70 Md. 508 | Md. | 1889
delivered the opinion of the Court.
A single question is presented by this appeal, and the following brief statement of facts, derived from the record, is sufficient to show how it arises:
Daniel B. Banks, by his will, devised the residue of his estate to his son, Andrew Banks, the appellee, in trust to collect the rents, issues and profits thereof, and to distribute one-half of the net income “at regular stated periods during each year” to his daughter Mrs. Dorsey, the appellant, during her natural life, and the other half in like manner, to his daughter Annie, now Mrs. G-odwin, during her natural life. Upon the death of each of these daughters he devised one-half' of the corpus of this residue to her issue pier stirpes, if she had any living at the time of her death. The will also gave the trustee power “to make such sales, leases, or other disposition of the trust estate, and such reinvestment of the proceeds, as in his judgment shall he expedient for the better and more profitable development thereof.” At the instance of the trustee a Court of equity assumed the supervision of this trust, and by a decree passed in June, lSII, he was directed to render regular semi-annual accounts of his receipts and disbursements. Some time after the passage of this decree, and prior to the year 1880, .the appellee, in connection with another party, undertook the building of a row of eleven marble-front houses on Oak street, and three brick houses on Mankin street. This transac
The trust, as to the appellant, continues during her life. Her share of the net income for life was all .that was given to her by her father's will, for her support and that of her family. The trustee was bound under the decree of June, 1877, to pay it over to her semiannually, but this he failed to do. Prior and up to the 1st of January, 1881, he was in arrear to the amount of $4848.97, and from that time on this amount varied, increasing in some years, and decreasing in others. Thus on the 1st of January, 1882, it was $5914.86; 1883, $6914.40; 1884, $5952.44; 1885, $3508.87; 1886, $3527.05; 1887,. $1952.36; 1888, $4191.35 ; and was not extinguished until March, 1888. It is admitted that the trustee applied this income to Ms oion uses whilst it thus remained in his hands. That a trustee who thus uses trust funds is chargeable with interest thereon is a proposition too well settled to admit of doubt. Diffenderffer vs. Winder, 3 G. & J., 342; Comegys vs. State, use of Dyckes, 10 G. & J., 186; Mickle, Adm’r vs. Cross, Adm’r, 10 Md., 362; Lewin on Trusts, 340; 1 Terry on Trusts, sec. 464.
Now, what is the defence which the trustee sets up against this claim ? It is, substantially, that the appel
The alleged agreement was made, if made at all, in the latter part of the year 1880, at the office of the trustee, and is set out in rather vague terms in the
Taking this testimony as a whole, we think it very doubtful, to say the least, whether it comes up to the standard of clearness universally required, to prove an agreement between a cestui que trust and trustee, under-which the latter derives a pecuniary benefit. But assuming the testimony of Mr. Banks and Mr. Culbreth to outweigh in probative force that of Mrs. Dorsey, still the question recurs, what consideration was there for this agreement? The only conceivable one is that, under it, she was to receive in the future her income as it accrued, or when she wanted it, instead of semi-annually as the decree of 1811 had provided. This may have been of some slight convenience to her, but we must observe that it is a very slender thread upon which to hang the consideration for an agreement, whereby a cestui que trust gives up a valuable and undoubtedly valid claim against a delinquent trustee. But again, assuming this consideration to be legally sufficient, it was coupled with the condition that on -each occasion when payments were thus made by the trustee on account of accruing income, he should make a partial payment on account of the arrearages of income, so that his indebtedness on this account would be reduced. This is explicitly stated as being an essential part of the arrangement, both in the Answer of the trustee, in his testimony, and in that of Mr. Culbreth. In order, therefore, for the trustee to avail himself of this agreement it was incumbent upon him to have scrupulously observed this important condition, for if' he failed in this his sister was no longer bound by it. That he did so fail has already been shown. So far from immediately reducing the indebtedness on account of arrears which had accrued prior to 1880, the date of the alleged agreement, he continued for several
We have examined the case very carefully, and while we acquit the trustee of all intention to wrong his sister, or injure the trust estate committed to his charge, we yet find that he has been delinquent in the legal sense of the term, and we cannot relieve him from the obligation to pay this interest. To do so would he setting a very dangerous precedent; and we cannot better conclude this opinion than by repeating the language of Judge Dobsey in Diffenderffer vs. Winder, to the effect that holding delinquent trustees “to a strict, if not rigorous, justice, is productive . of the most beneficial consequences, and is founded on the soundest principles of policy. It is the surest, perhaps the only, means of securing the fidelity, vigilance, and integrity of those to whose hands are committed the interests of the weakest, and most unprotected portion of the community.”
The result is that the order appealed from, which dismissed the appellant’s petition, must he reversed, and the cause remanded, to the end that the appellee may he required to pay to the appellant simple interest on the arrears of her income so long as he retained them in his hands.
Order reversed, and cause remanded.