Mr. Justice Mercur
delivered the opinion of the court, July 2d 1874.
In Ajpril 1862, when the appellee accepted the trust, there was due to ¡the appellant, from Anspach, on various obligations, as drawemand endorser, the sum of $81,341.76. In addition to some other personal securities, the appellants then held, as collateral securityifor this indebtedness, an assignment of certain stocks, and a conveyance of some lands: one piece situated wholly in SchuylkilLeounty. ‘.The other partially in each, Schuylkill and Columbia [227]*227counties. The latter piece was valuable coal-land, with a mine in working order, and costly improvements thereon in Schuylkill county. These lands had previously been conveyed by Anspach to William G-. Reed, the cashier of appellant, the one to secure the appellant for advances made by it at various times to Anspach ; the other, to protect Reed, both as cashier, and for liabilities which he had individually incurred to the appellant, by endorsement and otherwise, for Anspach. Having discovered the embarrassed condition of the appellant and of Anspach, Reed had, previous to April 1862, endorsed every obligation held by the appellant against Anspach, and also transferred to the appellant all the interest he had in the tract of land which he had been holding for his own security.
In settlement and adjustment of some of Anspach’s liabilities in 1868, the appellee took from him his new obligations, and as collateral thereto, five builder’s mortgages of $3000 each, on certain lots in Philadelphia. Anspach failed to pay the whole of these new obligations. Suit was brought on them in 1865, and judgment recovered. On the 22d of April 1871, this judgment was revived for $22,448.56. It remains wholly unpaid, and Anspach has no estate out of which it can be collected. The builder’s mortgages proved worthless.
The auditors found that the inability of the appellee to collect the whole indebtedness of Anspach was “ wholly due to the worthlessness of the five builder’s mortgages which the assignee accepted.”
In answer to the claim that the appellee should be charged with a sum equal to the amount of these collaterals, the auditors found “ that he did exchange notes held by the plaintiff for other obligations in part secured by collaterals which proved to be worthless; but whether he exceeded the bounds of that reasonable discretion which a trustee must be permitted to exercise, we cannot say, inasmuch as the comparative value of the paper surrendered was not affirmatively shown.” In thus speaking of the “value of the paper surrendered,” they manifestly did not consider the additional value given thereto by the lands held as collateral security.
Considering the varied and complicated character of the transactions, as well as the conflicting evidence, we are not prepared to say there was positive error in the conclusion of the auditors not to charge the appellee with the amount of these builder’s mortgages. We think, however, that the auditors went to the extreme limit of the protection which the law gives to a trustee.
The appellee failed to realize anything out of the coal-lands, but suffered them to be wholly lost to the appellants. Whether he should be surchai’ged therefor, presents the most important question in the case.
It is well settled that a trustee shall not be surcharged by a court of equity for a loss which has occurred, in case he has exer[228]*228cised common skill, common prudence and common caution; but for supine negligence, or for wilful default, be shall be held responsible : Twaddle’s Appeal, 5 Barr 15; Moore’s Appeal, 10 Id. 435; Springer’s Estate, 1 P. F. Smith 342.
Then the liability of the appellee must be determined by an examination of the testimony and the ascertainment on which side of the line of separation his conduct has placed him.
In considering whether a trustee has made himself liable for a failure to collect and convert the assets in his hands, regard must be had to the character of the trust. Thus, a guardian would not be held to such prompt action in enforcing the collection of securities, as an executor, administrator or assignee for the benefit of creditors, would be. The duty of the former is to hold and retain; that of the latter to collect and prepare for distribution: Charlton’s Appeal, 10 Casey 473 ; Neff’s Appeal, 7 P. F. Smith 91.
It was then the duty of the appellee, within a reasonable time, to make proper efforts to convert all the assets and securities into money for distribution. If he failed to make such efforts, he was guilty of gross negligence and became liable for any loss thereby sustained: Johnston’s Estate, 9 W. & S. 107. There an administrator, upon a sale of assets at vendue, took a note with security, payable in six months, and when it fell due, the payors were able to pay it, but the administrator made no effort to collect it within six months after maturity, and by the subsequent insolvency of the makers it was lost. The administrator was held to be chargeable with the loss. That was a case of omission only.
After the appellee obtained the builder’s mortgages, he told Reed, who held the legal title to the coal-lands in trust for the appellants, that Anspach had paid the debt which he had owed them. In consequence of this information, Reed reconveyed the lands to Anspach in July 1864. They were thereby wholly lost to the appellants.
The appellee seeks to justify his delay of more than two years in making any attempt to dispose of the coal-lands, as well as his suffering Reed to reconvey them, on the alleged ground that he was informed Anspach had no title to them, and therefore they were of no value to the appellants.
If the appellee had obtained this information in an investigation conducted with reasonable prudence and caution, although untrue in fact, it would have protected him from liability.
What are the facts ? The deeds from Anspach to Reed expressly designate these coal-lands as “ surveyed on three several warrants granted to William Kichner,” excepting therefrom “ so much of either one of the above three tracts as is supposed to interfere with an older survey in the warrantee name of Deborah Grant in 1793.”
The mines being worked were not on those portions covered by [229]*229the Deborah Grant survey. Within two weeks after the appellee’s appointment, his attention was called, by letter from Anspach, to the value of these coal-lands. He was then informed that 20,000 tons of coal had been shipped from one of the properties. He was invited to go upon the ground, and personally to examine the property. About two weeks thereafter he went to the mines in company with Anspach and some of the stockholders of the plaintiff. He went on the coal-breaker. Standing upon it, the surrounding lands were pointed out to him as those which Anspach had conveyed. He was satisfied of their value. But while on the ground they casually met two persons, one of them a stranger, the other previously known to them. Both of these persons cast discredit on Anspach’s title. The appellee afterwards consulted F. W. Hughes, a well-known lawyer of Pottsville, and at some time with O. W. Davis, his counsel in Philadelphia, in regard to the title. Each of them advised him that Anspach’s title was worthless.
The deeds from Anspach to Reed were recorded in Schuylkill county in 1861. A deed in partition .conveying the lands to Anspach had been recorded there in 1858. The appellee made no examination of the records.
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Mr. Justice Mercur
delivered the opinion of the court, July 2d 1874.
In Ajpril 1862, when the appellee accepted the trust, there was due to ¡the appellant, from Anspach, on various obligations, as drawemand endorser, the sum of $81,341.76. In addition to some other personal securities, the appellants then held, as collateral securityifor this indebtedness, an assignment of certain stocks, and a conveyance of some lands: one piece situated wholly in SchuylkilLeounty. ‘.The other partially in each, Schuylkill and Columbia [227]*227counties. The latter piece was valuable coal-land, with a mine in working order, and costly improvements thereon in Schuylkill county. These lands had previously been conveyed by Anspach to William G-. Reed, the cashier of appellant, the one to secure the appellant for advances made by it at various times to Anspach ; the other, to protect Reed, both as cashier, and for liabilities which he had individually incurred to the appellant, by endorsement and otherwise, for Anspach. Having discovered the embarrassed condition of the appellant and of Anspach, Reed had, previous to April 1862, endorsed every obligation held by the appellant against Anspach, and also transferred to the appellant all the interest he had in the tract of land which he had been holding for his own security.
In settlement and adjustment of some of Anspach’s liabilities in 1868, the appellee took from him his new obligations, and as collateral thereto, five builder’s mortgages of $3000 each, on certain lots in Philadelphia. Anspach failed to pay the whole of these new obligations. Suit was brought on them in 1865, and judgment recovered. On the 22d of April 1871, this judgment was revived for $22,448.56. It remains wholly unpaid, and Anspach has no estate out of which it can be collected. The builder’s mortgages proved worthless.
The auditors found that the inability of the appellee to collect the whole indebtedness of Anspach was “ wholly due to the worthlessness of the five builder’s mortgages which the assignee accepted.”
In answer to the claim that the appellee should be charged with a sum equal to the amount of these collaterals, the auditors found “ that he did exchange notes held by the plaintiff for other obligations in part secured by collaterals which proved to be worthless; but whether he exceeded the bounds of that reasonable discretion which a trustee must be permitted to exercise, we cannot say, inasmuch as the comparative value of the paper surrendered was not affirmatively shown.” In thus speaking of the “value of the paper surrendered,” they manifestly did not consider the additional value given thereto by the lands held as collateral security.
Considering the varied and complicated character of the transactions, as well as the conflicting evidence, we are not prepared to say there was positive error in the conclusion of the auditors not to charge the appellee with the amount of these builder’s mortgages. We think, however, that the auditors went to the extreme limit of the protection which the law gives to a trustee.
The appellee failed to realize anything out of the coal-lands, but suffered them to be wholly lost to the appellants. Whether he should be surchai’ged therefor, presents the most important question in the case.
It is well settled that a trustee shall not be surcharged by a court of equity for a loss which has occurred, in case he has exer[228]*228cised common skill, common prudence and common caution; but for supine negligence, or for wilful default, be shall be held responsible : Twaddle’s Appeal, 5 Barr 15; Moore’s Appeal, 10 Id. 435; Springer’s Estate, 1 P. F. Smith 342.
Then the liability of the appellee must be determined by an examination of the testimony and the ascertainment on which side of the line of separation his conduct has placed him.
In considering whether a trustee has made himself liable for a failure to collect and convert the assets in his hands, regard must be had to the character of the trust. Thus, a guardian would not be held to such prompt action in enforcing the collection of securities, as an executor, administrator or assignee for the benefit of creditors, would be. The duty of the former is to hold and retain; that of the latter to collect and prepare for distribution: Charlton’s Appeal, 10 Casey 473 ; Neff’s Appeal, 7 P. F. Smith 91.
It was then the duty of the appellee, within a reasonable time, to make proper efforts to convert all the assets and securities into money for distribution. If he failed to make such efforts, he was guilty of gross negligence and became liable for any loss thereby sustained: Johnston’s Estate, 9 W. & S. 107. There an administrator, upon a sale of assets at vendue, took a note with security, payable in six months, and when it fell due, the payors were able to pay it, but the administrator made no effort to collect it within six months after maturity, and by the subsequent insolvency of the makers it was lost. The administrator was held to be chargeable with the loss. That was a case of omission only.
After the appellee obtained the builder’s mortgages, he told Reed, who held the legal title to the coal-lands in trust for the appellants, that Anspach had paid the debt which he had owed them. In consequence of this information, Reed reconveyed the lands to Anspach in July 1864. They were thereby wholly lost to the appellants.
The appellee seeks to justify his delay of more than two years in making any attempt to dispose of the coal-lands, as well as his suffering Reed to reconvey them, on the alleged ground that he was informed Anspach had no title to them, and therefore they were of no value to the appellants.
If the appellee had obtained this information in an investigation conducted with reasonable prudence and caution, although untrue in fact, it would have protected him from liability.
What are the facts ? The deeds from Anspach to Reed expressly designate these coal-lands as “ surveyed on three several warrants granted to William Kichner,” excepting therefrom “ so much of either one of the above three tracts as is supposed to interfere with an older survey in the warrantee name of Deborah Grant in 1793.”
The mines being worked were not on those portions covered by [229]*229the Deborah Grant survey. Within two weeks after the appellee’s appointment, his attention was called, by letter from Anspach, to the value of these coal-lands. He was then informed that 20,000 tons of coal had been shipped from one of the properties. He was invited to go upon the ground, and personally to examine the property. About two weeks thereafter he went to the mines in company with Anspach and some of the stockholders of the plaintiff. He went on the coal-breaker. Standing upon it, the surrounding lands were pointed out to him as those which Anspach had conveyed. He was satisfied of their value. But while on the ground they casually met two persons, one of them a stranger, the other previously known to them. Both of these persons cast discredit on Anspach’s title. The appellee afterwards consulted F. W. Hughes, a well-known lawyer of Pottsville, and at some time with O. W. Davis, his counsel in Philadelphia, in regard to the title. Each of them advised him that Anspach’s title was worthless.
The deeds from Anspach to Reed were recorded in Schuylkill county in 1861. A deed in partition .conveying the lands to Anspach had been recorded there in 1858. The appellee made no examination of the records. He had never examined the deed of assignment. He remained in ignorance of the name of the tract on which the mines were located. He neither read any of the title-papers, nor, so far as it appears, did he inquire of any person the names of the tracts conveyed. He appears to have assumed, what the deed expressly denied, that the land conveyed was1 covered by the Deborah Grant survey. He submitted no title-papers to either Mr. Hughes or Mr. Davis» The testimony fails to show that he gave to Mr. Davis any information calculated to guide him in his investigations, or that Davis reported the specific investigations he had made, further than, he had gone into the county where the lands were situated.
It appears by the testimony of Mr. Hughes that the appellee inquired of him in regard to Anspach’s title to the Deborah Grant tract only. That nothing was said to him which led him to suppose the William Kichner tracts were the subject of inquiry. Had his attention been called to these tracts, he should have answered that Anspach had an unquestioned legal title. . The auditors therefore say, “ the assignee in fine seems to have suffered himself to be dissuaded from following up the lands by the loose declarations of irresponsible parties accidentally met, the hasty assertions of a lawyer given upon incorrect data furnished by the assignee himself, and the crude, ill-considered opinions of unqualified laymen.”
In the “ summary of facts,” which the auditors further report to have found, a majority of them declare that the assignee “made a feeble, insufficient attempt to reduce into possession the lands [230]*230in Schuylkill county, which had, under his deed of assignment, been vested in him; that these lands were of the value of $70,000 and upwards, and were sufficiently valuable to have paid, if sold, the whole indebtedness of Anspach then due the plaintiff.”
The appellee further justifies his action in regard to the land, from the fact that some of the active stockholders of the plaintiff went upon the ground with him, and they also came to the same conclusion he did, in regard to Anspach’s title. A majority of the auditors found that this fact showed concurrent negligence on the part of the plaintiffs, and therefore refused to surcharge the appellee with any proceeds of the lands. The court confirmed the report.
Both court and auditors appear to have overlooked the fact, that none of the stockholders in any manner participated in the consultation which the appellee had with his counsel. There is no evidence that any of the stockholders had any information as to Anspach’s defective title, or that the appellee supposed they had any information, other than that which was acquired when they were on the premises together. This was manifestly so insufficient and unreliable that the appellee was not justified in predicating his final action either the facts there communicated, nor the opinion of any person known to have been formed on those facts. The appellee concedes the inadequacy of all the information there obtained, to lead to an intelligent opinion, by his endeavor to show that he afterwards consulted with a lawyer in regard to Anspach’s title. He did not then rely on any opinion those stockholders formed or expressed. A lawyer himself, he knew the necessity of getting the opinion of a lawyer familiar with land-titles. He well knew the value of a lawyer’s opinion depends on the fulness and entire accuracy with which the facts are communicated to him. The means of ascertaining the name of the tract on which the mines were located, were easily within his reach. His duty clearly required him to ascertain that fact and to communicate it to the lawyer whose opinion.he asked. We cannot see how any person, in the exercise of common prudence and care, would have done less. His failure so to do, united with his notice to Reed that the debt against Anspach was paid, thus causing him to reconvey, were such a dereliction of duty as clearly to constitute supine negligence and make him liable for the loss which the appellants thereby sustained. The learned judge, therefore, erred in not surcharging the appellee with such portion of the value of these lands as will equal the residue of the indebtedness due from Anspach to the appellants.
We will not discuss seriatim the thirty-one assignments of error filed. The evidence shows the transactions to have been numerous and complicated. They extended over many years. The funds which the appellee used as assignee were mingled with those he [231]*231held under other trusts. This appears to have been done with the assent of the stockholders, and in some cases with their active co-operation. We therefore feel unwilling to say there is any error in the conclusions to which the court have arrived, other than as to the action of the appellee in relation to the coal-lands. The decree, therefore, should be so far modified as to surcharge the appellee with a sum equal to the residue of the debt due from Anspach to the appellants, and the residue of the decree be confirmed. .
And now, decree reversed; and it is ordered that the record be remitted, with instructions to enter a decree conform-ably to this opinion, and that the appellee pay the costs of this appeal.