Nichols v. Eaton et al. present case the bankrupt is not entitled to anything as matter of right, as the power to grant or withhold rests entirely in the discretion of trustees. They may give or withhold, in their discretion; and if they refuse to pay anything, or to apply any portion of the fund to such a use, neither the bankrupt nor his wife and children have any claim upon them for the income, or for any damages for refusing to exercise the power. Perry on Trusts, 453, 454. Property in trust, it is conceded, may not pass to an assignee in bankruptcy in a case where the will provides that in that event there shall be an absolute cessor of the bankrupt's interest, if the will contains a provision that his interest shall in that event vest in some other person. Tillinghast v. Bradford, 5 R. I. 205; Dommet v. Bedford, 3 Ves. 149; Joel v. Mills, 3 Kay. & J. 458; Rochford v. Hackman, 9 Hare, 475. But the complainant insists that where property is left upon such a discretion as exists in the will under consideration, it passes to the assignee in bankruptcy. Provisions of various kinds have been framed by conveyancers to effect such an object as that contemplated by the testatrix in this case, that is, that the trusts expressed in the will respecting the income of the life estate shall cease and determine by reason of the bankruptcy of the beneficiary or donee; and a learned author expresses the opinion that the only mode of effectuating the object, often anxiously entertained by donors, of securing the corpus of the property against the acts of the donee himself and the claims of his creditors, is to invest a third person with a discretionary power either to give or withhold it as he may think best, in short to defer absolutely all proprietary interest in the intended object of bounty until its application to his use, by the testator's nominee, and ultimately to give to another what remains so unapplied at the decease of the devisor. Evidently every one of these conditions was adopted in the will in question to the very letter, and it is equally clear that the defence is fully supported by that authority. Hayes & Jarman on Wills (7th ed.), 199. Forms for such a provision in a will are given by conveyancers of the highest repute, and those forms have the sanction of a learned annotator. 11 Bythewood's Conveyancing 713 (3d ed.). James v. Atlantic Delaine Co. et als. loan of $75,000, and it appears that they advanced him the amount for which he applied by signing accommodation notes and by accepting his drafts, and that he gave them satisfactory security for the loan in a mortgage executed to the treasurer of the company, as trustee for the corporation, which made the advances, including in the instrument all his interest in the stock and property of the company. He also executed to the same person, as trustee of the lenders of the credit, separate mortgages of his homestead in the city of Providence, and of his farm in the town of Scituate, together with certain bonds and notes of a Western corporation. Though he obtained the pecuniary assistance for which he applied, yet it was not sufficient for the purpose, and on the 2d of September of the same year he failed in business, and made an assignment of all his property of every name and description to an assignee. His assets consisted of the several properties described in that mortgage, and of the other real and personal property, stock and promissory notes specified in the schedule annexed to the second deposition of the assignee, as exhibited in the record. By the terms of the instrument, he made his liability under the contract with the company for building and equipping the mill, a charge upon the assets specified in the assignment, and directed the assignee to apply all the assigned estate, as the same should come to his hands, to the fulfilment of that contract so far as the same was necessary to build and equip the mill and put the same in operation. Due acceptance of the trust was made by the assignee; but he soon found that means to carry forward the work could not be raised fast enough by converting the assigned property into money; and to obviate that difficulty he made an arrangement with the company, through their treasurer, to supply the deficiency, and to charge the same to the assets in his hands. Advances were made by the treasurer under that arrangement, as claimed by the respondents, to the amount of $53,314, and it appeared that the assignee completed and equipped the mill early in February, subsequent to his appointment, and that the mill with its machinery was delivered to the company in the course of that month. Success ultimately attended the enterprise; but the Nichols v. Eaton et al. to deny that the discretion of the trustees ceases in all cases of bankruptcy, but it is not necessary to decide that point in the present case, as the provisions of the will in question differ widely from the clause under revision in the case of Piercy v. Roberts, where it is clear there was an absolute trust established by the will in favor of the son, and the only discretion vested in the executors was as to the amount they should apply and the time and manner of directing the application. Perry notices this distinction in his valuable work on Trusts, nor is there anything in the case of Piercy v. Roberts, which affords any countenance whatever to the proposition that the trustees must be made incapable of exercising the discretion in favor of the bankrupt, in order to prevent the fund from passing to the assignee so long as the power conferred is a mere discretionary power to be exercised or not as they shall see fit, as it is clear that such a mere naked power does not carry with it any vested right in the donee which can be enforced in a court of law or equity. Attempt was made to show that the trustees, in the exercise of their discretion, had applied a certain portion of the life interest of the trust-fund for the use of the bankrupt legatee, and the argument is that such portion of that fund as was not expended at the time the petition in bankruptcy was filed, passed to the assignee, but the court is of the opinion that the proofs do not sustain the proposition that anything so applied remained unexpended when the petition in bankruptcy was filed, which is all that need be remarked in answer to that suggestion. Other propositions were discussed at the bar, but having determined that the bankrupt had no estate which could pass to his assignee, it is not necessary to examine the other issues between the parties. The bill of complaint is dismissed with costs. James v. Atlantic Delaine Co. et als. might be able to represent the stock advertised to be sold in its true light," and make it sell for what it was worth." Instead of complying with that demand, the trustee called upon the assignee to convince him that such an account could-not be made at that time, and he professed to believe that the assignee was satisfied with his explanations; but it was evident that he was under a mistake, as it appeared that, failing to obtain the required statement, he instituted a suit in equity in the State Court against the trustee to enjoin the proposed sales of the several properties, and that the court, no satisfactory accounts having been rendered, enjoined the sale of the stock until the further order of the court. Proceedings to accomplish the same object were also instituted by certain creditors of the mortgagor having a lien upon the Scituate farm, in the course of which the creditors tendered to the company the amount of the mortgage debt, which the company refused to accept; and the court passed an order enjoining the sale, unless the trustee would file a stipulation not to enforce the mortgage against the property subject to the lien of the complainant in that suit. Efforts were made by the assignee to prevent the sale of the homestead, but without success, because it appeared that the sale was made at the time specified in the advertisement prepared and published by the trustee. Two days before the sale of the homestead, the assignee informed the mortgagor that he had succeeded in stopping the sale of the stocks, but that the application for an injunction as to the sale of the other properties had been denied; and it appeared that it was on the very day that the sale of the homestead took place that he gave to his assignee a full description of the nature of the efforts he had made to prevent the consummation of that design. Such a statement as that demanded was not furnished during the controversy growing out of the application to enjoin the proposed sales, and the letter of the assignee addressed to the assignor on the day of the sale, furnished no evidence that negotiations were pending for a settlement, or for a transfer of the equities of redemption. Two suits were pending to redeem the properties mortgaged, and the order of the State Court restraining the sale of the stock was in full force when the James v. Atlantic Delaine Co. et als. sale of the homestead took place. Both of these parties were in some respects the representatives of the original owner of the property, and as such were bound to good faith in their dealings with the same; but they were pursuing opposite aims, as the trustee was endeavoring to effect a sale of the mortgaged properties, and the assignee was exerting all his power to prevent the accomplishment of that object. Nothing occurred to change these relations prior to the sale of the homestead; but it appeared that the trustee on the same day addressed a letter to the assignee, enclosing a paper which he described "as a statement of the affairs of our company," without making any reference to the fact that the assignee had ten or twelve days before demanded of him a statement of the condition, standing, and accounts of the company, which he had neglected and refused to furnish. A similar request had previously been made and refused, and the charge was, that the statement as furnished was incorrect and untrue, and that it was so made and rendered with intent to deceive and defraud the assignee, and that the assignee was thereby deceived as to the true state of the accounts, and that he was thereby induced to entertain a proposition which resulted in a withdrawal of the injunction suit and in the execution of mutual releases between him as such assignee and the respondent corporation, in respect to the entire interest of the complainant in all the assigned and mortgaged property. * In a prior opinion in the same case, the court ordered a decree referring the same to a master. By that order the court set aside the instrument of release and settlement executed by the assignee of the original complainant to the treasurer of the corporation respondents, and adjudged and decreed that the same were void, as having been obtained by the assignee by fraudulent representations and concealment. Such an adjudication entitling the complainant to relief, the court sent the cause to a master to take an account of all the dealings between the original complainant and his assignee and the respondent company or their treasurer, including an account of all assigned and mortgaged prop * Ante p. 621. |