Estate of Fesmire

Citations

• 134 Pa. 67
• 19 A. 502
• 1890 Pa. LEXIS 668

Syllabus

<p>[To be reported.]</p> <p>1. By virtue of his acceptance of a trust, a trustee does not become an insurer of the trust funds against the possibility of loss, nor a surety for his co-trustees. His undertaking is personal, requiring of him good faith and reasonable diligence; and if these requirements be met, he is not liable for losses occasioned by the bad faith or embezzlement of his co-trustees: Hall v. Boyd, 6 Pa. 270; Wilson’s App., 115 Pa. 95; Stell’s App., 10 Pa. 149 ; Jones’s App., 8 W. & S. 143.</p> <p>2. When two of three trustees for investment have put it into the power of the third to collect the principal of a mortgage belonging to the trust, it becomes their duly to see that it is properly re-invested. If they neglect this duty, and do nothing for several years beyond inquiring whether the re-investment has been made and ascertaining that the co-trustee has paid annually to the cestui que trust the usual sum as income thereof, they are responsible for his embezzlement of the fund.</p> <p>(а) Certain trust funds were invested in mortgages held in the names of three testamentary trustees. For convenience the original mortgages and the accompanying bonds were left in the custody of one of the trustees, who lived near the cestui que trust, was in good repute and had been intrusted by the testator with the management of his financial affairs, with authority to collect and pay over the interest on the mortgages. This duty he performed satisfactorily for some years.</p> <p>(б) Finally, however, without the knowledge of the co-trustees, he entered satisfaction upon one of the mortgages, signing it as acting executor, and received the principal which he embezzled: he also entered judgment on the bond accompanying another mortgage, and had the property embraced therein levied on and sold: the property was bought by his daughter for less than the mortgage debt, and he embezzled the proceeds:</p> <p>3. The arrangement under which the securities were left with th