Court Opinion

ID: 5553245
Source: CourtListenerOpinion
Date Created: 2022-01-11 00:36:11.774389+00
Date Added: 2024-06-11T08:35:13.546005
License: Public Domain

By the Court.

McDonald, J.
delivering the opinion.
The plaintiff in error promised to par?, “ as trustee,” expressed in the body of the promissory notes ; to his name, subscribed to each note, he added, “ trustee for Mrs. Abbey Farrar.”
[1.] The consideration of the notes was property purchased for the cestui que trust. A note given by A. and B. " as executors,” is recoverable from A. and B. individually. 2d.Brod. & Bing. 460. We think the case of a trustee different fiom that of an executor, who has no right to deal with the property of his testator. IXis duty begins and ends with tho collection of the assets of the tstate, and paying the debts and legacies. It is true, that the will may make him a tiusttee as well as executor. If it does, his character of executor Is changed into that of trustee. But as executor, he has no authority to purchase property for the estate, or to deal in a manner, making it necessary to give his note. If he give his note as executor to a creditor, he is liable out of hie own estate, for a very palpable reason. It is an admission of assets to pay. If he give his note payable at a future day, he makes the debt his own, for the same, with an additional reason, that it may be a personal benefit to him to postpone the day of payment, when it is generally to the interest of legatees and creditors to have prompt payment when the assets are in hand. It is not the same with trustees, who are, often, under the necessity of dealing in a manner, for the benefit of his cestui que trust, to create a debt pa} able in future. In such cases there are many rca?ons founded in good policy', justice and sound sense, why a trustee should not be held personally liable. Trustees ate but poorly paid; when they make purchases, the persons who sell, know that *243they are dealing on the credit of the trust estate, and ought to have just the security they rely on and no more. In this case, the plaintiff in the Court below sold property to the cestui que trust; the notes were given for the property, the trustee specifies in the face of each note that he promises as trustee, and the plaintiff received them with such understanding, and he ought not to be allowed to recover of the trustee individually. In the case of Ashley vs. Ashley, 7. Barnwell & Creswell, 446, some of the Couit but for the power of precedents, would have recognized a rule more compatible with reason and justice, in the case of executors, and I know of no authorities which bind us down in a case like the present, to say that the trustee shall be liable from his private funds.
[2.] At the time this suit was commenced, a trust fund could be subjected to the payment of debts through a Court of Equity only. That Court has always claimed and held an exclusive jurisdiction in such cases. It can enquire into the whole matter, and determine whether the debt was necessary and just, and properly chargeable upon the trust fond; whether the trustee had acted in any manner faithlessly, so as to subject him to a liability for the whole, or a part of the debt; whether there had been fraud or imposition on the part of the creditor, so as to affect his right of recovery, in whole or in part.
Since the institution of this suit, the Legislature has passed an Act to authorize claims against trust estates to be recovered in a Court of law.
It is an Act respecting the remedy, and claims arisiflg before its passage, may be collected under it.
The Court below erred in refusing the motion to dismiss the case, and also in charging the jury that the defendant was personally liable, and that a Court of law haffTrisdiction of the case. *
J udgmSrn* reversed.