Court Opinion

ID: 6378878
Source: CourtListenerOpinion
Date Created: 2022-06-24 23:58:15.001381+00
Date Added: 2024-06-11T15:50:16.948715
License: Public Domain

Lamokelle, P. J.,
dissenting. — Stripped of verbiage and boiled down to the very limit, I believe these to be the essential facts upon which my decision must stand or fall: A statutory guardian is appointed by this court to receive the minor’s share of proceeds of real estate when and if sold; later the land is sold and the minor’s share is paid to such guardian upon the entry of proper security; such (corporate) bond is entered pursuant to our decree of July 19, 1929; the money is received February 4, 1930; the minor is then one year and nearly nine months short of attaining her majority; the guardian deposits the money in a bank; later, in March, 1931, transferring it to the “savings department” of another bank, which bank has since been taken over by the State; in May, 1930, the minor marries and in February, 1931, has an operation for appendicitis and, her husband being unable to pay the expenses, her mother assumes the burden; afterward this court, by decree made June 17, 1931, reimburses the mother $256.10, leaving intact the original and only estate of the minor, some $1000, less costs, etc.
Asked why he did not invest in legal securities, the guardian answered: “I thought that was a better way of handling it.” In short, he substituted his individual thought for the duty imposed upon him as a fiduciary, and losing the estate because of the failure of the bank and having lent the money without security, I, as auditing judge, felt — and still feel — -that the loss, if any, should be borne by him and his corporate bonding company, rather than by the ward whose interests he was bound in law to protect and in a manner known to and provided by law.
This so-called investment is not in the manner permitted by the legislature in section forty-one of the Fiduciaries Act of June 7, 1917, P. L. 447. The accountant was a guardian appointed by the court, so that no question can arise as to a power granted by will or deed. The personal liability of a trustee who invests in a manner not authorized by will or the statute has been fixed in a number of cases. A former chief justice, in Taylor’s Estate, 277 Pa. 518, 529, thus expresses himself:
“The law has erected a guidepost for trustees to observe, reading ‘Legal Investments,’ and if, apparently, that warning is negligently ignored by a fiduciary possessed of nonlegal securities coming from a decedent, he cannot, in the absence of strong explanatory circumstances, shift the risk of such inatten*252tion to his cestui que trust, nor can he escape responsibility by substituting ‘supine negligence,’ as the test, for the measure of care just indicated.”
It thus appears that the trustee has an absolute duty to make his investments in conformity with the law and that the matter of prudence or good faith does not enter into a consideration of unauthorized investments.
It is nowhere shown that the guardian knew in advance that at some time during the existence of the trust he was to be called upon to use even the income; and even had it been so shown', his deposit of the entire estate would be no answer.
I feel that the majority opinion, in reversing the ruling of the auditing judge, runs counter to a well-known legal maxim: “The express mention of one thing implies the exclusion of another.” The duty to invest fixed the character of investment, and a deposit is in no sense an investment, legal or otherwise; and we have it out of his own mouth that the deposit for some twenty months was to be an investment and not merely a means towards an end; a temporary placing while he sought something permanent. It also runs counter to another principle frequently invoked: “Where of two innocent parties one must suffer, it should not be the one to whom no negligence can be imputed.” In the instant case, why should the innocent ward of this court be in effect penalized for the benefit of a guardian and his bonding company? I find nothing in the law to warrant such action,, and, therefore, I think the ruling of the auditing judge should be upheld.