209 Mass. 509 | Mass. | 1911
The defendants are trustees under an express trust, and in accounting for their administration of the property which they admit that they have received, the burden is on them to show' that in the discharge of their duties they have exercised reasonable skill, prudence and judgment. Andrews v. Tuttle-Smith Co. 191 Mass. 461. Pine v. White, 175 Mass. 585. Little v. Phipps, 208 Mass. 331. If we examine the allegations of the bill, they are charged with having failed to protect the property from foreclosure of a second mortgage whereby the equity of redemption was lost, and generally that they grossly neglected their duties, entailing great pecuniary loss to the plaintiffs in common with other beneficiaries and shareholders. But in the report of the master to whom the case was referred, the transactions which the plaintiffs contended were imprudent
The very full statements relating to the defendants’ first and third exceptions need not be reviewed. The master reports the facts, but does not decide the question of liability. If when the defendants took possession of the premises for the purpose of
But the payment to Albert A. Pope of $5,200 for thirteen months’ use of the furniture, stands upon a different footing. If under the circumstances it is assumed, that the trustees had implied authority to buy the furniture, fixtures and household supplies which were in the hotel, but permitted or requested Pope to act for the sole benefit of the trust as apparently he did, the master finds, that he had been fully reimbursed by the trustees for the loss sustained when he sold the property to their new lessee for a less sum than that which he paid. The trustees themselves were doubtful as to the propriety of recognizing his claim for rent. It was after their promissory note had been given in payment for the combined amount, that, acting under the suggestion of counsel, they signed an antedated paper with a preamble, and form of vote containing recitals, that the purpose of the note was, "to reimburse him for his loss sustained in behalf of the Copley Square Hotel property in the sale of the furniture, and for the use of the same.” The master fittingly characterized their action as a “posthumous record of an imaginary meeting.” It was ineffective as an act of ratification, for the payment was unauthorized, and his disallowance of this item was right and should not be disturbed. Rowland v. Maddock, 183 Mass. 360. Hayes v. Hall, 188 Mass. 510. Andrews v. Tuttle-Smith Co. 191 Mass. 461.
But the principal sum for which the plaintiffs seek to charge the defendants is the loss arising from the foreclosure of the second mortgage. The powers of the defendants are defined by the instrument under which they were appointed. By section 5, they were given discretionary authority to mortgage the estate, either to pay in whole or in part outstanding mortgages, or to
If there is no doubt that Winkley must be charged with the full amounts previously stated, the defendant Pope urges that he should be exonerated from all blame. It is well settled, that a trustee is not responsible for the acts or misconduct of a co-trustee in which he has not joined, or to which he does not consent, or has not aided or made possible by his own neglect. Hayes v. Hall, 188 Mass. 510, 514. Pom. Eq. Jur. (3d ed.) §§ 1081, 1082. The defendant was required to inform himself of the various business transactions involved in the execution of the trust. He could not properly discharge his duty by surrendering the substantial or entire control to Winkley, or delegate his authority to him, or to Albert A. Pope, or be indifferent, when the course of affairs was distinctly disadvantageous to the beneficiaries whose interests he had been selected to protect. But even if he is given the benefit of the master’s finding, that Winkley misled and deceived him in the final attempt to preserve the property
We may add, that, notwithstanding the defendants’ contention that the Sheldon Corporation, which is one of the parties plaintiff, should not be permitted to recover, it is not estopped upon the facts reported from sharing in the distribution of the amounts which the defendants must pay, but, Albert A. Pope having participated in their misconduct, they should not be charged with the proportion of the loss represented by his shares. Andrews v. Tuttle-Smith Co. 191 Mass. 461, 468, and cases cited.
The result is, that the interlocutory decree must be modified by overruling the defendants’ second exception to the master’s report, and the final decree should charge the defendants with the sum of $100,000 with interest from September 19,1907, and the additional sum of $4,000 with interest from September 30, 1905, and when so modified the decrees severally are affirmed, and the plaintiffs are respectively entitled to recover the amounts as therein specified.
Ordered accordingly.