Court Opinion

ID: 6244910
Source: CourtListenerOpinion
Date Created: 2022-02-17 20:55:49.962376+00
Date Added: 2024-06-11T08:59:15.854118
License: Public Domain

Opinion by
Me. Justice Dean,
Robert Wood, for some years carried on a stone and marblé business in Philadelphia; as early as February, 1892, he seems to have been embarrassed by debts of a large amount owing to a number of creditors who had furnished him granite and marble.- To one of these appellants, the Rockport Granite Company, to whom he was indebted in the sum of $13,500, he made at that time a written statement showing assets over $45,000 ; he continued to carry on business, however, up to July 12, 1893, when he confessed a judgment to William P. Bryson, in the sum of $32,211.72, as trustee for certain creditors, among them these appellants, whose claims amount to about $30,000. Two days after the date of the judgment, fi. fa., and attachment executions were issued thereon, but only $943.50 was realized by the creditors in a judgment confessed two days before this one. Nothing further seems to have been done by the trustee in the execution of his trust, for about nine months; the creditors became dissatisfied and, on April 16, 1894, took a rule on the trustee to show cause why he should not be removed and another appointed in his stead; this rule, the court, on May 25, following, discharged; then counsel' for creditors urged the trustee to file a bill against Wood to compel him to a discovery of his assets, which the trustee declined to do ; the counsel themselves filed the bill; Wood demurred, on the ground that Bryson alone was the proper plaintiff to such proceeding ; the court sustained the demurrer, and dismissed the *369bill. On May 7, 1896, the creditors petitioned the court to remove Bryson as trustee, and appoint Frederick M. Leonard. In this petition they set out as grounds for removal, that Bryson was at the time the judgment was confessed, and since has been, the bookkeeper of Wood, the debtor; that he is not financially responsible has given no security, and has collected no money; that Wood has personal property subject to levy and sale, but that, in collusion with Wood, he refuses to have it levied on; that Wood retains possession of his business, as before his failure, which business is carried on in name of “Robert Wood Granite and Blue Stone Company; Robert Wood, Manager,” aided by Bryson as bookkeeper, and that they believe the capital is the money of Robert Wood; that Bryson promised, more than a year before the presenting of the petition, to make a full statement of the financial affairs of Wood at the date the judgment was confessed, but has not done so; that he has refused to take action for the seizure of the assets of Wood, as suggested by creditors ; and further, that Bryson is trustee in a judgment adverse to that of the creditors. To this Bryson filed answer, denying all collusion with Wood, and averring fidelity and vigilance in all particulars to his trust. Thereupon the court appointed A. H. Harris, Esq., examiner and master, to report and suggest decree. After-hearing he was of opinion that the averments of the petition had not been sustained, and recommended its dismissal, which-was in effect decreed accordingly, from which the creditors have appealed, assigning for error the decree of the court. We say, “ in effect, decreed accordingly,” because the decree is, “ Exceptions dismissed,” which had the same result as a formal denial of the prayer, and was therefore an adverse final decree as to these appellants.
The conclusion of the master is wholly based on the absence of any positive evidence that the trustee was guilty of mala fides; but that is not the whole question; Whatever doubt there may be as to that, these facts are indisputable. The year before Wood failed, Bryson, as his bookkeeper, made a written statement, showing his principal’s assets to be $45,000, which in a subsequent letter in Bryson’s handwriting giving full details is confirmed as correct. Then Bryson accepts a judgment from Wood, as trustee for creditors, without consul*370tation with them: the apparent property is sold at sheriff’s sale, purchased by the daughters of Wood for a small amount, which is credited on a prior judgment of which Bryson is also trustee, and the business goes on under the same name, with the father as manager and the trustee as bookkeeper. He refuses to adopt the suggestions of creditors as to legal steps for the collection of assets; refuses to make a statement of facts necessarily within his knowledge; does not attempt to give an explanation as to the disappearance of $45,000 of property which he had twice stated in writing existed, and persisted, notwithstanding the creditors’ repeated complaints and attempts to remove him, in ostensibly acting as trustee, to their embarrassment and prejudice. This is not a testamentary trusteeship, or one by deed, where the fiduciary relation is constituted by a testator or a grantor, because of his confidence in his appointee, which, when accepted, the -trustee may feel it his duty to execute in accordance with his views of fidelity, and against the objections of the cestui que trust. It was a trust by the appointment of the debtor, and the trustee ought not to have continued in it a moment after the confidence of the creditors in him was withdrawn. It is not material that he was innocent of actual misfeasance; his conduct ought to meet the approval of those whose interests were to be promoted, for his whole duty was to them. His very obstinacy in holding on to his office in defiance of their wishes not only shows an absence of that sensitiveness to imputation generally possessed by the self-respecting, but of itself warranted suspicion of loyalty to the interests of those for whom he professed to act. As said by Lord Nottingham, in Uvedale v. Ettrick, 2 Cases in Chancery, 130, “ He liked not that a man should be ambitious of a trust, when he could get nothing but trouble by it.” In this state, by act of May 1, 1861, the courts have power to remove an executor, administrator, guardian, committee of a lunatic or habitual' drunkard or any other trustee, when he is wasting or mismanaging the property under his charge, “ or for any reason the interests of the estate or property are likely to be jeopardized by the continuance of such executor, administrator, .... or trastee.” Under this statute we held, in Kellberg’s Appeal, 86 Pa. 129, that those interested in the estate had a right to be freed from a representative who declined to proceed in *371the collection of a doubtful claim against a corporation in which he was interested. In Marsden’s Estate, 166 Pa. 213, it was held that the relation did not depend alone upon the misconduct of the trustee, but that it was enough to show that, by reason of his retention, the hostile relations between him and the cestui que trust would work disadvantage and inconvenience to the latter.
The personal relations between this trustee and the debtor at the date of the judgment, his relations with him and his family in the business afterwards, almost necessarily hampered him in the rigorous performance of his duty to the creditors. It is not necessary he should have had a pecuniary interest in the business of his employer or of his family; a strong sentiment of friendship may as effectively hold him back as interest. We think, on the admitted facts, the prayer for the removal of the trustee should have been granted; that he should have been removed, and another appointed.
Therefore, the decree dismissing the bill is reversed at costs of appellee, and it is directed that the record be remitted to the court below, that the proper order and decree may be made.