Calhoun's Estate

6 Watts 185

• Court: Supreme Court of Pennsylvania
• Decided: May 15, 1837
• Status: Published

Opinion

The opinion of the Court was delivered by

Rogers, J.

It is a general principle, that whenever trustees fail in the peformance of their duty, or exceed, or pervert the power with which they are invested, they and their representatives, whether deriving any benefit from it or not, become responsible to those for whom the trust property should be held; and are chargeable in equity for breach of trust. But it is not for every act of neglect that they are responsible. Thus, executors and administrators, or trustees, acting with good faith, and without any wilful default, or fraud, will not be responsible for any loss that may arise. All that a court of equity requires from trustees, is common skill, common prudence, and common caution. Executors, administrators, or guardians, are not liable, beyond what they actually receive, unless in case of gross negligence; for when they act as others do with their own goods, and with good faith, and not guilty of gross negligence, they are not liable. 1 Penns. Rep. 213. Theenigmote, appellant, v. Thimnell, assignee; Thompson v. Brown, Fay and others, 4 Johns. Cha. Rep. 619. A court of equity, as is said in Thompson v. Brown, always treated trustees acting in good faith, with great tenderness. In Knight v. The Earl of Plymouth, 3 Atk. 480, Dicken’s 120, Lord Hardwicke observes, if there was no mala Jides, nothing wilful in the conduct of the trustee, the court will always favour him. For as a trust is an affair necessary in the concerns between man and man, and which, if faithfully discharged, is attended with no small degree of trouble and anxiety, it is an act of great kindness in any one to accept of it. To add hazard or risk to that trouble, and to subject a trustee to losses which he could not foresee, would be a manifest hardship,, and would be deterring eveiy one from accepting so necessary an office. In that case, a receiver had deposited money with a banker of good credit, who afterwards failed, and as he was not chargeable with any wilful neglect or fraud, the court refused to hold him responsible for the loss of it. In Routh v. Howell, 3 Ves. 567, the same point was ruled. Executors were discharged from liability, for a loss arising from the insolvency of a banker, whom the testator had trusted, and with whom they suffered stock, deposited by the testator, to remain. This principle has an exceedingly strong bearing on the case in hand, as well as Wilkinson v. Stafford, 1 Ves. Jun. 41, and Van v. Emery, 5 Ves. 144, where the court of chancery determine to relieve trustees, acting upon professional advice, with the best judgment they could form, from losses of the heir’s property. The facts of this case are directly within the principles, which have been ruled in the cases cited, all of which have been distinctly recognised' by this court. It is not pretended but that the executors acted with good faith. Fraud is not even alleged; and nothing has been found, which shows a want of common skill, common prudence, or common caution; or differs their conduct from what is usually manifested in conducting otu own affairs. They reposed confidence, where the testator had reposed it; for it must not be forgotten that Mr Wright was' the counsel selected by the testator himself. The executors acted with professional advice, and we have it in proof that they called, at least twice, on their attorney, and how much oftener, it may be impossible to show, to inquire the state of the business, and were informed by him that the money was attached in the sheriff’s hands, and that as soon as it could be had, he would attend to it. I cannot perceive the force of the objection, that, when an offer was made by the purchaser of Gochenaur’s property, to let the money remain secured in the hands of the purchaser, until Good’s right to it should be ascertained, they rejected the proposition, and insisted on the money being paid to the sheriff. This was in the due course of law, and so far from this being a reason for charging them, a contrary course would have rendered them responsible to the legal representatives. It is true, they knew the money was in the hands of the sheriff, and it is equally true, that they had placed the business under the care and management of an -attorney, whose skill and integrity they had not the slightest reason to distrust, who, in addition, had been selected by the testator himself. It may be safely said, that few clients, whether acting for themselves or others, but would at that time have reposed a similar confidence in the honour and integrity of the counsel who was employed; and nothing had occurred, of which we have any evidence, which was calculated to awaken suspicion as to his skill and diligence. The executors reposed merely the usual confidence in him, and for this, we think it would show unwarrantable rigour, to subject them ■to the loss of assets which were never in their hands, nor subject to their control. If the testimony is believed, (and we have the positive testimony of the sheriff, to the fact) the money was' lost in consequence of the insolvency of the attorney; who, at the time, was in good standing and credit, and of whose actual situation the executors were not informed. Nor can it affect the liability of the executors, whether Mr Wright received the money or not, nor in' what capacity he received it, as they had a right to repose confidence in his skill. The money was lost by his misconduct, and the cases cited show, that trustees who act with good faith, are not liable for such mismanagement of their agents, as they can neither foresee, nor control. We are, therefore, of the opinion, that gross negligence has not been shown, and that the court erred in charging the executors with 2103 dollars and 33 cents and interest, the amount of the judgment against Adam and Abraham Gochenaur. With this correction, the account is confirmed.

The decree reversed, so far as concerns the sum of 2103 dollars and 33 cents, and confirmed as to the residue.