Court Opinion

ID: 9570469
Source: CourtListenerOpinion
Date Created: 2023-08-21 20:23:27.824111+00
Date Added: 2024-06-11T12:08:53.314594
License: Public Domain

Hill, Chief Justice,
dissenting.
I must disagree with the majority opinion because in my view it adopts an erroneous rule. The facts are simple: Mr. Perling desired to establish trusts for his daughters using USI stock, with C & S Bank and Golden as trustees. USI stock was not on the legal list. The trust agreement therefore included the following language: “[A]ny investment made or retained by the Trustee in good faith shall be proper, although of a kind or in amount or proportion not authorized by law as suitable for the trustees.”
The majority holds that the foregoing language clearly and unambiguously (as it must) expresses the intent of the settlor (as it must) to relieve the trustee of the duty to exercise prudence. I must disagree.
Since 1863 our law has provided that “Trustees having possession of the trust property are bound to exercise ordinary diligence in the preservation and protection of the same.” OCGA § 53-13-51 (Code Ann. § 108-402).
Can it be said as a matter of law, as the majority does, that the settlor agreed to pay these trustees so that they might wisely and efficiently manage substantial assets for the benefit of his daughters, and that he clearly intended to waive his statutory right that they exercise ordinary care? I think not. True, the trustees might have obtained just such a waiver. But see II Scott on Trusts § 222.3 (1956). But because common sense dictates that it is unlikely that a settlor would knowingly waive the standard of ordinary care, the law wisely provides, as the majority recognizes, that any such waiver must be clear and unambiguous. Restatement Trusts 2d, § 222, comment a. The language involved here, I submit, is not a clear and unambiguous waiver of the statutory right to insist upon the exercise of ordinary diligence.
What the settlor agreed to is that the trustees are not liable as long as they act in good faith. Does not “in good faith” mean *680“non-negligently?” Surely the settlor did not conceive of the possibility that the language used could be construed to mean that the trustees need not exercise ordinary diligence. That, it seems to me, was precisely what he was paying them to do, at a minimum. No doubt he hoped for more. No doubt he hoped for sagacity, minute and constant attention, and even a measure of luck. But he did not strike a bargain entitling him to that. No doubt he could not have struck such a bargain. Nor, in my opinion, could the trustees have struck the bargain which the majority opinion credits them with. Whether they could have is not, of course, the question. The question is whether they clearly and unambiguously did, and I submit that they did not — and that we effect an injustice when we determine the settlor’s intent as a matter of law and disallow the beneficiaries the simple right to try to establish a lack of ordinary diligence. I therefore respectfully dissent.
I am authorized to state that Justice Smith joins in this dissent.