi 
 
 ^? 
 
 dends among the shareholders as they may deem expedient. 
 
 6. The trustees shall call meetings of the shareholders 
 annually on the third Wednesday of March, and shall report 
 their receipts and expenses for the year ending on the 31st 
 of January preceding. They may call special meetings of 
 the shareholders at any time, and shall do so upon the writ 
 ten request of the holders of one-twentieth of the shares. 
 
 7. Notices of meetings, of calls for payments of sub- 
 scriptions, or for any other purpose, shall be deemed bind- 
 ing upon each subscriber and shareholder if mailed prepaid 
 tc the last address given by him to the trustees, or in default 
 thereof, to his last given place of business or abode. No- 
 tices of meetings shall be given seven days beforehand, and 
 may be given by advertisement for three successive days 
 in two daily papers published in said Boston, or by mail, 
 at the option of the trustees. In notices of special meet- 
 ings the purpose therefor shall be stated. 
 
 8. Shareholders may vote by proxy. At any annual 
 meeting or special meeting called for the purpose the hold- 
 ers of a majority of the entire number of shares may fill any 
 vacancy existing in the number of trustees, may depose any 
 or all of the trustees and elect others in their place, may 
 authorize a sale or mortgage of the real estate or any part 
 thereof held by trustees, and may alter or amend this agree- 
 ment. For all other purposes a majority of those sharehold- 
 ers present may decide at such meetings, and ten sharehold- 
 ers or their proxies representing one-fifth of all the shares 
 shall constitute a quorum. No such alteration or amend 
 ment of this agreement or deposition or appointment of 
 trustee shall affect any person not having actual notice 
 thereof until recorded in Registry of Deeds for Suffolk 
 County, nor shall any such alteration or amendment or 
 other action affect rights (previously acquired) of any third 
 person. A certificate signed by the chairman of such meet- 
 ing shall, if countersigned by at least one of the trustees, 
 be conclusive evidence of the regularity of the meeting and 
 
 10
 
 of the vote having been passed by the requisite majority 
 and of all facts stated in such vote or certificate material 
 to title. 
 
 9. Any vacancy in the number of trustees may be 
 filled by the remaining trustee until the next annual meet- 
 ing of the shareholders or special meeting called for the pur- 
 pose of filling such vacancy. The acting trustee or trustees 
 from time to time shall have all the powers of original trus- 
 tees. Upon resignation, decease, incapacity, or removal, or 
 vacancy for any cause, the title of the outgoing trustee 
 shall rest in the remaining trustee, and upon the filling of 
 any vacancy by the shareholders as aforesaid the title of the 
 whole trust property shall rest in the new board jointly. 
 
 10. No sale or mortgage of the real estate held by the 
 trustees, or any part thereof, shall be made by them unless 
 authorized by vote of the shareholders as provided above, 
 except that the trustees may sell all the trust property at 
 the expiration of the trust in default of action relative 
 thereto by the shareholders. 
 
 11. This trust shall not continue in any event longer 
 than twenty years after the death of the last surviving sub- 
 scriber hereto. The trustees shall not be required to give 
 bond, and each shall be liable only for his own acts, and 
 then only for wilful breach of trust. 
 
 12. Any certificate or paper signed by the trustees or 
 any of them or by the shareholders, or a copy of the record 
 of any of their proceedings certified by any one of the trus- 
 tees which it may be deemed desirable to record in the Kegis- 
 try of Deeds for the County of Suffolk, may be acknowl- 
 edged by any one of the trustees or parties signing in the 
 manner prescribed for the acknowledgment of deeds in Mas- 
 sachusetts. 
 
 13. We the subscribers agree to pay to the trustees 
 the amounts stated against our names, in such sums and at 
 such times as the trustees may require, and in case any sub- 
 scriber neglects to pay any installment required by the 
 
 ii
 
 trustees in twenty days after notice, the amount of his sub- 
 scription then unpaid may be canceled at the option of the 
 trustees, who may accept another subscriber in his place. 
 
 14. The limit of subscriptions hereto shall be the sum 
 of |2,700,000, and no subscription shall be binding until the 
 total amount reaches the sum of $1,400,000. It being un- 
 derstood that the remaining $1,300,000 is to be raised by a 
 mortgage of the said real estate. 
 
 15. The first trustees under this agreement shall be 
 Charles E. Cotting and Francis C. Welch, both of said 
 Boston, who signify their acceptance of the trust by sub- 
 scribing their names thereto. No surety or sureties shall 
 have to be required of any trustee acting hereunder. 
 
 CHARLES E. COTTING, 
 FRANCIS C. WELCH, 
 
 Trustees. 
 
 Name. Amount. Name. Amount. 
 
 Estate of Fred L. 
 
 Ames, by Oliver 
 
 Ames 2d, Samuel 
 
 Carr, Exca $200,000 H. H. Hunnewell. .$200,000 
 
 B. P. Cheney, By Henry Lee 100,000 
 
 B. P. Cheney, David Sears 50,000 
 
 Jr., Attorney . . . 200,000 Grant Walker 60,000 
 
 Etc., etc. 
 
 I, Andrew C. Wheelwright, hereby certify that I was 
 the Chairman of a Special Meeting of the shareholders of 
 the Tremont Building Trust under an Agreement and Dec- 
 laration of Trust made April 14th, 1894, and recorded with 
 Suffolk Deeds, lib. 2212, Page 210, duly called for the pur- 
 pose and held at Boston on Tuesday the fifth day of March, 
 A. D. 1901, and that at said meeting the holders of a ma- 
 jority of the entire number of shares passed the following 
 vote, amending said Agreement and Declaration of Trust. 
 
 12
 
 VOTED : That the Agreement and Declara- 
 tion of Trust dated April 14th, 1894, and recorded 
 with Suffolk Deeds, lib. 2212, Page 210, be and the 
 same hereby is altered and amended as follows: 
 The Trustees under said agreement are authorized 
 to purchase the estate on the westerly corner of 
 Beacon Street and Tremont Place, in Boston, now 
 belonging to Walter J. Otis and numbered six on 
 said Beacon Street, and one and three on said 
 Tremont Place, also the adjoining estate on said 
 Tremont Place now belonging to Isidore B. Rag- 
 giotti and numbered five on said Tremont Place, 
 containing together about four thousand, eight 
 hundred and sixty-five square feet, and any exist- 
 ing leases and mortgages thereon, and to proceed 
 to erect thereon a "building of the first class," 
 said real estate when so purchased to be held by 
 the said trustees upon the trusts set forth in said 
 agreement and with the same powers in all re- 
 spects as if the same had been included within the 
 scope of the original trust, and upon the comple- 
 tion of such building or at any time thereafter 
 said trustees are authorized to issue from time to 
 time such additional stock on such terms as to 
 them shall seem best to pay for said land, the can- 
 cellation of leases and mortgages and the con- 
 struction of such building and any incidental ex- 
 penses connected therewith. 
 
 I further certify that at said meeting the holders of a 
 majority of the entire number of shares passed the fol- 
 lowing vote: 
 
 VOTED: To provide means of paying for 
 the land situated on the westerly corner of Bea- 
 con Street and Tremont Place, numbered six on 
 Beacon Street and one, three, and five on Tremont 
 Place, containing together about four thousand, 
 
 13
 
 eight hundred and sixty-five square feet, the can- 
 cellation of leases, the discharge of mortgages, 
 and the erection of a building thereon; the trus- 
 tees are authorized to borrow from time to time 
 such money as in their opinion is necessary for 
 those purposes, and to give the notes or obligations 
 of the trustees therefor on such time and bearing 
 interest at such rate as to the trustees shall seem 
 best, which notes shall be enforceable against any 
 property now or hereafter held under the agree- 
 ment of trust, and to secure payment for such 
 notes or obligations by giving a power of sale, 
 mortgage or mortgages in such form as they may 
 deem expedient covering said land and buildings. 
 No mortgagee, however, to be under any obliga- 
 tion to see to the application of the money lent. 
 
 Witness my hand this 30th day of March, A. D. 1901. 
 ANDREW C. WHEELWRIGHT. 
 Countersigned : — 
 
 CHARLES E. COTTING, 
 FRANCIS C. WELCH, 
 
 Trustees of Tremont Building, 
 
 Under an Agreement and Declaration of 
 Trust made April 14th, 1894, and re- 
 corded with Suffolk Deeds, lib. 2212, 
 Page 210. 
 
 Commonwealth of Massachusetts, ) 
 Suffolk. ( ss - 
 
 Then personally appeared the above named Charles E. 
 Cotting and Francis C. Welch, and acknowledged the fore- 
 going instrument by them subscribed to be their free act 
 and deed as Trustees. 
 
 Before me, ERNEST DANE, 
 
 Recorded : Justice of the Peace. 
 
 April 2d, 1901, one o'clock and 
 twenty-eight minutes P. M. 
 
 14
 
 5. Form of Declaration of Trust Formed to Handle 
 Personal Property. 
 
 Agreement and 
 Declaration of Trust of the 
 
 MASSACHUSETTS ELECTKIG COMPANIES. 
 
 Dated: June 29th, 1899. 
 
 THIS AGREEMENT, made this twenty-ninth day of 
 June, A. D. 1899, by and between E. Rollins Morse, Henry 
 Russell Shaw, Robert W. Emmons, 2d, and George W. 
 Parker, co-partners under the firm name of E. Rollins 
 Morse and Brother, and William A. Tucker, S. Reed An- 
 thony, Philip L. Saltonstall and Nathan Anthony, co-part- 
 ners under the firm name of Tucker, Anthony and Com- 
 pany, together with their assigns, herein designated as the 
 "SUBSCRIBERS," and Gordon Abbott, Charles Francis 
 Adams, 2d, S. Reed Anthony, John N. Beckley, Amos F. 
 Breed, Everett W. Burdett, Charles E. Cotting, Eugene N. 
 Foss, Walter Hunnewell, Stillman F. Kelley, E. Rollins 
 Morse, Richard Olney, Percy Parker, S. Endicott Peabody, 
 and Philip L. Saltonstall, together with their successors, 
 herein designated as the "TRUSTEES," witnesseth : 
 
 That 
 
 WHEREAS the subscribers propose to transfer, as- 
 sign, and deliver to the Trustees, under the designation of 
 "MASSACHUSETTS ELECTRIC COMPANIES," certain 
 shares of the capital stock and other securities of sundry 
 street railways and other companies and contracts to pur- 
 chase the same and also other property, as shown in a sched- 
 ule identified by the signatures of the parties hereto and 
 filed with the Trustees ; and the Trustees for the purpose of 
 defining the interests of the subscribers and their assigns 
 in such property, have agreed to issue to the Subscribers 
 negotiable certificates for two hundred and forty thousand 
 
 15
 
 (240,000) shares, of which one hundred and twenty thou- 
 sand (120,000) shall be preferred and one hundred and 
 twenty thousand (120,000) shall be common, each share to 
 be expressed of the par value of one hundred ( 100 ) dollars, 
 and all of said shares to be issued to the Subscribers in the 
 following proportions, viz : 
 
 To said E. Kollins Morse and Brother, or order, 60,000 
 preferred shares and 60,000 common shares ; to said Tucker, 
 Anthony & Company, or order, 60,000 preferred shares and 
 60,000 common shares. 
 
 NOW, THEREFORE, the Trustees hereby declare that 
 they will hold said property so to be transferred to them, as 
 well as all other property which they may acquire as such 
 Trustees, together with the proceeds thereof, in trust, to 
 manage and dispose of the same for the benefit of the hold- 
 ers from time to time, of the certificates of shares issued 
 hereunder, according to the priorities expressed in said cer- 
 tificates, and in the manner and subject to the stipulations 
 herein contained, to-wit: 
 
 FIRST. The Trustees, in their collective capacity, 
 shall be designated, so far as practicable, as the "MASSA- 
 CHUSETTS ELECTRIC COMPANIES," and under that 
 name shall, so far as practicable, conduct all business and 
 execute all instruments in writing, in performance of their 
 trust. 
 
 SECOND. The Trustees shall always be fifteen in 
 number, and of the Trustees herein mentioned by name, S. 
 Reed Anthony, Everett W. Burdett, E. Rollins Morse, S. 
 Endicott Peabody, and Philip L. Saltonstall, shall hold 
 office until the first annual meeting of the shareholders; 
 Gordon Abbott, John N. Beckley, Amos F. Breed, Walter 
 Hunnewell, and Stillman F. Kelley, shall hold office until 
 the second annual meeting of the shareholders ; and Charles 
 Francis Adams, 2d, Charles E. Cotting, Eugene N. Foss, 
 
 16
 
 Richard Olney, and Percy Parker, shall hold office until 
 the third annual meeting of the shareholders; except that 
 said Trustees, as well as any Trustees hereafter elected, 
 shall in all cases hold office until their successors have been 
 elected and accepted this trust. 
 
 The shareholders shall, at each annual meeting, or ad- 
 journment thereof, elect five Trustees to serve for the term 
 of three years next ensuing. In case of the death, resigna- 
 tion, or inability to act of any of said Trustees, the remain- 
 ing Trustees shall accept any resignation and fill any va- 
 cancy for the unexpired term. As soon as any Trustees 
 elected by the shareholders or by the remaining Trustees to 
 fill a vacancy have accepted this trust, the trust estate shall 
 rest in the new Trustees or Trustee, together with the con- 
 tinuing Trustees, without any further act or conveyance. 
 
 THIRD. The Trustees shall hold the legal title to all 
 property at any times belonging to their trust, and shall 
 have and exercise the exclusive management and control of 
 the same; they shall assume all contracts for and obliga- 
 tions and liabilities in connection with or growing out of 
 the purchase of the stock or securities assigned to them by 
 the Subscribers and mentioned in the annexed schedule, and 
 to the extent and value of such stock and securities, but not 
 personally, shall agree to hold the Subscribers and any per- 
 son associated or acting with them harmless and indem- 
 nified from and against any loss, cost, expense, or liability 
 upon, by reason of, or in connection with, any such contract, 
 obligation or liability; they may adopt and use a common 
 seal ; they shall have power to vote in person or by proxy 
 upon all shares of stock at any time belonging to the trust, 
 and to collect, receive, and receipt for the dividends thereon, 
 and may contract with each or any of the controlled compa- 
 nies in respect of any matter or matters relating to the 
 operation of the road or the conduct of the business of any 
 such company or companies, to collect, sue for, receive and 
 receipt for all sums of money at any time coming due to 
 
 i7
 
 said trust; to employ counsel to begin, prosecute, defend 
 and settle suits at law, in equity or otherwise, and to com- 
 promise or refer to arbitration any claims in favor of or 
 against the trust; they may also, with the consent of not 
 less than ten of their number given at a meeting called for 
 that purpose, but not otherwise, exchange, upon such terms 
 as may be agreed upon, the stock or securities held by them 
 in any corporation for the stock or securities of any other 
 corporation, taking over the property of such corporation 
 by consolidation or otherwise; and with such consent but 
 not otherwise, may loan money to any corporation of which 
 they may own a majority of the capital stock, and may sub- 
 scribe for or acquire additional stock or the securities or 
 obligations of such corporations ; and with such consent, but 
 not otherwise, may subscribe for, purchase, and acquire 
 shares in the capital stock of any corporation (1) owning 
 or operating railways or railroads, or engaged in the busi- 
 ness of transporting merchandise, mails or express matter, 
 or (2) engaged in whole or in part in supplying light, heat, 
 power or other public service, or (3) manufacturing, sell- 
 ing or repairing machines, equipments, supplies or other 
 articles used by corporations of either or both of the classes 
 above named, or (4) engaged in the business of insuring 
 corporations of any or all of the foregoing classes against 
 loss by fire or casualty, or (5) engaged in the business of 
 advertising in the cars or upon the premises of railways, or 
 railroad companies; and with such consent, but not other- 
 wise, may borrow money for any of the purposes aforesaid. 
 With the consent of the holders of at least two-thirds of 
 each class of shares outstanding, at a meeting called for that 
 purpose, but not otherwise except as herein otherwise pro- 
 vided, the Trustees may sell, mortgage, pledge, encumber, 
 or dispose of any shares or stock securities or other prop- 
 erty from time to time held by them upon such terms and 
 for such purposes as the shareholders at such meeting may 
 approve. 
 
 So far as strangers to this trust are concerned, a reso- 
 lution of the Trustees authorizing a particular act to be done 
 
 18
 
 shall be conclusive evidence in favor of such strangers that 
 such act is within the powers of the Trustees, and no pur- 
 chaser from the Trustees shall be bound to see the applica- 
 tion of the purchase money or other consideration paid or 
 delivered by or for said purchaser to or for said Trustees. 
 
 FOURTH. Stated meetings of the Trustees shall be 
 held at least once a month, and other meetings shall be held 
 from time to time upon the call of the President or any 
 three of the Trustees. A majority of the Board constitutes 
 a quorum, and the concurrence of all the Trustees shall not 
 be necessary to the validity of any action done by them, but 
 the wish of a majority of the Trustees present and voting 
 at any meeting shall be conclusive except as hereinbefore 
 specifically provided. The Trustees may make, adopt, 
 amend, or repeal such by-laws, rules, and regulations, not 
 inconsistent with the terms of this instrument, as they may 
 be deemed necessary or desirable for the conduct of their 
 business and for the government of themselves and their 
 agents, servants, and representatives. 
 
 FIFTH. The Trustees shall annually elect from among 
 their number a President and Vice-President of the Board, 
 and shall also annually elect a Treasurer and Secretary, and 
 they shall have authority to appoint such other officers, 
 agents, and attorneys as they may from time to time deem 
 necessary or expedient for the conduct of their business. 
 They shall have authority to accept resignations and to fill 
 any vacancy in the office of President, Vice-President, 
 Treasurer, or Secretary, for the unexpired term ; and shall 
 likewise have authority to elect temporary officers to serve 
 during the absence or disability of regular officers. The 
 President, Vice-President, Treasurer, and Secretary shall 
 have the authority and shall perform the duties usually inci- 
 dent to those offices in the case of corporations, so far as 
 applicable thereto, and shall have such other authority and 
 perform such other duties as may from time to time be 
 determined by the Trustees. The Trustees shall fix the 
 compensation of any, or all officers and agents whom they 
 
 19
 
 may appoint, and are likewise authorized to pay to them- 
 selves such compensation for their own services as they may 
 deem reasonable. The Trustees shall also appoint from 
 among their number an Executive Committee of three or 
 five persons, to whom they may delegate such of the powers 
 herein conferred upon the Trustees as they may deem expe- 
 dient, except so far as those matters are concerned in 
 which the concurrent action of at least ten Trustees is 
 required. 
 
 The Trustees shall not be liable for errors of judgment 
 either in holding property originally conveyed to them or in 
 acquiring and afterward holding additional property, nor 
 for any loss arising out of any investment, nor for any 
 act or omission to act performed or omitted by them in the 
 execution of this trust in good faith, nor shall they be 
 liable for the acts or omissions of each other or of any 
 officer, agent, or servant appointed by or acting for them, 
 and they shall not be obliged to give any bond to secure the 
 due performance of this trust by them. 
 
 SIXTH. Shares hereunder shall be of the par value 
 of one hundred ($100.00) dollars each, and shall be divided 
 into preferred and common shares. The preferred shares 
 shall entitle the holder to accumulative semi-annual divi- 
 dends at the rate of 4 per centum per annum, and no more, 
 the same to be paid or set apart before any dividend shall 
 be paid or set apart for the common shares; and in case of 
 liquidation, the proceeds of the liquidation shall be first 
 applied to the payment to the holder of preferred shares, 
 of the sum of one hundred dollars per share and any accrued 
 and unpaid dividends thereon, and the balance remaining 
 thereafter shall be divided among the holders of common 
 shares in proportion to their holdings. As evidence of the 
 ownership of said shares, the Trustees shall cause to be 
 issued to each shareholder a negotiable certificate or cer- 
 tificates, which certificates shall be in form following, to- 
 wit : 
 
 20
 
 ( Form of Certificates of Common Shares. ) 
 ( Form of Certificates of Preferred Shares. ) 
 
 SEVENTH. In addition to the shares to be original- 
 ly issued to the subscribers as hereinbefore provided, the 
 Trustees shall issue and sell, at public or private sale, upon 
 such terms and for such prices as they may deem expedient, 
 such additional preferred or common shares, or both, as 
 may be necessary to provide means to pay for the stock of 
 the New Bedford, Middleborough, and Brockton Street 
 Railway Company, the contract for the purchase of which 
 is to be assigned to and assumed by the Trustees. 
 
 Except as aforesaid, no share shall be issued by the 
 Trustees in excess of the amount to be originally issued to 
 the Subscribers, as hereinbefore stated. But the Trustees 
 may from time to time, for the purpose of acquiring means 
 for the acquisition of additional property or otherwise 
 accomplishing the purpose of this trust, with the consent 
 of at least two-thirds of the preferred stockholders and two- 
 thirds of the common shareholders, present and voting, at 
 any meeting called for that purpose, issue and dispose of 
 additional shares upon such terms and in such manner as 
 the shareholders at such meeting may determine. 
 
 In case of the loss or destruction of any certificates of 
 shares issued by the Trustees, the Trustees may, under such 
 condition as they may deem expedient, issue a new certifi- 
 cate or certificates in the place of the one lost or destroyed. 
 
 EIGHTH. The Trustees may from time to time declare 
 and pay dividends out of the net earnings from time to 
 time received by them, but the amount of such dividends 
 and the payment of them shall be wholly in the discretion 
 of the Trustees ; except that the dividends on the preferred 
 shares shall be payable semi-annually on the first days of 
 June and December in each year, at the rate of 4 per cent 
 per annum, and no more, and shall be cumulative, and said 
 semi-annual dividends shall be paid or set apart before any 
 dividends are paid on the common shares. 
 
 21
 
 NINTH. The fiscal year of the Trustees shall end on 
 the thirteenth day of September in each year. Annual 
 meetings for the election of five Trustees and for the trans- 
 action of other business, shall be held in Boston, on the 
 Wednesday following the first Monday of November, in 
 each year, beginning with the year 1900, of which meet- 
 ings notice shall be given by the Secretary, by mail, to each 
 shareholder, at his registered address, at least ten days 
 before said meeting. 
 
 Special meetings of the shareholders may be called at 
 any time, upon seven days' notice given as above stated, 
 when ordered by the President or Trustees. At all meet- 
 ings of the Shareholders, each holder of shares, whether 
 preferred or common, shall be entitled to one vote for each 
 share held by him, and any shareholder may vote by proxy. 
 
 No business shall be transacted at any special meeting 
 of the shareholders unless notice of such business has been 
 given in the call for the meeting. 
 
 No business except to adjourn shall be transacted at 
 any meeting of the Shareholders unless the holders of a 
 majority of all the shares outstanding are present in person 
 or by proxy. 
 
 TENTH. The death of a Shareholder or Trustee during 
 the continuance of this trust shall not operate to determine 
 the trust, nor shall it entitle the legal representative of the 
 deceased shareholder to an accounting, or to take any action 
 in the courts, or elsewhere, against the Trustees; but the 
 executors, administrators, or assigns of any deceased share- 
 holder shall succeed to the rights of said decedent under 
 this trust, upon surrender of the certificate for the shares 
 owned by him. 
 
 The ownership of shares hereunder shall not entitle 
 the shareholders to any title in or to the trust property 
 whatsoever, or right to call for a partition or division of the 
 same, or for an accounting. 
 
 22
 
 ELEVENTH. The Trustees shall have no power to 
 bind the shareholders personally, and the subscribers and 
 their assigns and all persons or corporations extending 
 credit to, contracting with, or having any claim against the 
 Trustees shall look only to the funds and property of the 
 trust for payment under such contract or claim, or for the 
 payment of any debt, damage, judgment, or decree, or of 
 any money that may otherwise become due or payable to 
 them from the Trustees, so that neither the Trustees nor 
 the shareholders, present or future, shall be personally 
 liable therefor. 
 
 In every written order, contract, or obligation which 
 the Trustees shall give or enter into, it shall be the duty of 
 the Trustees to stipulate that neither the Trustees nor the 
 Shareholders shall be held to any personal liability under 
 or by reason of such order, contract, or obligation. 
 
 TWELFTH. This trust shall continue for the term 
 of twenty-one years, at which time the then Board of Trus- 
 tees shall proceed to wind up its affairs, liquidate its assets, 
 and distribute the same among the holders of preferred and 
 common shares according to the priorities hereinbefore ex- 
 pressed, PROVIDED, HOWEVER, that if prior to the ex- 
 piration of said period, the holders of at least two-thirds 
 of the shares then outstanding shall, at meeting called for 
 that purpose, vote to terminate or to continue this trust, 
 then said trust shall either terminate or continue in exist- 
 ence for such further period as may then be determined. 
 
 For the purpose of winding up their affairs and liqui- 
 dating the assets of the trust, the then Board of Trustees 
 shall continue in office until such duties have been fully 
 performed. 
 
 This agreement and declaration of trust may be 
 amended or altered except as regards the liabilities of the 
 Trustees at any annual or special meeting of the share- 
 holders with the consent of the holders of at least two- 
 thirds of the shares of each class then outstanding; pro- 
 
 23
 
 vided notice of the proposed amendment or alteration shall 
 have been given in the call for the meeting; and in case of 
 such alteration or amendment, the same shall be attached 
 to and made a part of this agreement, and a copy thereof 
 shall be filed with the OLD COLONY TRUST COMPANY. 
 
 IN WITNESS WHEREOF, the said Gordon Abbott, 
 Charles Francis Adams, 2d, S. Reed Anthony, John N. 
 Beckley, Amos F. Breed, Everett W. Burdett, Charles E. 
 Cotting, Eugene N. Foss, Walter Hunnewell, Stillman F. 
 Kelley, E. Rollins Morse, Richard Olney, Percy Parker, S. 
 Endicott Peabody, and Philip L. Saltonstall, Trustees, 
 hereinbefore mentioned, have hereunto set their hands and 
 seals, in token of their acceptance of the trust hereinbefore 
 mentioned, for themselves and their successors, and the said 
 E. Rollins Morse, Henry Russell Shaw, Robert W. Em- 
 mons, 2d, and George W. Parker, as co-partners under the 
 firm name of E. Rollins Morse and Brothers, and William 
 A. Tucker, S. Reed Anthony, Philip L. Saltonstall, and 
 Nathan Anthony, as co-partners under the firm name of 
 Tucker, Anthony and Company, Subscribers, have hereunto 
 set their hands and seals, in token of their assent to and 
 approval of said terms of trust, for themselves and their 
 assigns, the day and year first above written. 
 
 (Signed) 
 
 E. Rollins Morse, , C0 . PARTNERg tj^DER THE 
 
 Henry Russell Shaw , piRM NAMB QF R R0LLINg 
 
 Robert W, Emmons, 2d, | MQRgE BR0THERS> 
 
 George W. Parker 
 
 William A. Tucker, 
 S. Reed Anthony, 
 Philip L. Saltonstall, 
 Nathan Anthony, 
 
 CO-PARTNERS UNDER THE 
 
 FIRM NAME OF TUCKER, 
 
 ANTHONY & COMPANY. 
 
 24
 
 Gordon Abbott, 
 Charles F. Adams, 2d, 
 S. Reed Anthony, 
 John N. Beckley, 
 Amos P. Breed, 
 Everett W. Burdett, 
 Charles E. Cotting, 
 Eugene N. Foss, 
 Walter Hunnewell, 
 Stillman F. Kelley, 
 E. Rollins Morse, 
 Richard Olney, 
 Percy Parker, 
 S. E. Peabody, 
 Philip L. Saltonstall. 
 
 Agreement and 
 Declaration of Trust of the 
 
 MASSACHUSETTS ELECTRIC COMPANIES. 
 
 For three years : 
 
 Richard Olney, Eugene N. Foss, 
 
 Charles E. Cotting, Percy Parker, 
 
 Charles Francis Adams, 2d. 
 
 For two years : 
 
 Gordon Abbott, John N. Beckley, 
 
 Amos F. Breed, Stillman F. Kelley, 
 
 Walter N. Hunnewell. 
 
 For one year: 
 
 S. Endicott Peabody, Everett W. Burdett 
 
 S. Reed Anthony, Philip L. Saltonstal 
 
 E. Rollins Morse. 
 
 25
 
 OFFICERS. 
 
 President — Ames F. Breed. 
 Vice-President— Charles E. Cotting. 
 Secretary — Everett W. Burdett. 
 Treasurer — Joseph H. Goodspeed. 
 General Manager— P. F. Sullivan. 
 
 Executive Committee: 
 
 Gordon Abbott, Chairman, 
 Charles F. Adams, 2d, Percy Parker, 
 
 Eugene N. Foss, Philip L. Saltonstall. 
 
 26
 
 INDEX 
 
 References are to Pages. 
 
 A. 
 
 Acknowledgment to Declaration of Trust, Same as of Deed 11 
 
 Advantages of Incorporation Compared With Trust Agreements . . 5-7 
 
 Advantages of the Trust Method Over Incorporation 7 
 
 Amendments to Trust Agreements — 
 
 How Made 13-14, 23-24 
 
 To Be Recorded 10 
 
 To Be Filed 24 
 
 Application of Trust Funds, Liability of Third Parties to See to, 
 
 How Limited 14, 19 
 
 B. 
 
 By-Laws Adopted by Trustees 19 
 
 C. 
 
 Certificates of Stock to Cestuis Qui Trust 6, 9 
 
 Committee, Executive, May Be Chosen by Trustees 20 
 
 Common Law, Organization Under, as Protection 4 
 
 Compensation of Trustees 9-10 
 
 Continued Existence, as Advantage of Incorporation 5 
 
 How Limited in Trust Agreement 23 
 
 D. 
 
 Death of Member Will Not Terminate Trust 22 
 
 Dividends, How Declared and Paid 21 
 
 Directors of Corporations and Trustees Compared 6 
 
 Dissolution of Trust Compared With Dissolution of Corporation.. 7 
 
 E. 
 
 Eliot vs. Freeman et al 3, 7 
 
 Evidence of Regularity of Meeting 10-11 
 
 Executive Committee of Trustees 20 
 
 Existence of Trust, Limiting Time of 11 
 
 27
 
 F. 
 
 Fiscal Year, Provided for in Trust Agreements 22 
 
 Fixed Interest Rates on Certificates May Be Provided For 9 
 
 Form of Declaration of Trust to Handle Personal Property 15-26 
 
 To Hold Real Estate 80 4 
 
 Franchise Taxes, Trust Agreements Not Subject to 7 
 
 H. 
 
 Holding Companies, Powers of May Be Provided in Trust Agree- 
 ments rj 
 
 Form Providing For -. ig 
 
 Hussey vs. Arnold et al g 
 
 J. 
 
 Joint Stock Companies Distinguished From Trust Agreements.. 4 
 
 L. 
 
 Liability of Trustees and Shareholders, How Limited ... 8-9, 17, 20, 23 
 
 Litigation, in Corporate Name as Advantage of Incorporation 7 
 
 Brought and Defended by Trustees 18 
 
 Lost Certificates, New May Be Issued for, by Trustees 21 
 
 M. 
 
 Maine Baptist Missionary Convention vs. Cotting et al 3, 7 
 
 Management of Trusts in Hands of Trustees 17 
 
 Massachusetts Electric Companies, Form of Organization 15-26 
 
 Meetings, Safety and Convenience of 6 
 
 Of Shareholders, How Called 10 
 
 Of Trustees 19 
 
 Mortgages, Powers of Trustees in Respect to 6 
 
 Mortgagee Relieved From Liability to See to Application of 
 
 Money Loaned 14 
 
 N. 
 
 Notice of Meetings 10, 22 
 
 O. 
 
 Officers of Trust Estate, Chosen and Named Same as of Corpora- 
 tions 19.20 
 
 Olney, Richard, Reputed Author of Trust Agreement of Massa- 
 chusetts Electric Companies 4 
 
 P. 
 
 Partition, Right of Denied to Shareholders 22 
 
 Perpetuities, Rule Against, How Avoided by Trust Agreements.. 5 
 
 Personal Liability Limited in Trust Agreements 5 
 
 Preferred Shares, Provided for in Trust 20-21 
 
 Promoters, Compensation of, Provided for in Trust Agreement. . 9 
 Proxy, Shareholders in Trust May Vote by 10, 22 
 
 28
 
 R. 
 
 Real Estate Business, General Laws of Massachusetts do Not Per- 
 mit Incorporation for 3 
 
 Reports Required of Corporations as Such, Not Required of Trusts 7 
 
 Resolution Authorizing Trustees to Borrow Money 14 
 
 Rule Against Perpetuities, Violation of, How Avoided in Trust 
 
 Agreements 5 
 
 S. 
 
 Seal May Be Adopted by Trustees, Equivalent to Corporate Seal . . 17 
 Shares in Trust, Transferable 6 
 
 T. 
 
 Taxation of Corporations as Such Does Not Apply to Trust 
 
 Agreements 7 
 
 Trustees, Liability of, How Limited 20 
 
 U. 
 
 Unissued Shares in Trust May be Provided for 21 
 
 V. 
 
 Vacancies in Number of Trustees, How Filled 10, 11, 17 
 
 29
 
 LAW LIBRARY 
 UNIVERSITY QF CAUFSRNIA
 
 UNIVERSITY OF CALIFORNIA LIBRARY 
 
 Los Angeles 
 
 This book is DUE on the last date stamped below.