Business Trusts 
 
 ^^m as Substitutes for 
 
 Business Corporations 
 
 THOMPSON 
 
 forma 
 nal 
 
 ty
 
 UNIVERSITY 
 
 OF CALIFORNIA 
 
 LOS ANGELES 
 
 SCHOOL OF LAW 
 LIBRARY
 
 Business Trusts 
 
 as Substitutes for 
 
 Business Corporations 
 
 A paper read before the Kansas 
 City Bar Association, April 10, 1920 
 
 By 
 
 GUY A. THOMPSON, Esq. 
 
 OP THE ST. Louis BAB 
 
 ST. LOUIS 
 
 THOMASDLAW BOOK COMPANY 
 
 1920
 
 DEDICATED TO 
 
 L. WADE CHILDRESS 
 
 AS A SLIGHT TESTIMONIAL TO BIS 
 
 STERLING CHARACTEB AND THE 
 
 ESTEEM IN WHICH I HOLD 
 
 HIS FRIENMHIP 
 
 Coyyrigrht, 1920 
 l/ GUY A. THOMPSON 
 All rights reserved
 
 PREFACE. 
 
 Something more than a year ago it became necessary for me, 
 in the discharge of my professional duties, to consider the 
 proposed employment of the express trust as a vehicle of trade. 
 Interest thus aroused has since led me to read as widely on the 
 subject as opportunity permitted. I learned that the atten- 
 tion of lawyers generally was being directed to this subject. 
 Accordingly when, recently, I accepted an invitation to ad- 
 dress the Bar Association of Kansas City, no subject seemed 
 to be more opportune for discussion certainly none, appro- 
 priate for such an occasion, in which I personally felt a keener 
 interest. The subjoined production was the result. There was 
 no thought of publication in its preparation, but merely, 
 within the necessarily restricted limits of such a paper, to se- 
 lect for discussion those phases of the subject which seemed 
 both interesting and fundamental. Since its delivery, mem- 
 bers of the Bar, whose judgment I value, have advised that it 
 be published, and so numerous are the requests received for 
 copies that I have consented to its publication. I have done 
 this with some hesitation, for it is not, and in the nature of 
 things could not have been, a comprehensive treatise. On the 
 contrary, many of the important aspects of the subject were 
 of necessity eliminated from consideration. Such, for exam- 
 ple, as the duties of the trustees, their right of indemnity, 
 their liability to the cestuis, action by and against the trus- 
 tees, theory and extent of creditors' rights against the trus- 
 tees and against the trust estate, inviolability of the trust 
 fund, seeking direction of the Chancellor, etc. With this 
 foreword of explanation I submit the pages that follow in the 
 hope that they may be of interest and possibly of service to 
 my brethren of the Bar. 
 
 GUY A. THOMPSON. 
 St. Louis, Mo., May 1, 1920. 
 
 3
 
 ANALYTICAL INDEX 
 
 THE BUSINESS CORPORATION 
 
 1. Its Rapid Growth. 
 
 2. Reasons for Delay in Development 
 
 3. Its Accomplishments. 
 
 4. Reasons Therefor. 
 
 5. Growing Dissatisfaction With the Corporation as Business 
 
 Agency. 
 
 6. Its Disadvantages. 
 
 7. Is There a Satisfactory Substitute. 
 
 THE BUSINESS TRUST 
 
 8. Origin and Development of the Express Trust. 
 
 9. The Proposed Business Trust. 
 
 10. Its Legality. 
 
 11. May the State Forbid It. 
 
 12. Will Quo Warranto Lie Against It? 
 
 a. For Usurping the Privileges of a Corporation. 
 
 b. For Usurping the Franchise of a Corporation. 
 
 c. For Violating Constitution. 
 
 13. Does It Afford Limited Liability. 
 
 a. As to the Cestuis Que Trust, or Shareholders. 
 
 b. As to the Trustees. 
 
 14. Advantages Over the Corporation. 
 
 a. Prejudice. 
 
 b. Migratory Rights. 
 
 c. Inquisitorial Legislation. 
 
 d. Taxation. 
 
 15. Its Disadvantages Considered. 
 
 a. Its Novelty and Consequent Uncertainty of Its Status. 
 
 b. Possible Legislation. 
 
 c. Nature of Cestuis' Interest and Extent of Rights They May 
 
 Hare. 
 
 d. Perpetuities. 
 
 16. Conclusions. 
 
 APPENDIX 
 
 Forms for Trust Declarations. 
 Forms for Trust Certificates.
 
 THE BUSINESS CORPORATION 
 
 1. Its Rapid Growth: The most remarkable 
 fact of all commercial history is the business corpora- 
 tion. Remarkable not only because of the economic 
 and social part it has played, but remarkable also be- 
 cause of the rapidity and magnitude of its growth. 
 With approximate accuracy it may be said that the 
 business corporation is the product of the past seventy 
 years. 
 
 As late as 1775, so eminent an authority as Adam 
 Smith wrote: "The only trades which it seems pos- 
 sible for a joint stock company to carry on success- 
 fully without an exclusive privilege are those of which 
 all the operations are capable of being reduced to what 
 is called a routine, or to such a uniformity of method 
 as admits of little or no variation. Of this kind is, 
 first, the banking trade; secondly, the trade of insur- 
 ance from fire, and from sea risk and capture in time 
 of war; thirdly, the trade of making and maintaining 
 a navigable cut or canal; and, fourthly, the similar 
 trade of bringing water for the supply of a great 
 city." 1 
 
 There is authoritative warrant for the statement 
 that up to the year 1800 there were not to exceed one 
 hundred private corporations in the entire United 
 States, that one-half of these were in Massachusetts 
 
 i Wealth of Nations, Vol. 2, Book 5, Part 2, p. 242.
 
 6 BUSINESS TRUSTS AS SUBSTITUTES 
 
 and that the enterprises carried on by them were 
 banking, turnpike roads, toll bridges, canals, and, to a 
 very limited extent, manufacturing. 2 
 
 Giving attention to our own State of Missouri, it 
 may be noted that during our territorial days but two 
 private corporations were created and both of those 
 were banks, namely: The Bank of St. Louis in 1813 
 and the Bank of Missouri in 1817. From Missouri's 
 admission to the sisterhood of States in 1821, to the 
 year 1850, while a number of academies, colleges and 
 seminaries, turnpike road, insurance and railroad 
 companies, and a few bridge and bank companies were 
 incorporated, yet it is unlikely that more than fifty 
 companies were granted charters which now would 
 incorporate under the manufacturing and business 
 act. 
 
 The first English text upon corporations, Kyd, was 
 published in 1793 and dealt exclusively with municipal 
 corporations. The first American text, that of Angel 
 and Ames, appeared in 1831, and gave scant treatment 
 to business corporations. Indeed, it may be said that 
 corporate literature and the business corporation as 
 it exists today virtually begin with the year 1850. 
 
 And yet in 1918 there were in the United States at 
 least 350,000 business corporations with gross incomes 
 of $79,500,000,000, net incomes of $10,730,000,000, pay- 
 ing to the Federal Government alone in income taxes 
 for the year 1917, $2,142,000,000. 3 
 
 2. Reasons for Delay in Development: Without 
 doubt their growth was retarded until this late date 
 first because of the difficulty and expense attendant 
 
 2 Williston, Law of Business Corporations, 2 H. L. R. 105, 149. 
 s Statistics of Income, Treas. Dept. 1919.
 
 FOB BUSINESS CORPORATIONS 7 
 
 upon the securing of corporate charters and, second- 
 ly, because the necessities of commerce were served 
 with measurable adequacy by the ordinary partner- 
 ship, and quasi-partnership, the joint stock company. 
 
 In England only the Crown and the Parliament 
 could grant corporate charters and not until 1862 was 
 the English Company's act adopted, 4 called by Sir 
 Francis Palmer, the "Magna Charter of Co-operative 
 Enterprises." In our country it was necessary to ob- 
 tain corporate charters by special acts of the legisla- 
 tures. Excepting perhaps a half dozen states, we find 
 no general incorporation acts till toward the middle of 
 the last century. 5 In Missouri the first general cor- 
 poration act for business companies was enacted in 
 1849, 6 and not until 1865 was the creation of corpora- 
 tions by special acts of the legislatures prohibited by 
 constitutional provision. 7 
 
 During the early part of the last century the field of 
 commercial enterprise was held by the ordinary part- 
 nership practically alone. But, the increase in popula- 
 tion, the constantly growing settlements by the pio- 
 neers of new territory, the discovery of vast natural re- 
 sources, the multiplication and complexity of human 
 needs and wants, the progress of inventions and par- 
 ticularly the advent of steam, proved that the partner- 
 ship was an agency utterly inadequate to commercial 
 necessities. It was inadequate chiefly because of the 
 unlimited liability of its members, for this made it im- 
 
 * 25 and 26 Viet. C. 89. 
 
 5 First general incorporation acts for manufacturing companies 
 were N. Y. 1811, Mass. 1836, Mich, and Conn. 1837, and Ind. 1838. 
 
 6 Laws 1849, page 18; Laws 1864, page 20; R. S. 1865, Chapter 39, 
 367. 
 
 i Art. VIII, Sec. 4.
 
 8 BUSINESS TRUSTS AS SUBSTITUTES 
 
 possible to mobilize necessary capital. The result was 
 that corporations began to increase ; and when the re- 
 straint that was imposed upon their formation was re- 
 moved by the enactment of general corporation acts 
 under which they might be readily organized at little 
 expense, they quickly crowded the partnership from 
 the field and started upon that career which is the out- 
 standing feature of commercial history. 
 
 3. Accomplishments: Neither has the rapidity 
 of their growth exceeded the importance of their ac- 
 complishments, for, without forgetting, or in any de- 
 gree minimizing or palliating, the gross frauds, the 
 heavy oppressions, and the black iniquities that have 
 been, and are today being, perpetrated under the cor- 
 porate cloak, it must be conceded by all that the busi- 
 ness corporation has been also of immeasurable bene- 
 fit to mankind. It has played an important, if not an 
 indispensable, part in the development and progress 
 of our country and the world. It has afforded the 
 means for experiments essential to the development 
 of our arts and sciences. It has fostered our indus- 
 tries, cultivated our deserts, brought from their hid- 
 ing places the stored-up treasures of nature, harnessed 
 the very elements to the service of mankind, bridged 
 our rivers, tunneled our mountains, constructed our 
 railroads and, while linking our states in closer unity, 
 has brought the nations of the earth together. 
 
 4. Reasons : Without doubt this monopolization 
 by the corporation of the field of commercial endeavor, 
 has been due to the limited liability of the investor or 
 stockholder, for it was this assurance that made it pos- 
 sible to mobilize capital in projected business enter-
 
 FOR BUSINESS CORPORATIONS 9 
 
 prises. In this connection it is interesting to recall 
 that we have come far away from the original concep- 
 tion of the chief value of the corporation. Since the 
 municipal, the ecclesiastical, the educational and the 
 charitable corporation preceded the regulated com- 
 pany and the joint-stock company, its immortality was 
 emphasized as the chief and most valuable attribute of 
 corporate existence. Indeed, as late as 1819, it would 
 seem to be this characteristic that was chiefly empha- 
 sized by our great Chief Justice in his famous defini- 
 tion in the Dartmouth College case. 8 With the advent 
 of private corporations, it was the right of associa- 
 tion, governmental powers and trading privileges that 
 were chiefly desired and that were granted. Though 
 early decided that the stockholder was not personally 
 liable for the debts of the corporation, yet the corpora- 
 tion, through leviations, could compel him to pay the 
 sums assessed. Later this power was avoided by con- 
 tract between the stockholder and the company; but 
 until and unless it was so avoided, the creditor might 
 enforce it in chancery through a kind of subrogation. 9 
 The artificial personality gradually came to be empha- 
 sized, and from that fiction was developed what proved 
 to be the attribute of chief value, namely: the limited 
 liability of the stockholder ; for, the theory is that since 
 the corporation is an artificial person entirely distinct 
 from those who have formed it, its debts and obliga- 
 tions are those of this artificial person and not of its 
 stockholders. 
 
 5. Growing Dissatisfaction: And yet, though 
 its growth has been marvelous and its accomplish- 
 
 4 1 Wheat. 518. 
 
 Salmon v. The Hamborough Co. (1671), 1 Ch. Cas. 204.
 
 10 BUSINESS TRUSTS AS SUBSTITUTES 
 
 ments great, is there not now perceptible an increas- 
 ing dissatisfaction with the corporation as a business 
 agency! Can it be that the very fiction, viz.: imper- 
 sonal, artificial entity distinct from the persons com- 
 posing it, which has given such value to the corporate 
 form, is now being laid hold of to cripple its useful- 
 ness? Why are business men, in increasing numbers, 
 asking for another device, some other vehicle or 
 agency of trade, that will serve the needs of commerce 
 and be free from oppressive exactions? 
 
 6. Disadvantages: That there are corporate 
 disadvantages must be conceded. Prejudice is one of 
 them. It is reflected daily in our courts, in the ver- 
 dicts of juries, while our legislatures too frequently 
 respond to it. 
 
 Again, the corporation being an artificial person, 
 existing only in contemplation of law and by force of 
 law, can have no legal existence beyond the boundaries 
 of the sovereignty which created it. "It must dwell 
 in the place of its creation and can not migrate to an- 
 other sovereignty." 10 It is not a citizen within the 
 meaning of Article 4, Section 2 of the Constitution of 
 the United States, providing that * * the citizens of each 
 state shall be entitled to all privileges and immunities 
 of citizens in the several states." 11 It follows that it 
 may do business in another state only by comity, and 
 that the other state may prescribe such conditions as 
 it will (not discriminatory) upon the right of the for- 
 eign corporation to transact business within its bor- 
 ders. The consequent cost and inconvenience are 
 
 10 Bank of Augusta v. Earl, 38 U. S. (13 Peters) 519. 
 
 11 Paul v. Virginia, 8 Wall. 178.
 
 FOR BUSINESS CORPORATIONS 11 
 
 harassing and burdensome to the corporation that 
 transacts business in several states. 
 
 Constantly changing legislation and the necessarily 
 attendant uncertainty are additional impediments, for 
 there is no assurance whatever that the law of today 
 with respect to corporate rights will remain as the law 
 of tomorrow. 
 
 Inquisatorial legislation and the state's visitorial 
 powers, finding expression in the necessity of making 
 multitudinous reports, and of submitting to examina- 
 tions by state authorities, are also disagreeable fea- 
 tures of corporate existence. 
 
 Above all, perhaps, taxation presents the most for- 
 midable objection to corporate life, for it seems that 
 we have entered upon a new economic era, in which 
 revenue in large part is to be collected from the public 
 indirectly through corporate levies. 
 
 7. Is There a Substitute: Is there any arrange- 
 ment men may make, any form of agreement they may 
 enter into under which they may serve the require- 
 ments of commerce and trade as satisfactorily as does 
 the corporation? The ordinary partnership will not 
 answer. Its necessarily limited resources and the un- 
 limited liability of its members have already proven 
 this. The limited partnership is no more satisfactory 
 since it is rendered impracticable by statutory require- 
 ments. Neither will we find our answer in the quasi- 
 partnership, the joint-stock company, for, while it af- 
 fords advantages not found in the ordinary partner- 
 ship, still it contains the very element of the ordinary 
 partnership that causes its rejection, namely: the un- 
 limited liability of its stockholders.
 
 12 BUSINESS TRUSTS AS SUBSTITUTES 
 
 The vehicle for which we seek, therefore, must, as its 
 essential characteristic, afford limited liability to the 
 investor; for, unless it is possible for men to con- 
 tribute to a business enterprise without thereby endan- 
 gering their entire private fortunes, it will be futile 
 to attempt the mobilization of capital in amounts suffi- 
 cient to transact any considerable part of the busi- 
 ness of the country.
 
 FOR BUSINESS CORPORATIONS 13 
 
 THE BUSINESS TEUST 
 
 8. Origin and Development: Whether derived 
 from the Roman fidei-commissa, 12 or, as Mr. Justice 
 Holmes concludes, from the Grennan law, 14 all 
 students of the law will agree with Professor 
 Maitland that "Of all the exploits of equity 
 the largest and most important is the invention 
 and development of the Trust It is an institute of 
 great elasticity and generality; as elastic, as general 
 as contract." 15 A remarkable tribute this to an insti- 
 tution the parents of which were Fraud and Fear, 
 and whose nurse was a Court of Conscience; 16 for it 
 should be remembered that in its youthful days the 
 trust or use, if not devised, was still employed by the 
 debtor to avoid his creditor, by the freeholder to be 
 relieved from the feudal burdens he owed his lord, and 
 by the ecclessiastic to avoid the mortmain statutes. 17 
 It was also laid hold of during the wars of York and 
 Lancaster to prevent forfeitures of estates for trea- 
 son. 18 Later, with the increase in property, the multi- 
 plication of investments and the increasing complexity 
 in financial affairs, it reached its maturity and was 
 used in the making of marriage and family settlements 
 and settlements upon charities. It is of the express 
 
 12 Spence Equitable Juris, Vol. 1, p. 435. 
 i* Early English Equity, 1 L. Quarterly Rev. 162. 
 is Lectures on Equity, p. 23. 
 
 le Sir Robert Atkyns in argument, Attorney General v. Sands, 
 Hard. 491. 
 
 "Lewin, Trusts (12th Ed.) 1. 
 is perry, Trusts (6th Ed.), Sec. 3.
 
 14 BUSINESS TRUSTS AS SUBSTITUTES 
 
 trust so employed we are accustomed to think, and 
 with which we are the most familiar. 
 
 9. The Proposed Business Trust: Now it is 
 urged by members of our profession who, to a serious 
 consideration of the subject, have brought wide re- 
 search and a wealth of learning, that this 'institute of 
 great elasticity and generality, as elastic, as general 
 as contract,' may be utilized in the field of commerce 
 and trade as an effective substitute for the ordinary 
 private business corporation. 19 Its use, as they sug- 
 gest, closely resembles in form the incorporated com- 
 pany. It is created by the execution of a declaration 
 of trust, usually by three or more trustees, to whom 
 there has been, or will presently be, transferred or 
 paid the property or money to constitute the corpus 
 of the trust. It recites: (1) the property to constitute 
 the corpus of the trust and that the corpus shall be by 
 the trustees managed and disposed of for the benefit 
 of the holders from time to time of the transferable 
 certificates of shares, or beneficial interest, issued and 
 to be issued by the trustee thereunder; (2) if desired, 
 the number of shares or of beneficial interests that 
 may be issued; their character, whether common or 
 preferred, or both (for both may be issued) ; and 
 the nominal or par value if they are to have an 
 expressed par value; (3) the business to be conducted 
 by the trustees and an elaborate recitation of the pow- 
 
 18 S. R. Wrightington, of the Boston Bar, see his "Unincorporated 
 Associations;" John H. Sears, formerly of the St. Louis and now of 
 the New York Bar, see his "Trust Estates As Business Companies;" 
 Alfred D. Chandler, of the Boston Bar, see his "Express Trusts Under 
 the Common Law;" and Prof. H. L. Wilgus, see his "Corporations 
 and Express Trusts as Business Organizations," 13 Mich. L. Rev. 70, 
 205.
 
 FOB BUSINESS COBPORATIONS 15 
 
 ers they may exercise in its prosecution and in the man- 
 agement of the corpus; (4) usually a clause providing 
 that creditors shall look only to the funds and prop- 
 erty of the trust for payment, and requiring the trus- 
 tees to incorporate in their contracts a provision to 
 this effect; (5) that the shareholders shall have no 
 title to the trust property but only the right at the 
 termination of the trust to share pro rata in the pro- 
 ceeds of the sale of the property thereof, and mean- 
 while to income, which shall be distributed when and 
 as provided therein; and that the death of a share- 
 holder shall not operate to terminate the trust or en- 
 title his legal representative to an accounting; (6) gen- 
 erally a name and provision for the adoption of a 
 seal; (7) the trustees' compensation and the manner 
 and time of choosing trustees and filling vacancies; 
 (8) the extreme limit of time during which the trust 
 may continue, usually not more than twenty-one years 
 after the death of the last surviving original trustee. 
 Such other provisions as appear appropriate and de- 
 sirable may, of course, be added. Thus the corpus of 
 the trust corresponds to the capital of the incorporated 
 company, the trustees to the Board of Directors, the 
 beneficiaries or cestuis que trust to the stockholders, 
 and the beneficial interests or shares to the corpora- 
 tion's shares of stock. 
 
 10. Its Legality Considered: We purpose to 
 consider this proposal solely from the standpoint of 
 the investor. 
 
 The comparative novelty of this employment of the 
 express trust, at once excites inquiry as to its legality. 
 Equity has long since established the principle that all 
 persons sui juris have the same power to create trusts
 
 ,16 BUSINESS TRUSTS AS SUBSTITUTES 
 
 that they have to make a disposition of their property ; 
 * ' that every one competent to enter into a contract, or 
 to make a will, or to deal with the legal title to prop- 
 erty, may make such disposition of it as he pleases; 
 and he may annex such conditions and limitations to 
 the enjoyment of it as he sees fit; and he may vest it 
 in trustees for the purpose of carrying out his inten- 
 tion." 20 Or, as said by Lewin: 21 "It may be laid 
 down as a general rule that whoever is competent to 
 deal with the legal estate may, if he so disposes, vest 
 it in a trustee for the purpose of executing the settlor's 
 intentions." While not customary, it has not been un- 
 usual for a testator in his will to designate that a 
 trustee therein appointed shall, for a limited time, 
 carry on the business of a partnership of which testa- 
 tor was a member, and it must be conceded that no 
 legal objection has been found to this use of the trust. 22 
 Again, since a settlor may convey property to a trus- 
 tee in trust for himself and others 23 there would seem 
 to be no legal objection to the business trust upon the 
 ground that the beneficiaries thereof are themselves 
 the settlors. It has been judicially determined by two 
 notable decisions, one in England and one in North 
 Dakota, that a business trust created by a debtor with 
 himself and his creditors as cestms que trust is a valid 
 arrangement which equity will recognize and enforce. 2 * 
 
 20 Perry, Trusts, 6th Ed., Sec. 13. 
 
 21 Trusts, 12th Ed., Chap. 3, Sec. 1. 
 
 22Burwell v. Mandeville's Executor, 43 U. S. (2 How.) 506; Smith 
 v. Ayer, 101 U. S. 320; Ex parte Richardson, 3 Maddocks, Ch. 79. 
 
 23 in re Est. of foulard, 141 Mo. 642 ; Mcllvaine v. Smith, 42 Mo. 
 45; Lampert v. Haydel, 96 Mo. 439. 
 
 24 Cox v. Hickman, 9 C. B. (N. C.) 47; Wells-Stone Mercantile 
 Co. v. Grover, 7 N. Dak. 460.
 
 FOR BUSINESS CORPORATIONS 17 
 
 As long ago as 1880, in Smith v. Anderson, 25 which is 
 without doubt the leading English case upon this sub- 
 ject, the court of Chancery gave judicial recognition 
 and approval to a trust of the character we are now dis- 
 cussing. For at least the past thirty-five years, in the 
 State of Massachusetts, the business trust has been a 
 recognized institution of great utility. 26 In at least 
 three decisions by the Supreme Court of the United 
 States, presently to be noticed, it has received judicial 
 recognition. Likewise in other cases here and there 
 (only a few it is true) the courts have approved 
 them. 
 
 Therefore, it may be fairly concluded that weapons 
 of attack have not as yet been used to destroy the 
 legality of the business trust. However, every inno- 
 vation to serve commercial needs has met with opposi- 
 tion. Indeed, this was true of the corporation, and it 
 is reasonable to assume that the express trust as an 
 agency of trade, if it shall be increasingly used, will 
 be subjected to the closest legal scrutiny and that ob- 
 jections to it not yet considered will be found. 
 
 Recently the Attorney General of the State of Ohio, 
 
 25 15 Ch. D. 247 ; see also Crowther v. Thorley, 50 L. T. 43 ; In re 
 Siddall, 54 L. J. Ch. 682; In re Thomas, 54 L. J. Q. B. 336; In re 
 Faure Electric Ace. Co., 40 Ch. Div. 141, 151, 152. 
 
 26Hoadley v. County Comrs., 105 Mass. 519; Whitman v. Porter, 
 107 Mass. 522; Shoe & Leather Co. v. Dix, 123 Mass. 148; Gleason v. 
 McKay, 134 Mass. 419; Phillips v. Blatchord, 137 Mass. 519; Ricker 
 v. American Loan and Trust Company, 140 Mass. 346; Mayo v. 
 Moritz, 151 Mass. 481; Hussey v. Arnold, 185 Mass. 202; Wil- 
 liams v. Boston, 208 Mass. 497; Williams v. Johnson, 208 Mass. 544; 
 Williams v. Milton, 215 Mass. 1; Frost v. Thompson, 219 Mass. 361; 
 Rand v. Farquhar, 226 Mass. 91; Dana v. Treas. and Recr. Genl., 227 
 Mass. 562; Cunningham v. Bright, 228 Mass. 385; Priestley v. Treas. 
 and R. Genl., 230 Mass. 452; Kimball v. Whitney (Mass.), 123 N. E. 
 665; Tax Comrs. (Mass.) Rep. House Doc. No. 1646; also House 
 Doc. No. 1788.
 
 18 BUSINESS TRUSTS AS SUBSTITUTES 
 
 answering an inquiry from the Commissioner of Se- 
 curities as to whether a trust, seemingly of the char- 
 acter we are considering, was valid, rendered an 
 opinion holding that it was not, because, in his judg- 
 ment, it had the appearance of a corporation, its mode 
 of conducting business was such as was calculated to 
 impress the general public with the belief that it was 
 a corporation, and its acts and mode of organization 
 and control were such as appertained to corporations, 
 or were done after the manner of corporations. There- 
 fore, he held it was violative of a statute of Ohio au- 
 thorizing an action in quo warranto to be brought 
 "against an association of persons who act as a cor- 
 poration within this State without being legally incor- 
 porated." 27 
 
 This suggests, first, whether the state may, by con- 
 stitutional statutory provision, forbid this proposed 
 use of the trust, and, second, the further inquiry 
 whether, in the absence of statute, quo warranto would 
 lie for assuming or usurping the privileges, or the 
 franchise, of an incorporation. 
 
 11. May the State Forbid It: The question is 
 not whether the state may constitutionally abolish the 
 express trust in the interest of the public welfare, but 
 whether it may prevent such use of the trust as we are 
 considering. The constitutionality of such preventive 
 legislation is a question, the adequate consideration 
 of which this occasion does not permit. Suffice it to 
 observe that such legislation could find warrant only 
 in the police power ; that there is a limit beyond which 
 that power may not be exercised ; that if a business, or 
 the manner in which a business is conducted, is in- 
 
 27 Opinion No. 575, dated Aug. 19, 1919.
 
 FOR BUSINESS CORPORATIONS 19 
 
 jurious to the community it may not shield itself be- 
 hind the constitutional guaranty of life or contract; 
 that if a business, or the manner in which it is eon- 
 ducted, is not injurious to the community, these con- 
 stitutional bulwarks render it impervious to legisla- 
 tive attack; and that whether considerations of the 
 public advantage require the suppression of a trade, 
 avocation or business, or the means by which, or the 
 manner in which it is conducted, can not be decided by 
 mere legislative fiat, but remains for final determina- 
 tion by the court under the facts as they actually exist 
 in the light of recognized legal principles and consti- 
 tutional rights. 
 
 12. Will Quo Warranto Lie: Concerning the 
 second inquiry suggested, namely: Whether, in the 
 absence of statute, quo warranto would lie for assum- 
 ing or usurping the privileges or the franchise of a 
 corporation, it is submitted that it should not. 
 
 a. For Usurping the Privileges of a Corporation: 
 The privileges exercised by the business trust are 
 those which are merely accessory as distinguished from 
 essential attributes or privileges of the corporation. 28 
 It was formerly thought that the privilege of having 
 transferable shares could be had only by charter from 
 the Crown or by act of Parliament, and that pretend- 
 ing to be possessed of this privilege was pretending to 
 act as a corporation, and that, therefore, it was illegal 
 at common law to attempt to create a body not having 
 the protection of the King's charter, the shares of 
 which might be assigned without any control or re- 
 striction whatsoever. This view has been long since 
 
 28 Warner v. Beers, 23 Wend. 103, 190.
 
 20 BUSINESS TRUSTS AS SUBSTITUTES 
 
 exploded and would be now dismissed with that state- 
 ment except for its historic interest and relation to the 
 subject under discussion, and that even to this day 
 it is an impression widely prevailing among the 
 laity. 
 
 The joint-stock company, that is an unincorporated 
 company with numerous members or partners holding 
 transferable shares, was recognized as a valuable in- 
 strument of commerce as early as the last decade of 
 the seventeenth century. While such company was a 
 partnership in that unlimited liability for its obliga- 
 tions rested upon its members or shareholders, still it 
 differed from the ordinary partnership in the multi- 
 plicity of the members or partners, the absence of the 
 principle delectus personae in consequence of the 
 transferability of shares or interests, and in the fact 
 that it was not dissolved by the death of a member. 
 While it was useful for the mobilization of credit, its 
 very existence encouraged wild speculation and be- 
 came the means of perpetrating gross frauds. Many 
 of these companies also assumed to operate under 
 abandoned corporate charters whose powers were 
 utterly foreign to the purpose of the new organiza- 
 tion. England's tremendously expanding commerce 
 following the treaty of Utrecht in 1713 found these 
 joint stock companies rapidly increasing; and with 
 their increase the public was seized with a mania for 
 stock gambling and speculation. They were organized 
 for the promotion of the most chimerical and whimsi- 
 cal schemes. For example, one company was formed 
 "for breeding silk worms in Chelsea Park;" another 
 "for importing a number of large jackasses from 
 Spain in order to propogate a larger kind of mule in 
 England;" another "for making salt water fresh;"
 
 FOB BUSINESS CORPORATIONS 21 
 
 while another project was thus advertised in the news- 
 papers: "For subscribing two million to a certain 
 promising or profitable design which will hereafter be 
 promulgated." 29 An authoritative historian refers to 
 the year 1720 as "a year remarkable beyond any other 
 which can be pitched upon by historians for extraordi- 
 nary and romantic projects, proposals and undertak- 
 ings, both national and private." 30 He further rec- 
 ords: "Any impudent imposter, while the delirium 
 was at its greatest height, need only to hire a room at 
 some coffee house, or some other house near that alley 
 (exchange alley) for a few hours and open a subscrip- 
 tion book for somewhat relative to commerce, manufac- 
 ture, plantations or of some supposed invention, either 
 newly hatched out of his own brain, or else stolen from 
 any of the abortive projects of which we have given an 
 account in former reigns, having first advertised it in 
 the newspapers the preceding day, and he might in a 
 few hours find subscriptions for one or two millions (in 
 some cases more) of imaginary stock. . . . Among 
 these many bubbles, there were some so bareface and 
 palpably gross as to not have so much as the shadow of 
 anything like feasibility." 31 Accordingly, that same 
 year (1720) in order to put an end to such companies 
 and the feverish speculation that was proving so harm- 
 ful to the nation, Parliament passed that famous act 
 known as the ' * Bubble Act. ' ' The act in terms seemed 
 to make it an offense for any except an incorporated 
 company to raise transferable shares of stock, and at 
 first it was so construed, the decisions seemingly going 
 
 29 Anderson's Hist, of Com., V. 3, p. 103. 
 so Anderson's Hist, of Com., V. 3, p. 91. 
 si V. 3, p. 102. 
 82 6 George I, C. 18, Sec. 18.
 
 22 BUSINESS TRUSTS AS SUBSTITUTES 
 
 to the extent of holding that regardless of the act it 
 was illegal at common law for any unincorporated so- 
 ciety to raise transferable shares. 33 Finally, however, 
 more than a century after the act was passed, and, in- 
 deed, after it had been expressly repealed, 3 * it was 
 definitely decided by the English courts (1) that the 
 act was directed at the raising of transferable shares 
 only in those unincorporated companies whose pur- 
 poses were mischievous and tended to the common 
 grievance, and (2) that it was not an offense at com- 
 mon law for an unincorporated company to have and 
 issue transferable shares. 86 Therefore, as said by 
 Judge Lindley: 36 "The legality at common law of 
 such companies may, therefore, be considered as fin- 
 ally established." It further seems that this ground 
 of illegality was urged chiefly because of the rule of 
 pleading established by the courts requiring that all 
 partners, however numerous, must be made parties de- 
 fendant. The shareholders of these unincorporated 
 companies being partners in contemplation of law, and 
 the judges finding it necessary to adhere to this rule of 
 pleading considered such companies mischievous and 
 illegal. 87 
 
 as Vansandan v. Moore, 8 East. 516 ; Kinder v. Taylor, not reported 
 but referred to and quoted in part by Collyer, Law of Partnership, 
 6th Ed.; Ellison v. Rignold (1821), 2 Jac. and Walk. 503; Josephs 
 v. Pebrer (1825), 3 Barn, and Ores. 639; Duvergier v. Fellows (1828), 
 
 5 Bing. 248; affd. 10 B. and C. 1826; Blundell v. Winsor (1837), 8 
 Sim. 601. 
 
 34 In 1825, by 6 George 4, C. 91. 
 
 35 King v. Webb (1811), 14 East. 506; Walburn v. Ingelby (1832), 
 1 Mylne and K. 61; Garrard v. Hardey (1843), 5 Mann, and Gr. 1. c. 
 257; Harrison v. Heathorn (1846), 6 Mann, and Gr. 81; Re Mexican 
 
 6 So. Am. Co. (1859), 27 Beav. 474, 4 DeG. and J. 320. 
 
 36 Law of Companies, 5th Ed. Chap. 4, p. 133. 
 
 37 Lindley, Law of Companies, 5th Ed., p. 134.
 
 FOR BUSINESS CORPORATIONS 23 
 
 As it was both difficult and costly to obtain a cor- 
 porate charter and the Bubble Act stopped the develop- 
 ment of the joint stock society, enterprise languished 
 and ' l for upwards of a century industry was deprived 
 of a certain amount of capital which would otherwise 
 have been available." 88 
 
 Therefore, it may be taken as firmly established that 
 the privilege of raising and issuing transferable shares 
 is a common law right and not a privilege peculiar to 
 the corporation. The fact that the exercise of this right 
 by the quasi-partnership or joint-stock company is in 
 derogation of the principle delectus personae, and 
 makes it difficult for the purposes of suit to identify 
 the partners, lends an emphasis to the objection to its 
 exercise by such companies which does not obtain with 
 the trust. In the case of the pure trust, because of the 
 absence of personal liability of the cestuis que trust, 
 the public is indifferent to the changing personnel of 
 the beneficiaries. This is a matter of important con- 
 sideration with the business trust, in view of the re- 
 quirement of equity that the beneficiaries of a trust be 
 identified. Since, in the business trust, with changing 
 beneficiaries the shares or certificates of beneficial in- 
 terest furnish the indicia of identification, their legality 
 is, of course, essential. 
 
 In this connection, it should be noted that as yet 
 there has been no satisfactory determination of the 
 exact nature of the cestuis' interests in a business trust, 
 that is, whether they are mere choses in action, or 
 equitable interests, estates or titles in the corpus. Upon 
 principle it would seem that they should be regarded 
 not as jura in rem, but jura in personam, mere choses 
 
 ss Scott, Const, and Finance of English, Scottish and Irish Joint 
 Stock Cos., V. 1, p. 438.
 
 24 BUSINESS TRUSTS AS SUBSTITUTES 
 
 in action. 39 Nevertheless, since equitable interests are 
 commonly regarded not as mere choses in action but as 
 interests in the corpus, when so regarded their charac- 
 ter will be determined by the character of the corpus, 
 being considered as personalty or realty as the corpus 
 is personalty or realty. A recent decision contains a 
 dictum that where the property of the trust is real 
 property "the provision for assignability of shares 
 without complying with the formalities necessary for a 
 conveyance of real estate does not make them personal 
 property. They represent equitable interests in the 
 corpus and if the corpus is real estate it would seem 
 that the transferability would depend upon the law 
 governing the transfer of interests in real estate in the 
 place where the real estate was situated, in the absence 
 of legislative authority making special provision for 
 their transfer." 40 If the capital or corpus of the trust 
 consists solely of realty and the trustees are directed 
 to convert it into cash at the termination of the trust, 
 then no equitable conversion will be deemed to have 
 occurred and the property remains real property. If 
 the corpus consists of both personal and real property 
 and the trustees are directed to convert at the termina- 
 tion of the trust, then, under some cases, an equitable 
 conversion will be deemed to have taken place at the 
 inception of the trust and the entire fund will be con- 
 sidered personalty from that time forward. 41 To avoid 
 any possibility that the shareholders shall be em- 
 barrassed in their right to transfer their interests, 
 
 "9 Maitland, Equity, p. 112; Langdell (1877), Summary of Equity 
 Pleading, 90. 
 
 40 Bartlett v. Gill, 221 Fed. 476. 
 
 <i Dana v. Treasurer and Receiver General, 227 Mass. 562; Priest- 
 ley v. Treasurer and Receiver General, 230 Mass. 452; Bartlett v. 
 Gill, supra.
 
 25 
 
 whatever the nature of these interests may be, by mere 
 assignment of their certificates, it is advisable that the 
 declaration of trust contain a peremptory direction to 
 the trustees to convert the property, but allowing such 
 conversion to be postponed in their discretion. The 
 corpus, though consisting of real property alone, will 
 then unquestionably be considered as having been con- 
 verted from the beginning and the interests of the bene- 
 ficiaries would be regarded, if not mere choses in action, 
 then as interests in personal property and hence per- 
 sonalty. This consideration is also of importance in 
 connection with questions of inheritance and other 
 taxes that may arise. 
 
 We conclude, therefore, that the business trust does 
 not usurp the privileges of the corporation. 
 
 b. For Usurping the Franchise of a Corporation: 
 
 Neither can it be said to usurp the franchise of a corpo- 
 ration. As well said by the Missouri Springfield Court 
 of Appeals : ' * The corporate franchise is the right to 
 exist as an entity for the purpose of doing things which 
 are permitted under the law authorizing the incorpora- 
 tion. The things which the corporation is authorized 
 to do are its powers as distinguished from its fran- 
 chise, that is its right to exist as a corporation. ' ' 42 As 
 the franchise, the distinguishing feature of the cor- 
 poration, is the artificial personality distinct from the 
 individuals composing it, there can be no usurpation of 
 corporate function unless there be an assumption of 
 such distinguishing personality. To quote Judge Lind- 
 ley again: 43 "What distinguishes corporations from 
 
 42 state on Inf. v. Business Men's Athletic Club, 163 S. W. 901, 1. c. 
 907. 
 Law of Companies, 5th Ed., p. 134.
 
 26 BUSINESS TRUSTS AS SUBSTITUTES 
 
 other bodies is their independent personality; and no 
 society which does not arrogate to itself this character 
 can be fairly said to assume to act as a corporation." 44 
 
 c. Constitutional Objection: Another objection 
 which reasonably may be expected to be raised is this : 
 Our (Missouri) State Constitution, Sec. II, Art. 12, pro- 
 vides : "The term 'corporation' as used in this article 
 shall be construed to include all joint-stock companies 
 or associations having any powers or privileges not 
 possessed by individuals or partnerships." The same 
 definition appears as the first section of our laws relat- 
 ing generally to corporations. 45 A great number of the 
 states have the same or substantially the same consti- 
 tutional provision. It may be urged, therefore, that 
 the business trust is a corporation within the meaning 
 of this constitutional definition, and that, not having 
 been incorporated in the manner prescribed by law, it 
 should not be recognized as a lawful institution and 
 may be dissolved by quo warranto. 
 
 This objection, though not free from difficulty, should 
 not prevail. If the arrangement proposed is a pure 
 trust and avoids associate powers among the bene- 
 ficiaries it certainly cannot be considered to be a 
 "joint-stock company" or an "association," whether 
 the word "association" is to be qualified by "joint- 
 stock" or not. 46 Otherwise it might be unsafe to con- 
 stitute any trust with more than one trustee and one 
 beneficiary, particularly if intended that the trustees 
 should conduct or transact any business. Again, does 
 not the constitutional provision mean joint-stock com- 
 
 See also Theodore W. Dwight, "The Legally of Trusts," Pol. S. 
 Quar., V. 3, p. 610. 
 
 4B R. S. Mo. 1899, Sec. 2963. 
 
 48 See opinion of James, L. J., in Smith v. Anderson.
 
 FOE BUSINESS CORPORATIONS 27 
 
 panies and associations that have and exercise under 
 grant of the sovereign, powers and privileges not pos- 
 sessed by individuals or partnerships? Furthermore, 
 properly to interpret this section requires that it be 
 read in conjunction with Section 2 of the same article, 
 providing that "no corporation after the adoption of 
 this constitution shall be created by special laws." 
 When it is remembered that these sections first ap- 
 peared in the constitution of 1865, and that their pur- 
 pose was to put an end to the practice of granting cor- 
 porate charters by special acts of the legislature, it 
 seems manifest that the intention was to define "cor- 
 poration" and provide that no such thing thereafter 
 could be created by special laws. Hence, even if the 
 business trust is to be considered as a "joint-stock com- 
 pany" or "association," with powers and privileges 
 not possessed by individuals or partnerships, it could 
 reasonably be urged that the only effect of the consti- 
 tutional provisions referred to is to preclude their 
 establishment by special laws. Again, so far from 
 rendering invalid such stock companies and associa- 
 tions our courts have construed this constitutional and 
 statutory definition to be recognition of them, entitling 
 them to sue and be sued "as entities" in the courts of 
 our state, and recent statutory amendment so regards 
 them. 47 These views find support in a very carefully 
 considered and exhaustive opinion by the Supreme 
 Court of Idaho, 48 though perhaps they are at variance, 
 in part at least, with a recent decision of the Supreme 
 Court of Kansas.* 9 
 
 *TWientchter v. Miller (Sup. Ct. Mo.), 208 S. W. 38; Williams v. 
 U. S. Express Co., 195 Mo. App. 362; Acts Mo., 1915, p. 225. 
 
 <8Spottswood v. Morris, 12 Idaho 360, 6 L. R. A. (N. S.) 665. 
 
 *9 The Home Lumber Company, et al, v. Hopkins, Attorney Gen- 
 eral, et al, filed Feb. 7, 1920.
 
 BUSINESS TRUSTS AS SUBSTITUTES 
 
 13. Does It Afford Limited Liability: Assuming 
 therefore, the legality of the business trust, the all im- 
 portant question arises whether it possesses that at- 
 tribute which is indispensable if it is to serve as a sub- 
 stitute for the business corporation, namely: limited 
 liability of the investors or shareholders. 
 
 / First. As to the Cestuis Que Trust or Shareholders : 
 The law is firmly settled that the cestui que trust is not 
 personally liable for the obligations incurred by the 
 trustee in the management of the trust estate. This, 
 for the reason that the trustee has no authority to bind 
 ex directo the cestui que trust. The trustee is not an 
 agent but, upon the contrary, he himself is the prin- 
 cipal. He is the owner (in trust it is true) of the prop- 
 erty, and the business he transacts is his business, even 
 though another is to receive the benefits or profits 
 therefrom. "A trustee is a man who is the owner of 
 the property and deals with it as principal, as owner 
 and as master, subject only to an equitable obligation 
 to account to persons to whom he stands in the relation 
 of trustee and who are the cestuis que trust." 50 Since, 
 in relation to the property and the business in which it 
 is employed, he stands as proprietor, as principal, as 
 master, upon no recognized principle of law can the 
 beneficiary be held for his obligations with respect to 
 that property and that business. Therefore, in the few 
 cases that have arisen in which creditors of trustees in 
 business trusts have undertaken to hold the sharehold- 
 ers liable they have failed. 51 
 
 so Smith v. Anderson, supra. 
 
 si Cox v. Hickman, 8 H. L. C. 268; Wells-Stone Mercantile Co. v. 
 Grover, 7 N. Dak. 406; Mayo v. Moritz, 151 Mass. 481; Rhode Island 
 Hospital Trust Co. v. Copeland, 39 R. I. 193; Johnson v. Lewis, 6 
 Fed. 27.
 
 FOR BUSINESS CORPORATIONS 29 
 
 If the declaration of trust confers absolute and un- 
 controlled power upon the trustees with respect to the 
 management of the property given them and the bene- 
 ficiaries have only the rights that are implied because 
 they are fundamental to the trust relation, viz : to call 
 upon the trustees to account, to have them removed 
 for misconduct or neglect, to receive the income while 
 the trust lasts, and their share of the corpus or of the 
 conversion thereof upon its termination, then plainly 
 the arrangement is a pure trust and the shareholders 
 are not liable to creditors. It transpires, however, that 
 sometimes a declaration of trust has been so drawn 
 that it is uncertain whether it constitutes in truth a 
 trust. This arises from the fact that the provisions 
 thereof have given certain rights to the beneficiaries in 
 addition to and beyond those fundamentally and neces- 
 sarily adherent to the cestui que trust. For example, 
 the right to hold meetings and fill vacancies among the 
 trustees; to elect the trustees periodically; to remove 
 trustees and choose successors; to initiate and adopt 
 and to consent to amendments to the trust agreement ; 
 to direct or agree to a termination of the trust ; and to 
 give directions to the trustees. 
 
 In any of such cases, it is submitted that the inquiry 
 should be, who are the owners of the property and of 
 the business in which it is employed? If the trustees, 
 they are the principals, the masters, and the arrange- 
 ment is a strict trust ; if the shareholders, they are the 
 principals, tne masters, and the trustees, so called, are 
 mere agents and a strict trust does not exist. If the 
 shareholders are the principals and the trustees their 
 agents, then it would follow of necessity that the share- 
 holders would be personally liable for the conduct of 
 their agents and that too whether they (shareholders)
 
 30 BUSINESS TRUSTS AS SUBSTITUTES 
 
 constitute a partnership or not. At least, this would 
 be true in the absence of contract or estoppel. 
 
 Now to determine whether the trustees are the own- 
 ers of the property and of the business in which it is 
 employed, the intention of the parties as expressed in 
 the trust instrument should control. That is, the legal 
 intention the intention which the law will impute to 
 them from what they have written. If the instrument 
 is in trust form and expressly or impliedly indicates 
 that it is not the intention that the trustees shall have 
 authority to bind the shareholders personally, and 
 reserves to the shareholders only those rights 
 which are consonant with the relation of trustee and 
 cestui que trust, then a trust has been established, even 
 though those rights may also be such as pertain to other 
 relations. For example, a principal may discharge his 
 agent and employ another, and so may a partnership 
 and joint stock company; but so may the settlor of a 
 trust empower the cestui que trust to remove the trus- 
 tee and appoint a successor. 52 The principal may im- 
 pose upon his agent new powers and duties, and so may 
 a partnership and joint-stock company; but the creator 
 of a trust may likewise give the beneficiaries the right 
 to annul uses and appoint new uses in place thereof. 53 
 The principal, the partnership and the joint-stock com- 
 pany, having an agent to sell property, may make his 
 right to sell dependent upon the employer's acquies- 
 cence first obtained, and so may the settlor of a trust 
 provide that the trustee, before disposing of the prop- 
 erty, shall first obtain the consent of the cestui que 
 
 52 May v. May, 167 U. S. 310; March v. Romare, 116 Fed. 355; Fos- 
 ter v. Goree, 4 Ala. 440; Perry on Trusts (6th Ed.), Sec. 287. 
 
 63 28 Am. and Eng. Encyc. of Law, 2d Ed., p. 1105, and cases there 
 cited.
 
 FOB BUSINESS CORPORATIONS 31 
 
 trust. 54 Why may not association, which is essential 
 to the partnership, be also enjoyed by cestuis que trust 
 and, indeed, be provided for by the trust instrument. 
 The possession by the cestuis que trust of these rights, 
 in addition to those already mentioned as being rights 
 which they impliedly have by virtue of the trust rela- 
 tion, should by no means of itself deprive the trustees 
 of their ownership of the property and of the business 
 in which it is directed to be employed. The benefici- 
 aries may have these additional rights and the trustees 
 still be the owners of the property and of the business, 
 if that is what was intended by the parties. 
 
 In Williams v. Milton, 215 Mass. 1, Judge Loring un- r 
 dertook to establish a test by which to determine 
 whether a strict trust has been created. He says that 
 this depends upon (a) the association provided for 
 among the cestuis, and (b) the nature and extent of 
 the rights reserved to them; that if they are to asso- 
 ciate through meetings and have rights sufficient in ex- 
 tent to make them the masters over the trustees, then 
 the arrangement is not a trust, but is a partnership. 
 But the trouble with this test is that it does not enable 
 us to know just what association and how much power 
 make cestuis partners. In this very case the share- 
 holders had the right (a) to consent to an alteration or 
 amendment of the trust instrument, and (b) to a ter- 
 mination of the trust before the time fixed in the deed. 
 It was held that these were not rights sufficient in ex- 
 tent to convert the trustees into agents, and thereby 
 the arrangement into a partnership, but that the trus- 
 tees still remained the ' 'masters of the trust property. " 
 
 s* Hamilton v. N. Y. Stock Ex., 20 Hun. 88; Gindrat v. Montgom- 
 ery G. L. Co., 82 Ala. 596; Loring v. Salisbury Mills, 125 Mass. 138.
 
 32 BUSINESS TRUSTS AS SUBSTITUTES 
 
 On the other hand, the same opinion indicates that 
 should a trust instrument reserve to the beneficial own- 
 ers the right to elect the trustees and their officers 
 annually, 55 or the right to hold meetings, remove trus- 
 tees, give instructions to trustees, alter or amend the 
 declaration of trust and direct the trustees to termi- 
 nate the trust, 56 the so-called trustees would be con- 
 sidered as mere agents, the certificate owners prin- 
 cipals and the arrangement a partnership. But, says 
 this same opinion, the mere right of the shareholders 
 to have meetings and to amend the declaration of trust 
 by conferring additional powers upon the trustees will 
 not make them partners. 57 
 
 The inconelusiveness and unsatisfactory character 
 of the Williams v. Milton test is further emphasized by 
 cases in Rhode Island and Kansas since decided. 58 In 
 the former, the common shareholders had the right to 
 remove a trustee and appoint a new one in his stead, 
 and meetings of the shareholders were provided for at 
 which they might amend the declaration of trust "with 
 the consent of the trustees ' ' and terminate the trust at 
 any time. And yet the arrangement was held to be a 
 strict trust and these rights in the cestuis insufficient 
 to constitute a partnership. In the Kansas case re- 
 ferred to, the trust instrument made provision for 
 meetings of the shareholders and the election by them 
 of the trustees annually, and this was held not to be 
 
 55 Whitman v. Porter, 107 Mass. 522. 
 
 se Williams v. Boston, 208 Mass. 97. 
 
 57 Williams v. Johnson, 208 Mass. 544; in this connection see also, 
 In re The Associated Trust, 222 Fed. 1012; Connally v. Lyons, 82 
 Tex. 664, and Frost v. Thompson, 219 Mass. 360. 
 
 os Rhode Islland Hospital Trust Co. v. Copeland, 39 R. I. 193; Home 
 Lumber Co., et al. v. Hopkins, Attorney General, et al, filed Feb. 7, 
 1920.
 
 FOB BUSINESS CORPORATIONS 33 
 
 control of sufficient "extent," to deprive the arrange- 
 ment of the character of a "true trust." Under the 
 aforesaid test laid down in Williams v. Milton, as ap- 
 plied in later Massachusetts cases, 59 the trust instru- 
 ments under consideration in both the Rhode Island 
 and Kansas cases might reasonably be held to consti- 
 tute partnerships. 
 
 Again, if power to control the trustees is alone to be 
 absolutely decisive, then what shall we say when the 
 cestuis have the right to be trustees and, pursuant to 
 such right, cestuis, owning a majority, or perhaps 
 ninety or ninety-five per cent of the beneficial shares, 
 constitute the Board of Trustees? 
 
 Williams v. Milton is fairly subject to criticism be- 
 cause (1) it assumes there can be no middle ground be- 
 tween the trust and the partnership and that if there 
 is no trust there must be a partnership. This we are 
 unwilling to concede. (2) It assumes that if there is a 
 partnership there can be no trust. On principle this 
 should not be so, particularly if the corpus is personal 
 property. Why may not a partnership itself be the ces- 
 tui que trust? Two of the three judges in Smith v. An- 
 derson clearly held that an "association" might be the 
 beneficiary of an express trust. (3) And, above all, it 
 makes the question more complex by giving insufficient 
 consideration to the intention of the parties and by 
 approaching it from the field of partnership and exam- 
 ining it in the light of the law of partnership seeing if, 
 perchance, characteristics of that relation may not be 
 found ; whereas it should be approached from the field 
 of the express trust, remembering that the expressed 
 
 59 Dana v. Treasurer and Receiver General, 227 Mass. 562; Priest- 
 ley v. Treasurer and Receiver General, 230 Mass. 452.
 
 34 BUSINESS TRUSTS AS SUBSTITUTES 
 
 intention of the parties must control and having in 
 mind the principles and rules of equity concerning the 
 trust relation. 
 
 Therefore, we urge that though under the trust in- 
 strument the cestuis have rights in addition to those 
 necessarily adhering to the trust relation, even though 
 such additional rights may pertain to other relations 
 such as principal and agent, partnership and joint- 
 stock company, nevertheless, if they are also rights 
 which under established principles of equity, a cestui 
 may enjoy, and the instrument discloses otherwise that 
 a trust was intended, then effect should be given the in- 
 tention of the parties and the trustees be held to be the 
 owners of the property and of the business the prin- 
 cipals, the masters. ''It is the intention of the party 
 that creates and governs uses and trusts. ' ' 60 
 
 Until more general consideration shall have been 
 given to this question by the courts, and it can be said 
 that there is a preponderance of authority, the only 
 absolutely safe course to pursue in drafting the trust 
 instrument, is to see to it that the shareholders are not 
 given therein associate relation or any rights beyond 
 those which the law implies and affixes to the cestui que 
 trust. 
 
 It must not be concluded, however, that, if the dec- 
 laration does not create a strict trust, it of necessity 
 follows that the shareholders are liable as partners, or 
 otherwise, for the conduct of the so-called trustees. 
 Even in such circumstances, if the declaration provides 
 against liability upon the part of the cestuis que trust, 
 subjects the trust estate to the discharge of all obliga- 
 tions, requires creditors to look solely to the funds of 
 the estate for payment and the trustees to so contract, 
 
 eo Hale, C. B. in Atty. Gen. v. Sands, Hard. 1. c. 494.
 
 FOE BUSINESS CORPORATIONS 35 
 
 the creditor may, by contract, be required to look solely 
 to the trust property for reimbursement. 81 
 
 Second. As to the Trustees Who May Be and 
 Their Liability: Here again the established prin- 
 ciples of equity control. Speaking generally, any 
 whom the settlors or creators of the trust desire, may 
 be selected to be the trustees. Cestuis que trust are not 
 disqualified from being also trustees, for, while the rule 
 is that, if the equitable and the legal estates meet in one 
 and the same person, the equitable estate merges into 
 the legal estate, thereby extinguishing the trust or con- 
 fidence, yet both estates must be commensurate with 
 each other, otherwise there can be no merger. There- 
 fore, there should be no legal objection to the trustees 
 being cestuis que trust, certainly not if they are not all 
 of the cestuis que trust.* 1 * Indeed, it has been empha- 
 sized that in such a case it would be presumed that in 
 promoting the interests of the cestuis que trust the 
 trustees to so great an extent promote their own inter- 
 ests. 62 But manifestly one may not be a trustee if he 
 himself is in fact the settlor and sole beneficiary. 63 
 
 The trustee is not an agent either of the cestuis que 
 trust or of the estate. He is the owner of the trust 
 property and of the trust business. He is the principal, 
 the master. Therefore, his acts are his own acts, his 
 contracts are his own contracts and for both he is per- 
 sonally responsible. 64 More than half a century ago a 
 very eminent authority upon the law of Trustees wrote : 
 
 eiKimball v. Whitney (Sup. Ct. Mass.), 123 N. E. 665; Shoe & 
 Leather Co. v. Dix, 123 Mass. 148; Hussey v. Arnold, 185 Mass. 202; 
 Bank of Topeka v. Eaton, 100 Fed. 8, affd. 107 Fed. 1003. 
 
 eia Murry v. King, 153 Mo. App. 710, 715. 
 
 ez Heard v. March, 12 Cush. 580. 
 
 s Cunningham v. Bright, 228 Mass. 385. 
 
 * Taylor v. Davis, 110 U. S. 330; Connally v. Lyons, 82 Tex. 664.
 
 36 BUSINESS TRUSTS AS SUBSTITUTES 
 
 "In the present state of the law, no trustee oould be 
 advised under any circumstances to undertake the re- 
 sponsibility of carrying on any trade for others. For 
 by so doing he adopts the same risks and liabilities as 
 persons who trade on their own account, while he can 
 participate in none of the profits ; and, as a matter of 
 ordinary prudence, a trust for such a purpose should 
 be unhesitatingly declined." 65 To this consideration a 
 very thoughtful writer attributes the fact that cor- 
 porate organization has been preferred to trusts for 
 carrying on trade. 66 Whatever deterrent effect this 
 ominous statement of the law may have had in the past, 
 the apprehensions excited by it have, in recent years, 
 been greatly allayed by the protection which insur- 
 ance affords and by the growing practice among 
 trustees of contracting against personal liability. The 
 right of the trustee to so contract, and thereby to re- 
 quire the creditor to look solely to the trust estate for 
 compensation, is now fully recognized. As said by Mr. 
 Justice Woods in Taylor v. Davis : 67 "If a trustee con- 
 tracting for the benefit of a trust wants to protect him- 
 self from individual liability on the contract, he must 
 stipulate that he is not to be personally responsible, but 
 that the other party is to look solely to the trust es- 
 tate." 68 The trust instrument, therefore, should pro- 
 vide against personal liability upon the part of the 
 trustees and that those with whom they deal must look 
 to the property of the trust for compensation, and in 
 
 es Hill, Trustee (4th Am. Ed.) 534. 
 
 aa Sears, Trust Estates and Business Companies, Sec. 27. 
 
 T 110 U. S. 330. 
 
 es See also Bank of Topeka v. Eaton, 100 Fed. 8, affd. 107 Fed. 
 1003; Shoe and Leather Co. v. Dix, 123 Mass. 148; Hussey T. Arnold, 
 185 Mass. 202; Rand v. Farquhar, 226 Mass. 91.
 
 FOE BUSINESS COBPOBATIONS 37 
 
 their contracts the trustees should, by explicit refer- 
 ence to that provision of the trust, give notice of their 
 exemption from personal liability, and that the other 
 contracting party must look solely to the property of 
 the trust for payment of any obligation. In any event, 
 of course, the trustees have the right to indemnify 
 themselves out of the property of the trust estate. 
 
 14. Advantages Over Corporations: Let us con- 
 sider the business trust in connection with the cor- 
 porate disadvantages we have already mentioned. 
 
 a. Prejudice: There is a popular significance at- 
 tached to the word " Trust," making it synonymous 
 with "monopoly," or "conspiracy in restraint of 
 trade. ' ' This does not presage a reception of the busi- 
 ness trust by the public with a mind free from pre- 
 judice. Until this odious impression can be removed, 
 and the people come to understand the true signifi- 
 cance of the express trust, and its use as a legitimate 
 vehicle of trade, it is unlikely that it will find the public 
 attitude toward it more benign than does the corpora- 
 tion. 
 
 b. Migratory rights considered, the business trust 
 has a decided advantage over the corporation, for the 
 trustees are "persons" and also "citizens" within the 
 meaning of Section 2, Article 4 of the Constitution of 
 the United States and they are, therefore, entitled to 
 all the privileges and immunities of citizens in the sev- 
 eral states, and they may of right go into every state 
 and there transact business without molestation upon 
 equal terms with every other citizen.* 9 
 
 c. Inquisitorial Legislation : Again, for the present 
 
 e9 Farmers' Land and T. Co. v. Chicago, etc., Ry. Co., 27 Fed. 146; 
 Shirk v. Lafayette, 52 Fed. 855; Roby v. Smith, 131 Ind. 342.
 
 38 BUSINESS TRUSTS AS SUBSTITUTES 
 
 at least, the business trust is free from the necessity 
 of making periodical reports and from inquisitorial 
 legislation of every kind. There is, of course, no as- 
 surance how long this condition will continue. But how 
 far the state may constitutionally go in attempts to reg- 
 ulate business transacted in this form pursuant to the 
 exercise of the common law right of contract, and 
 whether the business trust may constitutionally be 
 singled out from all other trusts to be the object of 
 legislative attack, are questions that will be ever pre- 
 sent to operate as deterrents against hasty or radical 
 action. Then too the question whether exactions may 
 be imposed upon this form of commercial activity ar- 
 ranged under the right of contract, which are not im- 
 posed upon partnerships, will also give the legislature 
 pause. It is. interesting to note that in Massachu- 
 setts, except in the cases of trusts holding securities 
 of public service corporations, the legislature has 
 never undertaken to require more than the public filing 
 of the declaration of trust. 
 
 d. Taxation: In matters of taxation the advan- 
 tage is decidedly with the business trust. The corpora- 
 tion must pay an organization tax, a property tax, a 
 franchise tax, a state and federal capital stock tax, and 
 a state and federal income tax. If it would establish 
 agencies in other states it must do so upon the terms 
 prescribed by those states, paying always an incorpora- 
 tion tax to be followed in turn with the obligation of 
 there also making the various reports and paying the 
 various assessments imposed upon corporations. Then 
 there is the stock transfer tax and often the separate 
 tax against the shareholder upon his shares, even 
 though he lives in the state of the corporation's 
 nativity. With the express trust, on the contrary, it is
 
 FOB BUSINESS CORPORATIONS 39 
 
 believed that no case can be found upholding the right 
 to tax the corpus of the trust estate and also the equita- 
 ble interest therein. Manifestly this would be double 
 taxation and would impose a burden upon those need- 
 ing the protection of the trust which others more for- 
 tunate in not needing that protection would escape. 
 Since the business trust is the creation of the parties' 
 common law right of contract, a franchise tax could not 
 be imposed upon it ; and the Supreme Court of Massa- 
 chusetts decided that the shares in a trust held to be a 
 partnership could not be taxed to the owner; 70 also 
 that an excise tax on corporations could not constitu- 
 tionally be applied to such associations. 71 It should be 
 noted, however, that a majority of the judges of that 
 court in an opinion to the legislature held that a stock 
 transfer tax, including tax on shares in unincorporated 
 associations, would be constitutional. 72 
 
 The Federal Corporation Tax Law of 1909 provided 
 for the payment -of a special excise tax by ' ' every cor- 
 poration, joint stock company, or association organized 
 for profit and having a capital stock represented by 
 shares. ' ' The United States Supreme Court held that 
 a trust formed for the purpose of purchasing, holding 
 and selling lands and buildings in Boston was not re- 
 quired to pay any taxes under this law. This upon the 
 ground that the tax was an excise tax upon the privi- 
 lege of doing business in a corporate capacity and with 
 the advantages which arise from corporate or quasi- 
 corporate organization. It was, therefore, said that 
 the act should be held not to apply to such a trust but 
 
 70 Hoadley v. County Commissioners, 105 Mass. 519. 
 TiGleason v. McKay, 134 Mass. 419, and Minnot r. Winthrop, 162 
 Mass. 113. 
 
 72 Opinions of Justices, 196 Mass. 603.
 
 40 BUSINESS TRUSTS AS SUBSTITUTES 
 
 to embrace "only such corporations and joint stock 
 associations as are organized under some statute or 
 derive from that source some quality or benefit not 
 existing at the common law. ' m 
 
 Perhaps to the case of Crocker v. Malley, 74 more 
 than to any other one thing, should be attributed the 
 widespread and growing interest in the business trust. 
 The Court had under consideration a trust instrument 
 known as The Wachusett Eealty Trust, drawn by Mr. 
 Felix Rackemann of the Boston Bar. This instrument, 
 with clearness and brevity, combines adequate compre- 
 hensiveness and may well serve as a model (see ap- 
 pendix). It enjoys the distinction of being the first and, 
 thus far, the only instrument of the class we are con- 
 sidering to be held by the highest court of the land to 
 constitute a pure trust. Though consent of the bene- 
 ficial owners was required to fill a vacancy among the 
 trustees, and for a modification of the terms of the 
 trust, the court held that the agreement did not consti- 
 tute either a joint-stock company, association or part- 
 nership within the meaning of the income tax act of 
 1913, but that it was a pure trust and should be assessed 
 under the provisions of that act relating to fiduciaries. 
 In view of the decision in that case, it is believed that 
 under the present income tax law such a trust would 
 not be considered a "corporation," or "person," as 
 those terms are defined in the act, but that the tax 
 would have to be levied under the sections relating to 
 estates and trusts, and fiduciaries. 
 
 15. Disadvantages: Candor requires the admis- 
 sion, however, that the business trust is not entirely 
 
 73 Eliot v. Freeman, 220 U. S. 178. 
 
 74 249 U. S. 223.
 
 FOE BUSINESS CORPORATIONS 41 
 
 without its disadvantages. As a practical matter, the 
 greatest of these no doubt is the very fact that it is 
 comparatively new, that is, that it has not been in gen- 
 eral use, and that its status therefore, is as yet not 
 well denned. That it will, in the course of time, incite 
 legislation of some character, it is reasonable to expect, 
 and what the nature of this legislation will be, or to 
 what extent it may constitutionally go, none can fore- 
 tell. Tradition and respectable authority are opposed 
 to allowing large numbers of men "an unlimited and 
 unregulated power of grouping themselves for a com- 
 mon purpose." 75 And yet, experience thus far would 
 not warrant the prophecy that this legislation will be 
 of hostile character. We have already observed that 
 Massachusetts has done no more than require the pub- 
 lic filing of the trust declaration, except in the cases of 
 trusts holding securities of public service corpora- 
 tions. 75 ' 1 The State of Oklahoma has, by recent legisla- 
 tive enactment, completely recognized and validated 
 the business trust and exempted the trustees and bene- 
 ficiaries from personal liability and required creditors 
 to look solely to the trust estate for reimbursement. 71 * 
 Again, there is comfort in the reflection that as yet 
 there is practically no other legislation at all. 
 
 Then too, there are important inquiries which will 
 remain without satisfactory answers until there shall 
 be further adjudication. Such, for example, as the 
 precise nature of the cestui's interest; to what extent 
 the cestuis may be also trustees; whether the share- 
 holders may periodically choose trustees; and espe- 
 cially a satisfactory guide by which to determine pre- 
 
 75 Holdsworth, Hist. E. L., V. Ill, pp. 374, et seq. 
 
 75a Supra, 14, c. 
 
 75b Laws of Oklahoma, 1919, p. 30.
 
 42 BUSINESS TRUSTS AS SUBSTITUTES 
 
 cisely the line of division between the strict trust and 
 the partnership or other relation. 
 
 Again, will the trust violate the rule against per- 
 petuities and restraints upon alienation in the absence 
 of peremptory requirement that it be terminated with- 
 in the period of lives in being and twenty-one years 
 and nine months thereafter? There is great con- 
 trariety of opinion upon this last question. The better 
 rule would seem to be that "where there are persons 
 in being at the creation of an estate, capable of con- 
 veying an immediate and absolute estate in fee, in pos- 
 session, there is no suspension of the power of aliena- 
 tion and no question as to perpetuities can arise." 79 
 But since it cannot be said that this is the established 
 rule, prudence dictates that the trust agreement pro- 
 vide for its termination within the period prescribed 
 by the rule against perpetuities. In this respect the 
 corporation would seem to have the advantage ; but it 
 is an advantage more seeming than actual, for, in most 
 States, the trust can be made to continue for a period 
 of twenty-one years beyond the death of the last sur- 
 vivor of the youngest of living children, a period, we 
 dare say, entirely adequate to its needs and greatly in 
 excess of the customary two-score years and ten of the 
 business corporation. 
 
 16. Conclusions: The following conclusions are 
 believed to be warranted : 
 
 1. For reasons that are manifest, the express trust 
 cannot be used as a substitute for public service cor- 
 porations, or for corporations carrying on business of 
 
 76 Hart v. Seymour, 147 111. 598; See also Johnson T. Preston, 226 
 111. 1. c. 455.
 
 FOB BUSINESS CORPORATIONS 43 
 
 a public, or quasi-public character, at all times requir- 
 ing and subject to state regulation and control, such as 
 banking and insurance. 
 
 2. The business trust cannot be used as a substitute 
 for those corporations with three stockholders, two of 
 whom are dummies. 
 
 3. The express trust has been used as an agency of 
 business and trade chiefly in Massachusetts and has 
 been so used there not as a substitute for the corpora- 
 tion but because the corporation could not (until re- 
 cently) be used in the field in which the trust has been 
 principally employed, namely : in the business of deal- 
 ing in real property. One hundred and three of such 
 trusts, said to own in the city of Boston alone real 
 property of the value of Two Hundred and Fifty Mil- 
 lions of Dollars, were investigated in 1912 pursuant to 
 legislative direction by the Tax Commissioner of that 
 Commonwealth. He reported as advantages claimed 
 by these trusts : 
 
 (a) " These associations have been found by the ex- 
 perience of twenty-five years to be a convenient, safe 
 and unobjectionable character of co-operative owner- 
 ship and management. They are for the interest alike 
 of the investor and the public. 
 
 (b) "The form of organization ensures a continuity 
 of management and control which appeals strongly to 
 investors in real estate which cannot be secured by a 
 corporation with changing officers. The trustees, who 
 are the managing officers of a trust, are not so likely 
 to be changed as are the directors of a corporation. 
 
 (c) "It affords a more economical and more con- 
 venient and flexible form of management than does a
 
 44 BUSINESS TRUSTS AS SUBSTITUTES 
 
 corporation. Trustees can transact business with 
 more ease and rapidity than directors. ' m 
 
 Nevertheless, it is probable that at that time not 
 more than a dozen of these trusts were engaged in in- 
 dustrial enterprises. 78 Thus, it would seem that in the 
 state where the business trust is best known, its possi- 
 bilities as a business agency superior to the corpora- 
 tion were either doubted or not appreciated. 
 
 4. The declaration or agreement of trust need not 
 make the beneficiaries the principals; neither need it 
 constitute the trustees, or the beneficiaries, or both, to- 
 gether, a partnership, joint-stock company or associa- 
 tion; but, when properly drafted, it is a pure trust 
 which affords an agency in all respects legal and one 
 in principle entirely adequate to be used to carry on 
 any business for the benefit of two or more investors 
 that is now conducted by the ordinary manufacturing 
 or private business corporation. Whether in practice 
 it will constitute such agency, remains to be demon- 
 strated by fuller experience and its more general util- 
 ization. 
 
 5. Its employment would seem to be ideal : 
 
 (a) As a substitute for holding and for investment 
 companies, that is companies merely holding the 
 stock of corporations, and companies engaged in the 
 business of dealing in, buying and selling as invest- 
 ments, stocks, bonds and commercial paper. 
 
 (b) As a substitute for companies whose business 
 travels a beaten path and is routine in character, such 
 as owning and conducting an office or apartment build- 
 
 77 Tax Com. Report, House Doc. No. 1646. 
 
 78 Same, p. 19.
 
 FOE BUSINESS CORPORATIONS 45 
 
 ing or hotel, or developing a subdivision, or doing a 
 specified building or construction work under a con- 
 tract, or operating a mine ; and in this class might ap- 
 propriately be placed also companies handling large 
 estates. 
 
 6. The inconvenience attendant upon the necessity of 
 express notice and contract in order to absolve the 
 trustees from liability, is a practical consideration 
 tending to repress its use in new ventures and to con- 
 fine it to conversions from the corporate form of sea- 
 soned, established and proven enterprises whose 
 methods are fixed and whose risks, with reasonable 
 certainty, can be assessed. 
 
 8. Its chief advantages over the corporation are 
 found (a) in the convenience, continuity and flexibility 
 of the management; (b) in its migratory rights; (c) in 
 its freedom from visitorial and inquisitorial laws and 
 the consequent immunity from the necessity of making 
 periodical reports which disclose its condition and af- 
 fairs; and (d) in matters of taxation. 
 
 On the other hand, disadvantages of a very practical 
 nature are recognized in that (a) this employment of 
 the express trust is new; (b) attacks upon its validity 
 with new weapons are yet to be encountered ; (c) regu- 
 latory and perhaps repressive legislation affecting it 
 may reasonably be expected; (d) the precise nature of 
 the cestui's interest remains still undetermined; (e) an 
 adequate chart disclosing clearly the line of demarca- 
 tion between the domain of the trust and that of the 
 partnership or other relation is yet to be drawn; (f) 
 what rights the beneficiaries may have in addition to 
 those essential to every cestui que trust, and whether 
 they may periodically choose trustees, or remove trus-
 
 46 BUSINESS TRUSTS AS SUBSTITUTES 
 
 tees, fill vacancies, or even themselves be trustees if the 
 trustees will then be also owners of the majority of 
 beneficial interests, are questions still to be deter- 
 mined. 
 
 Thus, riper practical experience is essential, and 
 much law has yet to be made and many decisions yet to 
 be rendered, before the status of the business trust can, 
 with entire satisfaction, be known and defined.
 
 APPENDIX 
 
 FORMS OF TRUST DECLARATIONS 
 
 THE WACHUSETT REALTY TRUST. 
 Prepared Toy 
 
 MB. FELIX RACKEMANN 
 of the Boston Bar 
 
 (Considered by the Supreme Court of the United States in 
 Crocker v. Malley, 249 U. S. 223.) 
 
 Know All Men by These Presents, That we, Alvah 
 Crocker and Charles T. Crocker both of Fitchburg in 
 the Commonwealth of Massachusetts, John J. Riker of 
 the City and State of New York, Samuel E. M. Crocker 
 of said Fitchburg, and Felix Rackemann of Milton in 
 said Commonwealth, the grantees named in a certain 
 deed from the Crocker, Burbank & Co., Inc., (Maine 
 Corporation), dated this day by which deed there are 
 conveyed to us certain lands and buildings situate in 
 the City of Fitchburg in the Commonwealth of Massa- 
 chusetts, hereby declare and agree that we will, and 
 our heirs and successors shall, hold said granted prem- 
 ises, and all other funds and property at any time 
 transferred to and received by the Trustees hereunder, 
 for the purposes, with the powers, and subject to the 
 provisions hereof, for the benefit of the cestui que 
 trusts (who shall be trust beneficiaries only, without 
 
 47
 
 48 BUSINESS TRUSTS AS SUBSTITUTES 
 
 partnership, associate or any other relation whatever 
 inter sese), and upon the trusts following, viz.: 
 
 1. In trust to convert the same into money and dis- 
 tribute the net proceeds thereof among the persons at 
 the time of such conversion holding and owning bene- 
 ficial interests therein, as evidenced by the receipt cer- 
 tificates issued by the Trustees as hereinafter pro- 
 vided; it being however expressly understood and 
 agreed that the Trustees may, in their uncontrolled dis- 
 cretion, defer or postpone such conversion and dis- 
 tribution, except that the same shall not be postponed 
 beyond the end of twenty years from and after the 
 death of the last survivor of the persons named and 
 described in the last paragraph hereof. During such 
 postponement, and until such conversion, the interests 
 of the cestui que trusts shall be considered for pur- 
 poses of transmission and otherwise as personal prop- 
 erty. 
 
 2. In trust, pending final conversion and distribu- 
 tion of the property, to manage and control the same, 
 the Trustees having, for such purposes and for all 
 purposes of sale, lease, mortgage, exchange, improve- 
 ment and development, and any and all arrangements, 
 contracts and dispositions of the trust property, or 
 any part thereof, all and as full discretionary powers 
 and authority as they would have if they were them- 
 selves the sole and absolute beneficial owners thereof 
 in fee simple. 
 
 3. In trust to collect and receive all rents and in- 
 come from the property, and semi-annually or oftener 
 at their convenience, to distribute such portion thereof 
 as they may, in their discretion, determine to be fairly 
 distributable net income, to and among the several ces- 
 tui que trusts according to their respective fractional
 
 FOR BUSINESS CORPORATIONS 49 
 
 interests, the Trustees in this connection having full 
 authority from time to time to use any funds on hand, 
 whether received as capital or income, for purposes 
 of any repair, improvement, protection or develop- 
 ment of the property held hereunder, or the acquisition 
 of other property as the Trustees may determine to be 
 wise and expedient, for the protection and develop- 
 ment of the trust property as a whole pending its con- 
 version and distribution. The determinations of the 
 Trustees, made in good faith, as to all questions as be- 
 tween ''capital" and " income" shall be final. 
 
 4. The said Crocker, Burbank & Co. Inc., (Maine 
 Company) having determined to wind up its affairs 
 and be dissolved, without waiting for final cash sale 
 of its real estate, this trust is declared in favor, and for 
 the benefit of the eight shareholders of said Maine cor- 
 poration, according to their respective fractional in- 
 terests to whom the Trustees shall issue proper re- 
 ceipt certificates, which certificates, and all others 
 which may be hereafter issued in exchange or substi- 
 tution therefor, shall be deemed parts hereof and con- 
 clusive evidence the ownership of respective interests 
 in this trust ; and the Trustees shall, from time to time, 
 on request (on surrender of the old) issue such new 
 certificates as may be proper and necessary to evidence 
 any new or sub-divided interests. 
 
 5. The Trustees shall have authority to borrow mon- 
 ey and fix the terms of any loans, and give any pledge, 
 mortgage or other security which they may deem wise. 
 
 No purchaser from or lender to the Trustees shall 
 ever have any liability to see to the application of any 
 proceeds. 
 
 6. The Trustees may employ all such agents and at-
 
 50 BUSINESS TRUSTS AS SUBSTITUTES 
 
 torneys as they may think proper and find expedient, 
 and prescribe their powers and duties, and shall not 
 be personally responsible for any misconduct, errors or 
 omissions of such agents or attorneys employed and re- 
 tained with reasonable care. 
 
 7. The Trustees shall at all times keep full and 
 proper books of account and records of their proceed- 
 ings and doings, and shall, at least annually, render 
 account of the trust to any beneficiary requesting the 
 same, but no Trustees serving hereunder shall be 
 obliged to give any bond, nor shall any Trustee have 
 any liability except for the results of his own gross 
 negligence or bad f aith> 
 
 8. The recording of this instrument shall be at such 
 times and in such places as the Trustees may in their 
 discretion, determine to be necessary or expedient, 
 and they shall in like manner determine the form and 
 record of all muniments of title. 
 
 9. The Trustees shall have full power at any time, 
 pending final termination of this trust, to transfer the 
 whole or any part of the property then held by them 
 hereunder to any corporation which they may acquire 
 or cause to be organized for the more convenient or 
 expedient holding or management of the property, tak- 
 ing any securities issued by such corporation in ex- 
 change and payment therefor, and the Trustees, or 
 any of them, may at any time be or become directors 
 or officers of any corporation any shares of which are 
 held by them. 
 
 10. The Trustees shall be entitled to receive reason- 
 able compensation for service not exceeding a total of 
 one per cent reckoned upon the gross income received 
 by them as such, unless, at any time, a majority in
 
 FOB BUSINESS CORPORATIONS 51 
 
 interest of the cestui que trusts consent in writing to 
 some larger compensation for any past service. The 
 Trustees shall also be entitled to reimbursement and 
 indemnification from the trust property for all their 
 proper expenses and liabilities, and shall be entitled 
 at all times to the advice of counsel ; and traveling ex- 
 penses to and from any meetings of the Trustees shall 
 be considered proper expenses. 
 
 11. Any Trustee hereunder may resign by written 
 instrument duly acknowledged and attached to the 
 original of this instrument, or recorded with Worcester 
 County (North District) Deeds if the original hereof 
 be then there recorded. 
 
 Any vacancy in the office of the Trustee, however 
 occasioned, shall be filled by the remaining Trustees 
 by an instrument in writing, signed by them and as- 
 sented to in writing, by the holder or holders of a ma- 
 jority in amount of the beneficial interests herein, such 
 appointment to be in like manner attached to the orig- 
 inal of this instrument, or recorded as in the case of 
 resignation last above provided for. 
 
 12. If, at any time or times, a majority of the Trus- 
 tees hereunder shall certify in writing that the remain- 
 ing Trustees are either absent from the Commonwealth 
 of Massachusetts or incapacitated through illness or 
 otherwise, from acting, then such majority shall, at 
 such time or times, have, and may exercise, any and 
 all the powers of the Trustee hereunder with like ef- 
 fect as if similarly exercised by all. 
 
 13. The terms and provisions of this trust may be 
 modified at any time or times by instrument in writing, 
 signed, sealed and acknowledged by the then Trustees, 
 assented to in writing by a majority in interest of the
 
 52 BUSINESS TRUSTS AS SUBSTITUTES 
 
 cestui que trusts, and attached to the original of this 
 instrument, or recorded with Worcester County (North 
 District) Deeds if the original hereof be then there 
 recorded. 
 
 14. The certificate in writing of the Trustees as to 
 any resignation from the office of Trustee hereunder 
 and as to the appointment of any new trustees here- 
 under and as to the existence or non-existence of any 
 modifications hereof, may always be relied upon, and 
 shall always be conclusive evidence in favor of all 
 persons dealing in good faith with said Trustees in 
 reliance upon such certificate. 
 
 15. The title of this trust (fixed for convenience) 
 shall be "The Wachusett Realty Trust," and the term 
 "Trustees" in this instrument shall be deemed to in- 
 clude the original and all successor trustees. 
 
 16. At the end of twenty years from and after the 
 death of the last survivor of said Charles T. Crocker, 
 Samuel E. M. Crocker and Alvah Crocker, and of the 
 lawful issue now living of any of them (unless this 
 trust shall heretofore have been otherwise lawfully 
 terminated), all the property of every kind then held 
 hereunder shall be sold by the Trustees and equitable 
 distribution made of the net proceeds among the per- 
 sons then entitled. 
 
 In Witness Whereof we have hereunto set our 
 hands and common seal on this 29th day of March in 
 the year nineteen hundred and twelve. 
 
 ALVAH CEOCKEE (Seal) 
 
 CHAELES T. CEOCKEE 
 JOHN J. BIKEE 
 
 FELIX RACKEMANN 
 ^ 
 
 SAMUEL E. M. CEOCKER
 
 FOR BUSINESS CORPORATIONS 53 
 
 Commonwealth of Massachusetts, 
 
 Worcester, ss. March 29, 1912. 
 
 Then personally appeared the above named Alvah 
 Crocker and acknowledged the foregoing instrument to 
 be his free act and deed, 
 
 Before me, 
 
 Justice of the Peace. 
 
 RECEIPT CERTIFICATE ISSUED UNDER FOREGOING TRUST. 
 
 The Wachusett Realty Trust. 
 No. (24,000) 
 
 This is to certify that of 
 
 is entitled to twenty-four 
 
 thousandths of the net proceeds of the property held 
 under Declaration of Trust made by Alvah Crocker, 
 et al., dated March 29, 1912, known as "The Wachu- 
 sett Realty Trust," when said property is converted 
 into cash (and meantime to income), all as therein 
 provided. Said Declaration is recorded with Worcester 
 County, Mass. (North District) Deeds, and all the 
 terms thereof are, by reference, made part hereof and 
 expressly assented to. 
 
 The holder hereof has no interest, legal or equitable, 
 in any specific property and the interest hereby repre- 
 sented can be transferred only by due endorsement and
 
 54 BUSINESS TRUSTS AS SUBSTITUTES 
 
 surrender hereof and transfer noted on the books kept 
 for the purpose by the Trustees, or their agent. 
 
 ALVAH CROCKER 
 CHARLES T. CROCKER 
 JOHN J. BIKER 
 SAMUEL E. M. CROCKER 
 FELIX RACKEMANN 
 
 Trustees. 
 
 v Old Colony Trust Company, 
 
 Agent. 
 
 by 
 
 Dated ,19... 
 
 INDORSEMENT THEREUPON: 
 
 Value received, the undersigned hereby sells, as- 
 signs and transfers unto of the frac- 
 tional interests represented by the within certificate, 
 
 and does hereby constitute and appoint 
 
 true and lawful attorney irrevocable in the 
 
 name and stead of the undersigned to make transfer 
 accordingly on any books or records of the trustees. 
 
 Witness , 
 Dated . ,
 
 FOR BUSINESS CORPORATIONS 55 
 
 TAXICAB TRUST ESTATE. 
 
 (Prepared by the Author.) 
 
 This Declaration of Trust, made at St. Louis, Mis- 
 souri, this day of , 
 
 19. ., by L. Wade Childress, of the County of St. Louis, 
 Frank C. Band, of the County of St. Louis, and Robert 
 Holmes, of the City of St. Louis, all in the State of 
 Missouri, Witnesseth: That, 
 
 Whereas, By deed of even date herewith, the Colum- 
 bia Taxicab Company, a corporation of the City of St. 
 Louis, and State of Missouri, pursuant to votes of its 
 directors and stockholders, has conveyed to the said 
 L. Wade Childress, Frank C. Rand and Robert Holmes, 
 the following described real property, lying, being and 
 situated in said City and State, to-wit : Lots 22, 23, 24, 
 25, 26, 27, 28, 29, in block 8 of Peter Lindell's First 
 Addition, and in block 1951 of the City of St. Louis, 
 having an aggregate front of 200 feet on the north line 
 of Lawton avenue, by a depth northwardly of 128 feet 6 
 inches, to an alley, bounded west by Channing avenue, 
 and the undivided interest of its stockholders therein ; 
 and 
 
 Whereas, The said Columbia Taxicab Company and 
 the Yellow Motor Car Company, a corporation of the 
 City of St. Louis, and State of Missouri, pursuant to 
 votes of their respective directors and stockholders, 
 have also conveyed, transferred and delivered to the 
 said Childress, Holmes and Rand, by their separate in- 
 struments, in writing, of even date herewith, all the
 
 56 BUSINESS TRUSTS AS SUBSTITUTES 
 
 assets and property of said corporations, real, per- 
 sonal and mixed, of whatsoever kind and wheresoever 
 situated (except their respective charters), including 
 motor vehicles, cabs, automobiles, machinery, ma- 
 terials, equipment, office fixtures and furniture, cash on 
 hand, accounts receivable, contracts, leases, licenses, 
 privileges, easements, credits, causes of action, claims, 
 demands, surplus, profits, business, trade reputation, 
 trade-marks, trade devices, trade names, trade dress 
 and style and trade insignia, and good will, and the 
 undivided interests of their stockholders therein, and 
 including, as to the Columbia Taxicab Company, the 
 exclusive right to the use of the names "Columbia 
 Taxicab" and "Columbia Taxicab Company" and in- 
 cluding, as to the said Yellow Motor Car Company, the 
 trade-mark device, trade colors, design, finish, get-up, 
 dress and style and trade insignia of the said Yellow 
 Motor Car Company and its taxicabs, taxicab service 
 and business, and the trade name, "yellow cab," and 
 the exclusive right to the names "yellow cab," "yellow 
 taxi, " " yellow motor car, " " yellow taxicab company, ' ' 
 and "Yellow Motor Car Company," and the undivided 
 interests of its stockholders therein ; and 
 
 Whereas, All of the aforesaid property so conveyed, 
 transferred and delivered to the said Childress, 
 Holmes and Band, together with all other funds and 
 property hereafter transferred to and received and 
 acquired by them hereunder, is to be held, used and 
 managed by them upon the trusts herein declared ; 
 
 Therefore, Know All Men By These Presents : That 
 we, the aforesaid L. Wade Childress, Frank C. Band 
 and Robert Holmes (hereinafter called "Trustees"), 
 hereby declare and agree that we will, and our heirs 
 and successors shall, hold, use and manage the said
 
 FOE BUSINESS CORPORATIONS 57 
 
 granted and conveyed premises, property and things, 
 and all other funds and property at any time trans- 
 ferred to and received by the Trustees hereunder, for 
 the purposes, with the powers and subject to the provi- 
 sions hereof for the benefit of the cestui que trusts 
 (who shall be trust beneficiaries only, without part- 
 nership, associate or any other relation whatever inter 
 sese), and upon the trusts following, viz.: 
 
 (1) In trust to convert the same into money and 
 distribute the net proceeds thereof ratably among the 
 persons at the time of such conversion holding and 
 owning beneficial interests therein, as evidenced by the 
 certificates of beneficial interest issued by the Trustees 
 as hereinafter provided; it being, however, expressly 
 understood and agreed that the Trustees may, in their 
 uncontrolled discretion, defer or postpone such conver- 
 sion and distribution, except that the same shall not 
 be postponed beyond the end of twenty years from and 
 after the death of the last survivor of the persons 
 named and described in the last paragraph hereof. 
 During such postponement, and until such conversion, 
 the interests of the cestui que trusts shall be consid- 
 ered for purposes of transmission and otherwise as 
 personal property. , 
 
 (2) In trust, pending final conversion and distribu- 
 tion of the property, to hold, control, manage, use, em- 
 ploy, invest and reinvest, the same, the Trustees hav- 
 ing full power and authority (a) to pay and discharge 
 as such Trustees, but not personally, the debts and 
 obligations of the said Columbia Taxicab Company and 
 the said Yellow Motor Car Company, including the 
 deed of trust now outstanding on the aforesaid lots 
 25 to 29, defend all suits now pending, or that may be
 
 58 BUSINESS TRUSTS AS SUBSTITUTES 
 
 hereafter instituted against said companies, or either 
 of them, and, as such Trustees, but not personally, pay 
 and perform all judgments that may be entered against 
 said companies, or either of them; (b) to establish, 
 manage and carry on the business of transporting for 
 hire in motor vehicles, automobiles, taxicabs, busses, 
 carriages, cabs, wagons and trucks, persons, parcels, 
 baggage, freight, goods and merchandise; (c) to pur- 
 chase, lease, manufacture, repair, buy, sell, hire, mort- 
 gage and deal in motor vehicles, automobiles, taxicabs, 
 busses, carriages, cabs, wagons and trucks, and equip- 
 ment for same; (d) to buy, build, sell, lease, take, hold, 
 convey, mortgage and pledge such property, real per- 
 sonal or mixed, as may be necessary, requisite or con- 
 venient in and for the prosecution of said business, or 
 as the interests of the trust may, in the judgment of 
 said Trustees, from time to time require; (e) to ac- 
 quire and hold such stocks, shares and securities of 
 corporations or associations as in their discretion may 
 be deemed necessary, or useful, or advantageous to the 
 trust, and the same to sell or exchange in their discre- 
 tion; (/) to invest or loan any moneys that may come 
 into their hands, in such manner and in such property 
 or securities, real and personal, and wherever situated, 
 as may seem to them to be advantageous, prudent and 
 expedient; (g) to begin and defend legal proceedings 
 and compromise or arbitrate claims, and (h) generally 
 to do all acts and things which, in their judgment, are 
 necessary, proper, advantageous or expedient to pro- 
 mote the complete and most successful execution of 
 this trust and the interests of the cestui que trusts; the 
 Trustees having for all the aforesaid purposes and for 
 all purposes of sale, lease, mortgage, exchange, invest- 
 ment and reinvestment, improvement and development,
 
 FOB BUSINESS CORPORATIONS 59 
 
 and any and all arrangements, contracts and disposi- 
 tions of the trust property, or any part thereof, all and 
 as full discretionary powers and authority as if they 
 were themselves the sole and absolute beneficial own- 
 ers thereof in fee simple. The naming of any specific 
 duties and powers herein shall not be construed as lim- 
 iting the general powers conferred upon the Trustees. 
 
 (3) In trust to collect and receive all rents, income 
 and profits from the property and from the conduct of 
 the affairs of the trust, and semiannually or oftener, 
 at their convenience, and in their discretion, to dis- 
 tribute such portion thereof as they may, in their dis- 
 cretion, determine to be fairly distributable net income, 
 to and among the several cestui que trusts, according 
 to their respective fractional interests; the Trustees, 
 in this connection, having full authority, from time to 
 time, to use any funds on hand, whether received as 
 corpus or income, for purposes of any repair, improve- 
 ment, protection or development of the property held 
 hereunder, or the business transacted hereunder, or the 
 acquisition of other property as the Trustees may de- 
 termine to be wise and expedient for the protection and 
 development of the said trust property as a whole, and 
 the business and conduct of the affairs of the trust 
 pending its conversion and distribution. The deter- 
 mination of the Trustees made in good faith as to all 
 question as between "corpus" and "income" shall be 
 final. 
 
 (4) The Trustees may, from time to time, set apart 
 (out of the income of the trust property) as and for a 
 surplus fund such sums, if any, as they may think 
 proper; and the said surplus fund shall be applicable 
 during the continuance of the said trust to any pur-
 
 60 BUSINESS TRUSTS AS SUBSTITUTES 
 
 poses to which money from a part of the corpus or in- 
 come may be applied, including distribution among the 
 several cestui que trusts as hereinbefore, in paragraph 
 numbered 3, provided. 
 
 (5) The said Columbia Taxicab Company and the 
 said Yellow Motor Car Company having determined 
 to wind up their affairs and be dissolved without wait- 
 ing for final cash sale of their property and assets, this 
 trust is declared in favor and for the benefit of the 
 stockholders of the said Columbia Taxicab Company, 
 according to their respective fractional interests as de- 
 termined and agreed upon by them, to whom the Trus- 
 tees shall issue proper negotiable certificates of bene- 
 ficial interest; said certificates of beneficial interest 
 and all others which may be hereafter issued in ex- 
 change or substitution therefor shall be deemed parts 
 hereof and conclusively evidence the ownership of the 
 respective interests in this trust; and the Trustees 
 shall, from time to time, on request (or surrender of 
 the old), issue such new certificates as may be proper 
 and necessary to evidence any new or subdivided inter- 
 ests. In case of the loss, mutilation or destruction of a 
 certificate, the Trustees may issue a new one upon such 
 terms as they see fit. 
 
 The said certificates of beneficial interest shall be in 
 such form as the Trustees deem best, shall bear the 
 impress of their seal, and shall be executed either by 
 said Trustees themselves or by their President, attest- 
 ed by their Secretary. 
 
 No transfer of beneficial interest in this trust shall 
 be binding upon the Trustees, or affect them or the 
 trust in any way, unless and until the certificate of such 
 beneficial interest shall be surrendered to the Trustees 
 at their office in the City of St. Louis, Missouri, the
 
 FOR BUSINESS CORPORATIONS 61 
 
 transfer thereof noted on their records and a new cer- 
 tificate of such beneficial interest issued by them. 
 
 (6) It is not intended to create hereby any relation 
 of partnership or of agency among the Trustees, or be- 
 tween the Trustees and the cestui que trusts, or among 
 the cestui que trusts, or between any or all of the cestui 
 que trusts; but the title to every several item of the 
 property constituting the trust estate shall be vested 
 solely in the trustees; and the cestui que trusts, jointly 
 and severally, shall have no legal or equitable title, 
 right or interest in or to any several item thereof. The 
 right of the cestui que trusts shall relate only to the net 
 distributable proceeds of the liquidation of the trust, 
 and, meanwhile, to the income from the administration 
 thereof. 
 
 (7) The Trustees shall have no power to bind the 
 cestui que trusts personally by any act, neglect or de- 
 fault, and no cestui que trust shall be personally liable 
 as a partner or principal, or otherwise, upon account 
 of any express or implied contract made by the Trus- 
 tees, or made in any way in behalf of the trust estate, 
 or upon account of any tort committed by the trustees 
 or by any officer, agent or servant acting under them, 
 or in their behalf, or in any way connected with this 
 trust or its administration; but all cestui que trusts 
 and all persons, firms, corporations and associations 
 extending credit to, contracting with or having any 
 claim against the Trustees of any character whatso- 
 ever, whether legal or equitable, and whether arising 
 out of contract or tort, shall look only to the funds and 
 property of the trust for payment or for indemnity, or 
 for the payment of any debt, damage, judgment or de- 
 cree, or any money that may otherwise become due or
 
 62 BUSINESS TRUSTS AS SUBSTITUTES 
 
 payable from the Trustees, so that neither the Trus- 
 tees, nor any of their officers or agents appointed by 
 them hereunder, nor the cestui que trusts, shall be per- 
 sonally liable therefor. And every note, bond, obliga- 
 tion or contract in writing, made or given by the Trus- 
 tees, shall, by explicit reference to this declaration of 
 trust, give notice of the limitations upon the power of 
 the Trustees, their officers and agents, and of the ex- 
 emption from personal liability both of the Trustees 
 and the cestui que trusts, and shall contain an express 
 declaration to the effect that no recourse shall be had 
 in any event upon any Trustee, their officers and agents 
 or cestui que trust and that the other contracting party 
 shall look only to the funds and property of the trust 
 for payment of any liability and obligation. Even 
 though in any case the Trustees shall not give such 
 notice to the other party, nevertheless, such other con- 
 tracting party shall have no recourse against the Trus- 
 tees, their officers or agents, or the cestui que trusts, 
 but shall look only to the funds and property of the 
 trust for payment of any liability and obligation. The 
 Trustees may also, at the cost of the trust estate, pro- 
 tect and indemnify themselves, their officers and agents 
 and the trust estate against damage and loss with such 
 contracts of insurance as to them shall seem proper. 
 
 (8) The death of any cestui que trust shall not ter- 
 minate the trust nor entitle his legal representative to 
 claim an account, or to take any action in the courts, or 
 otherwise, against the trust or the Trustees, but the 
 executors, administrators or assigns of the decedent 
 shall succeed to all the rights of the decedent under 
 this instrument upon producing his certificate of bene- 
 ficial interest.
 
 FOB BUSINESS CORPORATIONS 63 
 
 (9) The Trustees shall have authority to spend the 
 moneys of the trust in any way that, in their judgment, 
 will advance the purposes of the trust or assist in the 
 improvement and development of its business, and they 
 may borrow money either to pay off an indebtedness or 
 to create funds for other purposes, and fix the terms 
 of any loan, and give any pledge, mortgage or other 
 security which they may deem wise. No purchaser 
 from or lender to the Trustees shall ever have any 
 liability to see to the application of any proceeds. 
 
 (10) Every Trustee, in his individual capacity, or 
 in any other fiduciary capacity, may purchase, hold and 
 own beneficial interests in this trust in all respects as if 
 he were not a Trustee, and may purchase at public 
 auction any real estate or personal property offered 
 for sale by the Trustees. 
 
 (11) The Trustees may employ all such servants, 
 agents and attorneys as they may think proper and 
 find expedient, and prescribe their powers and duties, 
 and shall not be personally responsible for any mis- 
 conduct, errors or omissions of such servants, agents 
 or attorneys employed and retained with reasonable 
 care. 
 
 (12) The Trustees shall at all times keep full and 
 proper books of account and records of their proceed- 
 ings and doings, and shall, at least, annually, render 
 account of the trust to any beneficiary requesting the 
 same; but no Trustee serving hereunder shall be re- 
 quired to give any bond, nor shall any Trustee have 
 any liability one for another, or for anything except 
 for the result of his own gross negligence or bad faith. 
 
 (13) All written conveyances of real property, at
 
 64 BUSINESS TRUSTS AS SUBSTITUTES 
 
 whatever time taken by the Trustees as such, shall 
 name as grantees all the Trustees and shall designate 
 them as Trustees under this Declaration of Trust, re- 
 ferring to the same by its book and page record in the 
 office of the Eeecorder of Deeds of the City of St. 
 Louis. 
 
 (14) The Trustees shall have full power at any 
 time, pending final termination of this trust, to trans- 
 fer the whole or any part of the property then held 
 by them hereunder to any corporation which they may 
 acquire, or cause to be organized, for the more con- 
 venient or expedient holding or management of the 
 trust or the conduct of the business of the trust, taking 
 any securities issued by such corporation in exchange 
 and payment therefor, and the Trustees, or any of 
 them, may, at any time, be or become, and vote for 
 themselves to be or become, directors or officers, with 
 remuneration or salary, in any corporation, any shares 
 of which are held by them. 
 
 (15) If, and when, the Trustees shall have occasion 
 to apply to any court of competent jurisdiction for di- 
 rection as to their powers, duties and obligations, they 
 need not notify the cestui que trusts, or make any of 
 them parties to any such proceeding ; but the said Trus- 
 tees may apply for, and receive, such direction without 
 any notice to the cestui que trusts, who shall be as con- 
 clusively bound thereby as though they had been noti- 
 fied and made parties to the proceeding. 
 
 (16) Any Trustee hereunder may resign by written 
 instrument duly acknowledged and attached to the 
 original of this instrument, and recorded in the office 
 of the Recorder of Deeds of the City of St. Louis, Mis- 
 souri.
 
 FOR BUSINESS CORPORATIONS 65 
 
 Any vacancy in the office of trustee, however occa- 
 sioned, shall be filled by the remaining Trustees by an 
 instrument in writing, signed and acknowledged by 
 them, and attached to the original of this instrument 
 and recorded, as in the case of resignation last above 
 provided for. A Trustee so appointed shall have all 
 the powers and duties of his predecessor. The acting 
 Trustees for the time being, whether surviving or re- 
 maining, shall have all the powers and discretions of 
 the original Trustees. The title of the outgoing Trus- 
 tee shall vest in the remaining Trustees, and, upon the 
 filling of any vacancy, the title to the whole trust prop- 
 erty shall vest jointly in those who shall then be Trus- 
 tees hereunder. Any Trustee may, by power of attor- 
 ney, delegate his powers for a period not exceeding six 
 months at any one time to any other Trustee or Trus- 
 tees hereunder. 
 
 (17) Any two of the Trustees concurring and act- 
 ing jointly may do anything that is within the power of 
 the Trustees, save as expressly herein otherwise pro- 
 vided. If two of the Trusteeships shall be vacant, or if 
 one be vacant and one of the remaining Trustees be, for 
 any reason, temporarily unable to act, or, if without a 
 vacancy, two of the Trustees be for any reason tem- 
 porarily unable to act, the other Trustee, acting alone, 
 may do such things and only such things as are neces- 
 sary for the preservation of the trust and its adminis- 
 tration in regular routine. But all vacancies shall be 
 filled as soon as practicable after their occurrence, and 
 the power of a single Trustee to act shall be treated as 
 an emergency power whose exercise is to be temporary, 
 rare and as brief as possible. 
 
 (18) The certificate in writing of the Trustee as to
 
 66 BUSINESS TRUSTS AS SUBSTITUTES 
 
 any resignation from the office of Trustee hereunder, 
 and as to the appointment of any new Trustees here- 
 under, and as to the existence or non-existence of any 
 modifications hereof, and as to the authorization of a 
 particular act to be done, may always be relied upon 
 by, and shall always be conclusive evidence in favor of, 
 all persons dealing in good faith with said Trustees in 
 reliance upon such certificate. 
 
 (19) The Trustees shall be entitled to receive as 
 compensation for their services the sum of one dollar 
 per year each, except that the Trustee who shall also 
 be President shall receive such reasonable salary as the 
 other Trustees shall, from time to time, determine and 
 fix. 
 
 The Trustees shall also be entitled to reimbursement 
 and indemnification from the trust property for all 
 their proper expenses and liabilities, and, if any Trus- 
 tee shall be adjudged personally responsible for any 
 obligation, he shall be entitled to have such responsi- 
 bility discharged in the first instance by the trust prop- 
 erty without himself discharging the same; and the 
 Trustees shall be entitled at all times to the advice and 
 service of counsel, and traveling expenses to and from 
 any meetings of the Trustees shall be considered 
 proper expenses. 
 
 (20) The title of this trust (fixed for convenience) 
 shall be Taxicab Trust Estate and it may deal and be 
 dealt with by said title and also in the names of its 
 Trustees. Said title may be changed and a new title 
 selected from time to time by the Trustees by instru- 
 ment signed and acknowledged by all of the Trustees 
 and attached to this declaration of trust and recorded
 
 FOE BUSINESS CORPORATIONS 67 
 
 in the office of the Recorder of Deeds of the City of St. 
 Louis, Missouri. 
 
 The term " Trustees" in this Declaration of Trust 
 shall be deemed to include the original and all suc- 
 cessor Trustees. 
 
 (21) The Trustees shall annually elect from among 
 their number a President and a Vice-President, and 
 shall also elect from among their number, or otherwise, 
 a Secretary and a Treasurer, and such other officers as 
 they may deem advisable, and prescribe their powers 
 and duties. The offices of Secretary and Treasurer 
 may be filled by the same person. 
 
 (22) The Trustees may adopt and use a common 
 seal. 
 
 (23) The terms and provisions of this trust may 
 be amended, modified or added to (except as regards 
 the liability of the Trustees and the cestui que trusts), 
 at any time or times, by instrument in writing signed, 
 sealed and acknowledged by all the then Trustees, and 
 assented to in writing by two-thirds in interest of the 
 cestui que trusts, and attached to the original of this 
 instrument and recorded in the office of the Recorder 
 of Deeds in and for the City of St. Louis, Missouri. 
 
 (24) This Declaration of Trust and all amendments 
 and modifications thereof and additions thereto shall 
 be recorded in the office of the Recorder of Deeds in 
 and for the City of St. Louis, and State of Missouri, 
 and in such other places as the Trustees may, in their 
 discretion, from time to time, determine to be neces- 
 sary or expedient. 
 
 (25) At the end of twenty years from and after the 
 death of the last survivor of the said L. Wade Chil-
 
 68 BUSINESS TRUSTS AS SUBSTITUTES 
 
 dress, Frank C. Band and Robert Holmes (unless this 
 trust shall theretofore have been otherwise lawfully 
 terminated), all the property of every kind then held 
 hereunder shall be sold by the Trustees and equitable 
 distribution made of the net proceeds among the per- 
 sons entitled thereto. 
 
 In Witness Whereof, we have hereunto set our hands 
 
 and seal on this day of 
 
 in the year nineteen hundred and 
 
 (Seal) 
 
 (Seal) 
 
 . (Seal) 
 
 State of Missouri, ) 
 City of St. Louis. ) ss * 
 
 On this day of , 
 
 A. D. 19 . . , before me, the undersigned, Notary Public 
 within and for the City and State aforesaid, personally 
 appeared L. Wade Childress, Frank C. Band and Rob- 
 ert Holmes, to me personally known to be the persons 
 whose names are subscribed to the foregoing instru- 
 ment, and each acknowledged to me that he executed 
 the same as his free act and deed for the purposes and 
 considerations therein expressed. 
 
 In Witness Whereof, I have hereunto set my hand 
 and affixed my official seal the day and year last afore- 
 said. 
 
 My commission expires 
 
 Notary Public.
 
 FOB BUSINESS CORPORATIONS 69 
 
 CERTIFICATE OF BENEFICIAL INTEREST ISSUED UNDER 
 
 FOREGOING. 
 Certificate Fractional Interest 
 
 No. 
 
 SOOOths 
 TAXICAB TRUST ESTATE. 
 
 This Is to Certify That of 
 
 is entitled to five thou- 
 sandths of the net proceeds of the property held under 
 Declaration of Trust made by L. Wade Childress, 
 Frank C. Band and Robert Holmes, dated December 
 31, 1919, known as Taxicab Trust Estate when said 
 property is converted into cash and meanwhile to in- 
 come, all as therein provided. Said Declaration is 
 recorded in the office of the Recorder of Deeds of the 
 City of St. Louis, Missouri, in Book 3294, page 22, and 
 all the terms thereof are by reference made part here- 
 of and expressly assented to. 
 
 The holder hereof has no interest, legal or equitable, 
 in any specific property and the interest hereby repre- 
 sented can be transferred only by due endorsement and 
 surrender hereof and transfer noted on the books kept 
 for the purpose by the Trustees, or their agent. 
 
 In Witness Whereof, The said Trustees have here- 
 unto set their hands and caused their seal, duly at- 
 tested by their Secretary, to be impressed hereupon 
 this first day of January, 1920. 
 (Seal) L. W. CHILDRESS, 
 
 FRANK C. RAND, 
 ROBERT HOLMES, 
 
 Trustees. 
 J. C. MAGUIRE, Secretary.
 
 70 BUSINESS TRUSTS AS SUBSTITUTES 
 
 ENDORSEMENTS THEREUPON. 
 
 For Value Received the undersigned hereby sells, 
 
 assigns and transfers unto , 
 
 of the fractional interests represented by the 
 
 within certificate, and does hereby constitute and ap- 
 point true and lawful attorney irre- 
 vocable in the name and stead of the undersigned to 
 make transfer accordingly on any books or records of 
 the Trustees. 
 
 Dated . ,19.. 
 
 Witness :
 
 FOR BUSINESS CORPORATIONS 71 
 
 ST. LOUIS HOME OWNERS' ASSOCIATION. 
 
 Prepared by 
 MR. TOM "W. BENNETT, 
 
 President Mortgage Trust Company of St. Louis, As Chair- 
 man of Special Committee of St. Louis Chamber 
 of Commerce. 
 
 This Agreement made this day of June, 1919, 
 
 by and between , herein designated 
 
 as subscribers, and , herein desig- 
 nated as Trustees, witnesseth : 
 
 Whereas, The subscribers have created a fund of 
 One Million Dollars ($1,000,000.00) for the purpose of 
 enabling wage-earners to own their own homes and to 
 create better housing conditions in St. Louis and St. 
 Louis County, Missouri, they do hereby assign, trans- 
 fer and deliver to above-named Trustees, under the 
 designation of the St. Louis Home Owners' Associa- 
 tion, said fund and any increase thereof in trust as 
 hereinafter set out. 
 
 1. The Trustees in their collective capacity shall be 
 designated as far as practicable as the St. Louis Home 
 Owners ' Association, and under that name shall, as far 
 as practicable, conduct all business, and execute all in- 
 struments in writing in performance of their trust. 
 
 2. The Trustees shall be fifteen (15) in number, and 
 the persons selected and named as Trustees herein- 
 above shall hold office until the first Tuesday of June, 
 1920, at which time, at the annual meeting of the share- 
 holders, a new Board of Trustees shall be selected by 
 the shareholders, five (5) of whom shall be elected to 
 serve for one year; five (5) for two years; and five (5)
 
 72 BUSINESS TRUSTS AS SUBSTITUTES 
 
 for three years, and thereafter on each first Tuesday 
 in June, five (5) Trustees shall be elected, to serve for 
 a term of three years and until their successors are 
 elected and qualified. 
 
 Any or all of the members of the above-named Board 
 of Trustees shall be eligible for re-election to the Board 
 at the meeting of the shareholders on the first Tuesday 
 of June, 1920, and thereafter. 
 
 In case of death, resignation or inability to act of 
 any of the Trustees, the remaining Trustees shall fill 
 the vacancy until the next annual meeting of the share- 
 holders and at such annual meeting the shareholders 
 shall elect a trustee or trustees to fill the vacancy or 
 vacancies for the remainder of the unexpired term. 
 As soon as any trustee elected by the shareholders, or 
 by the remaining trustees, to fill a vacancy shall have 
 accepted the trust, the trust estate shall vest in the new 
 trustee or trustees without any further act or convey- 
 ance. 
 
 Upon the election of any trustee, either by the re- 
 maining trustees or by the shareholders to fill a va- 
 cancy, he shall forthwith execute a written acceptance 
 of this trust, which shall be filed with the secretary of 
 the company. 
 
 3. The home office of the company shall be in the 
 City of St. Louis, Mo. 
 
 4. The Trustees are authorized, in the name of the 
 company, to purchase materials, employ labor, to pur- 
 chase, hold, own, convey, lease, mortgage or otherwise 
 dispose of real estate and personal property. The 
 Trustees are authorized to do all things necessary and 
 desirable or incidental that may be required to carry 
 out the purposes for which this trust is formed. Any 
 written instrument conveying, leasing, mortgaging real
 
 FOB BUSINESS CORPORATIONS 73 
 
 estate or personal property may be executed in the 
 name of the company by the President and counter- 
 signed by the Secretary when authorized by the Board 
 of Trustees. 
 
 Said Trustees may loan trust funds herein provided 
 for to wage-earners at the rate not to exceed 6 per cent, 
 and for a term of years not to exceed fifteen, and not 
 more than $5,000 shall be loaned to any one individual. 
 Loans shall be made only to wage-earners for the pur- 
 chase of homes in which they, themselves, shall live. 
 But no borrowers shall be charged any commission or 
 brokerage of any kind. 
 
 The Trustees may make provisions for cancellation 
 of the debt in case of death or total disability of the 
 wage-earner, and for compensation in the case of ill- 
 health. The monthly payments made by the wage- 
 earners in re-payments of said loans shall include taxes 
 and insurance which shall be paid by the company. 
 
 5. The Trustees shall have authority to adopt and use 
 a common seal, and make such contracts as they may 
 deem expedient in the conduct of the business of the 
 trust; to collect, sue for, receive and receipt for all 
 moneys at any time becoming due to said trust ; to be- 
 gin, prosecute, defend or settle suits at law, in equity 
 or elsewhere in the name of the St. Louis Home Own- 
 ers Association, and to compromise or refer to arbitra- 
 tion any claim in favor of or against said trust ; from 
 time to time to lease, sell, exchange, or otherwise dis- 
 pose of at public or private sale, any or all of the trust 
 property, real or personal, for such prices either in 
 cash or the stocks, shares or securities of other cor- 
 porations, trusts or companies, and upon such terms as 
 to credit or otherwise as they may deem expedient. 
 
 6. The trust herein created shall not be operated
 
 74 BUSINESS TRUSTS AS SUBSTITUTES 
 
 for profit, and the returns to the subscribers of the 
 trust fund shall not exceed five per cent per annum. In 
 the event the net profits of the trust shall amount to 
 more than five per cent, the excess profits over and 
 above 5 per cent as aforesaid, shall be used in further- 
 ance of the objects for which this trust is formed. 
 
 No salaries shall be paid to any member of the Board 
 of Trustees unless he may be called upon to perform 
 work which in the opinion of the Trustees requires the 
 granting of compensation; all compensation to em- 
 ployes shall be fixed by the Board of Trustees. 
 
 7. The trust fund of $1,000,000.00 is hereby made 
 the capital stock of the St. Louis Home Owners ' Asso- 
 ciation, divided into 10,000 shares of the par value of 
 $100 each. As evidence of the ownership of said shares, 
 the Trustees shall cause to be issued to each share- 
 holder a negotiable certificate, to be signed by such 
 officer or agent as the Trustees may direct and by at 
 least one of the trustees. 
 
 The shares shall be transferable by assignment in 
 writing and upon surrender of the certificates therefor, 
 but no such transfer shall 'be of any effect as regards 
 the Trustees until it has been recorded upon the books 
 of the company kept for that purpose. 
 
 In case of loss or destruction of any certificate of 
 shares the Trustees may, under such conditions as they 
 may deem expedient, issue a new certificate or certifi- 
 cates in place of those lost or destroyed. 
 
 8. So far as strangers to this trust are concerned, 
 a resolution of the Trustees authorizing a particular 
 act to be done, shall be conclusive evidence in favor of 
 such strangers that such act is within the powers of the 
 Trustees, and no purchaser from the Trustees or one 
 loaning money to the Trustees, or borrowing from the
 
 FOR BUSINESS CORPORATIONS 75 
 
 Trustees, shall be bound to see to the application of the 
 purchase or loaned money or other consideration paid 
 or delivered to or for the said purchasers or loaned to 
 or by said Trustees. 
 
 Stated meetings of the Trustees shall be held at 
 least once every month, and other meetings shall be 
 held from time to time upon call of any officer or Trus- 
 tee. A majority of the Board of Trustees present at 
 any special or called meeting shall constitute a quorum, 
 and the concurrence of all the Trustees shall not be 
 necessary to the validity of any act done by them, but 
 the wish of the majority of the Trustees present and 
 voting at any meeting shall be binding. 
 
 The Trustees may make, adopt, amend or repeal 
 such by-laws and regulations not inconsistent with the 
 terms of this instrument as they may consider neces- 
 sary or desirable for the conduct of the business or for 
 the government of themselves, their agents and repre- 
 sentatives. 
 
 The Trustees may elect annually from among their 
 a number a President and Vice-President, and may 
 also elect from among their number or otherwise, a 
 Treasurer, Secretary, Manager, General Counsel and 
 other professional advisors, which officers shall have 
 the authority and duties usually incident to like offi- 
 cers in a corporation, or such duties as the Trustees 
 may designate. The Trustees may combine the duties 
 and authority of two or more officers in one person. 
 They shall also have authority to elect temporary offi- 
 cers to serve during the absence or disability of reg- 
 ular officers. The Trustees may employ such other em- 
 ployees, agents or representatives as may be necessary 
 for the proper conduct of the trust. 
 
 9. The Trustees shall not be liable for any error of
 
 76 BUSINESS TRUSTS AS SUBSTITUTES 
 
 judgment, or for any loss arising out of any act or 
 omission to act in the execution of this trust, so long 
 as they act in good faith, nor shall they be personally 
 liable for the acts and omissions of each other, or for 
 the acts and omissions of any officer, agent or repre- 
 sentative elected or appointed by them or acting for 
 them, and they shall not 'be obliged to give bond to 
 secure the due performance by them of this trust. 
 
 Any Trustees may acquire, own and dispose of 
 shares in this trust to the same extent as if he were not 
 a Trustee. 
 
 10. Shares hereunder shall carry only the rights 
 specifically set forth in this instrument and in the cer- 
 tificates thereof. The death of a shareholder or a 
 Trustee during the continuance of the trust shall not 
 operate to determine the trust, nor shall it entitle the 
 legal representative of the deceased to an accounting, 
 or to take action in the courts or elsewhere against the 
 Trustees ; but the executors, administrators or assigns 
 of any deceased shareholder shall succeed only to the 
 rights of said decedent under this trust, upon the sur- 
 render of the certificates for the shares held by him. 
 
 The ownership of the shares hereunder shall not en- 
 title the shareholder 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, or for any 
 voice or control whatever in the management of said 
 property or of the business connected therewith, ex- 
 cept to participate in the elections of the Trustees as 
 herein provided. 
 
 11. The Trustees shall have no power to bind the 
 shareholders personally. All persons, trusts, or cor- 
 porations extending credit to, contracting with, or hav- 
 ing claims against the Trustees, shall only look to the
 
 FOR BUSINESS CORPORATIONS 77 
 
 funds and property of the trust, for the payment of 
 any such contract or claim, or for the payment of any 
 debts, damages, judgments or decree, or of any money 
 that may otherwise become due and payable to them 
 from the Trustees, so that neither the Trustees, share- 
 holders nor officers, present or future, shall be per- 
 sonally liable therefor. 
 
 In every written order, contract or obligation which 
 the Trustees shall give, authorize or enter into, it shall 
 be the duty of the Trustees to stipulate, or cause to be 
 stipulated, that neither the Trustees nor the sharehold- 
 ers shall be personally responsible therefor under or 
 by reason of such order, contract or obligation. 
 
 12. The Trustees shall, in the building of homes, 
 give due consideration to the recommendations or re- 
 quests of the subscribers hereto, and priority where, in 
 their opinion, the best interests of the trust seem to re- 
 quire the same. 
 
 13. The wage-earners borrowing for the purpose of 
 purchasing homes as aforesaid, shall, as far as prac- 
 ticable, collectively be entitled to representation upon 
 the Board of Trustees. 
 
 14. This trust shall not continue in any event longer 
 than for term of twenty (20) years, at which time the 
 then Board of Trustees shall proceed to wind up its 
 affairs, liquidate its assets, and distribute the same 
 among the holders of the shares, provided, however, 
 that if, prior to the expiration of said period the hold- 
 ers of at least two-thirds of the shares then outstand- 
 ing shall, at a meeting called for that purpose, vote to 
 terminate or continue this trust, then the said trust 
 shall either terminate or continue in existence for such 
 further period as may then be determined. For the 
 purpose of winding up the affairs and liquidating the
 
 78 BUSINESS TRUSTS AS SUBSTITUTES 
 
 assets of the trust the then Board of Trustees shall 
 continue in office until such duties have been fully per- 
 formed. 
 
 15. This agreement and declaration of trust may be 
 amended or altered in any particular whatever, except 
 as regards the liability of the Trustees, at any annual 
 or special meeting of the shareholders with the consent 
 of the holders of at least two-thirds of the shares then 
 outstanding, provided ten days ' notice of the proposed 
 amendment or alteration shall have been given in writ- 
 ing in the call for the meeting, and in the case of the 
 adoption of such amendment or alteration, the same 
 shall only become effective when it has been certified 
 by the chairman of the meeting which voted it, counter- 
 signed by at least two of the then Board of Trustees in 
 token of the acceptance by said Board of Trustees of 
 said amendment or alteration as an added or altered 
 part of their trust, then attached to and made a part of 
 this agreement and a copy thereof, with the Secre- 
 tary's certificate attached as aforesaid, filed with the 
 office or official having custody of the duplicate of this 
 instrument. 
 
 In Witness Whereof, etc.
 
 FOR BUSINESS CORPORATIONS 79 
 
 AGREEMENT AND DECLARATION OF TRUST 
 OF THE COMPANY. 
 
 (Prepared by member of Chicago Bar whose name the author has 
 been unable to learn.) 
 
 This Agreement, made this day of 
 
 A. D. 19 . . , between , des- 
 ignated as the Subscriber, and , 
 
 and , together with 
 
 their successors, herein designated as the Trustees, wit- 
 nesseth : 
 
 That Whereas, the Subscriber proposes to transfer, 
 assign and deliver to the Trustees, under the designa- 
 tion of the Company, certain proper- 
 ties, as shown in ''Schedule A" identified by the signa- 
 tures of the parties hereto and filed with the Trustees ; 
 and the Trustees for the purpose of defining the inter- 
 est of the Subscriber and his assigns in such property, 
 have agreed to issue to the Subscriber, negotiable cer- 
 tificates representing Beneficial Interests, or shares, 
 in and to the Trust Estate herein created, to the amount 
 of ( ) Common Beneficial In- 
 terests ; each Interest to be of the expressed par value 
 of ( ) Dollars, the same be- 
 ing fully paid and non-assessable, and are transfer- 
 able on the books of the Trustees in accordance with 
 the terms of this instrument. 
 
 Now, Therefore, the Trustees hereby declare that 
 they will hold said property to be transferred to them 
 as well as all other property which they may acquire 
 as Trustees, together with the proceeds and profits 
 thereof, in trust; to manage and dispose of the same
 
 80 BUSINESS TRUSTS AS SUBSTITUTES 
 
 for the benefit of the holders from time to time, of cer- 
 tificates issued hereunder, and in the manner and sub- 
 ject to the stipulations herein contained, towit : 
 
 First : That whenever the term * ' Trustees ' ' is used 
 herein, it shall refer to and include the above Trustees, 
 and also any successors in trust, appointed under the 
 terms hereof. That whenever the term "Company" 
 
 is used herein, it shall be deemed to refer to said 
 
 Company, being the designation, so far as 
 
 practicable, of the said Board of Trustees and their 
 successors in trust, in their collective capacity, under 
 the terms hereof. That whenever the term "Certifi- 
 cate Holder" is used herein it shall be deemed to mean 
 the owner of a certificate evidencing one or more Bene- 
 ficial Interests, of the par value of 
 
 Dollars ($ ) each, in and to the Trust Estate 
 
 herein mentioned the legal title, ownership and control 
 of which estate is vested in said Trustee; and that 
 whenever the term "Certificate" is used herein, it shall 
 be deemed to mean an instrument in writing, or printed 
 or partly written and printed, issued by said Trustees, 
 evidencing the ownership of an equitable interest in 
 said estate of one or more beneficial interests, as may 
 therein be stated. 
 
 (b) The Trustees, in their collective capacity, shall 
 
 be designated, so far as practicable, as the 
 
 Company, and under that name shall, so far 
 
 as practicable, conduct all business and execute all in- 
 struments in writing, in performance of their trust. 
 
 Second: The Trustees do hereby acknowledge the 
 receipt by them of the property aforementioned, and it 
 is expressly agreed that the said property, as well as 
 any other which may hereafter be acquired by the 
 Trustees for the purpose herein mentioned under the
 
 FOR BUSINESS CORPORATIONS 81 
 
 terms hereof, shall be received by the Trustees, and 
 shall be by them held, owned, controlled, managed, and 
 applied to the uses and purposes herein mentioned, and 
 to no other. 
 
 ('b) That the money, or property, together with the 
 income and issues thereof received or acquired by the 
 said Trustees under the terms hereof, shall constitute 
 and be held, kept and used by them as a Trust Estate 
 for the use and benefit of the Certificate Holders in the 
 said estate, and that the said Trustees are authorized, 
 empowered and directed to apply the said money or 
 property or the proceeds, the increase or income there- 
 of, constituting said Trust Estate, as follows, towit: 
 
 (c) Here state the particular line of business to be 
 followed. 
 
 (d) Make further amplifications and specifications 
 of paragraph (c). 
 
 (e) To enter into, apply for, purchase or otherwise 
 acquire any franchises, contracts or concessions for or 
 in relation to the construction, execution, carrying out, 
 equipment, improvement, administration, management 
 or control of the aforementioned operations or of 
 works and conveniences, and to undertake, execute, 
 carry out, sublet, dispose of or otherwise turn to ac- 
 count the same. 
 
 (f) To construct, manufacture, buy, sell, install, 
 lease or otherwise dispose of and deal in and trade in 
 works, machinery, appliances, instruments, vehicles, 
 supplies, materials and articles of every nature and 
 description used or capable of being used in the pro- 
 duction, manufacture, operation, distribution, control 
 or other application or use of hydrocarbons, gas, oil, 
 electricity or any other power now known or which 
 may hereafter be discovered or invented.
 
 T*rsss 
 
 (g) To manufacture, purchase or acquire in any 
 lawful manner, and to hold, own, mortgage, pledge, 
 sell, transfer, or in any manner dispose of, and In deal 
 in and to trade in goods, wares, merchandise and prop- 
 erty of any kind and every class and description, and 
 in any part of the United fltatet* 
 
 (h) To acquire the good will, rights and property 
 and to undertake the whole or any part of the assets or 
 liabilities of any person, firm, association or corpora- 
 tion; to pay for the same in cash, the Beneficial Inter- 
 ests of this Trust Estate, bonds or otherwise; to hold 
 or in any manner dispose of or conduct in any lawful 
 manner the whole or any part of the business or prop- 
 erty so acquired, and to exercise all the powers noen 
 sary or convenient in and about the conduct and man- 
 agement of such busii 
 
 (i) To apply for, purchase or in any manner to 
 acquire, and to hold, own, use and operate, and to sell 
 or in any manner dispose of, and to grant license or 
 other rights in respect of, and in any manner deal with 
 any and all rights, inventions, improvements and pro- 
 cesses used in connection with or secured under Let- 
 tors Patent or Copyrights of the United States or 
 other countries, or otherwise, and to work, operate or 
 develop the same and to carry on any business, manu- 
 facturing or otherwise, that may directly or indirectly 
 effectuate these objects or any of them. 
 
 ( j ) To guarantee, purchase, hold, sell, assign, trans- 
 fer, mortgage, or otherwise dispose of, or deal in, the 
 stocks, bonds, or shares of any corporation, associa- 
 tion or trust estate engaged in any business herein 
 named, or of this State, or any other State, country, 
 nation or government, and while the owner of such 
 stock or shares, may exercise all the rights, powers aid
 
 FOR Business CORPORATIONS 83 
 
 privileges of ownership, including the right to vote 
 thereon, to the same extent as natural persons might 
 or conld do. 
 
 (k) To enter into, make and perform contracts of 
 every kind with any person, firm, association or cor- 
 poration, persons, municipality, body politic, county, 
 State, government, colony or dependency thereof, and 
 without limit as to amount, to draw, make, accept, en- 
 dorse, discount, execute and issue promissory notes, 
 drafts, bills of exchange, warrants, bonds, debentures, 
 and other negotiable and transferable instruments and 
 eveidences of indebtedness whether secured by mort- 
 gage or otherwise, so far as may be permitted by the 
 
 laws of the State of , or of the United 
 
 States. 
 
 (1) To do any or all of the things herein set forth 
 to the same extent as natural persons might or could 
 do, and in any part of the world, as principals, agents, 
 contractors, trustees, or otherwise, and either alone or 
 in company with others. 
 
 (m) To have offices, conduct its business and pro- 
 mote its objects within and without the State of 
 
 , in other States, the District of Columbia, 
 
 the territories and colonies of the United States, and in 
 foreign countries, without restriction as to place or 
 amount. 
 
 In general, to carry on any other business in connec- 
 tion therewith, whether manufacturing, agricultural, 
 mining or otherwise, not forbidden by the laws of the 
 United States. 
 
 Third: The Trustees hereunder shall be three in 
 number, but at any annual meeting, or regular or spe- 
 cial meeting of the Trustees, called for that purpose, 
 the Board of Trustees may be increased to five, seven 
 or nine members by the then Board of Trustees, and
 
 84 BUSINESS TRUSTS AS SUBSTITUTES 
 
 the Trust Estate shall rest in the additional Trustees, 
 in connection with those already in office, the same as 
 if they were original parties to this instrument; and 
 the Trustees herein mentioned shall hold their office 
 until the annual meeting, or until their successors have 
 been elected and have accepted their trust. 
 
 (b) The Trustees shall, at every annual meeting or 
 adjournment thereof, elect a full Board of Trustees 
 to serve for the next ensuing year, said annual meeting 
 
 to be on the in , 
 
 each year, commencing in 19 ... 
 
 Fourth: The Trustees are authorized to employ 
 all necessary or proper agents, servants, brokers, at- 
 torneys, employees or counsel, to carry into effect the 
 purpose of the trust herein contained, and to protect 
 and preserve the same, and to provide and pay out of 
 said trust estate the compensation, fees, commissions 
 or expenses incurred in the management thereof. To 
 contract for and on behalf of said trust estate, and to 
 bind the same and its property to the performance of 
 such contracts; to borrow money on behalf of such 
 trust estate on such terms and conditions as said Trus- 
 tees shall deem best, and to bind said estate and its 
 assets to the payment of such indebtedness and to 
 pledge and incumber any property of said estate, 
 whether real, personal or mixed, for the security of the 
 indebtedness so incurred, under such terms and condi- 
 tions as to the Trustees may seem best, and to agree 
 upon, approve and fix, execute and deliver in the name 
 and on behalf of the said trust estate, any deed, pledge, 
 mortgage, bond, note, endorsement or guarantee, trust 
 deed, or any other instrument which may be necessary 
 or proper to carry out the terms of this instrument. 
 But neither the said Trustees nor the said certificate 
 holders nor any of them shall be in any manner per-
 
 FOB BUSINESS CORPORATIONS 85 
 
 sonally liable by virtue of any contract, note, bond, 
 deed of trust, mortgage or other instrument executed 
 under the terms of this paragraph, but the same shall 
 fully bind the property of the said trust estate for the 
 performance thereof. 
 
 (b) The said Trustees are hereby authorized to do, 
 or cause to be done in any lawful manner, all the things 
 which are incidental, necessary or proper to carry fully 
 into effect all of the purposes herein enumerated or 
 powers hereby conferred, the general authority given 
 being intended to control and make fully effective the 
 power and authority of the Trustees under this instru- 
 ment, notwithstanding the specific enumeration and de- 
 scription thereof herein. 
 
 (c) It is expressly understood that all expense in- 
 curred by said Trustee in carrying out the terms here- 
 of, as well as all liabilities incurred by them in the ex- 
 ecution of said trust, whether arising from contract or 
 tort, shall be considered as expenses of executing said 
 trust, which shall first be paid out of the assets and 
 properties thereof, and which shall be a first and prior 
 lien against the said estate and property, superior to 
 all others. 
 
 (d) The said Trustees shall, in their own name, as 
 Trustees of said estate, bring any suit or action which 
 in their judgment shall be necessary or proper to pro- 
 tect said estate or to enforce any contract made for the 
 benefit thereof, and to defend in their discretion any 
 suit or action against said estate or against the Trus- 
 tees thereof. The said Trustees are expressly author- 
 ized to bring or defend such suit in their discretion or 
 to compromise and settle any suit, claim or controversy 
 in which the said estate is interested, as to them may 
 seem best, and to discharge the same out of said estate 
 and its assets ; and they are specially authorized to pay
 
 86 BUSINESS TRUSTS AS SUBSTITUTES 
 
 or transfer out of said estate and its assets, all sums of 
 money or property necessary to discharge any judg- 
 ment against them in their said capacity as Trustees, 
 together with all court costs, or other costs, including 
 counsel and attorney's fees and also to pay out of said 
 estate or its assets, such sums of money, or transfer or 
 appropriate property thereof, for the purpose of set- 
 tling, compromising, or adjusting any such claim or 
 controversy, together with any such costs and expenses 
 connected therewith, and all of such expenditures shall 
 be treated as expenses of executing this trust. 
 
 (e) The Trustees shall have full power to invest and 
 reinvest the trust estate, its profits, income, increase, 
 surplus or avails, subject to the terms of this instru- 
 ment. But the trustees shall not delegate to any agent 
 or attorney in fact, the power to contract on behalf of 
 said estate, or bind it to the payment of money, but 
 when said Trustees have agreed upon the terms and 
 forms of any contract or contracts, or other instru- 
 ment or instruments necessary or proper for the car- 
 rying out of the purposes herein mentioned, and the 
 execution of the trust hereby created, they may, by res- 
 olution or other written authority, designating and de- 
 scribing the form of such contract or contracts or in- 
 strument, authorize an agent or agents, attorney or at- 
 torneys in fact, to countersign and deliver, in the name 
 and on behalf of said Trustees, any such contract or 
 instrument, but in no case shall such agents or attor- 
 neys be authorized to countersign or deliver any notes, 
 bonds, bill of sale, mortgages, trust deeds, encum- 
 brances, or pledges transferring, binding, encumbering 
 or alienating the property of said trust estate, whether 
 real, personal or mixed. 
 
 (f ) The Trustees shall hold the legal title to all prop- 
 erty at any time belonging to their trust and shall have
 
 FOE BUSINESS COKPOBATIONS 87 
 
 and exercise the exclusive management and control of 
 the same, and the right of the said Trustees to man- 
 age, control and administer the said trust estate shall 
 be absolute and unconditional, free from the control or 
 management of the certificate holders. 
 
 (g) So far as strangers to this trust are concerned, 
 a resolution of the Trustees authorizing a particular 
 act to be done shall be conclusive evidence in favor of 
 such strangers that such act is within the powers of 
 said Trustees, and no purchaser from the Trustees or 
 one loaning money to the Trustees shall be bound to 
 see to the application of the purchase money or loaned 
 money or other consideration paid or delivered by or 
 for said purchaser or loaner to or for said Trustees. 
 
 Fifth : Stated meetings of the Trustees shall be held 
 at least once every month, and other meetings shall be 
 held from time to time, upon the call of any officer or 
 Trustee. A majority of the Board of Trustees shall 
 constitute 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 the majority of 
 the Trustees present and voting at any meeting shall 
 be conclusive, except as hereinafter provided; they 
 may adopt and use a common seal; they may make, 
 adopt, amend or repeal such by-laws, rules, and regu- 
 lations, not inconsistent with the terms of this instru- 
 ment, as they may deem necessary for the conduct of 
 their business or for the government of themselves, 
 their agents or representatives. 
 
 Sixth: The Trustees may elect officers, who shall 
 have the authority, and perform such duties as the 
 Trustees may determine. They may combine the du- 
 ties of several officers in one person. Two of such offi- 
 cers, elected, at least, shall be from among their own 
 members. The Trustees shall have authority to elect
 
 88 BUSINESS TRUSTS AS SUBSTITUTES 
 
 or appoint temporary officers to serve during the ab- 
 sence or disability of regular officers ; to fix the com- 
 pensation of any or all officers, agents or employees 
 they may appoint, and are likewise authorized to pay 
 themselves such compensation for their services as 
 they may deem reasonable. 
 
 (b) The Trustees shall cause to be kept by a Secre- 
 tary elected by them, a record of all meetings of the 
 beneficiaries and of the Trustees, which record shall be 
 similar in character and of the effect as that kept in 
 case of corporations, and so far as strangers to this 
 trust are concerned, shall be conclusive against the 
 Trustees of the facts and doings therein stated. 
 
 (c) Any Trustee may acquire, own and dispose of 
 beneficial interests in this trust to the same extent as if 
 he were not a Trustee hereof. 
 
 (d) Any Trustee may be removed for just cause. 
 The term "Just Cause" as used in this paragraph, 
 shall mean any cause which is detrimental to the inter- 
 est of the trust estate other than political, racial or re- 
 ligious. Any Trustee may file charges for just cause 
 with the Board of Trustees against any member there- 
 of, and the remaining members of said Board of Trus- 
 tees shall constitute a Commission with the exclusive 
 power and authority to investigate and determine said 
 charges. 
 
 (e) In case of removal of any Trustee, a statement 
 of the cause therefor shall be set forth in writing, 
 which statement shall be in duplicate, and shall be 
 signed by the members of the Commission. The copy 
 of said statement shall be delivered personally to the 
 Trustee so to be removed and the other copy of said 
 statement shall be filed in the office of the Trustees 
 with a notation thereon showing proof of service of a 
 copy of said statement upon the said Trustee. Upon
 
 FOB BUSINESS CORPORATIONS 89 
 
 filing of a copy of said statement, in the office of the 
 Trustees, the removal shall immediately become effec- 
 tive. 
 
 (f) Whenever a Trustee who has been so removed, 
 shall file with the Commission, within five days after 
 his removal, a statement in writing alleging his re- 
 moval was made for political, racial or religious causes, 
 and that he believes that upon a hearing he will be able 
 to establish such fact, it shall be the duty of the Com- 
 mission to order a hearing. The time and place of 
 such hearing shall be fixed 'by the Commission and due 
 notice thereof given to said Trustee. Upon such hear- 
 ing, the Commission shall determine and decide 
 whether or not the removal was made for political, ra- 
 cial or religious causes, and the Commission shall have 
 no jurisdiction or authority to review, consider or de- 
 termine any other question. 
 
 (g) In case of death, resignation or removal of any 
 Trustee, the remaining members of the Board of Trus- 
 tees shall have the power and authority to elect Trus- 
 tees to fill the unexpired term or vacancy thus created, 
 and for that purpose, a majority of the remaining 
 Trustees shall be sufficient to elect one or more Trus- 
 tees as above stated, and such Trustees, as above 
 elected, shall occupy the same relation to this Trust as 
 if they were original parties to this instrument. In 
 case of death, resignation or disqualification of the en- 
 tire Board of Trustees, a new Board may be appointed 
 for the unexpired term by a Court of Equity of com- 
 petent jurisdiction. 
 
 (h) Neither the said certificate holders or any of 
 them, or their property shall be liable for any indebt- 
 edness or liability created by, growing out of, or aris- 
 ing from the execution of the said trust estate, whether 
 arising from contract or tort of the said Trustees, their
 
 90 BUSINESS TRUSTS AS SUBSTITUTES 
 
 servants, agents or employees, in the administration of 
 said estate. The Trustees, personally, nor either of 
 them, nor their private property, whether real, per- 
 sonal or mixed, shall be in any manner, liable for any 
 debt or liability incurred by said Trustees, or any of 
 them, in the administration or management of the said 
 estate, whether arising from contract or tort of the said 
 Trustees or any of them, or their agents, servants, or 
 employees ; and neither said Trustees or either of them 
 shall ever be held personally liable for any damage or 
 injury to person or property caused by or arising from, 
 incident to, or growing out of the execution of said 
 trust; nor shall they be liable for the acts or omissions 
 of each other. That the assets of the said trust estate 
 only, shall be liable for any indebtedness, liability, 
 wrong, injury or tort incurred, arising out of or grow- 
 ing out of, the administration of the said trust estate 
 by the said Trustees or any of them or for any act or 
 negligence or default of their servants, agents, or em- 
 ployees in the administration of said estate. 
 
 (i) The said Trustees shall use ordinary and rea- 
 sonable diligence in the performance of this trust, but 
 shall not be liable to the certificate holders or any of 
 them, for any act, default, failure or negligence in or 
 connected with the execution of the said trust, pro- 
 vided, the same shall not amount to and constitute 
 fraud, embezzlement or wilful breach of trust, and they 
 shall not be obliged to give bond to secure the due per- 
 formance of this trust by them. 
 
 Seventh: That for the purpose of evidencing the 
 respective and proportionate equitable interests of the 
 said certificate holders in and to the said trust estate, 
 the said Trustees are hereby authorized and directed 
 to execute and deliver to each such beneficiary here- 
 under, a certificate signed by the officers designated for
 
 FOR BUSINESS CORPORATIONS 91 
 
 that purpose, which shall evidence and set forth how 
 
 many interests of the par value of 
 
 Dollars ($ ) each, the said beneficiary therein 
 
 named is entitled to as a beneficiary of said trust es- 
 tate. 
 
 (b) The said trust estate shall be divided into 
 
 ( ) Beneficial Interests, all 
 
 of which Interests shall be of the expressed par value 
 of Dollars ($ ) each, and the certifi- 
 cates issued by the Trustees to said beneficiaries shall 
 be substantially in the following form, to-wit. : 
 
 Organized Under the Common Law. 
 
 Number Shares 
 Shares Par Value $ 
 
 Company 
 
 General Offices 
 
 This Certifies, That is the holder of 
 
 Shares in the Capital of the 
 
 Company, fully paid and non-assessable, subject to 
 Declaration of Trust in favor of said Organization 
 
 dated , 19 . . . . , and recorded in the 
 
 Records of County, , 
 
 and transferable on the books this Organization in per- 
 son or by Attorney upon surrender of this Certificate 
 properly endorsed, 
 
 In Witness Whereof, The said Organization has 
 caused this Certificate to be signed by its duly author- 
 ized officers and its seal to be affixed hereto, this 
 
 day of A.D., 19 
 
 Secretary President. 
 
 Shares $ each. 
 
 (c) By a unanimous vote of all the Trustees at any 
 annual meeting, or special meeting called for that pur-
 
 92 BUSINESS TRUSTS AS SUBSTITUTES 
 
 pose, the Trustees shall have the power to increase or 
 to decrease the number of beneficial interests of the said 
 trust estate to such an amount, from time to time, as 
 they shall deem expedient, for the interest and ad- 
 vancement of the trust estate herein created, and such 
 additional shares may be sold for cash, exchanged for 
 property, the shares of other companies or corpora- 
 tions, or distributed as dividends, at the option of the 
 Trustees. 
 
 (d) In case of the loss or destruction of any certifi- 
 cate of beneficial interests issued hereunder, by the 
 Trustees, the Trustees may, under such terms as they 
 may deem expedient, issue new certificates in place of 
 the ones lost or destroyed. 
 
 (e) The Trustees may from time to time declare and 
 pay such dividends as are earned by all outstanding 
 beneficial interests, out of the net earnings from time 
 to time received by them, as they may deem advisable; 
 but the amount of such dividends and the payment of 
 them, shall be wholly in the discretion of the Trustees, 
 and the surplus profits or earnings shall not be main- 
 tained as separate fund, but shall be merged into the 
 body of the trust property. 
 
 (f) Beneficial interests hereunder shall be transfer- 
 able only on the books of the Trustees upon surrender 
 of certificates therefor and presentation of a written 
 transfer thereof. The acceptance of a certificate of 
 beneficial interests by the original holder or transferee 
 shall make the person named in said transfer of certi- 
 ficate a party to this instrument as if such party had, in 
 person, joined in the execution thereof. 
 
 (g) The name in which a certificate of beneficial in- 
 terests stands on the books of the Trustees, shall be 
 considered by the Trustees conclusive evidence of own- 
 ership, and they shall not be required upon trans-
 
 FOE BUSINESS CORPORATIONS 93 
 
 ferring such certificate, or paying dividends on such 
 interests, or distributing assets upon the termination 
 of the trust, or at any other time, to inquire in any way 
 into the relations between assignor and assigns, 
 pledger or pledges, trustee and beneficiary, guardian 
 and ward, or in any other similar relation, and shall 
 have the right to conclusively presume without inquiry, 
 that the holder of any such certificate as shown by their 
 books is the real and true and unconditional owner 
 thereof. 
 
 Eighth: Annual meetings for the election of Trus- 
 tees and for the transaction of other business shall be 
 
 held in the office of the Trustees on the 
 
 , in , each year, commencing in 
 
 19 . . , of which meeting the secretary or acting secre- 
 tary, shall give notice by mail to each Trustee at his 
 registered address at least ten days before such meet- 
 ing, but failure to give notice of such meeting shall not 
 invalidate the proceedings of the meeting. 
 
 (b) The Trustees may call the certificate holders to- 
 gether at the annual meeting of said Trustees, upon 
 ten days' notice given as aforesaid, at which meeting 
 the Trustees may submit an annual, or such other re- 
 ports as they may deem advisable, to said certificate 
 holders for their information, and the certificate hold- 
 ers, at such annual meeting, may nominate from among 
 themselves, candidates for the office of Trustees, pre- 
 senting such nominations to the Board of Trustees, but 
 the election of such nominees, by the Trustees, shall be 
 wholly optional with said Trustees. The fiscal year 
 shall end each year on December 31st. 
 
 Ninth: The death of a beneficiary or of a Trustee 
 during the continuance of this trust shall not operate 
 to determine the trust, nor shall it entitle the legal rep- 
 resentative of the deceased certificate holder to an ac-
 
 94 BUSINESS TRUSTS AS SUBSTITUTES 
 
 counting, or to take any action in the courts, or else- 
 where, against the Trustees ; but the executors, admin- 
 istrators or assigns of any deceased certificate holder 
 shall succeed to the rights of said decedent under this 
 trust, upon surrender for transfer, .of the certificates 
 for the interests held by him. 
 
 (b) It is expressly agreed that the said trust shall 
 not be terminated or the administration thereof in any 
 wise interfered with or suspended by the death of any 
 such beneficiary, or his incapacity for any reason, or 
 by his said interest or interests being by process of law 
 subjected to the payment of debts, or in any way vested 
 in any heir, assign, creditor, or purchaser, of the said 
 beneficiary, or in any trustee, assignee or officer of any 
 court, or by the same in any manner being divested out 
 of the beneficiary and transferred or vested in any 
 other person, administrator, executor, trustee, as- 
 signee, or personal representative. But any such per- 
 son who may, in any such manner acquire or become 
 vested with the ownership of such certificate, shall 
 thereupon succeed to and become entitled to all the 
 rights and equities of the beneficiary therein named, 
 and the beneficial interests in the said trust estate, 
 upon surrendering the original certificate to the said 
 Trustee with such proof of ownership as may be rea- 
 sonably required by them, and the issue in lieu thereof 
 of a new certificate, and notwithstanding said change 
 of ownership or interest in any such certificate, or 
 death or insolvency of the original owner thereof, the 
 said trust estate shall continue and remain in full force 
 until terminated as herein provided. 
 
 (c) The ownership of interests hereunder shall not 
 entitle the certificate holder to any title in or to the 
 trust property whatsoever, or right to call for a parti- 
 tion or division of the same, or for an accounting, or
 
 FOR BUSINESS CORPORATIONS 95 
 
 for any voice or control whatsoever of the trust prop- 
 erty or of the management of said property or business 
 connected therewith by the Trustees. 
 
 Tenth: The Trustees hereunder shall, in entering 
 into contracts and in the execution of notes, bonds, or 
 other written instruments obligatory upon the said es- 
 tate, set forth in appropriate terms that the said in- 
 struments are not entered into by them nor binding 
 upon them individually, but only as Trustees of this 
 estate, and that contracts or obligations are to be satis- 
 fied or performed out of the assets of said trust estate 
 only. But the failure or neglect of such Trustee or 
 Trustees to so declare in any instrument, contract or 
 obligation entered into for the purpose of carrying out 
 the objects of said trust, shall not be construed to ren- 
 der said Trustees or any of them, individually liable 
 thereon, but the same shall be obligations binding upon 
 and performable only out of the assets of said trust 
 estate. 
 
 (b) It is further expressly agreed that the said Trus- 
 tees are fully authorized in their capacity as such and 
 for and on behalf of said trust, to receive, collect, re- 
 ceipt and give full releases, acquittances and dis- 
 charges for any sums of money which may be payable 
 to them as said Trustees for the benefit of said trust, 
 or for any property or any other thing of value which 
 they may be entitled to receive on behalf of said trust. 
 
 Eleventh : This trust shall not continue in any event 
 longer than for the term of twenty years, at which time 
 the then Board of Trustees shall proceed to wind up its 
 affairs, liquidate its assets, and distribute the same 
 among the certificate holders of the beneficial interests 
 according to the numlber of interests held by them. 
 
 (b) For the purpose of winding up their affairs and 
 liquidating the assets of the trust, the then Board of
 
 96 BUSINESS TRUSTS AS SUBSTITUTES 
 
 Trustees shall continue in office until such duties have . 
 been performed. 
 
 In Witness Whereof, the said , 
 
 and .., Trustees, 
 
 hereinbefore mentioned, have set their hands and seals 
 in token of their acceptance of the trust herein speci- 
 fied, for themselves and their successors ; and the said 
 
 , Subscriber, has hereunto set his 
 
 hand and seal in token of his assent to and approval 
 of said terms of trust for himself and his assigns, the 
 day and year first above written. 
 
 Trustee (Seal) 
 
 Trustee (Seal) 
 
 Trustee (Seal) 
 
 Subscriber (Seal) 
 
 State of . 
 
 County of 
 
 I, , a notary public in and for said 
 
 county aforesaid, do hereby certify that 
 
 , , and , per- 
 sonally known to be the same persons whose names are 
 subscribed to the foregoing instrument, appeared be- 
 fore me this day in person, and acknowledged that they 
 signed, sealed and delivered the said instrument as 
 their free and voluntary act for the uses and purposes 
 therein set forth. 
 
 Given under my hand and official seal this 
 
 day of , A. D. 19. .. 
 
 Notary Public. 
 My commission expires
 
 University of California 
 
 SOUTHERN REGIONAL LIBRARY FACILITY 
 
 405 Hilgard Avenue, Los Angeles, CA 90024-1388 
 
 Return this material to the library 
 
 from which it was borrowed. 
 
 TO 
 MAR 2 
 
 APR 
 
 6 1992 
 
 i 5 F9
 
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