Court Opinion

ID: 6503693
Source: CourtListenerOpinion
Date Created: 2022-07-19 18:16:08.402871+00
Date Added: 2024-06-11T15:54:40.704504
License: Public Domain

COLLIER, C. J.
The office of guardian was originated upon the hypothesis that persons of immature years, were incapable of protecting their own interests. An acceptance of such a trust imposes an obligation to perform its duties— among the most prominent of which is, the use of diligence in managing and taking care of the ward’s estate. For if it be lost or injured by the negligence or misfeasance of the guardian, he is liable at least to the same extent that any trustee would be under the same circumstances. See Tibbs v. Carpenter, 1 Madd. R. 298; Powell v. Evans, 5 Vesey’s R. 839; Eagleston v. Kington, 8 Id. 466 ; Ram. on Assets, 538; 2 Kent’s Com. 1st ed., 187, et seq.; 2 Kinne’s Comp. 391, et seq., and cases there cited; Johnson’s Appeal, 12 Serg. & R. Rep. 317; Monell v. Monell, 5 Johns. Ch. Rep. 286. It is incumbent on a trustee to manage the trust estate in the same manner that a discreet man would manage his own concerns, and he is accountable if he neglects to perform his duty. Rainsford v. Rainsford, Rice’s Eq. Rep. 343. If he acts bona fide, and with due diligence he will be protected. But if he grossly violates his duty, or is guilty of unreasonable negligence, his acts are inspected with severity, and rules of strict, if not rigorous justice, are applied. Diffendorfer v. Winder, 3 G. & Johns. 311; Shepherd v. Towgood, Turn. & Russ. Rep. 379; Hester v. Hester, Dev. Eq. Rep. 328. In The Bank of Virginia v. Craig, 6 Leigh’s Rep. 399, it *197was held, that if a guardian unnecessarily sell bank stock belonging to his ward, and appropriate the proceeds, he and his sureties shall be held to replace the stock, or account for and pay its present value, and all dividends accruing thereon since the sale ; and commissions were allowed to the guardian on the dividends only. In respect to an executor, it has been said that he should collect the effects of the testator with reasonable diligence ; and if by delaying to commence an action he has enabled a debtor of the deceased to avail himself of the statute of limitations, he becomes personally answerable. 1 Lomax on Ex’rs, 381.
In Green v. Winter, 1 Johns. Ch. Rep. 27, a trustee agreed to purchase and pay for a farm at the request of the cestui que trust, out of the proceeds of the trust estate. He gave his bond for the purchase money, secured by a mortgage on the premises; but when the bond became due he refused to pay it, and procured a foreclosure of the mortgage and sale of the farm at a loss of $4,000: Held, that the trustee was chargeable for this loss and all the costs of the suit. So, in Taylor v. Tabrum, 6 Sim. Rep. 281, trustees who were directed to sell an estate as soon as conveniently might be after their testator’s death, refused, by the desire of one of the parties interested, an offer of sixty-six hundred pounds for the estate, and afterwards sold it for thirty-six hundred pounds. The court charged them with the difference between the price offered, and that at which the estate was sold.
A trustee, it is said, is bound by his implied obligation to perform all those acts, which are necessary and proper for the due execution of the trust which he has undertaken. If he has acted with good faith in the exercise of a fair discretion, and in the same manner as he would ordinarily do in regard to his own property, he ought not to be held responsible for any losses accruing in the management of the trust estate. 2 Story’s Eq. $ 1267 to 1272.
In the case at bar, the mortgagees were not bound by the terms of the mortgage to sell on any particular day — although notice had been given of a sale on a particular day, it was allowable to postpone it to a day certain, or indefinitely. If, as conceded, the security was intended for the benefit of the ward of the mortgagees, it was their duty to have pro*198crastinated a sale, until the price offered approximated a fair cash valuation, or furnished a sufficient sum. to pay the debt intended to be secured. No prudent man would ordinarily sell his own estate worth thirty-five hundred dollars, for five or six hundred; nor would he sacrifice a real security of that value (for so small a sum,) which was the only probable means of realizing a debt of some two thousand dollars. Considering the power and duty of the guardians in the collection of money due their ward, especially in the case at bar, and it is impossible to say that they are not chargeable' with negligence. If they had compounded the debt, released, or suffered it by neglect or other fault of theirs to become unavailable, their inattention to the interest of the ward would be palpable and confessed. Upon principle, such a case is not distinguishable from the present. Here, property worth nearly twice as much as the demand due the ward was placed under the guardians’ control — they were authorized to sell it any time after a day prescribed, and did actually sell it for about one fourth the amount of the debt. This brief statement of facts shows quite as satisfactorily as the most extended argument could do, that the fiducial 'power of the defendants has not been prudently exercised, and with a proper regard to the interest of their ward. The law, we have seen, makes them responsible for the loss which has been occasioned by their negligence or want of discretion; and the judgment of the orphans’ court is consequently reversed, and the cause remanded.