Appeal of Baker

120 Pa. 33 | Pa. | 1888

Opinion,

Mr. Justice Paxson :

We might well affirm this decree upon the opinions of the court below and the auditing judge. They both cover the ground fully, and the only reason we add one word thereto is to emphasize the principle upon which their decree rests, that a trustee will not, under any circumstances, be allowed to make a profit out of the trust funds. Whatever profit arises therefrom in any way belongs to the owner of the fund, and not to its custodian. As was said in Norris’s Appeal, 71 Pa., at page 125: “It is a well-settled rule that where a trustee speculates with the trust funds he may be held to profits or interest at the option of the cestui que trust. Profits, if the investment has been successful, and interest, if it has been disastrous. In no event will the trustee be allowed to make a profit out of the trust fund. The law holds out no inducements to trustees to so misapply the estate. He may lose, but he cannot make by so doing. It is equally clear that when the trust funds can be fairly traced into the purchase of any particular stock, the latter shall be held to belong to the estate, if the cestui que trust so elect. The cases upon this point are numerous and strong.” In addition to the authorities there cited we may add Seguin’s Appeal, 103 Pa. 139; McLaughlin v. Fulton, 104 Pa. 161. But a principle so familiar hardly needs a reference to cases.

I will not speculate upon what might have been the result if these executors had made a clean transaction of the sale held under the direction of the Orphan’s Court, and had actually paid in cash the proportion due their cestuis que trustent, and had subsequently, as was said by the court below, invested the amounts awarded to them as trustees upon the settlement of their account. The auditing judge, and the court below, have distinctly found that they did not do this. On the contrary, the money of their cestuis que trustent was practically used in this purchase, and when they sold the property, subsequently, to the Disstons at a profit of $13,600, they were selling property which the money of the eestuis que trustent had in part at least paid for. Hence the profits belonged to those whose money was used for this purpose. This is the law of every decided case in Pennsylvania, and we are not disposed to permit a principle so essential to the proper management of trust funds to be undermined or impaired in the slightest degree.

Tbe decree is affirmed, and the appeal dismissed at the costs of the appellants.