Court Opinion

ID: 4495309
Source: CourtListenerOpinion
Date Created: 2020-01-23 18:14:16.017769+00
Date Added: 2024-06-11T15:04:02.664451
License: Public Domain

GoodRioh,
dissenting: Both Investment Trust of Mutual Investment Co., supra, and Ittleson v. Anderson, supra, upon which the majority opinion relies, bottom upon facts so divergent from those m the instant proceeding that those decisions, save for reiteration of principles, offer little basis for the determination of this controversy.
These questions must be answered here: Do funds held by petitioner as trustee under instruments creating strict trusts - change character when commingled for investment? ■ Does the investment (and reinvestment) of separate trust funds, which is an activity clearly within the duties of the trustee of a strict trust, become a different thing when done on a large scale and simultaneously for a number of such trusts? And do the commingling of funds, and the carrying on of investment and reinvestment in bulk, so to speak, transform into a quasi-corporate operation such as these statutory provisions aim at, the performance of the duty to which petitioner, as trustee, is committed respecting each separate, strict trust ?
I am not ready, as apparently are the majority of my brethren, to answer these questions affirmatively and so reach their conclusion in this case. Moreover, I cannot comprehend the composition of the association which, according to the prevailing opinion, here exists. Who is in it? The settlors of the various strict trusts? Not they, for they don’t know each other in this arrangement; they have no control of the fund nor voice in its management; they don’t have *1082even an evidence of an interest in it. Or is the association composed of petitioner, standing on one foot as trustee of the several strict trusts, and on the other as manager of the composite fund ? If that be the theory, it is one too novel for me to accept without considerably more elucidation, especially since it necessarily was considered and already has been rejected by the district court in its decision on this issue — Brooklyn Trust Co. v. Corwin, supra.
It is immaterial whether, as respondent asserts and petitioner denies, this arrangement under the declaration of trust creating the composite fund was planned to obtain for petitioner the advantages resulting from the operation of an investment trust and yet avoid classification and taxation as an association. That is its effect. And we would do better to recognize the result rather than nullify it by a conclusion so plainly erroneous.
Arundell, YaN Fossan, McMahoN, Matthews, and Leech agree with this dissent.