Darlington's Estate

Citations

• 245 Pa. 212
• 91 A. 486
• 1914 Pa. LEXIS 862

Syllabus

<p>Trusts — Trustees—Theft of securities — Liability of trustee for loss caused by theft — Surcharge—Erroneous surcharge.</p> <p>1. A trustee is not an insurer of trust funds against the possibility of loss, and all that is required of him is good faith and reasonable diligence.</p> <p>2. Where the funds of a trust estate are invested in securities not expressly authorized by the acts of assembly, there is not a breach of trust although there may be liability for loss by reason of depreciation.</p> <p>3. A trustee is not liable for securities taken by her attorney-at-law and converted to his own use where negligence on the part of the trustee has not been established, merely because the securities in question were not such investments of trust funds as were authorized by law.</p> <p>4 In a trustee’s account, stated by her executors, credit was claimed for the market value of securities of the trust estate. It appeared that the securities had been taken from the trustee’s safe deposit box by the trustee’s attorney-at-law, and converted to his own use; that for ten years the attorney had a key to the box in which the trust securities were kept and to another box containing the trustee’s individual securities; that the trustee had inquired concerning her attorney before retaining him, and that his reputation for honesty and financial responsibility in the community during the life of the trustee was unquestioned; and that the trustee had ample reason for the confidence which she reposed in him. The securities converted had been purchased by the trustee and were not of the class known as “legal” investments. An auditor appointed to examine the account did not find that the loss resulted from the trustee’s negligence, but surcharged the accountants for the market value of the securities, because they represented unauthorized investments. Held, the Orphans’ Court erred in confirming the auditor’s report in the absence of a finding that the loss resulted from the trustee’s