Butler v. Jarvis

4 N.Y.S. 137, 58 N.Y. Sup. Ct. 248, 21 N.Y. St. Rep. 278, 51 Hun 248, 1889 N.Y. Misc. LEXIS 228

Opinions

Daniels, J.

The action has been brought by the plaintiff as the ancillary administrator of the .goods, chattels, and credits which were of Bomanjee Byramjee Colah, deceased. He died at Bombay, on the 18th -of January, 1882. The defendant was appointed the committee of his estate by the court of common pleas of the city of New York, in the year 1870; and in support of the appeal it has been objected that the proceeding for the settlement of the defendant’s accounts and the delivery of the estate over to the plaintiff should have been taken in the court of common pleas, in which the appointment was made. A strenuous endeavor has been made to support this objection by a reference to the jurisdiction of the chancellor over idiots and lunatics, as that was exercised in the kingdom of Great Britain. The authority of the chancellor to initiate the proceedings was derived from a special warrant issued to him by the king, who was invested with the authority of caring for and protecting persons of unsound mind. But the authority delegated by the warrant of the executive appears to have extended no further than the inclusion of the power to select and appoint a suitable person to have the care and custody of the lunatic, and the administration of his estate. After that was done, and the person appointed entered upon the duties of his office, then the chancellor, as chancellor, had jurisdiction over the committee, and his control and direction in the administration of the estate. This point was examined in Ex parte Fitzgerald, 2 Sehoales & L. 432, where the conclusion was reached by the chancellor that “ the superintendence of the conduct of the committee in the management both of the property and the person originates in the authority of the court itself, as the court from which the commission inquiring of the lunacy issues, and into which the inquisition is returned, and which makes the grant founded on the inquisition.” The warrant of authority, it was held, included no more than that of selecting and appointing the committee. After that the jurisdiction over him and his control and management of the estate appertained to the court, as a court, and could be exercised as part of its own jurisdiction. This subject was considered in 2 Story, Eq. Jur. § 1364, where the result of the authorities was stated to be that, “after the custody is so granted, and maintenance is assigned, the chancellor acts in other matters, relative to lunatics at least, not under the warrant by the sign manual, but in virtue of his general power as holding the great seal, and keeper of the king’s conscience.” And this view also has the sanction, to a limited extent certainly, of the Case of Grtinstone, 2 Amb. 707. And the principle in this manner established became a part of the laws of this state vesting the like authority in the court of chancery, and continued to the adoption of the constitution of 1846, when, by section 3, art. 6, it was declared that the supreme court should have general jurisdiction in law and equity, which was sufficiently broad to include this class of cases.

But, if this conclusion should not be deemed to be so well established as to require the dismissal of this objection, its correctness seems td follow from the subsequent action of the legislature of the state; for as early as the year 1821 this power was vested in the chancellor of the state, and by the Revised Statutes, in 1830, it was declared that he should have the care and custody of all idiots, lunatics, persons of unsound mind, and persons who should be incapable of conducting their own affairs in consequence of habitual drunkenness, and of their real and personal estate, so that the same should not be wasted or destroyed. 1 Rev. St. (2d Ed.) p. 814, § 1. This legislation was so broad as to vest the entire authority to be exercised in the chancellor as chancellor, and as such it was made a part of the jurisdiction of the court of chancery of the state, and it continued to be so until the adoption of the constitution of 1846. And by section 217 of the Code of Civil Procedure, following other similar legislation, upon the abrogation of the court of chancery, its jurisdiction was vested in the supreme court of the state. This jurisdiction was general and unqualified, except so far as it might be limited only by the exigencies to be provided for through the authority of the court; and it has not been reduced, or in any manner taken away, except so far as like authority has by the legislature been vested to a defined extent in other tribunals. For this purpose it has been provided by section 2320 of the Code of Civil Procedure that, “where a superior city court, or a county court, or both, have jurisdiction of these matters concurrent with that of the supreme court, the jurisdiction of the court first exercising it as prescribed in this title is exclusive of that of the others, with respect to any matter within its jurisdiction, for which provision is made in this title.” And provision has been made in this title conferring such jurisdiction over the property of the incompetent person, so far as to preserve it from waste or destruction, and to provide out of its proceeds for the payment of his debts and for the safe-keeping, maintenance, and education of the incompetent person and his family. And, when he may fail to file the annual inventory required from him there, he may be compelled to do so by the action of such court; and, in case of a restoration of the competency of the person whose care is committed to the appointee of the court, it may require his property to be restored to him, so far as it remains in the hands of the committee. These provisions are contained in sections 2321, 2342, 2343, of the Code of Civil Procedure, and seem to include all the exclusive authority vested in a superor city court or a county court, and they fail to comprehend an action for the final accounting of the defendant after the decease of the lunatic; and that intrenches no further upon the general authority delegated to the supreme court as a court of equity, or acting under the statute, than to include this management, control, and administration. Meither section, nor anything contained in them, has vested either of these courts with exclusive jurisdiction over the estate of the lunatic after the fact of his decease; but it has been further provided by section 2344 of the Code of Civil Procedure, in that event, that the power of the committee shall cease, “and the property of the decedent must be administered and disposed of as if a committee had not been appointed.” Prom that time he ceases to be the committee of the estate previously committed to his charge, and holds the estate as so much property, to be accounted for and passed over to the administrator of the deceased person. In that respect, he stands in the same relation to the personal representative as any other individual would who has the possession of the property of the deceased person, holding it subject only to the obligation to pass it over to the personal representati ye, and therefore liable to account to him in the ordinary course of legal proceedings taken for that object. A right of action for that purpose vests in the personal representative, to be prosecuted and enforced the same as any other right of action accruing to him under and by virtue of his appointment. ' The appropriate remedy to enforce this right is an action for an accounting, the same as it would be if he had in any other way lawfully acquired the estate and property of the deceased person; and the jurisdiction over such an action is within the unabridged and general delegation of authority made to the supreme court as the successor of the court of chancery, and also under the General Statutes of the state, vesting it with the care and custody of lunatics and persons of unsound mind, and of their real and personal estates. The objection that this court had nq jurisdiction of the action was accordingly disposed of, as it should be, on the trial at the special term.

A further defense which has been presented by the answer of the defendant consists in the allegation that a proceeding had already been set on foot and was pending in the court of common pleas in the city of Mew York for the settlement of the accounts of the defendant, at the time when this action was commenced. Such a proceeding was there instituted on the petition of the plaintiff, and an order directing a reference for the hearing of the case had been made; but on the 24th of January, 1884, which was the day on which this suit was commenced, an order was entered in the court of common pleas, under the direction of one of its justices, and on motion of the plaintiff, discontinuing the proceeding upon the payment of the costs thereof to the defendant; and this order was served upon him on the following day, and an offer made for the payment of such costs. A motion was afterwards made, on notice to the plaintiff, to vacate this order, and it was vacated on the 8th of February, 1884. An appeal was taken from the last order to the general term, where it was affirmed, and from that affirmance an appeal was taken to the court of appeals, where the appeal was dismissed without a hearing of the merits. The plaintiff then applied, on notice, for leave to discontinue the proceeding in the court of common pleas, but the application was denied, and the order of denial affirmed by the general term of that court. The case was then taken again to the court of appeals, where it was heard upon its merits, and the general proposition enunciated that he had the right to discontinue where no substantial right of any other person had accrued in the proceeding, and injustice would not be done by permitting the discontinuance. In re Butler, 101 N. Y. 307, 4 N. E. Rep. 518. The orders were consequently reversed, and the discontinuance of the proceeding was permitted. This effectually put the proceeding in the court of common pleas from that time out of the way of the present action, which was afterwards tried; and under section 522 of the Code of Civil Procedure the plaintiff had the right to answer this defense without pleading it by any matter of avoidance, as this clearly was. This part of the defense consequently failed to form any portion of the action at the time when the trial took place before the court. All that was then pending between the parties was this suit, over which the court had jurisdiction, and in which it declared and determined the rights and obligations of the parties, so far as "they were then understood. The trial resulted in the conclusion that there was due from the defendant, on account of property received by him belonging to the intestate, the sum of $73,491.25. This included and proceeded upon the settlement of his accounts from the 31st of October; 1874, to the time of the completion of the trial. In arriving at this conclusion, the defendant was charged with the amount uncollected upon a mortgage taken by him for the sum of $6,000 on the 28tli of July, 1870. This mortgage was upon 32 lots of ground, upon which a wooden dwelling-house, two or three stories in height, was situated, in Flushing, on Long Island.

The facts upon which the court declined to deduct the amount of this mortgage from the moneys of the intestate in the hands of the defendent were obtained from him in the course of his examination as a witness. The money was loaned to Theodore M. Squire, a friend of the defendant, and no part of the principal or interest was paid upon it except the sum of $630 for interest, on the 1st of November, 1872 After that, so far as the evidence indicates the fact to be, it received no attention until proceedings for the foreclosure of the mortgage were taken, and they resulted in a decree on the 22d of June, 1880. The amount then unpaid on the mortgage was the sum of $9,290.83. The property, at the foreclosure sale, was purchased for the sum of $8,000 by the defendant in the name of Albert Langdon, who afterwards conveyed it to him individually, and he has held the title to the property since that time. It was not made to appear that the property was a fair security for this loan. The most that was said by the defendant was that it was a valuable piece of property; but at the sale under the foreclosure judgment no bid was made for it other than that for which it was purchased. No proceedings were afterwards taken to attempt to collect the deficiency during the life-time of Squires, who soon afterwards died insolvent. His personal estate, whatever he had, passed to his mother, but no proceedings were taken to collect the deficiency from her, and she finally died, leaving this indebtedness unpaid; and that ended, as well as completed, the attention of the defendant to this indebtedness. He charged the costs, as well as the taxes, to the estate, but they were disallowed by the court; and it was justified by his evidence in concluding that the entire indebtedness had been lost through the inattention of the defendant. It was his duty to have taken proceedings at once for the collection of the debt when the mortgagor failed to pay the interest upon it. That, however, he omitted to do, allowing the interest to accumulate for a period of five years or upwards before anything was done towards the collection of this debt. If he had acted promptly, it is a fair presumption to adopt that the debt might have been saved to the estate, and that his omission so to act was the cause of its loss; and on that presumption he could very well be charged with the loss of this debt, and as much as that, in the way of liability, was conceded by the defendant in his examination as a witness on the trial. The case, as to this fact, contains these questions and answers: “Question. What did you bid? Answer. I bought it in at eight thousand dollars. Q. You took the title in your own name? A. I bought it in, and had [it] conveyed to me individually. Q. Did you pay that bid to the estate of Colah in your hands as committee? A. No, sir. Q. Then you admit your liability for that nine thousand two hu ndred dollars and interest, I suppose? A. Of course. ” And this, together with the other evidence affecting this mortgage, was very manifestly sufficient to warrant the court in its refusal to deduct the amount of it from the moneys which had passed into the hands of the defendant as the committee of this lunatic.

Another mortgage was made on the 15th of March, 1871, by James T. Pettus to the defendant, to secure a loan of $20,000. This was upon a leasehold estate situated on the northerly side of Twenty-Second street, 100 feet westerly from Fifth avenue in the city of New York. The mortgagor had a lease of the property for the period of 20 years, with the privilege of certain renewals. The loan of this sum of money upon this security was entirely inexcusable, for it was a loan, in substance, upon what was no more than an incumbrance placed upon the property, instead of the property itself. The defendant, in making loans of the moneys of the lunatic, was bound to make them where they were secured by mortgage on real estate,—upon the estate itself,—subject to no preceding incumbrance, and of a value sufficient to secure the return of the money beyond doubt or peradventure. That he failed to do in this instance. The loan was not upon the estate, but it was upon a leasehold interest, subject at any time to be divested by the failure of the tenant, who was the mortgagor, to pay the rent reserved in the lease. And as a matter of fact he was so divested after he had made certain payments upon the indebtedness, leaving a balance of this loan, amounting to the sum of $7,333.34, uncollected and unpaid, and which at no time afterwards was either in part or wholly paid by the mortgagor. This was a plain violation of the obligations and duties of a person acting under relations of trust and confidence, as those were which had been assumed and accepted by him, and, within the doctrine of King v. Talbot, 40 N. Y. 76, he was liable to reimburse this money to the estate. Beyond that, by an order made on the 13th of January, 1871, in the court of common pleas, he was permitted only to loan the moneys of the estate upon bond and mortgage on real estate in the city of New York, or the bonds of the United States or of the state of New York, or the stocks or bonds of the city and county of New York. This order, under the provisions of the Code of Civil Procedure, w'hich have already been mentioned, as well as the preceding law, the court had the undoubted authority to make, and it was violated by the defendant in loaning the lunatic’s money upon this mortgage; and for that violation of his obligations he was plainly liable to reimburse this balance. And that liability was conceded by him upon the trial; for, after stating that the tenant had been dispossessed, he answered other questions propounded to him in the following way: “Question. The property was not worth any more than the rent he had to pay? Answer. I do not know what the property was worth. I regarded it as a very valuable piece of property. Q. What examination did you make at the time you loaned the money on it? A. That which appears in the abstract of title. Q. Let’s have that. A. It is among those papers. I have not seen them since I saw them here last. Q. You admit your liability to the estate for what has been lost on that mortgage? A. Certainly. Q. You do? A. Certainly. Q. With the exception of what was collected on the principal, and what was collected for interest, you admit your liability to the estate for the original investment for the Pettus mort gage, with the interest as secured by that mortgage; is notthatso? A. "Whether I am liable for the interest is a question not for me to answer. I admit my liability for the amount of money which I did not receive from the principal. ” And from this admission it follows, of course, that he was equally liable for the lost interest as well as the lost principal. So far, also, he was justly and legally charged by the judgment for the balance remaining unpaid and uncollected upon this mortgage.

It appeared by the proceedings upon the trial that a reference was made on the petition of the defendant for the adjustment of his accounts, and a determination of his right to extra compensation for the services which had been performed by him on behalf of the lunatic, prior to the latter part of the year 1874. The referee appointed under the application examined into and reported the state of the defendant’s accounts, showing money then in his hands amounting to the sum of $20,248.38, and securities in bond and mortgage to the sum of $32,833.34. And this statement was ratified and confirmed by the court, with the single addition of $150 added to the amount. And under the order finally confirming the report of the referee made in this manner, and affirmed on appeal by the general term of the court of common pleas, it has been urged that the defendant was relieved from liability for the uncollected indebtedness on each of these mortgages; but that position cannot be supported, for no question arose in the proceeding, as it has been shown, affecting the sufficiency of these mortgages as security for the indebtedness mentioned in them, or the propriety of making either of the loans. What then took place was to ascertain the securities in his hands, not their value or their sufficiency. This question of his liability in no manner appears to have been raised. It was not suggested by himself in his petition, or included in the order of reference; but that simply directed the referee to take and state the accounts of the committee, and report upon the amount of compensation which should be allowed to him for his services and commissions; and it was so far and no further that the referee proceeded under this order. That in no respect and in no manner involved this question of legal liability; and in fact it could not, for the circumstances out of w'hieh it has in each instance arisen had not then so matured as to present the question whether the defendant was liable for these losses or not. The proceeding then taken and consummated was consequently no bar to the inquiry instituted and followed as to these loans in this action, and the final order of confirmation made upon the referee’s report can afford him no protection against this liability.

The court declined to deduct the sum of $5,000 reported by the referee, and affirmed by the court, to be a fair compensation for the service of the committee up to and including the latter part of the year 1874. It appeared by his accounts that he had appropriated towards the payment of his commissions up to the latter part of the year 1874 the sum of $6,842.46, and the court charged him with the balance of this amount, after deducting the $5,000 reported in his favor by the referee, and allowed to him by the court of common pleas. This action of the court has been considered unjustifiable by the counsel representing the defendant on the argument of the appeal; but that he had received these commissions is plainly the effect of his own evidence given on the trial of the action. As to this fact his evidence was as follows: “Question. Look at this account, and see how much commission you had up to October, 1874. See if you do not find the item, January 1,1871, $1,173.34. Answer. That appears here. Q. You did have it? A. Yes, sir. Q. August 1, 1871, $1,139.57? A. Yes, sir. Q. January 1, 1872, $1,121.81? A. Yes, sir. Q. July 1, 1872, $982.00? A. Yes, sir. Q. January 1, 1873, $830.74? A. Yes, sir. Q. August 1,1873, $815.98? A. Yes, sir. Q. January 1,1874, $789.02? A. Yes. Q. You had all those sums? A. Yes, sir; it seems so. Q. Those amount to $6,842.26? A. Yes. Q. Look at the same book, page 22; see if you did not have July 1,1874, commissions, $760.98. A. Yes. Q. That makes, with that already given, $7,600.00? A. Yes.” As to the latter amount there was some slight qualification made in further portions of the-defendant’s testimony, but not reducing the commissions below the sum otherwise conceded and found by the court. The $5,000 allowed to him by the order of the court was in fact paid to him. He was asked, when he stated that he did not understand that there had been an overpayment of $2,600- “How do you understand it?” and his answer was: “I did not receive anything more than was allowed. ” “ Question. The report was that you ought to have five thousand dollars in all? Answer. Yes; and I got it.” The court was right in concluding that he had received out of the estate, not only this sum of $5,000 allowed by the order, but the preceding commissions specially mentioned by him, and charged to him in his own accounts, amounting to the sum of $6,842.26; and that clearly debarred him from claiming or insisting upon the deduction again of'this sum of $5,000. That it was intended to include all the commissions due to him down to the time of the making of the order is evident from his own petition and the report of the referee. What he asked the court for was the sum of $5,000 out of the funds then in his hands, as a just, proper, and reasonable allowance to him for bis services as committee of the estate to the date of his petition, which was the 3d of October, 1874. And the referee recommended that there should be allowed to him “a sum which, including his commissions, would make the full sum of five thousand dollars.” And as this report was in this respect confirmed without change by the order of the court, that is all that he could justly claim for services for the lunatic’s estate up to the time of the presentment of his petition. And as he had received that sum, according to his own evidence, he was not at liberty again to charge it against the funds in his hands.

In the investigation before the court it was objected that it should be limited to the transactions of the committee after the order made upon the referee’s report, near the close of the year 1874. And this objection was well taken, for the reason that to the extent to which the proceedings then went they were, under these provisions of the Code, within the exclusive jurisdiction of the court of common pleas, and its order and determination were in the nature of a final judgment passing upon the accounts and adjusting the amounts of cash and securities then in the hands of the defendant. The case of Tharp v. Tharp, 3 Mer. 510, has been cited as sustaining the right of the plaintiff to extend the inquiry upon the trial back to the time when the defendant received his appointment; but it does not decide in favor of this right where, as in this case, an intervening order has been made by a court of competent, and so far exclusive, jurisdiction. It does determine that in the settlement of the accounts of the committee notice should be given to his next of kin, so that they may appear and aid the court in correctly settling and adjusting the accounts; but it does not sustain the proposition that an order of this description may be disregarded, and the entire accounting taken over again. Neither does the case of Blake v. Pegram, 101 Mass. 592, for that proceeded upon a statute allowing the accounts of the guardian to be so far opened and re-examined as to correct mistakes in them. And the case of Douglas’ Appeal, 82 Pa. St. 169, proceeded no further. Neither these cases, nor either of the others cited, are authorities for opening this preceding accounting. In this state the rule is still less liberal, even to an infant, precluding him from such an adjustment as received the sanction of the court in the case cited from Massachusetts. In re Tilden, 98 N. Y. 434. But, while this objection should have been sustained by the court, no harm in the end was done, by overruling it erroneously, to the defendant; for it was finally held that the order made in 1874, closing the accounts as they were found to be established at that time, was binding upon the plaintiff, and that the defendant was liable for no more than the money and securities found in his hands at the time when the report of the referee was made. He accordingly was not prejudiced by the ruling of the court allowing the preceding accounts to be again investigated, or by the circumstance that the principal of the estate itself had in the period of four years been reduced from the aggregate amount of over $104,000 to the sum of $53,081.72. In this investigation, as well as by other evidence, it appeared that a committee of the person of this lunatic had also been appointed, and that large amounts had been paid to him by the defendant under the orders of the court of common pleas; but as the court had complete jurisdiction to make such orders, and they were made after the hearing of counsel, they could not be opened, or their propriety considered or passed upon in this action, and that was so determined and held by the court. It was undoubtedly unfortunate for the estate that the custody of the lunatic should have been committed to the control of another person, but that was done in the exercise of the discretion of the court, presuming it to be for the best interests of the lunatic himself, as the fact then probably appeared. But certainly it would be more in accord with the protection of unfortunates of this description that the number of persons to whom their property and their rights shall be committed shall be reduced as far as the circumstances will properly permit that to be done. These, however, are circumstances which have been disposed of by the judgment entered in the action, in no manner increasing the extent of the defendant’s liability beyond that appearing by the report of the referee adjusting the accounts in the year 1874. To this extent his liability has been well supported by the evidence taken during the trial; and no ground appears from an examination of the ease, or the arguments adduced in support of the appeal, which will justify any change in the principal sums charged against the defendant.

In arriving at the amount for which the judgment should be allowed, the defendant has been charged with the legal rates of interest, added to the principal at the close of each year after the year 1874. This was done because of his omission to invest the funds in securities, as that was directed by the order made in January, 1871, and as it was the clear obligation of the defendant to invest them without any order under the law of the state applicable to the case. The lunatic was returned to his own country under an order of the court made in 1871. After that a committee of his estate was appointed by a court alleged to have jurisdiction over the subject in Bombay, and an application was made to transfer the estate from the defendant to that place. This was opposed on behalf of the defendant, and it resulted in a decision of the court of common pleas declining to make the transfer, upon the understanding that the estate was all at that time carefully invested in bonds and mortgages at an annual rate of interest of 7 per cent. In re Colah, 6 Daly, 308, 317, 318. But, as a matter of fact, at that time the estate was not so invested, and never had been wholly invested in that manner. This decision was made in 1875, and upon this subject the defendant was asked: “Question. You just said the last mortgage paid off was paid in November, 1875? Answer. Then it was not invested. Q. There was not a dollar of it invested? A. No; it seems not.” Instead of the estate being invested, as it was assumed to be by this decision, the investments on bonds and mortgages were the two which have already been mentioned. There was a clear misapprehension on the part of the court as to the condition in which this estate was at the time under the control of the defendant. And under that misapprehension apparently it was that it was deemed best not to transfer it to Bombay, but to retain the control of it in the hands of the defendant as being more serviceable than it probably could be by sending it to another country. Instead of being invested upon bond and mortgage, or in any other manner, the estate, so far as any account of it has been given, was on deposit in the hands of Vermilye & Co., who allowed but a small rate of interest upon it, and it continued in this manner, without investment, to the time of the decease of the lunatic. The interest returned upon it has not been stated in the evidence. In one part of his testimony it has been mentioned by the defendant as 2 or 3 per cent., and in another, 4 per cent. ' The returns of interest, however, as they appeared in the accounts produced, were very small, when, if the funds had been invested as the order required them to be, sufficient moneys would probably have been derived from them to support, or nearly support, the lunatic and his family. The defendant, in his testimony, excused the omission to invest the funds on bond and mortgage by the depression in business and property values from about the year 1873. But such depressions ordinarily do not create an inability to make loans, or to make them on safe security at fair rates of interest; and the court for that reason was not required to accept this excuse, as it was given by'the defendant in his evidence. As against the interested party in the case it was still entitled to judge what weight and effect should be given to these statements, and the extent to which they should be allowed to relieve him from liability. Becker v. Koch, 104 N. Y. 395, 10 N. E. Rep. 701. They were not considered sufficient for that purpose, and because of the failure of the defendant to invest the moneys in his-hands he has been charged by the court with the legal rates of interest, added to the principal at the expiration of each year. The correctness of this charge is resisted on behalf of the defendant, and the objection which has been urged to it is supported by the authorities. It was not shown in the course of the trial—neither has the fact been found by the court—that there was any willful misappropriation of the moneys of the estate, or willful neglect to invest them as it was the duty of the defendant to do. What the evidence establishes, and the court has found as the facts proven by it, is that he failed and omitted to make the investments as he should have done, and mingled large portions of the estate with -his own funds, so as to render him unable to account for the amounts. But from the decision of the court it is evident that, if the judgment herein is collected, the estate has lost, or will lose, or has been deprived of, no part of the principal to which it is entitled. That is all included in the recovery provided for by the judgment entered upon the authority of the decision. And, where that is the case, it has not been the practice of the courts to charge a trustee—-which the defendant, in a general sense, was—with more than the legal rate of interest.

In King v. Talbot, supra, compound interest was added under the peculiar circumstance of that case. But where there has been no more than a neglect of duty on the part of the defendant, simple interest has been considered to be sufficient to charge him with; and that was the conclusion of the court in Thorn v. Garner, 42 Hun, 515. And in Livermore v. Wortman, 25 Hun, 341, the rate was limited to what the plaintiff might have obtained by the deposit of the money with the trust company, where it was his duty to have placed it. In McKim v. Blake, 139 Mass. 593, 2 N. E. Rep. 157, the trustee had sold securities, and converted the proceeds to his own use, and yet he was charged with no more than simple interest. And the court declined to go even as far as that in Wilmerding v. McKesson, 103 N. Y. 329, 8 N. E. Rep. 665, although the trustee had invested the trust funds in business, which he had no right to .do. The general rule, however, sustained by the authorities is to charge the trustee with simple interest for neglect on his part to invest the funds as it is his duty to do under his appointment. 1 Perry on Trusts, (2d Ed.) § 468, and cases there referred to. In re Thurston, 57 Wis. 104, 15 N. W. Rep. 126. What the court, under these authorities, should have done was to charge the defendant with simple interest upon the moneys from time to time, annually, remaining in his hands. This will include interest at the rate of 7 per cent, to the 1st of January, 1880, and at the rate of 6 per cent, from that time to the recovery of the judgment. O'Brien v. Young, 95 N. Y. 428; Ball v. Biddlecom, Id. 651. And to that extent he should be charged because of the large reduction which has taken place in the principal of this estate while it has been subject to his administration. It is plain to see, if the amount received by him of $104,000 had been invested, even at a lower rate of interest than that mentioned in the order,—and permission so to invest it might, if necessary, have been obtained, as provided by the act of 1879,—from the 1st of January, 1880, that the estate would have yielded a sufficient sum of money to have supported the lunatic and his family, consisting of his wife and two children, and allowed the principal to be paid to his personal representative after his decease, entirely intact. Discreet and prudent management would probably have supported them well out of the income, of the property, even if it had been invested at 4J or 5 per cent.; and that would have preserved the entire principal for the benefit of the lunatic’s family. It was the defendant’s duty to resist every improper encroachment upon the funds in his hands, instead of which they were depleted from time to time by orders which would not have been made if they had been reasonably resisted, and the facts affecting their propriety brought to the attention of the court, as it was the duty of the committee to present them. Under these circumstances no less a rate of interest than that already mentioned will answer the purposes of justice between these parties. In this respect the judgment should be modified, requiring the computation of interest to proceed without annual rests or additions to the balance in the defendant’s hands, but to charge him with the legal rate of interest of 7 per cent, to January, 1880, and at the rate of 6 per cent, since that time, and the additional allowance should be correspondingly reduced, without costs.

The appeal from the order denying the motion to resettle the case is without any foundation whatever, for by the case, as it has been settled, the matter proposed to be added to it is already contained in it. And if it was not, it could make no difference whatever in the determination of the appeal from the judgment. As to this appeal the order should be affirmed, with $10 costs, and also disbursements.

Bartlett, J., concurs.