Page:Henry Osborn Taylor, A Treatise on the Law of Private Corporations (5th ed, 1905).djvu/48

 § 44.] THE LAW OF PRIVATE CORPORATIONS. [CHAP. in. person to whom the duty is owed than ordinarily exists between man and man. That is to say, the circumstances are such that rules of law apply to the two persons, which manifest them- selves in peculiarly advantageous rights in the person under a disability. These are rights which, were it not for the circum- stances causing the disability as a compensation for which they are given, the person under the disability would not have had. For instancej through inexperience and on account of other cir- cumstances, an infant is presumed incapable of protecting itself against the acts of its guardian. Accordingly, not all the rules of law applying ordinarily to transactions of sale, for instance, apply when the guardian purchases his ward's property ; but certain other rules of law apply, which create further rights in the ward, and impose a most stringent accountability on the guardian, preventing the latter from taking advantages and profits to which he would have been entitled had the seller not been his ward. § 42. Accordingly, wherever there exists what is called a trust relation, there will be found an inability on the part of the cestui que trust to protect himself against the improper acts of the trustee ; an inability arising either from the status of the former, as infancy or insanity, or from the special circumstances of the case. A client cannot adequately guard against the im- positions of his attorney, nor an absent principal against the improper acts of his agent. § 43. Again, where a trust relation exists, there will usually be an actual confiding in the trustee by the cestui que trust, who intrusts his affairs to the former, or whose property may be con- fided to the trustee by others, as in testamentary guardianship. And the law will protect such confidence from abuse. The element of actual confidence does not exist when a person is held to the duties of a trustee by reason of his wrongful act, as the wrongful taking of another's property. § 44. A trust relation arises between directors and share- holders, because it is impracticable for the latter to keep them- selves adequately informed of the state of the corporate busi- ness, and because they have put confidence in the directors. The directors are in a position to do the shareholders injuries against which the latter can protect themselves only through the aid of the rules of law which manifest themselves in trust relations 28