Nashville union and American. [volume] (Nashville, Tenn.) 1868-1875, 1871-02-01

.isf1ed that they acteQ IN gOod Ialtn anu
did what they believed the best for the
parties, it is therefore ordered, adjudged
and decreed that said commissioners are
not liable for the said sum of 81, 043. 50,
and orders the bill to be dismissed at the
cost - of { commissioners; and it
is further ordered that said commiss
toner's may reimburse themselves
for said costs out of any moneys that they
may collect of .Kelso & Mcdonald
in the suits they are now prosecuting
against them on these claims, and that as
it appears to the court that they have
judgment against Henry Kelso, and have
his land attached, that at the sale of said
land, they may bid said debt on the same,
or do any other lawful act to collect the
money on said judgment. From this de-
cree the complainant Martha has appealed
to this court. We have thought 1t neces-
sary to refer thus at length to the facts
of this case that the exact relation of these
parties, to the trust in question, may be
understood that the doctrines of the
law which govern the case may be fifty
illustrated The proposition that con-
fronts us at the threshold, and which is
quite too plain and self-evident to demand
reason for its statement, is, that this
trust fund would not have been squan-
dered and lost to the complainant and her
children if the trustees had, in assuming
the responsibility of lending ii, taken
good security for its repayment.
The second proposition is, that If the
country was in such q state of dis
turbance and distraction that these par
ties were unwilling to keep the fund
about them because they spprehended its
depreciation they deemed it i'm
prudent even if practicable to invest the
funds as directed by the court, the inter-
ests of common prudence would seem
to have dictated wiser course than q
loar of the whole fund to trading firm
without security. A Court of Chancery
cannot overlook these salient points in
adjudging the equities of these parties.
1t is familiar remark of Lord Hardwicke
that ''the doctrines of the law which
govern trustees should not be laid down
with a strictness to strike terror into man.
kind, acting for the benefit of others and
not for their Own; and that is trust is
an office necessary in the concerns be-
tween man and man, and which if faith
fully discharged is attended by no small
degree of trouble and anxiety; it is an act
of great kindness to accept it" We have
felt the force of this observation in the
consideration of this case. As far as the
record acquaints US with the motives of
these parties, we are not permitted to
ascribe to them any but the most honor
able intentions. But yet we have in this
case the crassa3 neglIgentia of the law
books, without the slightest pur-
pose to do a wrong. This court
has repeatedly admonished persons in a
fiduciary capacity of the severe exactions
of the law and the responsibilities of their
position. Trustees must not venture to
apply the trust money in a manner not
authorized by the trust. 1t would seem
very reasonable and proper investment of
ones own money to lend it to person of
known wealth and solvency; but trust
fund, raised and created for a specific
purpose, must have that direction if pos
sible, and, if impossible, the aid of
court must be invoked in its disposition
If the trustee give it different direction
he does it at his peril. In this case the
parties were invested with the trust by
the court-and in violation of its positive
orders, the trust fund has been lost and
destroyed.
Would it be equitable and just that this
woman and her daughter should lose it7
We think not. The circumstances may,
perhaps, excuse the trustee for not in
vesting the fund in the manner directed
by the court, but nothing can excuse
them for investing in disobedience of the
orders of the court.
In England the lending of trust moneys
on anything less than the real security is
even at this late day seldom sanctioned by
a Court of ChancerY. In regard to the
money of persons under disability the
very fact of lending upon such personal
security was considered a conversion OF
the fund. 1t was never heard of, said
Lord Kenyon, that a trustee could lend
an infants money on private security.
This is rule, said he, that should be rung
in the ears of every person who acts in
character of trustee; for an act may very
probably be done with the very best in
tentions, yet no rule in the Court of
Equity is so well established as this.
Chancellor Kent seemed to think the
English rule too strict, John. Oh. r.
281, 2S4. But it is said that it will be at
the peril of the trustee, if trust money
comes to his hands, such as debt due
from a third person, to suffer it to remain
upon the mere personal credit of the
debtor, although the testator who created
the trust had left it in that very state,
Story Eq. Jur. TOT. In the case before
US, money was loaned in the midst of IN
certain and revolutionary times, in posi-
tive disregard of the orders of court,
and without any security whatever, either
real or personal. A court of law could
scarcely hesitate to pronounce such 8
course of conduct a conversion of the
fund, and court of equity which Lord
Coke Gays is but just correction of the
law, will not. -.--
The decree of the Chancellor is re-
versed, and q decree will be entered here
in accordance with the principles an
nounced in this opinion.
SNEED, Judge.
A true copy: F. G. DUNNNeToE, Clerk,