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OBLIGATIONS OF THIRD PERSONS. $ 2243. Third person, when involuntary trustee. $ 2244. When third person must see to application of trust
property. 2243. Third person, when involuntary trustee. Every one to whom property is transferred in violation of a trust, holds the same as an involuntary trustee under such trust, unless he purchased it in good faith, and for a valuable consideration. En. March 21, 1872.
Cal.Rep.Cit. 55, 562; 96, 307; 105, 64; 134, 657.
8 2244. When third person must see to application of trust property. One who actually and in good faith transfers any money or other property to a trustee, as such, is not bound to see to the application thereof, and his rignts can in no way be prejudiced by a misapplication thereof by the trustee. Other persons must, at their see to the proper application of money or other property paid or delivered by them. En. March 21, 1872.
Cal.Rep.Cit. 118, 106.
TRUSTS FOR THE BENEFIT OF THIRD PERSONS.
II. Obligations of Trustees, 88 2258-2263.
Termination of the Trust. 88 2279-2283.
Succession or Appointment of New Trustees, $8 2287
8 2250. § 2251. § 2252.
2253. § 2254.
NATURE AND CREATION OF THE TRUST.
$ 2250. Who are trustees within scope of this chapter. The provisions of this chapter apply only to express trusts, created for the benefit of another than the trustor, and in
which the title to the trust property is vested in the trustee; not including, however, those of executors, administrators, and guardians, as such. En. March 21, 1872.
Cal.Rep.Cit. 137, 638.
8 2251. Creation of trust. The mutual consent of a trustor and trustee creates a trust of which the beneficiary may take advantage at any time prior to its rescission, En. March 21, 1872.
Cal.Rep.Cit. 61, 334 ; 91, 193; 95, 168; 110, 576; 122, 25.
Revoking trust, beneficiary's consent necessary: Post, sec. 2280.
Promise for benefit of third person: See ante, sec. 1559.
$ 2252. Trustees appointed by court. When a trustee is appointed by a court or public officer, as such, such court or officer is the trustor, within the meaning of the last section. En. March 21, 1872.
Cal.Rep.Cit. 91, 193.
$ 2253. Declaration of trust. The nature, extent, and object of a trust are expressed in the declaration of trust. En. March 21, 1872.
$ 2254. Same. All declarations of a trustor to his trustees, in relation to the trust, before its acceptance by the trustees, or any of them, are to be deemed part of the declaration of the trust, except that when a declaration of trust is made in writing, all previous declarations by the same trustor are merged therein. En, March 21, 1872.
OBLIGATIONS OF TRUSTEES. $ 2258. Trustees must obey declaration of trust. $ 2259. Degree of care and diligence in execution of trust. § 2260. Duty of trustee as to appointment of successor. $ 2261. Investment of money by trustee. § 2262. Interest, simple or compound, on omission to invest trust
moneys. $ 2263. Purchase by trustee of claims against trust fund.
8 2258. Trustees must obey declaration of trust. A trustee must fulfill the purpose of the trust as declared at its creation, and must follow all the directions of the trustor given at that time, except as modified by the con
sent of all parties interested, in the same manner, and to the same extent, as an employee. En. March 21, 1872.
Cal.Rep. Cit. 58, 340. Trustee must follow declaration of trust: Compare witb. the duty of employee, sec. 1981, ante. Authority of trustee, generally: See, post, sec. 2267.
$ 2259. Degree of care and diligence in execution of trust. A trustee, whether he receives any compensation or not, must use at least ordinary care and diligence in the execution of his trust. En. March 21, 1872. Obligations of trustees: See, generally, ante, secs. 2228
$ 2260. Duty of trustee as to appointment of successor. If a trustee procures or assents to his discharge from his office, before his trust is fully executed, he must use at least ordinary care and diligence to secure the appointment of a trustworthy successor before accepting his own final discharge. En. March 21, 1872.
Succession or appointment of new trustees: See post, secs. 2287 et seq.
$ 2261. Investment of money by trustee. A trustee must invest money received by him under the trust, as fast as he collects a sufficient amount, in such manner as to afford reasonable security and interest for the same. En. March 21, 1872.
Cal.Rep.Cit. 137, 638.
$ 2262. Interest, simple or compound, on omission to in. vest trust moneys. If a trustee omits to invest the trust moneys according to the last section, he must pay simple interest thereon, if such omission is negligent merely, and compound interest if it is willful. En. March 21, 1872.
Cal.Rep.Cit. 120, 471; 124, 573; 137, 638. Trustee's liability for interest: Compare with sec. 2237, ante.
$2263. Purchase by trustee of claims against trust fund. A trustee cannot enforce any claim against the trust property which he purchases after or in contemplation of his appointment as trustee; but he may be allowed, by any
competent court, to charge to the trust property what he has in good faith paid for the claim, upon discharging the same. En. March 21, 1872.
Cal.Rep.Cit. 62, 376.
Purchasing debts against the trust estate prohibited: See ante, sec. 2230.
POWERS OF TRUSTEES. § 2267. Trustee's powers as agent.
2268. All must act.
§ 2267. Trustee's powers as agent. A trustee is a general agent for the trust property. His authority is such as is conferred upon him by the declaration of trust and by this chapter, and none other. His acts, within the scope of his authority, bind the trust property to the same extent as the acts of an agent bind his principal. En. March 21, 1872.
Powers to two or more trustees: See post, secs. 2268, 2288, and, ante, sec. 860.
Agent's acts binding principal: See post, secs. 2330-2339.
For what purposes trusts may be created: See ante, secs. 857, 2220.
8 2268. All must act. Where there are several co-trustees, all must unite in any act to bind the trust property, unless the declaration of trust otherwise provides. En. March 21, 1872.
Survival of trust: See post, sec. 2288.
Executors, when one or majority may act: See Code Civ. Proc., sec. 1355.
$ 2269. Discretionary powers. A discretionary power conferred upon a trustee is presumed not to be ieft to his arbitrary discretion, but may be controlled by the proper court if not reasonably exercised, unless an absolute discretion is clearly conferred by the declaration of trust. En. March 21, 1872.
C: Rep.Cit. 133, 648.
RIGHTS OF TRUSTEES. 2273. Indemnification of trustee. $ 2274. Compensation of trustee. 2273. Involuntary trustee.
$2273. Indemnification of trustee. A trustee is entitled to the repayment, out of the trust property, of all expenses actually and properly incurred by him in the performance of his trust. He is entitled to the repayment of even unlawful expenditures, if they were productive of actual benefit to the estate. En, March 21, 1872.
Reimbursement on purchase of claims against estate: See ante, sec. 2263.
$ 2274. Compensation of trustee. Except as provided in section 1700 of the Code of Civil Procedure, when a declaration of trust is silent upon the subject of compensation the trustee is entitled to the same compensation as an executor. If it specifies the amount of his compensation, he is entitled to the amount thus specified and no more. If it directs that he shall be allowed a compensation, but does not specify the rate or amount, he is entitled to such compensation as may be reasonable under the circumstances. En. March 21, 1872. Am'd. 1889, 334.
Cal.Rep.Cit. 56, 628. Compensation of trustees the same as that of executor where the declaration of trust is silent: See sec. 1618, Code Civ. Proc.
Involuntary trustee entitled to no compensation, when: See sec. 2275.
$ 2275. Involuntary trustee. An involuntary trustee, who becomes such through his own fault, has none of the rights mentioned in this article. En. March 21, 1872.
Involuntary trustee defined: Secs. 2217, 2223, 2224, ante.