Court Opinion

ID: 5382955
Source: CourtListenerOpinion
Date Created: 2022-01-08 09:10:14.435974+00
Date Added: 2024-06-11T08:30:10.303941
License: Public Domain

Peck, J. (dissenting).
The complaint alleges that the defendant, as settlor and cestui of a trust of which plaintiff was the trustee, maliciously pursued a campaign of vilification and abuse against plaintiff, accusing him of extortion, lying, acting behind her back, dirty business and luring her to destruction, so that the relationship of confidence and loyalty necessary to the maintenance of a trust disappeared and plaintiff was constrained to resign as trustee.
The action is to recover damages for defendant’s wrongdoing. The measure of damages suggested in the complaint is the amount of commission plaintiff would have earned had defendant co-operated and conducted herself with propriety and probity so that plaintiff could complete his performance as trustee. We are not concerned, however, on a motion to dismiss the complaint for failure to state a cause of action, with damages or with plaintiff’s demand for damages. The error in the majority opinion, to my mind, is in treating the action as a suit by a trustee for commissions. Although the complaint does claim the amount of commissions the plaintiff would have earned as trustee as the measure of damages, the action is not brought by a trustee for commissions but is brought by one not a trustee for breach of contract in that, he was wrongfully forced out as trustee.
The complaint does not allege physical prevention of performance of the trust. The question, therefore, is whether there is any duty of conduct on the part of a settlor-cestui toward a *746trustee, the breach of which, in the absence of physical interference, will justify the trustee’s resignation and give him a cause of action against the settlor-cestui. The question is novel, but if the cause of action is to be denied it must be on grounds other than its novelty.
There is nothing novel, of course, in the punctilio of conduct which must be observed by a trustee toward his cestui. Are the duties of good faith and consideration all one sided? May a person who has created a trust and engaged a trustee render the trust relationship untenable by maliciously vilifying the trustee, without having to answer for breach of trust or breach of contract?
It cannot be doubted that a trust relationship, whatever its business nature, involves personal relations requiring more than usual consideration and co-operation. The law recognizes this in the punctilio to which the trustee is held. It would seem that the relationship implies at least a reciprocal duty on th§ part of the settlor-cestui of refraining from malicious and wrongful attacks upon the character and conduct of the trustee.
It is hardly a sufficient answer to a trustee, who is the object of the vilification and abuse alleged in this complaint, that he may have an action for slander. Such an action he may have irrespective of trust relationship or contract, and such an action is hemmed about by rules of substantive law and damages which are quite different from those obtaining in an action for breach of contract or malicious interference with contract.
To repeat, however, we are not concerned on a motion to dismiss the complaint with the measure of damages or with whether plaintiff can prove damages. We are concerned only with the question of whether allegations of malicious vilification and abuse of a trustee by a settlor-cestui, undermining the trust and making the trustee’s performance virtually impossible, states a cause of action for wrongful conduct, entitling plaintiff to prove damages.
In' my opinion, a settlor-cestui owes a duty of good faith and co-operation to a trustee, and may not wrongfully and unjustifiably vilify him and render the trust relationship untenable without answering in an action for damages for her breach.
The order of Special Term, denying the motion to dismiss the third amended complaint should be affirmed.
Martin, P. J., Dore and Cohn, JJ., concur with Callahan, J.; Peck, J., dissents and votes to affirm, in opinion.
Order reversed, with $20 costs and disbursements to the appellant and the motion granted.