The following opinion was filed June 21, 1926:
Stevens, J.
A trustee occupies a position of peculiar responsibility. A trustee is selected because of confidence in his diligence, prudence, and absolute fidelity, as well as in his ability to so administer the trust as to protect those who, through infancy or other cause,, are not able to protect their own interests. The performance of the duties of a trustee requires the exercise of a high degree of fidelity, vigilance, and ability. Especially is this true when the trustee is a company organized for the purpose of caring for trust estates, which holds itself out as' possessing a special skill in the performance of the duties of a trustee, and which makes a charge for its services which adequately compensates it for a high degree of fidelity and ability in the administration of a trust estate.
Wisconsin early adopted the rule that trustees must exercise more than ordinary diligence and vigilance in the- management of a trust estate. Hutchinson v. Lord, 1 Wis. 286, 309. Good faith alone in making an investment will not protect a trustee. Simmons v. Oliver, 74 Wis. 633, 636, 43 N. W. 561. A trustee must also exercise diligence, prudence, and absolute fidelity.
This state has consistently adhered to the strict rule with reference to the liability of trustees early adopted in New [30]*30York, rather than to the more liberal rule adopted in Massachusetts. The law requires of a trustee “more than good faith and honest judgment.” It requires that the judgment of the trustee be
“ ‘enlightened and guided by the approved rules applicable to the investment of trust funds, not to his uninformed, personal judgment, exercised without reference to legal rules and principles. . . . He must always bear in mind that he is dealing with trust funds, which were not given him to be used in developing or furthering business enterprises, but to be guarded carefully and invested cautiously, so that principal, as well as interest, may be forthcoming at the appointed time. While he must be as diligent and painstaking in the management of the trust estate as the average prudent man is in managing his own estate, he may not always place the trust funds where he, or the average prudent man, would place his own funds.’ . . . The trustees are bound to act in good faith and exercise a sound judgment and prudent discretion in making an investment.” Pabst v. Goodrich, 133 Wis. 43, 73, 74, 113 N. W. 398.
“This necessarily excludes all speculation, all investments for an uncertain and doubtful rise in the market, and, of course, everything that does not take into view the nature and object of the trust, and the consequences of a mistake in the selection of the investment to be made. It therefore does not follow, that, because prudent men may, and often do, conduct their own affairs with the hope of growing rich, and therein take the hazard of adventures which they deem hopeful, trustees may do the same; the preservation of the fund, and the procurement' of a just income therefrom, are primary objects of the creation of the trust itself, and are to be primarily regarded.” King v. Talbot, 40 N. Y. 76, 86.
When a trust fund “passes into the hands of a trustee, it comes impressed with a double duty: first, to so invest it that it can be turned over at the expiration of the trust period without loss; and second, to secure an income therefrom. He must act honestly and faithfully, and in what he believes to be the best interest of the cestui que trust. He must exercise .a sound discretion. He is bound to proceed [31]*31with diligence in investigating the nature of the proposed investment, and to use such care ip deciding as, in general, prudent men of intelligence and integrity in such matters employ in their own affairs when making a permanent investment, in which the primary object is the preservation of the fund, and the secondary one that of obtaining an income therefrom. He must not permit himself to take the hazard of an investment with the hope of largely increasing the fund, as he might, perhaps, do in the prudent management of his own estate. The entire element of speculation must be removed. He must at all times remember that he is handling a trust fund, the care of which has been intrusted to him in reliance on his integrity, fidelity, and sound business judgment. ... A trustee has not unlimited authority to invest as an ordinarily prudent man would invest his own; he must take such risks only as an ordinarily prudent man would take who is a trustee of the money of others. . . . He must always bear in mind that the primary object of the creation of the trust is not, ordinarily, accumulation, but the preservation1 and perpetuity of the fund until the time for its distribution arrives; and he must make no investment by which this object -may be at all likely to be defeated.” In re Buhl’s Estate, 211 Mich. 124, 178 N. W. 651, 12 A. L. R. 569, 574.
In the absence of express statutory authority a trustee is not authorized to invest trust funds in any form of stock. But at the time the trust fund here in question was invested in the stock of the St. Paul road and of the Milwaukee Electric Railway & Light Company, these stocks were by express statute made a legal investment for trust funds. But this statute did not relieve the trustees from the duty of exercising the degree of diligence and prudence required of trustees in determining whether this stock should be continued as an investment for these trust funds.
“It is not by a prudent investment alone that a trustee performs his whole duty in regard to a trust fund. He is still bound to be watchful, keep himself informed as to whether or not a depreciation in the value of the security is taking place from any cause,'to see that the interest is [32]*32paid with a reasonable degree of promptness, to keep himself informed as to the pecuniary responsibility of the obligor, and in fine to keep himself informed and take notice of all those things affecting the investment which a man of fair judgment, care, and prudence would take and keep in consideration in the matter of a loan of his own moneys.” In re Stark’s Estate, 15 N. Y. Supp. 729, 731.
The fact that the trustees continued to hold the stock, especially the stock of the St. Paul road, after the statute permitting the investment of trust funds in such stock had been repealed and until the stock had so greatly depreciated in value, makes a prima facie case of failure to exercise reasonable diligence on the part of the trustees which calls for explanation. Beam v. Paterson S. D. & T. Co. 81 N. J. Eq. 195, 197, 86 Atl. 369, 370.
In determining the liability of the trustees, the administration of the estate by the Trust Company must be viewed in the light of the powers conferred upon the trustees by the will as well as in the light of the duties and liabilities imposed by the well established rules of law to which attention has been directed. By the broad powers given the trustees by his will the testator has taken the case out of the strict rules that ordinarily define the duties and responsibilities of trustees by vesting in them ver}’' broad powers as to the investment of the funds of the trust estate. In construing the will now before the court in In re Allis’s Estate, 123 Wis. 223, 229, 101 N. W. 365, this court said:
“The will grants the trustees 'full power and authority in their discretion to invest . . .
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The following opinion was filed June 21, 1926:
Stevens, J.
A trustee occupies a position of peculiar responsibility. A trustee is selected because of confidence in his diligence, prudence, and absolute fidelity, as well as in his ability to so administer the trust as to protect those who, through infancy or other cause,, are not able to protect their own interests. The performance of the duties of a trustee requires the exercise of a high degree of fidelity, vigilance, and ability. Especially is this true when the trustee is a company organized for the purpose of caring for trust estates, which holds itself out as' possessing a special skill in the performance of the duties of a trustee, and which makes a charge for its services which adequately compensates it for a high degree of fidelity and ability in the administration of a trust estate.
Wisconsin early adopted the rule that trustees must exercise more than ordinary diligence and vigilance in the- management of a trust estate. Hutchinson v. Lord, 1 Wis. 286, 309. Good faith alone in making an investment will not protect a trustee. Simmons v. Oliver, 74 Wis. 633, 636, 43 N. W. 561. A trustee must also exercise diligence, prudence, and absolute fidelity.
This state has consistently adhered to the strict rule with reference to the liability of trustees early adopted in New [30]*30York, rather than to the more liberal rule adopted in Massachusetts. The law requires of a trustee “more than good faith and honest judgment.” It requires that the judgment of the trustee be
“ ‘enlightened and guided by the approved rules applicable to the investment of trust funds, not to his uninformed, personal judgment, exercised without reference to legal rules and principles. . . . He must always bear in mind that he is dealing with trust funds, which were not given him to be used in developing or furthering business enterprises, but to be guarded carefully and invested cautiously, so that principal, as well as interest, may be forthcoming at the appointed time. While he must be as diligent and painstaking in the management of the trust estate as the average prudent man is in managing his own estate, he may not always place the trust funds where he, or the average prudent man, would place his own funds.’ . . . The trustees are bound to act in good faith and exercise a sound judgment and prudent discretion in making an investment.” Pabst v. Goodrich, 133 Wis. 43, 73, 74, 113 N. W. 398.
“This necessarily excludes all speculation, all investments for an uncertain and doubtful rise in the market, and, of course, everything that does not take into view the nature and object of the trust, and the consequences of a mistake in the selection of the investment to be made. It therefore does not follow, that, because prudent men may, and often do, conduct their own affairs with the hope of growing rich, and therein take the hazard of adventures which they deem hopeful, trustees may do the same; the preservation of the fund, and the procurement' of a just income therefrom, are primary objects of the creation of the trust itself, and are to be primarily regarded.” King v. Talbot, 40 N. Y. 76, 86.
When a trust fund “passes into the hands of a trustee, it comes impressed with a double duty: first, to so invest it that it can be turned over at the expiration of the trust period without loss; and second, to secure an income therefrom. He must act honestly and faithfully, and in what he believes to be the best interest of the cestui que trust. He must exercise .a sound discretion. He is bound to proceed [31]*31with diligence in investigating the nature of the proposed investment, and to use such care ip deciding as, in general, prudent men of intelligence and integrity in such matters employ in their own affairs when making a permanent investment, in which the primary object is the preservation of the fund, and the secondary one that of obtaining an income therefrom. He must not permit himself to take the hazard of an investment with the hope of largely increasing the fund, as he might, perhaps, do in the prudent management of his own estate. The entire element of speculation must be removed. He must at all times remember that he is handling a trust fund, the care of which has been intrusted to him in reliance on his integrity, fidelity, and sound business judgment. ... A trustee has not unlimited authority to invest as an ordinarily prudent man would invest his own; he must take such risks only as an ordinarily prudent man would take who is a trustee of the money of others. . . . He must always bear in mind that the primary object of the creation of the trust is not, ordinarily, accumulation, but the preservation1 and perpetuity of the fund until the time for its distribution arrives; and he must make no investment by which this object -may be at all likely to be defeated.” In re Buhl’s Estate, 211 Mich. 124, 178 N. W. 651, 12 A. L. R. 569, 574.
In the absence of express statutory authority a trustee is not authorized to invest trust funds in any form of stock. But at the time the trust fund here in question was invested in the stock of the St. Paul road and of the Milwaukee Electric Railway & Light Company, these stocks were by express statute made a legal investment for trust funds. But this statute did not relieve the trustees from the duty of exercising the degree of diligence and prudence required of trustees in determining whether this stock should be continued as an investment for these trust funds.
“It is not by a prudent investment alone that a trustee performs his whole duty in regard to a trust fund. He is still bound to be watchful, keep himself informed as to whether or not a depreciation in the value of the security is taking place from any cause,'to see that the interest is [32]*32paid with a reasonable degree of promptness, to keep himself informed as to the pecuniary responsibility of the obligor, and in fine to keep himself informed and take notice of all those things affecting the investment which a man of fair judgment, care, and prudence would take and keep in consideration in the matter of a loan of his own moneys.” In re Stark’s Estate, 15 N. Y. Supp. 729, 731.
The fact that the trustees continued to hold the stock, especially the stock of the St. Paul road, after the statute permitting the investment of trust funds in such stock had been repealed and until the stock had so greatly depreciated in value, makes a prima facie case of failure to exercise reasonable diligence on the part of the trustees which calls for explanation. Beam v. Paterson S. D. & T. Co. 81 N. J. Eq. 195, 197, 86 Atl. 369, 370.
In determining the liability of the trustees, the administration of the estate by the Trust Company must be viewed in the light of the powers conferred upon the trustees by the will as well as in the light of the duties and liabilities imposed by the well established rules of law to which attention has been directed. By the broad powers given the trustees by his will the testator has taken the case out of the strict rules that ordinarily define the duties and responsibilities of trustees by vesting in them ver}’' broad powers as to the investment of the funds of the trust estate. In construing the will now before the court in In re Allis’s Estate, 123 Wis. 223, 229, 101 N. W. 365, this court said:
“The will grants the trustees 'full power and authority in their discretion to invest . . . and employ said real estate and generally manage the same; to continue the same as it is invested at the time of my death — and especially as invested in the E. P. Allis Company, or to change such investments.’ The powers thus conferred are of the broadest kind, and are to be exercised by the trustees, in their discretion, in the execution of the trust. The purpose of the testator, manifested in this and other provisions of the will, evidently was to have the trustees invest and employ the [33]*33corpus of the estate in obtaining Securities in kind like those specified in the will; and he contemplated that they should purchase such securities as a prudent and provident person would purchase as good and safe investments, and that they should not be restricted to the conditions and limitations imposed by law for the investment of trust funds.”
It is the rule that trustees are not to be exempt from these strict rules “without a clear and unequivocal statement of intention to that effect made by the maker of the trust in the instrument creating or evidencing it.” Babbitt v. Fidelity Trust Co. 72 N. J. Eq. 745, 758, 66 Atl. 1076, 1081. But the will of Ernest Allis contains such clear and unequivocal statement of an intent to confer the broadest kind of powers upon the trustees to be exercised in their discretion in the execution of the trust. But even under the broad powers conferred it was the duty of the trustees to exercise a reasonable and not an arbitrary discretion, to execute the trust in accordance with existing laws governing trustees under like powers in the execution of their trust. Pabst v. Goodrich, 133 Wis. 43, 72, 113 N. W. 398.
The county court found that the trustees acted in good faith and as ordinarily prudent persons would act with reference to the retention of the stock here in question and that the trustees exercised the discretion vested in them by the will in accordance with their "best judgment and in the manner that seemed to them to be for the best interests of the trust estate. Were it not for the broad powers conferred by the will the court would find it difficult to affirm these findings of the county court. But with the broad powers granted the trustees, the court is satisfied that the case presented issues of fact upon which the findings of the trial court must be affirmed, ¿s they are supported by a preponderance of the proof, although it is strongly urged that there is sufficient proof to sustain a finding of liability on the part of the Trust Company. This, court does not [34]*34weigh the evidence on appeal as if it were sitting as a trial court. It will not disturb the findings of the trial court unless they are contrary to the great weight and clear preponderance of the evidence.
Under the broad powers conferred by the will, the trustees were authorized to purchase stock of the St. Paul road and of the Milwaukee Electric Railway & Light Company. These stocks were no more speculative than those of the E. P. Allis Company, in which the great bulk of the estate was invested at the time of the testator’s death. They were “securities in kind like those specified in the will.” The propriety of the investment of so large a part of the trust estate in the stock of the St. Paul road or of the Milwaukee Electric Railway & Light Company is not before the court for determination at this time, because the order entered by the county court on August 11, 1920, approving and allowing the accounts of the trustees effectually disposes of all questions as to the investment in these stocks and effectually estops Mrs. Harrison from raising any question as to the purchase of these stocks by the trustees. The order of the county court, entered with the express consent of Mrs. Harrison, is conclusive upon these questions. In re Menzie’s Estate, 54 Misc. 188, 192, 105 N. Y. Supp. 925, 927.
The minor appellants have no vested interest in the trust estate. They will never have a vested interest in this trust estate unless their mother dies intestate or makes them her heirs by will, because the mother has the absolute power to dispose of all the trust estate by will in such manner as she may elect.
The trustees are not liable for any loss which may have been sustained on one half of the stock of the St. Paul road and of the Milwaukee Electric Railway & Light Company which was transferred to and accepted by Mrs. Harrison after her mother’s death. The receipt given by Mrs. Harri[35]*35son and the order of the county court entered upon her express consent completely discharged the trustees from all liability for one half the amount of the trust funds which were invested in the stock of the St. Paul road and of the Milwaukee Electric Railway & Light Company.
If the trustees were liable, these orders would relieve the Trust Company of all liability because of the original purchase of the stock of the two railway companies or because of the failure to sell that portion of. the stock which was transferred to Mrs. Harrison. These orders effectually dispose of all questions with reference to the purchase or retention of the stock of these two railway companies except the liability of the Trust Company to repay to the estate the loss sustained through the depreciation in value of the stock which is still held by the trustees.
In determining whether the findings of the county court are supported by the evidence we must view the situation as it should have appeared to vigilant trustees during the years when they were charged with the responsibility of deciding what should be done with this stock. We can now see that it would have been wiser to sell the stock. But in judging the trustees’ acts we should put ourselves in their position at the time. The trustees . were considering the question, not whether they should invest in this stock,.but whether they should sell the stock upon a falling market. The evidence shows that the Trust Company in good faith made investigations, sought information from trustworthy sources, and acted upon such information according to its best judgment.
The determination of the question whether 'to sell on a declining market is always a difficult one. It was a difficult task to attempt to forecast the value of railroad stocks during the years when the World War so completely unsettled all values. In determining that trustees were not [36]*36responsible for the loss sustained by a trust estate through the decrease in the price of St. Paul railway stock held during the period of declining values, the New York court said:
“The general conditions in this country were most extraordinary. The railroads were taken over by the federal government, and it was a matter of common thought for a time that their securities would appreciate in value under that system. I think it would be unreasonable to hold a trustee liable for retaining such securities under such conditions in the hope of a better market, when it was authorized by the terms of the trust to make such an investment originally.” Matter of U. S. Trust Co. 189 App. Div. 75, 80, 178 N. Y. Supp. 125, 128.
The Trust Company appointed a special committee of seven men who are generally recognized as men of large experience and undoubted ability in financial affairs who' sought all available information as to the condition of the St. Paul road and the value of its stock. After extended investigations this committee made two reports to the Trust-Company in which it recommended that the stock of the St. Paul road be retained. The fact that the committee was mistaken in its recommendations does not lead to the conclusion that the findings of the trial court are not sustained by the proof. “ ‘The law does not hold a trustee responsible for errors in judgment when he has been careful to enlighten that judgment’ ” Pabst v. Goodrich, 133 Wis. 43, 73, 113 N. W. 398. There is no proof that the committee was not acting in good faith and exercising its best judgment in making its investigations and its recommendations or that the Trust Company was not acting in good faith and exercising its best judgment when it followed, the recommendations of its special committee and retained the stock of the St. Paul road. Under such circumstances it must be held that the findings of the county court as to liability for investment in the St. Paul stock are sustained by the proof.
[37]*37The trial court found that the investment of the trustees in the stock of the Milwaukee Electric Railway & Light Company was authorized by the will; that it was made in accordance with the powders and' duties conferred upon the trustees by the will, and that there was no breach of duty on the part of the trustees in retaining this investment. These findings are fully sustained by the evidence. Dividends have been paid upon this stock regularly. The proof shows that the stock is a safe and remunerative long-time investment which was a legal investment for trust funds at the time that the stock was purchased.
The proof also sustains the finding of the county court that the trustees had great difficulty in securing the stock of the Allis-Chalmers Company which belonged to the estate, and that they exercised diligence and were persistent in their demands to get possession of the stock. A careful study of the facts satisfies the court that the trustees were in no way to blame for delay in securing the stock. It follows that there is no liability on the part of the trustees because of their failure to secure this stock at an earlier date.
The appellants will pay the fees of the clerk of this court. No other costs will be taxed.
By the Court. — Judgment affirmed.
The following opinion was filed July 26, 1926: