The Pacific commercial advertiser. [volume] (Honolulu, Hawaiian Islands) 1885-1921, 1894-04-28

gently in making the investment of |
the trust funds; it shows further that |
he has, in making them, conscien-
tiously followed the directions of the |
testator
Neither our law nor the directions
in the will nor the exercise of a sound /
discretion forbade the making of the
investments made by Mr.. Allen.
They We're in the view of this Court
such that, had the necessity existed
for their approval by the Probate
Court, no good reason could have
been advanced for Withholding such
approval at the time and under the
circumstances under which they were
made.
The Fai Kee chattel mortgage is the
exception above alluded to. In lend
ing the trust funds it was the duty of
the trustee to ascertain the status OF
the mortgagor's leasehold interest,
which was cOnfessedly neglected, and,
while in all probability no loss TO the
trust estate may grow out OF 1T, the |
Court must hold the trustee answer
able for any loss which may arise |
from that investment.
The administrator has made his in |
vestments not without authority of |
law nor in violation of the directions |
in the will. The fact that he was not |
named executor, but was appointed by |
reason of the remuneration of the one
and refusal to accept the trust of the
other executor does not alter the situ-
alton. The administrator stands in
every respect in the same position as
the executors would have stood. He
has the same duties, powers, rights and
obligations which would have vested
in or fallen upon the executors, had
they chosen to act. Being, therefore,
of the opinion that the administrator
has acted honestly, prudently, faith
| fully and discreetly, he is not an
swerable for any anticipated or actual
| loss of part of the trust funds except
| in three instances; the investment in
| the bonds of the Union Iron Works
| Company and the bonds of:the Seattle
! Building Company and the Fa1 kee
| mortgage. The two former invest
ments NAV have been made on sound
business principles, yet they were not
made by the administrator personally
but by trusted agent. 1t is lmma.
terial that the agent be possessed OF
| the highest business capacity, tact
and experience. A loss occasioned
| under such, circumstances must be
made good by the trustee, and the sum
of $4,000 loss incurred in the first men,
| toned investment, and the sum or
$4,000 in the second must be borne by
the administrator because he dele
| gated his functions as trustee to an
other.
/. Levin on Trusts, p. 367. Perry
on Trusts, Sec. 40S, says: " If the
trust is of discretionary nature, the
trustee will be responsible for all the
mischievous consequences of the del
egation, and the exercise OF the dis
erection will be absolutely void In the
substitute"
Pearson ". Jamison, l Mclean, 1877.
The duties and powers of trustees
cannot be delegated. Potestas DEL
eoato non 2oOteSt detegdTa.
The Kai Fee mortgage was accept
ed by B. r. Banning as part of the
assets distributed to him and was in
Guided in the receipt which was given
by him to the administrator. That
receipt created no estoppei. The
relations between the parties be-
ing virtually those of trustee
and beneficiary made it obligatory
upon the trustee to exercise due dill
gence in making the investment. The
: belief, followed by the assertion, OF
, Mr.. Allen that the investment was
} sound when in fact it was partly OF
doubtful security does not preclude
) Banning from seasonably rejecting il
when defect in the title was discovered
| IT is true that the administrator haC
offered to pay Banning's share IL
l money which offer was apparently
not accepted, Mr.. Banning prooaoiN
: electine to take the investments be
g cause such course avoided a loss of in
terest and the trouble of reinvestins
e the money, yet even that fact dee
= not exonerate the administrator from
s liability for investing the trust fund
e in that chattel mortgage. Had AIIel
known that the leasehold of Fal Re
o was only "pOur dLtTe Uae" he woul'
e not have loaned the funds upon tina
: security; if he had loaned it with tina
1 knowledge such an Investment mus
e have been considered reckless. l.
e this view the administrator is account
If able for any loss caused by that III
vestment.
e That no false representation wa
|, made or improper influence used t
l. obtain the receipt is clearly shown b.
e the evidence. The conclusion reache
It by US rests upon the fact that the nav
e in the title of the Fai kee Ieasehol
= was one which the administrato
q easily could ana therefore shoulu nav
e discovered.
It The computation upon the prime
70 pIes herein enumerated of the com
= mission due the administrator is re
% ferred to the Clerk of the Court an
e when the amount is ascertained tn
If administrator may credit himse
e Herewith.
'e The administrator must be charge
:, with the loss on the investment /
i the Union Iron Works; also with tn
So amount invested in the bonds of tn
le Seattle National Bank Building Con
;, pany, and with the amount of the r;
f. Kee mortgage; such conveyances
J. NAV be necessary to transfer the 81
curities for the above investments
lie the administrator to be executed b
ic the benefciaries; in other respects tn
n | accounts are approved.
20 Order accordingly.
se A. s. Hartwell and w. a. Kline
e, for the beneficiaries; f. NJ. Hatch Il
S. the administrator.
n Honolulu April %, 1854.