Metzger v. Lehigh Valley Trust & Safe Deposit Co.

Citations

• 220 Pa. 535
• 69 A. 1037
• 1908 Pa. LEXIS 811

Syllabus

<p>Trusts and trustees — Contract of trustee — Wrongful use of trust money— Illegal contract — Mortgage—Unrecorded defeasance — Deed.</p> <p>A trustee not specially authorized cannot go beyond the line of duty prescribed by law, and work changes of property from money into land, or from land into money. One who does so, not only takes upon himself the hazard of loss, but to this extent he commits a breach of the trust. Neither a trustee nor any one in privity with him can acquire any right by a breach of the trust.</p> <p>Where a testatrix devises and bequeaths her estate to a trustee to convert the same into cash and to pay the income therefrom to her brother for life, and after his death the principal to his children, and the trustee uses a portion of the trust money to pay off incumbrances on the personal real estate of the brother, takes from him a straight deed of the real estate, and in an unrecorded writing agrees to reconvey it on payment of all advances with interest, such an agreement cannot be enforced, because it is an unauthorized act of the trustee.</p> <p>In such a case the trustee acquired no beneficial interest under the deed, and as a result could convey none. He took the title as trustee, that is to say, for the benefit of those he represented; and not only was it beyond his power to subject to disadvantage by his own act the parties he represented, but the actual ownership of the property having once vested in the estate, it was beyond his power to dispose of it. A purchaser under a voluntary deed from the trustee would be charged with notice of the trust and equity would fasten the original trust upon the property in his hands for the security of the real owners.</p>