In addition to the clause set forth in Section :3, above, the articles of agreement usually contain a provision similar to the following: It is further expressly agreed that in case any Trustee, officer, or shareholder shall at any time for any reason be held to or be under any personal liability as such Trustee, officer or shareholder, not due to his acts in bad faith, then such Trustee, officer, or shareholder, shall be held harmless and indemnified out of the trust estate from and of all loss, cost, damage, or expense by reason of such liability : and, if at any time the trust estate shall be insufficient to provide for such indemnity and to satisfy all liabilities of and claims upon it, then the trust estate shall, in preference and priority over any and all other 'claims or liens whatsoever, except mortgages, and except as otherwise expressly provided by law, be applied first to the indemnification of the Trustees from any loss, cost, damage or expense in connection with any personal liability which they may be under or have in curred except as aforesaid : next, to the indemnification in the same manner of the officers, and thereafter to the in demnification in like manner of the shareholders.
9. Duration of business trusts.—These business trusts are based not on any statutory enactments, but on the common law of trusts. In most states title to real property cannot be held in trust for a period longer than a given number of years after the death of certain persons alive at the time of the creation of the trust. For this reason it is usual to find the dura tian of the trust to be fixed for twenty years after the death of the last survivor of twenty or thirty per sons named, the selection usually beint made from among the young children of the persons most largely interested in the enterprise.
TO. Form of certificate of beneficial interest in a business a better idea of the true nature of these trusts can be obtained by studying the following form of trust certificate: _ _ Not subject to assessment.
This certifies that , is the holder of preferred shares, in the Massachusetts Electric Companies, which lie holds subject to an Agreement and Declaration of Trust, dated June 29, 1899, and on file with the Old Colony Trust Com pany, which is hereby referred to and made a part of this certificate.
The shares in said Massachusetts Electric Companies are divided into two classes, known as preferred and common, and the holders of the preferred shares are entitled to receive semi-annual dividends out of the net earnings of the Com panies, at the rate of four per centum per annum, and no more, payable semi-annually, on the first days of January and July in each year, which shall be paid or set apart be fore any dividends shall be paid or set apart on the common shares.
The dividends on the preferred shares are cumulative, and if, in any period of six months, semi-annual dividends at the rate of four per centum per annum are not paid on said preferred shares, the accrued and unpaid dividends are a charge on the net earnings of the Companies, payable sub sequently before any dividends are paid upon the common shares.
In the event of liquidation, the proceeds of liquidation will he first applied to the payment to the holders of preferred shares of the sum of one hundred dollars ($100) per share and any accrued and unpaid dividends thereon and the bal ance remaining thereafter will be divided among the holders of common shares in proportion to their holdings.
The holders of preferred and common shares are entitled to equal voting powers.
This certificate will not be valid until countersigned by the Old Colony Trust Company, Transfer Agent, and the Ameri can Trust Company, Agent to Register Transfers ; and no transfer hereof will be of any effect as regards the Massa chusetts Electric Companies until this certificate has been surrendered and the transfer recorded upon their books.