TRUST. 499 TRUST COMPANIES. a resulting trust is (Ifiiiicd to be created in favor of the grantor, and in many cases when volun- tary conveyances or conveyances without consid- eration are made a resulting trust is implied in favor of the grantor. (4) Constructive trusts include all those cases not included in the pre- cediiig classes in which courts of equity upon some equitable ground will compel the person liaving the legal title or interest in property to hold it for the benefit of another. Like result- ing trusts, they dill'er from express and implied trusts in that they are not created as a conse- quence of intention of the interested parties. Thus, whenever the legal title of property has been wrongfully acquired by fraud, the person guilty of the fraud, or any person claiming under him who is not a bona-fide purchaser of the property for value, will be treated as a trustee and eom])elled to turn the property over to the person defraiided who is a constructive cestui ijiic tnisf. Equity acts in a similar nuinner in enforcing equitable liens (q.v. ) by compelling the lienee to hold tbe property subject to the claim of the lienor. The so-called doctrine of tracing trust funds is a special application of the doctrine of con- structive trusts. Not only will eqiiity follow pro])erty acquired by fraud or breach of trust into the hands of any person who is not a pur- chaser in good faith for value, but it may compel any such constructive trustee who has disposed of the property to account for its proceeds in his liands. even though the proceeds have in time been converted into other property. As neither resulting nor constructive trusts are created by intention of the interested parties, neither is ithin the Statute of Frauds requiring the trust to be evidenced by writing. The trustee is. strict- ly speaking, the legal owner of the property, with all the rights and obligations of legal ownership, suliject ojily to the right of the crstiii que trust to compel with the aid of a eoiirt of equity per- formance of the trust. The trustee may sue and be sued with reference to the trust property with- out joining the cestui que trust. He may convey it, giving a complete legal title, although he may act in violation of the trust. With reference to the cestui que trust, however, he must perform completely the terms of the trust, and he cannot delegate his authority. He must act in good faith and with due care in administering his trust, and for failure to do this he must account to his cestui. When he has funds in hand he must keep them properly invested. In many States the investments which a trustee may make are regulated by statiite or by settled practice. Aside from his fees allowed by law or specifically granted by the terms of the trust, he cannot make any gain or profit from his position as trustee. In several of the United States, notably in New York, statutes have been passed defining and gen- erally regulating trusts and attempting to some extent to limit the doctrine of trusts as devel- oped by the English Court of Chancery. It may be said, however, that neither by legislation nor otherwise has there been any material modifica- tion of the notion of a legal interest vested in one person and held by him for the benefit of another, the obligation to so hold the property being enforced by courts having equity powers. More changes have been made in the direction of substituting one trustee for another with facility in case of death or misconduct of a trustee, and in providing for the accounting of trustees and regulating their acts. Breach of trust or misap- l)r(>priation of trust funds was not a crime at cdiiimon law. It is now generally made a crime, being punishable as one of the statutory forms of eiiiliczzlcnu'ut. In Xew York misappropriation of trist funds falls within the statutory defini- tion of larceny and is punishable as such. Consult the statutes of the various States; also the works on the law of trusts and trustees by Lewin (10th ed., London. 1H!M)) ; Komer (Lon- don, ISnS) ; Eobbins and Maw (3d ed., London, UIOl); and also the authorities referred to under Equity. See Chanceky; Equity; Eraud; FiDl'CIAUY. TRUST, Ch.ritable. See Chabitable Trusts. TRUST COMPANIES. Institutions char- tered by the several States of the United States for the purpose of performing, as corporations, the general acts and assuming the gencial re- sponsibilities imposed upon individuals under the law of trusts. The trust company in the United States exists in various forms, and com- bines with its trustee business numerous other lines of banking; as, for instance, the private savings bank business in certain States, chiefly in the West: mortgage investment in nearly all States ; title guarantee and other insurance ; and of recent years a general banking business simi- lar in all respects to that of the ordinary deposit bank. The growth and extension of trust companies in the United States has been one of the most noteworthy incidents in the country's recent financial history. The Comptroller of the Currency, in his annual rejiort summarizing the various banking institutions in the United States, had returns in 18'J.S from 246 institutions of this class, which numlier had at the close of 1902 risen to 417. In 1902, according to the same report, the assets of the 417 companies ag- gregated $1,983,214,707. On January 1, 1899, there had been incorporated in New York State 49 trust companies, having aggregate resources of ,$579,205,442. At the opening of 1903 there were 77 institutions in existence, with total as- sets of $1,039,956,625. On January 1, 1898. the deposits of the New York trust companies aggre- gated $383,328,724. At the opening of 1903 their total was $734,342,837. The loan account, which amounted at the opening of 1898 to $261,- 765,000, had risen at the opening of 1903 to .$597,104,389. At the opening of 1898 invest- ments by trust coijijianies in stocks aggregated in New York State .$113,525,797; at the opening of 1903 they had very nearly doubled, rising to $219,378,946. The trust companies have occupied public in- terest and discussion chiefly because of the ex- ceptional increase of de])osits since 1896-97, which is a result partly of the general practice main- tained by these companies of offering interest on deposit accounts — a practice very generally aban- doned nowadays by banks in the larger cities. The trust coiupanies in New York City oiler in- terest on all deposits at a rate varying from 2 to 4 per cent., according to the agreement made as to the permanency of the deposit. In addition to the large amount of deposits thus attracted, the immense credit fund in the hands of the
