Court Opinion

ID: 5550647
Source: CourtListenerOpinion
Date Created: 2022-01-10 21:34:48.428977+00
Date Added: 2024-06-11T08:35:02.938596
License: Public Domain

The Assistant Vice-Chancellor.
There is no such settlement of the accounts of the trustees, or of W. B. Skid-more, as guardian, established by the evidence, as to preclude the complainants from having the accounts taken in this suit.
If the statement in the answer were proved, and moreover, a release were shown to have been executed by Mrs. S til well in January, 1841, the court, on very slight suspicion of error in the accounts, would have opened the whole. Mrs. S. became of full age in that month, and a settlement made then with her uncle and principal guardian, without the presence of counsel, or even a disinterested friend, would have been regarded with great distrust by a court of equity.
There is no pretence, however, that Mrs. S til well ever did look into the accounts at large, not even of her own share of the income and her own expenses, much less the general accounts of the estate. And the delivery by Mr. Skidmore of a mere slip of paper, specifying a balance due to her in a gross *403sum, if it were shown to have been made to her in person, would not conclude her, or bar her from requiring a proper settlement.
It is no answer to this application for the trustees to say that they have accounted to the guardians, two of whom are trustees and executors. The cestuis que trust: are entitled to an account of their trust from the executors as well as the guardians.
The principal question, and I presume, the only one which has occasioned any difficulty between the parties, is the claim for the allowance of interest to Mrs. Stilwell on the balances due to her from year to year.
As those balances are stated by the defendants, (and they were assumed to be correct for the purpose of the argument,) they ranged, during the minority of Mrs. Stilwell, from about $200 to nearly $700 per year. At the end of three years from the death of the testator, the aggregate of the annual balances was $966 50 ; for the next three years, their aggregate was $755 76; for the three next, $1022 96; for the three next, $1655 37. The next year was 1841, which exhibited a balance of $502 42, while that for 1842 was $1255 84. The testator directed the guardians to put the surplus income at interest on security, on real property.
In the management of the estate which was adopted, the annual income came into the hands of W. B. Skidmore, about the close of each year. He kept no separate bank account, but deposited the monies of the estate with his own. He probably kept a good bank account, and was always prepared to meet any of the usual requisitions on behalf of the estate of Mr. Norsworthy, or of his family, from time to time. He was a merchant in active business.
He denies that he used any of the money in speculations, or that he used it constantly in his business. By omitting to deny that he used it in his business, he admits that allegation of the bill.
On the other hand, there was but one mode of investment authorized by the will. And the early balances were so small, *404that proper investments, in that mode were not often afforded. There is no testimony to show that any suitable investment on the security of real estate, was ever brought to his notice, or that he ever declined to make a loan of the money on mortgage. These are the facts bearing upon the point of interest.
The authorities do not establish that a trustee is to pay interest, solely for the reason that he deposites the trust monies indiscriminately with his own; nor because he makes use of them more or less in his own business. In both instances, there, must be superadded, a breach of trust; a neglect or refusal to invest the fund at the time or in the mode which the trust instrument, or the law itself, has pointed out. In the case where the trustee has made use of the funds, but no such breach of trust is shown, he may be charged with interest, if it be proved that he has made interest. No such thing is established here, and the claim for interest rests therefore upon the omission to invest the surplus. In considering that omission, I cannot act upon the suggestion that the shares of all the devisees at the end of each year might have been combined, and would thus have afforded an ample sum for investment on mortgage: The case discloses no such fact; and if it had, the propriety of such a combination of the several estates would be a matter of serious doubt.
I have not gone into a collation of the decisions here or in England, bearing upon these propositions, deeming the law of the court on the subject to be well settled and as well known.
I will however refer briefly to a very late case, upon the duty of the trustees to make investments of small sums on a prescribed security.
In Wyatt v. Wallis, (8 Lond. Jur. Rep. 117,) before the V. C. of England, Nov. 20, 1843, the testator directed his trustees and executors to invest the residue of his estate on good freehold security. The trustee retained in his hands a balance of more than £300 for a period of more than two years. Some part of it was in the hands of his bankers, but what proportion of it, did not appear. He had employed a solicitor to procure a proper investment. It was held that he was not responsible for interest on the balance, although he had been informed of certain *405persons who were desirous of borrowing money on freehold security. The court say that to make out a breach of trust under the circumstances, the plaintiff should have ascertained a proper security and then informed the trustee of the opportunity. The plaintiff was an adult. Some stress was laid by the vice-chancellor on the fact that the sum was small and the species of security limited. The counsel conceded that if it had been deposited in the banker’s hands, and the trustee had not derived any benefit from it, he would not have been chargeable with interest.(a)
Taking the proofs before me as a guide, I think no injustice will be done if interest be charged on the accumulated balances from the time that they amount to about $1000. And inasmuch as the period when they would attain that amount must usually have been known at least a year before hand, so that there was ample time to provide an investment, the interest should commence at the close of December, when the annual balances appear to have been made up.
Thus, if the accounting before the master results substantially as it is stated in the answer, the master will charge interest from December, 1832, on the aggregate balances to that time j and from December, 1835, on the balances in 1833,1834, and 1835; and from December, 1840, on the balances of 1839 and .1840. So, if it turns out that in December, 1831, there was due to Mrs. Stilwell $1000 or more, the interest on the amount will commence at that date.
The case is not one for compound interest. Nor on the other side, is it proper to permit Mr. Skidmore to withhold from the subjection to interest, at any of the periods when interest is directed to commence in the mode which I have mentioned, any portion of the income then in hand, for the payment of the expenses of the ensuing year. The estate appears to have been productive by means of rents, and ordinarily, the trustees would receive in February a portion of the income for the current year. So that at no time would they or the guardians neces*406sarily be in advance, on the principle adopted, longer than from the end of December to the ensuing February. While in about two years out of three, they would have in their hands a large surplus, which it appears they did not always suffer to remain idle.
I cannot listen to the suggestion that W. B. Skidmore was advancing from his own funds every year until December, while the accruing income of the estate was in the hands of his co-executors, or the other guardians, and ought to have been applied to the current charges and expenses.
The defendants are entitled to their commissions. Mr. Skid-more’s omission to claim them, is no reason why he should be deprived of them, when a strict legal claim is made against him, which he did not, at the time of such omission, expect would be made.
This disposes of all the questions which it is proper to determine before the accounts are taken.
There will be a decree for an account with the special directions above stated; and reserving all further questions and directions till the coming in of the master’s report.

 See Westover v. Chapman, (1 Colly. Ch. Ca. 177.)