Estate of Bartol

Citations

• 182 Pa. 407
• 38 A. 527
• 1897 Pa. LEXIS 825

Syllabus

<p>Trusts and trustees — Investment by trustees — Surcharge.</p> <p>A trustee will not be surcharged for a loss which has occurred to the trust estate if he has exercised common skill, common prudence and common caution; but, he will be held responsible for supine negligence or for wilful default.</p> <p>Trusts and trustees — Good faith — Investment by trustees — Will— Surcharge.</p> <p>Where a testator directs that his trustees may, in their discretion, if they deem it for the benefit of the estate, retain in their hands as assets any investments which he may have at the time of his death, without liability in case of depreciation or loss, the trustees will not be surcharged for a loss caused by depreciation in the value of the stock of a private corporation, owned by the testator at his death, and continued by the trustees as an investment.</p> <p>Testator by his will authorized his trustee to invest trust funds in their hands “in first class mortgage bonds of railroad companies whose railroads are finished, and paying interest on their entire bonded debt.” After the testator’s death, the trustees, after consulting with the cestui que trust and other business men who had means of knowledge, also after consulting Poor’s Manual and Dun & Co.’s Reports, bought with trust funds some of the consolidated mortgage bonds of a railroad company. The mortgage was a second mortgage created for the purpose of paying off a first mortgage and other debts. At the time of the investment the company was in a prosperous condition, and paying interest on its entire bonded debt. After the investment, the company built an extension to its line, and subsequently a trolley line was built in the same neighborhood,</p> <p>• which impaired the business of the company, and depreciated the value of the bonds. There was no question as to the entire good faith and the integrity of the trustees in making the investment. Held, that the trustees should not be surcharged with the loss, because the