82 N.J. Eq. 518 | New York Court of Chancery | 1913
The claim of the conrplainant in this case, and the facts upon which she relies, are fully stated in the opinion of Yice-Chan
I therefore think that, as a matter of fact, there was no lack of good faith on the part of the trustee, nor do I find any affirmative averment which can be construed into such a charge. That leaves open the question of the exercise by it of a reasonable discretion in holding on to the securities after they had begun to decline. On this question the judgment must be for the complainant. It must have sufficiently appeared to the trustee from the early part of 1906 forward that the securities held by it were doubtful in character, else there would have been no need of the exercise of the great watchfulness and anxiety testified to on the part of the defendant. There are probably no securities in which people invest their money which can be said to be safe at all events and under all circumstances. There is always some element of chance which time may develop. When, however, a security comes within the region of doubt, in my opinion, it would be the part of prudence and discretion to eliminate it from a trust fund at the earliest possible moment. That the trustee neglected to do. It is upon this ground that I deem the defendant to be liable to the complainant.
For the purpose of ascertaining the amount with which the defendant should be charged, it will be necessary to fix the date at or about the time of which the securities should have been sold. As nearly as I can get at it there was sufficient decline by August 1st, 1906, to inform the trustee that a doubt about their value existed. Without having heard argument on this point, this date seems to me to be approximately correct. However, the point will be left open, and may be discussed at the time of settling the decree.