The Saint Paul globe., 1901-12-14
LAW P0fNTSSETF TIED.
SUPREME COURT DECIDES Sew
ERAL IMPORTANT
CASES
TRUST FUND RULES LAID DOWN
Compound Interest Cannot BE
Charged Except in Case of
Fraud-PecuIiar Case of EM-
pIOyer's Liability.

The supreme court yesterday handed
down nine decisions in only one of which
the verdict of the lower court was re-
versed. In the case Of the St. Paul Trust
company, trustee of the estate of Charles
D. Strong, deceased, against Abigail Spur
Strong, and others, Justice Collins modi-
fies the ruling of the Ramsey county dis
trict court. holding that the trustee COM
pany need pay only simple interest on an
investment of $4,000 which was reject IL
The lower court awarded compound in.
terest.
The Strong estate consisted principally
of promissory notes to the amount OF
s105,000 the last of which was due in 1891.
These notes We're all promptly paid. The
will had provided that they should lie
reinvested in such a manner that the
widow would be provided with an annual
income of $3.50. A small legacy was left
to a friend
The trust company kept a separate ac-
count of the money, but did not keep the
money itself separate from its own or
other funds in it's charge. The funds
We're invested, and all of the investments
were approved except six notes to the
amount of $4,000 in the aggregate. These
notes, with the mortgages. were rejected.
The court, in sustaining the rejection and
surcharging the trust company with the
amount, provided for the payment of the
legal rate of interest, which was per
cent up to November, 1899, when, in ac-
cordance with law passed by the legs-
1ature of that year, it was reduced to
6 per cent.
The Ramsey county district court held
that the interest should have been COM
pounded on the money held by the COM
pany. The supreme court modifies this
order holding that simple interest only
should be charged.
The decision contains seevral importa 1t
rules laid down for the handling OF trust
funds.
Justice Brown affirms the Judgment Of
the Red Lake county district court which
awarded $1,000 to Albert Gray in his dam
age case against the Red Lake Falls
Lumber company. Gray was an employe
Of the defendant company, and while en-
gagged in decking logs he was caught
beneath some logs and SO badly crushed
as 10 neceSSltate an amputation of his
lower limbs. 1t was alleged tnat the ac-
cident was directly due to the .incompe-
tence and careleSsness of a fellow en-
ploye, of whose incompetence Gray had
repeatedly informed the company. The
court holds that a master is required by
law to provide his employees with compe-
tent fellow servants with whom they aro
ment
Justice Brown also affirms the order of
the district court of Hennepin county in
the case of Charles J. Swanson vs. j. L.
Andrus. Swanson had a contract to
furnish hreproofing for six stories that
were to be added to the Andrus block.
After he had made preparations to COM.
plete his contract, Thorpe Bros, agerts
for Mr.. Andrus, ordered him out Of the
h 6ir1O nd - l.
the work. Swanson sued to recover tie.
cost of material he had prepared for the
work, and for, the profits he might have
made had he completed, his contract. The
court holds that he can recover on the
six stories originally decided upon, but
not for two additional stories which were
added subsequent to his receiving the
contract
Syllabi in the cases decided are as fol-
lows: ri Scy.i2 -~
st. Paul Trust Company, as Trustee un-
der the will and codicil of Charles D.
Strong, deceased, appellant, vs. abb
gail Spur Strong ct al, respondents.
l. A trustee cannot legally purchase
on his own account that which his duty
or trust requires him to sell on account
OF another, nor can he purchase on ac-
count of another that which he sells on
his own account. He is not allowed to
unite the two opposite characters of
buyer and seller.
2. The foregoing we'll established rule
is not changed or abrogated by the pro-
visions found in G. S. 1894, Secs 2S41 to
1854, under which annuity, safe deposit
and trust companies are organized in
this state.
8. The various restrictions and obli-
cations which the statutes impose and
cast upon these companies were intro
duced to safeguard and protect their pa
irons, and were not designed for the ben
eht or advantage of the organizations
therein provided for. There was no in
tention to set aside well settled rules for
the conduct of private trustees by these
provisions, but, upon the other hand, it
was the object and purpose to insure a
rigid observance of such rules by stat
utory restrictions and regulations
4. This plaintiff V. Kittson, 62 Mimi.
40S, distinguished on one point on the
facts from the present case
D.. 10 establish the ratification of any
particular act performed by another, the
facts involved must not only be proven,
but it must be shown that such ratifica-
ton was made with full knowledge of all
the material particulars and circum-
stances.
6. The general rule is, that if an exec.
utor or trustee mingles trust funds with
ms own money, or uses the same in his
private business, he will be charged with
simple interest at the legal rate establish
ed by law in the abence of special agree
ments but this rule is subject to certain
qualifications. And another general rule
is that only in cases of fraud or fragrant
breach of trust should a trustee be charg-
ed with compound interest
Z. Where trust company has actually
appropriated trust funds by mingling
the same with its own money when de-
posting the same in banks, interest
should should be charged from the day
it received the money, because of the
fair presumption that it was used by the
company from that day for its own profit
Collins, J.
Albert Gray, respondent VS.. Red Lake.
Falls Lumber, Company, appellant.
l. A master is required by law to pro-
vide his servants competent fellow sew
ants, with whom they are associated in
the performance of the work of their
employment If a servant complains of
and notifies the master that a fellow
servant, with whom he is associated. is
incompetent and unfit for the work in
which they are Jointly engaged, and the
tent with a competent workman. in con-
sequence of which he is induced to re-
main in the masters service. the COM
planning servant may continue in such
service for a reasonable time to enable
the master to fulfill his agreement dur
ing which time he does not assume the
risks incident to or arising from such
lncompetency, unless they are so obvious
and imminent that a person of ordinary
care and prudence would not incur them:
but 1t does not necessarily follow that
because he does not, as matter of law.
assume such risks that he may not pe
chargeable with contributory negligence
with respect to his own conduct
g In actions founded on this principle
of the law, to recover dana geS for i'll
jury to the complaining servant, the
question whether the risks are SO obvi-
Gus and imminent that a person of Or
dinary care and prudence would not in
cur them by continuing in the work as
sociated with the incompetent servant.