uineness of the document in the other, to be satisfactorily established before allowing the transfer to be made.

The manner in which the secretary shall keep his books depends upon the nature and extent of the business.

He should adopt the very best system that can be devised, and should see that the work is promptly and properly done, and that the books should show at all times the true financial condition of the company.

Treasurer.

The treasurer of a corporation is the proper officer charged by law with the custody of its funds. The ordinary duties of the treasurer are to receive, safely keep and disburse, under the supervision of the directors, the funds of the company. Unless more extensive powers are conferred upon the treasurer by the charter or by-laws, he has no authority to assume the payment of debts without conferring with the directors. Nor can he set off debts due from against those due to the company. The power to transfer the negotiable securities of a business corporation, in the ordinary course of its business, rests upon a different footing from the power to create debts by emitting such securities. or to emit without any liquidation of debts already created.

Authority to accept or indorse commercial paper in the business of a corporation obviously does not extend to accepting or indorsing for the accommodation of third parties, since corporations themselves. have in general no such power.

The treasurer of a corporation cannot settle his own accounts; he has no authority, by virtue of his office, to pay to himself his own claim against the corporation until such claim has been approved by the proper officers; nor is the corporation estopped to deny the validity of such payment because it was entered by the treasurer on the corporation books of which he had charge.

When the duties of the treasurer are such that books are to be kept, they should be well systematized and conform with the other accounting systems.

If the treasurer's books are well devised, a true statement from them would oftentimes reveal the true financial condition of the company.

CHAPTER THIRTY-FOUR.

Expert Examinations of the Accounts and Financial Affairs of Executors, Administrators, Guardians, Trustees,

Assignees and Receivers.

Before taking up this lesson you should carefully study Estate Accounting, in Lesson 28, as it bears directly upon this subject.

It is an easy matter to examine the accounts of Executors and others, but to be able to prepare statements for court, there are a great many legal requirements that must be understood, therefore, your attention is directed to a few of the points that must, and must not be incorporated in reports.

As stated before, the first duty of an administrator, is to file an inventory; and it ought to be filed within thirty days.

This inventory should include only the personal assets of the decedent. A man, for instance, takes out a policy of life insurance, payable to his wife. That should not go into his estate. The proceeds of that policy belong to the wife, exclusive of creditors; with that, therefore, the creditor has nothing to do. The wife has it as soon as the man dies. The executor or administrator is not entitled to a commission on it, and it is not necessary to put it in the account. They would very naturally like to include it for the purpose of swelling the account, and increasing their commission, but you should not allow it. I examined an administrator's account a few years ago, and found that he had reinvested the whole of the estate, and had charged himself again with the full amount of the securities sold. He had charged the commission of five per cent on the double sum, in reality, ten per cent., and quietly credited himself with it. parties interested signed a paper to the effect that they were satisfied with the amount, I was not satisfied with it, and undertook to cut it down one-half, and my action was sustained by the court.

making

All the

Here is another instance that will serve to illustrate how far exceptions may come in. A man in his life time has had a piece of land. taken from him, and damages awarded but not paid. They are paid after his death. Those damages are personal estate, although they

have not been paid yet; inasmuch as the property has been converted during his life time, they should go into the personal estate, So you see what an easy matter it is to make a mistake, and how important to know the law.

The administrator of an estate has to deal exclusively with personal estate; his account is an account of personal estate.

There is, however, a single exception to this rule "every rule has its exception." As a rule, an administrator's account must deal only with personal estate; all the property of the decedent, however, is liable for his debts. His real estate, as well as his personal estate, is liable for his debts; but it is with the personal estate only that the administrator has to deal, until it is discovered that the personal estate is not sufficient to pay all the debts, and then recourse may be had to the real estate.

It is a very curious thing that the lawyers make many more mistakes in these matters than professional accountants. Lawyers very often make mistakes in their account, which show that they are either ignorant or else inconceivably negligent; for very often it happens that they bring in accounts in which rents are mingled with personal items.

Rents should not be entered with the accounts of an administrator. Although rents, when collected, are personal estate, yet if aman dies intestate and there are rents due him uncollected, they go to his heirs. If an administrator is directed to sell a portion of the real estate to raise money to pay debts, although he has a right to sell that estate, if he neglects to do so, within the limit of time, and goes on and collects rents in the meantime, those rents all go to the heirs. If the administrator charges those rents in the accounts, this result will follow. The administrator has given a bond for the faithful performance of his duties. He is responsible for the moneys that legitimately come into his possession. If he charges himself in his accounts with rents, the balance which he strikes is a mingled balance of realty and personalty. If there is a deficit and suit is brought against his sureties, they say: "Why, this balance is partly composed of the proceeds of real estate. This is no part of his duties." A great many losses have occurred in this way, and yet, we find every day that rents are included.

An executor differs from an administrator in that he derives his power from the will. The administrator has his authority from the law, which appoints him, the decedent having died intestate; the executor has his authority from the will, which has made him executor.

This makes some little difference in the duties of the two officers. In other respects their duties are very similar. An executor may charge himself with rents, because the law charges him with their collection.

An executor never has to give security, unless there is some doubt as to his fidelity. He is, by the confidence reposed in him by the testator, entitled to administer that estate without security; which is a very great difference between an administrator and an executor.

A guardian is required to file an account only in one of two cases -where he desires to be discharged from the trust, or where he is dismissed from the trust, the minor being of full age, or if the minor dies. These are the only cases in which he files a final account. But

he is expected to file a triennial account, which serves as a guide to those who want to see how the estate is managed, and is an assistant to the man who makes up the final account; usually, these triennial accounts are never audited.

The function of the administrator is to collect and distribute, and this would apply also to an executor The function of the trustee, on the contrary, is to hold.

of action.

There is some little difference in their modes

Distribution.

When it comes to the work of distribution, very frequently an administrator or executor places among other items in his account amounts of distribution. He has collected considerable money, and has paid some of the legatees in advance; he places these payments among the other items in his account. The Supreme Court has denounced that practice in unmeasured terms. The proper way is to make a separate table of distribution at the foot of the account. The object of the distribution account-the sole purpose of that account— is to find the balance which is due to the estate after the payment of all debts If you put in your account items of distribution, the balance that remains won't be the balance due the estate; it has been depleted by these amounts paid to legatees. Perhaps it would be well, just at this point, to refer to this question of paying legatees, before the audit of the account. The president of a bank in this city died about ten years ago, and left an estate of a quarter of a million dollars. He had been a prudent man, and his executors supposed they knew the amount of his debts. They were very few in number, and there was a very neat balance in securities and cash, over a quarter of a million. The executors concluded they would pay the legatees under the will, without

waiting until the final settlement; they did this as an act of kindness and generosity. They did not take any refunding bonds from the legatees. When they filed this account nine months after that time, and a year after the death of the testator, they showed the balance which was due to the estate. The balance was about two hundred and seventy thousand dollars. Then they had a distribution account which footed up two hundred and seventy thousand dollars. Eight years passed and then was discovered what perhaps the creditors didn't even know. The decedent had gone upon a bond of a committee of the estate of a lunatic, and the man had defaulted, ran away with the money belonging to the lunatic's estate. Suit was brought and judgment recovered against the securities, of which this decedent was one. The executors went into court and asked for an opening of the account; they asked for permission to come down upon these legatees, paid eight years before, for a refunding of the account.

The Counsel said, "Oh no! You can't recover that amount paid eight years ago. You didn't take any refunding bonds. If you had done so, the executors would not have been liable." They said, "It is true that we did not take refunding bonds, but our account was confirmed by the court. That account showed the balance due the estate; and the distribution."

The answer was; "You chose to pay at the time when it was your duty to take refunding bonds. The court approved that distribution, believing that it had been made in conformity with the law. If it had been, it is to be presupposed that refunding bonds were taken by you. If you had waited and come in with the balance and received an order of distribution from the court, you would have been relieved of all responsibility." The result was that the executors were held liable. If they had waited for an order of the court, or if they had preferred to distribute before the order of the court and had taken refunding bonds, they would not have been liable. It is not a safe plan to distribute before the order of the court. If you do pay, you should see that you are secured by taking refunding bonds. When orders are received from the court, you should make it your business to see that such orders are entered in the Court's Journal.

Commission.

The question of commission is also very often misunderstood. The executor or administrator is entitled to be paid, just as any other professional man, in accordance with his services. A certain per cent