ments of the 'act to incorporate the Yellow River Improvement Company' are violations of the constitution, we must inquire whether the provisions contained in such amendments could have been embodied in the original act of incorporation without violating the constitution. If, under the original title of the act incorporating the company, it would have been competent to confer upon the corporation the powers contained in the amendments, then there can be no doubt of the power to confer them upon it by way of amendment to such act, and under the title of an act to amend' the original act, reciting its title. Any additional powers may be given to the company under an amendatory act which could have been constitutionally conferred under the original act": Yellow River Imp. Co. v. Arnold, 46 Wis. 214; Union Depot Co. v. Commissioner of Railroads, 118 Mich. 340, 76 N. W. 631; Ex parte Howe, 26 Or. 181, 37 Pac. 536.

GILBERT v. HEWETSON.

[79 Minn. 326, 82 N. W. 655.]

TRUSTS AND TRUSTEES-DEALINGS IN TRUST PROPERTY. A receiver, trustee, attorney, agent or any other person occupying fiduciary relations respecting property or persons is utterly disabled from acquiring for his own benefit the property committed to his custody for management.

TRUSTS AND TRUSTEES DEALING WITH TRUST PROPERTY-AGENT OF RECEIVER.-A trusted clerk and confidential adviser of a receiver having full charge of the conduct of the receivership, subject to the approval of the receiver, is not permitted to take advantage of his position to deal or traffic in the property or property rights of the receivership to his own advantage or benefit, and to the detriment of the trust.

RECEIVERS, FOREIGN-TITLE TO CHOSES IN ACTION. A receiver of the property of a resident of one state appointed in a creditor's suit in that state, to whom all property of the debtor is transferred by order of the court, thereby acquires title and the right to recover upon a debt due the debtor from a resident of another state. The situs of such debt is at the domicile of the creditor.

LIMITATIONS OF ACTIONS-PLEADING.-The statute of limitations, to be available as a defense, must be pleaded, and if not pleaded is waived, except when the question is raised by demurrer, although the bar of the statute appears on the face of the complaint.

TRUSTS AND TRUSTEES-DEALINGS WITH TRUST PROPERTY-AGENT OF RECEIVER.-A receiver or other trustee of an express trust cannot permit nor authorize his agent to do with the trust estate what he is not permitted to do himself. He cannot speculate with the trust property to his own advantage and benefit, nor can he authorize or ratify such acts on the part of his ageut.

Webber & Lees, for the appellant.

Munn & Thygeson and J. P. Kyle, for the respondents.

830 BROWN, J. This is an action to enforce a constructive trust. The defendants had judgment in the court below, and the plaintiff appeals.

The facts, in brief, are as follows: In December, 1889, in a creditors' suit brought in the superior court of Cook county, in the state of Illinois, one Edward A. Filkins, of the city of Chicago, was duly appointed by said court receiver of the property and estate of the defendant in such action, Niels C. Frederiksen, with all the powers, rights, and duties of receivers in such cases. Said Filkins duly qualified as such receiver, and thereafter continued to act as such until August 5, 1892, when he resigned, and afterward, by proper order of the same court, the plaintiff in this action was duly 331 appointed his successor. Plaintiff duly qualified as such, and now is the duly qualified and acting receiver in such matter. At the time of the appointment of such receiver, said Frederiksen resided in the state of Illinois. In addition to such appointment, said superior court duly made a further order requiring said Frederiksen to deed and transfer to said receiver all and singular his property, real, personal, and mixed, and requiring and ordering that, in case of his failure to make such transfer, John T. Noyes, a master in chancery of said court, do so for him. Frederiksen refused to make the transfer, and said master in chancery duly made and executed a proper conveyance of said property to such receiver.

From December, 1889, to August, 1892, the defendant Michael Hewetson was in the employ of said receiver as clerk, and as such had general charge of the business of the receivership, with access to the books and papers pertaining thereto, and during the whole of said time occupied a position of trust and confidence to said receiver with respect to the business, property, and effects belonging to the estate. Among other items of property claimed by said receiver to belong to said Frederiksen, and to said receiver, by virtue of his said appointment, were certain causes of action against one Nunnenmacher for the recovery of usurious interest by him unlawfully taken from Frederiksen, which causes of action were claimed to amount in the aggregate to between $100,000 and $200,000; the facts with reference to which were unearthed and brought to light by said Hewetson acting as such confidential clerk. Said Nunnen-'

macher resided in the state of Wisconsin. The receiver brought an action in the circuit court of that state, seeking a recovery upon such causes of action, and the supreme court of that state held that a receiver appointed by the court of another state could not maintain such an action in the state of Wisconsin: Filkins v. Nunnenmacher, 81 Wis. 91, 51 N. W. 79. A motion for a reargument of said cause was duly made to that court, and the same was pending at the time of the settlement to be presently mentioned.

During the time he was so acting as the agent and clerk of said receiver, said Hewetson also discovered from the books and papers in his charge and under his control that one Rice, a resident of the 332 state of Wisconsin, held and owned certain promissory notes against said Frederiksen, amounting in the aggregate to the face value of about $96,000. Subsequent to the decision of said supreme court of Wisconsin, and pending the motion for a reargument, said Hewetson, and certain of the attorneys who had been retained by and were acting for said receiver, connived and conspired together to purchase said Rice notes, and therewith, and by means of a suit thereon against Frederiksen in the courts of Wisconsin, coupled with a garnishment against said Nunnenmacher, to force a settlement with said Nunnenmacher upon said causes of action so due to said Frederiksen, and to appropriate the proceeds thereof to their own use and benefit. Said Hewetson and attorneys understood from the decision of said Wisconsin supreme court that the receiver could not enforce his claim to the causes of action against Nunnenmacher in the courts of that state, and they sought to take advantage of the situation, and secure the same for their own benefit. In pursuance of this agreement between said Hewetson and said attorneys, said Hewetson, some time in the year 1891, negotiated a sale of said promissory notes from said Rice to one of said attorneys for the sum of $3,000. Later on in said year, and while said receiver's action to recover from said Nunnenmacher was still pending in said supreme court of Wisconsin, said attorney to whom said notes were sold and transferred brought suit thereon in the circuit court of Wisconsin against said Frederiksen, the maker thereof, and said Nunnenmacher as garnishee, seeking thereby to charge said Nunnenmacher with the indebtedness which the receiver was endeavoring to obtain by his suit. The attorneys so engaged with said Hewetson were the same attorneys who were acting for the receiver in his suit against Nunnenmacher.

In February or March, 1892, the said attorneys procured a settlement from said Nunnenmacher of both the receiver's suit and the action brought by them on said Rice notes, and Nunnenmacher paid to them in full adjustment of the Frederiksen claims against him the sum of $36,000-$1,000 in settlement of the receiver's suit, and $35,000 in settlement of the suit on the Rice notes. The receiver accepted the $1,000, supposing that that was all he could realize. He was so advised by said attorneys. The receiver knew that one 333 of his attorneys held the Rice notes, that action had been brought thereon, and also knew that negotiations were pending for the settlement thereof, but he did not know the nature of the settlement made. It was in August following this settlement that the plaintiff succeeded the former receiver.

Hewetson received, as his share of the profits of this transaction, the sum of $5,333.33, of which sum he invested $3,000 in the lands described in the complaint. The purchase price of the land was $6,179.85. Of this Hewetson paid said $3,000 in cash. The balance was paid subsequently, and from the proceeds of sales of certain portions of the land. Other facts are set out in the findings of the trial court, but the foregoing, though not as full and complete as such findings, is a sufficient statement to give an understanding of the questions presented.

The action is one to impress the land with a trust in favor of plaintiff to the extent, at least, of the $3,000 invested therein by Hewetson from the proceeds of the Nunnenmacher deal. It is founded on the fundamental principle of equity jurisprudence that a receiver, agent, attorney, or other person occupying a position of trust and confidence, respecting the business or property of another, will not be permitted or allowed to take advantage of his position to deal or traffic in the property or property rights of his trust to his own advantage or benefit. A person occupying such fiduciary relation is held strictly to an honest performance of his duties in the interests of his principal, and to the absolute exclusion of his own personal interests. The principle is very clearly stated in King v. Remington, 36 Minn. 15, 29 N. W. 352.

A receiver, trustee, attorney, agent, or any other person occupying fiduciary relations respecting property or persons is utterly disabled from acquiring for his own benefit the property committed to his custody for management. This rule is entirely independent of the fact whether any fraud has intervened. No fraud in fact need be shown, and no excuse will be heard from

the trustee. It is to avoid the necessity of any such inquiry that the rule takes so general a form. The rule stands on the moral obligation to refrain from placing one's self in positions which ordinarily excite conflicts between self-interest and integrity. It seeks to remove the temptation 334 that might arise out of such a relation to serve one's self-interest at the expense of one's integrity and duty to another, by making it impossible to profit by yielding to temptation. It applies universally to all who come within its principle.

This case comes fairly within this principle. Hewetson was a trusted clerk and confidential adviser of the receiver; had full charge of the conduct of the receivership, subject to the approval of the receiver; and, with knowledge and information gained while holding such position, he, with the attorneys of the receiver, sought to enrich themselves at the expense of the trust estate. He may have proceeded in good faith-may have supposed that the receiver had no title or interest in the Nunnenmacher claims-but his good faith does not relieve him. It is not necessary to show fraud in such cases. Equity declares all such transactions illegal, and all profits accruing to the trustee to belong to the cestui que trust, without regard to any intentional or other fraud: King v. Remington, 36 Minn. 15, 29 N. W. 352. The court below recognized this principle, but disposed of the case adversely to plaintiff, mainly on the theory that the Nunnenmacher causes of action did not pass to the receiver, and that he was in no way injured by the transaction. Counsel for respondents urge this and other reasons in support of their contention that the judgment should be affirmed. We are satisfied that the findings of fact are sufficient to warrant a judgment in plaintiff's favor, unless the position of the trial court with respect to some legal questions is correct. therefore turn our attention to such questions.

1. It is urged by respondents, and the court below held, that there was no showing of a legal liability on the part of Nunnenmacher to Frederiksen on account of the alleged causes of action for usurious interest, and that, in consequence, the receiver lost nothing by the conduct of Hewetson and the attorneys, and cannot complain. This contention cannot be sustained. Hewetson unearthed, by an examination of the books and papers belonging to Frederiksen, what he considered, and what all the attorneys considered, and evidently believed, to be a valid claim against Nunnenmacher, amounting to more than $100,000. The receiver's action in Wisconsin was brought to recover upon that