Third person becoming involuntary trustee. When third person application of trust property. ARTICLE III. OBLIGATIONS OF THIRD PERSONS. SECTION 958. Third person becoming involuntary trustee. 959. When third person must see to application of trust property. 958. One who acquires property held in trust, disposed of by a trustee contrary to his duty, holds the same as an involuntary trustee under such trust,' unless he purchases it for a valuable consideration, in good faith, and without notice of the trust." § 959. One who actually and in good faith pays or deli must see to vers any money or other property to a trustee, as such, is not bound to see to the application of such money or property; and his rights can in no way be prejudiced by a misapplication of the same by the trustee.' Other persons must, at their peril, see to the proper application of money or other property paid or delivered by them." 11 R. S., 730, § 66. The former law applied this rule to all persons. CHAPTER II. TRUSTS FOR THE BENEFIT OF THIRD PERSONS. ARTICLE I. Nature and creation of the trust. II. Obligations of the trustee. III. Rights of the trustee. IV. Termination of the trust. V. Succession or appointment of new trustees. ARTICLE I. NATURE AND CREATION OF THE TRUST. SECTION 960. Who are trustees within scope of this chapter 961. Creation of trust: Court, &c., as author of trust. trustees scope of this chapter § 960. The provisions of this chapter apply only to Who are express trusts, created for the benefit of another than the within author of the trust, in which the title to the trust-property is vested in the trustee. Executors, administrators, committees of persons of unsound mind, and guardians of infants, as well as trustees heretofore strictly so called, and known as such in the late court of chancery, are trustees within the meaning of this chapter. § 961. The mutual assent of the author of the trust and the trustee creates a trust, of which the beneficiary may at any time take advantage,' until revoked, if revocable, the author of the trust. by When a trustee is appointed by a court or public officer as such, such court or officer is the author of the trust, within the meaning of this section. 1 Moses v. Murgatroyd, 1 Johns. Ch., 119. trust. Creation of Court, &c., thor of trust as the au Trust, how executed. Degree of care and diligence ARTICLE II. OBLIGATIONS OF THE TRUSTEE. SECTION 962. Trust, how executed. 963. Degree of care and diligence in execution of trust. 964. Duty of trustee as to appointment of successor. 965. Investment of money by trustee. 966. Interest, simple or compound, on omission to invest trust. 967. Purchase by trustee of claims against trust fund. § 962. The trustee must fulfill the purpose of the trust, as declared at its creation. § 963. He must, whether he receives any compensation or not, use at least ordinary care and diligence in the tion of trust execution of his trust. in execu Duty of trustee as ment of successor. § 964. If he procures or assents to his discharge from to appoint his office, before the 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. Investment of money by trustee. Interest, simple or § 965. He 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. § 966. If the trustee omits to invest the trust moneys as compound, prescribed by the last section, he must pay simple interest thereon, if such omission is negligent merely, and compound interest if it is wilful. on omission to invest trust moneys. Purchase by trustee of claims against trust fund. § 967. The 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. ARTICLE III. RIGHTS OF THE TRUSTEE. SECTION 968. Compensation of trustee. tion of trustee. $968. The trustee is entitled to the same compensation Compensaas an executor,' and to the repayment of all expenses actu ally and properly incurred by him in the performance of his trust, to be paid out of the trust property." 1 This is the American rule. 2 Worrall v. Harford, 8 Ves., 8; Wilkinson v. Stuart, 2 ARTICLE IV. TERMINATION OF THE TRUST. SECTION 969. Trustee's office, how vacated. 970. Trustee, how discharged. 971. Removal by supreme court. 969. The office of the trustee is vacated: 1. By his death; 2. By his being adjudged to be of unsound mind; Trustee's office, how vacated. 3. By his discharge. Trustee, § 970. The trustee can be discharged from his trust only how di as follows: charged. 1. By the completion of his duties under the trust; 2. By such means as may be prescribed by the author of the trust in its creation, or at any time while he retains control over it; 3. By the consent of the beneficiary, if he has capacity to contract; 4. By the supreme court. Removal § 971. The supreme court may remove any trustee who by Supreme has violated or is unfit to execute the trust. 1 R. S., 730; People v. Norton, 9 N. Y., 176. Vacant trusteeship filled by court. Survivorship be tween cotrustees. Supreme Court as trustee. ARTICLE V. SUCCESSION OR APPOINTMENT OF NEW TRUSTEES. SECTION 972. Vacant trusteeship filled by court. 974. Supreme court as trustee. 972. The supreme court may appoint a new trustee, whenever there is a vacancy, and the instrument creating the trust does not provide a practicable method of appoint ment. 1 R. S., 730, § 71; Leggett v. Hunter, 19 N. Y., 459. 973. On the death of one of several co-trustees, the office survives to the others. the Lewin on Trustees, 299. § 974. When a trust exists without any appointed trustee, supreme court must execute the office of trustee, until another trustee is appointed. 1 R. S., 730, § 68. |