§ 116. Executors', fiduciaries' and trustees' investments in certain stocks regulated. Whenever an executor, trustee, guardian of an infant, committee of a lunatic, or other person or persons acting in a fiduciary capacity, or a life tenant, is entitled to receive the proceeds of the sale of any real property sold or to be sold pursuant to the provisions of this article, or pursuant to a judgment in partition, or pursuant to a power of sale contained in a deed or will, and the said property has been or is about to be purchased by a corporation formed or to be formed for such purpose, and all adult beneficiaries and also all adult persons having a vested interest or estate in possession, reversion or remainder in the proceeds of such sale have agreed, or desire to agree that their share of such proceeds shall be invested in the stock and bonds or in either the stock or bonds of such corporation, then the said executor, trustee, guardian, committee or other person or persons acting in a fiduciary capacity, or the life tenant or tenants, may, with the approval of the supreme court, invest his share of the proceeds of such sale in the stock or bonds of such corporation, provided, however, that such corporation shall be prohibited by its certificate of incorporation from investing in any stocks, bonds or other securities other than real estate which are not under the laws of this state a proper subject for the investment of trust funds. The supreme court shall not grant an order permitting such an investment, unless it appears to the satisfaction of such court that a written notice stating the time and place of the application for such leave has been served upon every beneficiary and also upon every person in being having a vested interest or estate in possession, reversion or remainder, in such proceeds at least eight days before the making thereof, if such beneficiary or other person is an adult within the state; or if a minor, lunatic, person of unsound mind, habitual drunkard or absentee, until proof of the service on such beneficiary or other person of such notice as the court or a justice thereof prescribes. The court shall appoint a special guardian for any minor and for any lunatic, person of unsound mind, or habitual drunkard, who shall not be represented by a committee duly appointed. The application must be by petition duly verified, must be made by the executor, trustee, guardian of an infant, committee of a lunatic, or such other person or persons acting in a fiduciary capacity, or a life tenant, entitled to receive the proceeds of such sale, and shall set forth the reasons for such investment and the nature thereof and the peculiar facts which make it proper that the application shall be granted. After taking proof of the facts either before the court or a referee, and hearing the parties and fully examining into the matter, the court must make a final order upon the application. In case the application is granted, the final order must authorize the said executor, trustee, guardian of an infant, committee of a lunatic, or other person or persons acting in a fiduciary capacity, or life tenant, so entitled to receive the proceeds of such sale, to make such investment upon such terms and conditions as the court may therein prescribe. Formerly section 94, Real Property Law of 1896, chapter XLVI, General Laws, as amended by chapter 166, Laws of 1901, and chapter 742, Laws of 1904. 894. Trustee's investments in stocks. Whenever an executor, trustee, guardian of an infant, committee of a lunatic or other person or persons acting in a fiduciary capacity, or a life tenant, is entitled to receive the proceeds of the sale of any real property sold or to be sold pursuant to the provisions of this article, or pursuant to a judgment in partition, or pursuant to a power of sale contained in a deed or will, and the said property has been or is about to be purchased by a corporation formed or to be formed for such purpose, and all adult beneficiaries and also all adult persons having a vested interest or estate in possession, reversion or remainder in the proceeds of such sale have agreed, or desire to agree that their share of such proceeds shall be invested in the stock and bonds or in either the stock or bonds of such corporation, then the said executor, trustee, guardian, committee or other person or persons acting in a fiduciary capacity, or the life tenant or tenants, may, with the approval of the supreme court, invest his share of the proceeds of such sale in the stock or bonds of such corporation, provided, however, that such corporation shall be prohibited by its certificate of incorporation from investing in any stocks, bonds or other securities other than real estate which are not under the laws of this state a proper subject for the investment of trust funds. The supreme court shall not grant an order permitting such an investment, unless it appears to the satisfaction of such court that a written notice stating the time and place of the application for such leave has been served upon every beneficiary and also upon every person in being having a vested interest or estate in possession, reversion or remainder, in such proceeds at least eight days before the making thereof, if such beneficiary or other person is an adult within the state; or if a minor, lunatic, person of unsound mind, habitual drunkard or absentee, until proof of the service on such beneficiary or other person of such notice as the court or a justice thereof prescribes. The court shall appoint a special guardian for any minor and for any lunatic, person of unsound mind, or habitual drunkard, who shall not be represented by a committee duly appointed. The application must be by petition duly verified, must be made by the executor, trustee, guardian of an infant, committee of a lunatic, or such other person or persons acting in a fiduciary capacity, or a life tenant, entitled to receive the proceeds of such sale, and shall set forth the reasons for such investment and the nature thereof and the peculiar facts which make it proper that the application shall be granted. After taking proof of the facts either before the court or a referee and hearing the parties and fully examining into the matter, the court must make a final order upon the application. In case the application is granted, the final order must authorize the said executor, trustee, guardian of an infant, committee of a lunatic, or other person or persons acting in a fiduciary capacity, or life tenant, so entitled to receive the proceeds of such sale, to make such investment upon such terms and conditions as the court may therein prescribe.96% Comment. This section was added to the old Real Property Law of 1896,97 by chapter 166, Laws of 1901, and amended by chapter 742, Laws of 1904. Under section 105 of this act a brief allusion has been made to the investments of trustees and the effect of acquiescence in their breaches of trust.98 98 This section was obviously designed to favor the incorporation of large estates, when the heirs, devisees and legatees are willing to take bonds and stock for their respective interests and thus facilitate the administration and division of the estate. Trustees' Investments. Trustees' investments generally are otherwise regulated by section 21 of the Personal Property Law.99 96 Repealed by Real Prop. Law of 1909, § 460, art. 14, chap. 50, Consolidated Laws. See below, § 460. 97 Real Prop. Law, chap. 547, Laws of 1896. 98 Supra, p. 513. 99 Chapter 41, Consolidated Laws of 1909, enacted by chap. 45, Laws of 1909. § 117. Commissions of trustees. Any trustee, under a deed of trust to sell real property for the benefit of creditors, shall be entitled to and allowed upon an accounting hereafter had, the same commissions as an assignee for the benefit of creditors. Formerly chapter 249, Laws of 1896: CHAP. 249. AN ACT to fix the compensation of trustees under deeds of trust to sell property for the benefit of creditors. Became a law April 15, 1896, with the approval of the Governor. Passed, a majority being present. The People of the State of New York, represented in Senate and Assembly, do enact as follows: SECTION 1. Any trustee, under a deed or trust to sell real or personal property for the benefi of creditors, shall be entitled to and allowed, upon an accounting hereafter had, the same commissions as an assignee for the benefit of creditors. § 2. This act shall take effect immediately.1 Comment. It was not intended by this section to change the substance of the former statute, chapter 249, Laws of 1896, although the language is not literally the same; the present section being expressly confined to trusts created by deed. This slight variance in language can hardly alter the substance of the law. Trusts of all Kinds were Originally Honoraria. The voluntary trustee was regarded as entitled to no compensation2 or allowance for his time or trouble, while an involuntary trustee might be charged by the chancellor for his misconduct in assuming the trust. The unfairness of this rule in some onerous instances of voluntary trusts probably induced the legislators to change the rule, and step by step almost all species of trustees are now able to point to some statute which rewards them, provided they have been faithful and diligent.3 Trustees in this State under an assignment for creditors were finally allowed compensation by statute, at the same rates of com 1 Repealed by § 80 of art. 5 of Pers. Prop. Law, chap. 41, Consolidated Laws of 1909, and by § 460, art. 14, chap. 50, Real Prop. Law of 1909. See below, § 460. 2 Lewin, Trusts, 627. 4 § 26, chap. 466, Laws of 1877, as amended by § 7, chap. 318, Laws of 1878, now in Debtor and Creditor Law, chap. 12, Consolidated Laws of 1909. See Matter of Assignments of Hurlburt, 89 N. Y. 259, 262. missions as executors, viz.: five per cent. upon first $1,000, two and one-half per cent. upon the next $9,000, and one per cent. upon the balance.5 By section 26 of article 2 of chapter 12 of the Consolidated Laws of 1909, "Debtor and Creditor Law," assignees named in any assignment shall receive for his or their services a commission of five per centum on the whole sum which will have come into his or their hands. When Assignment Invalid. When the assignment proves invalid or is not wholly performed the assignee is not entitled to commissions since he takes with the assignment the risk of its being fraudulent." Omitted sections.-At present there are no sections of this act between § 117 and § 130. 52 R. S. 93, § 58; Matter of Shaw, 18 Hun, 195; Matter of offatt, 24 id. 325; Meadcham v. Sterns, 9 Paige, 398; Duffy v. Duncan, 32 Barb. 587. 6 Dorner v. Thacher, 76 Hun, 361, 58 N. Y. St. Rep. 466, 27 N. Y. Supp. 787; Clark v. Brockway, I Abb. Ct. App. Dec. 351; Dexter v. Adler, 1 N. Y. Supp. 684. |
