303 Mass. 557 | Mass. | 1939
Janet H. Jones was one of two trustees under the residuary clause of the will of Everett Jones late of Brookline, who died April 25, 1919, and whose second wife she was. Through want of good judgment on the part of her co-trustee, now deceased, and without any moral fault on her part, she was charged with liability to the principal of the trust in the sum of $32,041.27 and to the income account in the sum of $26,474.27. She was and is financially irresponsible. The surety on her bond paid to the petitioner, the succeeding trustee, $32,000, and received a release from him and an assignment of the claims of the trust estate against Janet H. Jones arising out of her conduct as trustee and including any right by way of equitable lien or otherwise to reach and apply or retain any of the interest of Janet H. Jones as a beneficiary of the trust estate. The surety demands that the trustee pay to it all income, past, present and future, given by the will to Janet H. Jones. The trustee asks instructions as to his duty.
The will gave the residue of the estate to trustees “to
We assume that by the assignment or by subrogation or by both the surety has succeeded to the rights of the trust estate against Janet H. Jones. American Surety Co. of New York v. Vinton, 224 Mass. 337. When she procured the surety to become such, she expressly agreed to indemnify it against loss. The surety relies on the principle stated in Am. Law Inst. Restatement: Trusts, § 257, as follows: “If a trustee who is also one of the beneficiaries commits a breach of trust, the other beneficiaries are entitled to a charge upon his beneficial interest to secure their claims against him for the breach of Trust.” Belknap v. Belknap, 5 Allen, 468. Harmon v. Weston, 215 Mass. 242, 247, 248. Cogswell v. Weston, 228 Mass. 219. In re Brown, 32 Ch. D. 597. Edgar v. Plomley, [1900] A. C. 431. Raynes v. Raynes, 54 N. H. 201, 210, 211. See also cases where the interest of a beneficiary, not a trustee, has been taken to make good his liability to the trust estate. Crocker v. Dillon, 133 Mass. 91, 102. Stetson v. Moulton, 140 Mass. 597. Hammond v. Hammond, 169 Mass. 82, 85. Minot v. Purrington, 190 Mass. 336, 342. Allen v. Stewart, 214 Mass. 109, 113. Bailey v. Smith, 214 Mass. 114, 120. Corkery v. Dorsey, 223 Mass. 97. Am. Law Inst. Restatement: Trusts, §§ 251-256. In re Dacre, [1915] 2 Ch. 480, affirmed [1916] 1 Ch. 344. Compare Abbott v. Foote, 146 Mass. 333.
In Bucknam v. Bucknam, 294 Mass. 214, we declined to follow Am. Law Inst. Restatement: Trusts, § 157, in approving another of those encroachments. In the present case we think that the interest of Janet H. Jones in the income of the trust estate cannot be taken to make good her default as trustee. This conclusion is supported by authority elsewhere. Overman’s Appeal, 88 Penn. St. 276. Stanley v. Stanley, 7 Ch. D. 589.
The alternative methods of disposition of the income of each beneficiary, given to the trustees by the will to be exercised at their election, cannot be narrowed by an instruction to the present trustee to apply the income to the payment of the liability of Janet H. Jones to the trust estate or the surety. Besides, it does not appear that in her financial condition an application of her income without her consent to the discharge of her liability would be
The first prayer for instructions in the petition is answered in the negative. The second is answered in the affirmative. These are the only present questions. The costs and expenses of the trustee may doubtless be included in his account. Those of other parties are not allowed.
Ordered accordingly.