Carter, J.
This is a suit commenced by the beneficiary under a testamentary trust to recover from the trustees the original trust fund of $5,000. The trial court found in favor of the defendant trustees and plaintiff appeals.
On January 31, 1928, one David Thomas died leaving a will which provided in part as follows: “I give, devise and bequeath to each of my surviving grandchildren the sum of Five Thousand ($5,000) Dollars, subject to the following conditions that all who may be minors shall have their said $5,000 held in trust by my executors together with accumulations thereto until they shall reach their majority.” The plaintiff, Beverly Thomas Rotzin, was one of five minor grandchildren entitled to share in the estate under this provision of the will.
The will appointed William H. Thomas and Thomas D. Thomas, sons of the testator, and A. R. Miller executors, and contained also the following provision: “I hereby authorize and empower the trustees hereunder to do any and all things necessary in the furtherance of their duties in court or otherwise. in protecting the interests ' in their hands and I. hereby authorize and empower my executors hereinafter named to sell, bargain, grant and convey any or all property of my estate and convert the same into cash in order to meet the bequests and conditions of this will, without order of the court.”
On March 1, 1929, the defendants,, while acting as executors, had in their possession $65,009 in cash, belonging to the estate of David Thomas, deceased. The evidence of [10]*10the trustees is to the effect that they concluded to purchase good first mortgages on real estate because of' the uncertainty of the then existing banking situation. The trustees thereupon purchased a number of first farm mortgages from the Omaha National Company through the Miller Allied Securities Company, of which A. R. Miller, one of the trustees, was president. The only mortgage purchased that has any bearing in the present case was one for $4,000 on a quarter-section of Antelope county land owned by Mary Jensen. It appears that A. R. Miller inquired of the Antelope State Bank of Neligh regarding the value of the land before the mortgage was purchased and that Ray Swanson of that institution advised that it was worth from $65 to $75 an acre, or a total of. $10,400 to' $12,000. The record further shows that the land was appraised by two other residents of Neligh at $10,400, which appraisal was before .the trustees before the mortgage was purchased. It also appears that the land at the time was assessed at $7,500 and that this fact was considered by the trustees' before the purchase was consummated. In addition to these precautions, the trustees procured a written agreement with the Omaha National Company by which the Omaha National Company agreed to repurchase. the mortgage within six months at the full purchase price if, for any reason, the trustees desired to turn it back.
On July 5, 1929, the final decree of the probate court of Platte county was entered, based upon the final report of the expcutors showing that they held the trust fund in question as cash when in fact the $4,000 Jensen mortgage had been purchased with a part of the fund. Thereafter the executors continued to handle the funds as trustees and at all times showed the Jensen mortgage or Jensen land, and the income therefrom, as the property of the Beverly Thomas Rotzin trust fund. The record discloses that A. R. Miller kept an account of every transaction made on behalf of this trust estate, such account appearing in the record. In addition thereto, reports were filed with [11]*11the county judge by the trustees ■ on- January 15, 1931, March 15, 1932, March 1, 1933, March. 1, 1934, and March 1, 1935, and in each the Jensen mortgage or the land, secured by it appeared as the property of this trust. We necessarily conclude from this statement'of the facts that the trustees used due care in the purchase of this mortgage, that the Jensen mortgage was at all times a part of the Beverly Thomas Rotzin trust account and that the trustees kept records and filed reports which correctly show the whole transaction.
Complaint is made that the executors had no right to purchase the mortgage while they were acting as executors and before they were formally appointed trustees and that they falsified in reporting the Jensen mortgage as cash. This contention might have merit if it had resulted or contributed to the loss which eventually occurred. The Jensen mortgagee was purchased in March, 1929, and the executors had the option of returning it to the seller and receiving back their cash payment at any time during the following six months. Within the six months they had been formally appointed and had duly qualified as trustees. It would have been a simple matter to put the actual cash in the estate at the time it was settled had the occasion demanded, and subsequently to have repurchased this mortgage. We fail to see that these trustees acted dishonestly in this transaction, especially when they knew that they were shortly to be appointed trustees. Any- irregularity in reporting cash in their final report as executors of the estate, when as a matter of fact they held this mortgage,. bears no relation whatever to the, loss sustained by the depreciation of the value of the property.
The evidence shows, however, that some time after the purchase of the Jensen mortgage the owners of the land secured there,by were unable to pay the interest thereon. Subsequently it became, necessary to' take over the land. This was done by.having the owners deed the land to the Miller. Allied Securities Company under date of September 14, 1932, the deed , being recorded on November 9, 1932. [12]*12On November 26, 1932, the Miller Allied Securities Company deeded the land to the defendants as trustees, who placed the deed in the file of the Beverly Thomas Rotzin trust estate without recording it. Plaintiff contends that this method of handling the property was a violation of the trust that would make the trustees liable to the plaintiff for the original $5,000 cash trust fund when she reached her majority on August 12, 1933.
It is claimed by plaintiff that the land is now worth less than the amount of $4,000 and she refuses to accept it as the equivalent of $4,000 in her accounting with the trustees.
This court has held that when a trustee actually deals with his trust in the name of another, or by means of an agency which he himself controls, he will be deemed to have transacted the business in his individual name and as an individual. In re Estate of Boschulte, 130 Neb. 284, 264 N. W. 881. We necessarily conclude that the trustees, when they took the title to the land in the name of the Miller Allied Securities Company, an institution controlled by A. R. Miller, one of the trustees, fell within the rule of. law applicable when a trustee takes the trust property in his own name. It is a fundamental rule of law that a trustee who takes trust property in his own name violates his duty as a trustee. Where, however, it appears affirmatively from the record that the breach of duty in no' way contributed to the loss suffered by the trust estate, and the trustee acted in good faith, no liability attaches to the trustee.
An authoritative text states the rule as follows: “If the trustee takes title to the trust property in his individual name in good faith, and no loss results from his so doing, he is not liable for breach of trust.
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Carter, J.
This is a suit commenced by the beneficiary under a testamentary trust to recover from the trustees the original trust fund of $5,000. The trial court found in favor of the defendant trustees and plaintiff appeals.
On January 31, 1928, one David Thomas died leaving a will which provided in part as follows: “I give, devise and bequeath to each of my surviving grandchildren the sum of Five Thousand ($5,000) Dollars, subject to the following conditions that all who may be minors shall have their said $5,000 held in trust by my executors together with accumulations thereto until they shall reach their majority.” The plaintiff, Beverly Thomas Rotzin, was one of five minor grandchildren entitled to share in the estate under this provision of the will.
The will appointed William H. Thomas and Thomas D. Thomas, sons of the testator, and A. R. Miller executors, and contained also the following provision: “I hereby authorize and empower the trustees hereunder to do any and all things necessary in the furtherance of their duties in court or otherwise. in protecting the interests ' in their hands and I. hereby authorize and empower my executors hereinafter named to sell, bargain, grant and convey any or all property of my estate and convert the same into cash in order to meet the bequests and conditions of this will, without order of the court.”
On March 1, 1929, the defendants,, while acting as executors, had in their possession $65,009 in cash, belonging to the estate of David Thomas, deceased. The evidence of [10]*10the trustees is to the effect that they concluded to purchase good first mortgages on real estate because of' the uncertainty of the then existing banking situation. The trustees thereupon purchased a number of first farm mortgages from the Omaha National Company through the Miller Allied Securities Company, of which A. R. Miller, one of the trustees, was president. The only mortgage purchased that has any bearing in the present case was one for $4,000 on a quarter-section of Antelope county land owned by Mary Jensen. It appears that A. R. Miller inquired of the Antelope State Bank of Neligh regarding the value of the land before the mortgage was purchased and that Ray Swanson of that institution advised that it was worth from $65 to $75 an acre, or a total of. $10,400 to' $12,000. The record further shows that the land was appraised by two other residents of Neligh at $10,400, which appraisal was before .the trustees before the mortgage was purchased. It also appears that the land at the time was assessed at $7,500 and that this fact was considered by the trustees' before the purchase was consummated. In addition to these precautions, the trustees procured a written agreement with the Omaha National Company by which the Omaha National Company agreed to repurchase. the mortgage within six months at the full purchase price if, for any reason, the trustees desired to turn it back.
On July 5, 1929, the final decree of the probate court of Platte county was entered, based upon the final report of the expcutors showing that they held the trust fund in question as cash when in fact the $4,000 Jensen mortgage had been purchased with a part of the fund. Thereafter the executors continued to handle the funds as trustees and at all times showed the Jensen mortgage or Jensen land, and the income therefrom, as the property of the Beverly Thomas Rotzin trust fund. The record discloses that A. R. Miller kept an account of every transaction made on behalf of this trust estate, such account appearing in the record. In addition thereto, reports were filed with [11]*11the county judge by the trustees ■ on- January 15, 1931, March 15, 1932, March 1, 1933, March. 1, 1934, and March 1, 1935, and in each the Jensen mortgage or the land, secured by it appeared as the property of this trust. We necessarily conclude from this statement'of the facts that the trustees used due care in the purchase of this mortgage, that the Jensen mortgage was at all times a part of the Beverly Thomas Rotzin trust account and that the trustees kept records and filed reports which correctly show the whole transaction.
Complaint is made that the executors had no right to purchase the mortgage while they were acting as executors and before they were formally appointed trustees and that they falsified in reporting the Jensen mortgage as cash. This contention might have merit if it had resulted or contributed to the loss which eventually occurred. The Jensen mortgagee was purchased in March, 1929, and the executors had the option of returning it to the seller and receiving back their cash payment at any time during the following six months. Within the six months they had been formally appointed and had duly qualified as trustees. It would have been a simple matter to put the actual cash in the estate at the time it was settled had the occasion demanded, and subsequently to have repurchased this mortgage. We fail to see that these trustees acted dishonestly in this transaction, especially when they knew that they were shortly to be appointed trustees. Any- irregularity in reporting cash in their final report as executors of the estate, when as a matter of fact they held this mortgage,. bears no relation whatever to the, loss sustained by the depreciation of the value of the property.
The evidence shows, however, that some time after the purchase of the Jensen mortgage the owners of the land secured there,by were unable to pay the interest thereon. Subsequently it became, necessary to' take over the land. This was done by.having the owners deed the land to the Miller. Allied Securities Company under date of September 14, 1932, the deed , being recorded on November 9, 1932. [12]*12On November 26, 1932, the Miller Allied Securities Company deeded the land to the defendants as trustees, who placed the deed in the file of the Beverly Thomas Rotzin trust estate without recording it. Plaintiff contends that this method of handling the property was a violation of the trust that would make the trustees liable to the plaintiff for the original $5,000 cash trust fund when she reached her majority on August 12, 1933.
It is claimed by plaintiff that the land is now worth less than the amount of $4,000 and she refuses to accept it as the equivalent of $4,000 in her accounting with the trustees.
This court has held that when a trustee actually deals with his trust in the name of another, or by means of an agency which he himself controls, he will be deemed to have transacted the business in his individual name and as an individual. In re Estate of Boschulte, 130 Neb. 284, 264 N. W. 881. We necessarily conclude that the trustees, when they took the title to the land in the name of the Miller Allied Securities Company, an institution controlled by A. R. Miller, one of the trustees, fell within the rule of. law applicable when a trustee takes the trust property in his own name. It is a fundamental rule of law that a trustee who takes trust property in his own name violates his duty as a trustee. Where, however, it appears affirmatively from the record that the breach of duty in no' way contributed to the loss suffered by the trust estate, and the trustee acted in good faith, no liability attaches to the trustee.
An authoritative text states the rule as follows: “If the trustee takes title to the trust property in his individual name in good faith, and no loss results from his so doing, he is not liable for breach of trust. Thus, if the trustee of a mortgage accepts a conveyance of the property from the mortgagor, and in order to prevent a merger takes the ■ conveyance In his individual name,, acting in good faith and crediting the trust estate in his accounts with all receipts from the property, and the only objection to the transaction is that he took title in his own name, he is not liable [13]*13merely because the property depreciates in value. The breach of trust in such a case is merely a technical breach of trust, and no loss has resulted therefrom. If, however, he took title in his own name in bad faith, intending to misappropriate the property, he is liable for the full amount of the mortgage and interest thereon. Even if he acted in good faith, if a loss resulted from the fact that he took title in his own name, as for example if his personal creditors were thereby enabled to reach the property free of trust, he would be liable for the loss." Restatement, Trusts, sec. 179, comment d. See, also, Freas’ Estate, 231 Pa. St. 256, 79 Atl. 513.
In our opinion, the record before us clearly demonstrates that the loss to the trust estate, if any, was the result of a depreciation in land values subsequent to the date of the purchase of the mortgage and was in no way caused by a breach of duty on the part of these trustees. The breaches of duty urged before this court, under the evidence contained in- the record, are technical and in no way contributed to the loss. The trustees kept records and made reports which clearly show that there was no intermingling of the trust property with the private property of the trustees. The undisputed documentary evidence precludes the conclusion that the trustees could have substituted a poor investment for a good one to the injury of this plaintiff. At the time the trustees purchased the mortgage, it appeared to be a sound investment. It is only in the light of subsequent events which resulted in a great depreciation of real estate values generally that it could be charged that the trustees were in any manner guilty of bad judgment. They are not liable for failing to foretell this eventuality. The records, accounts, reports and other documentary evidence establish the fact that there was no breach- of duty committed by the trustees for which liability attaches.
We have come to the conclusion that we erred in our former opinion, Rotzin v. Miller, 133 Neb. 4, 274 N. W. 190, and it is therefore vacated and set aside. For the reasons [14]*14herein contained, and after a consideration of all the evidence, we conclude that the judgment of the trial court was in all respects correct and it is
Affirmed.