1 S.C. 452 | S.C. | 1870
The opinion of the Court was delivered by
The bonds and mortgage held by the defendant, Rogers, were in his hands, subject to the trusts which primarily attached on the land sold by the trustee, Haynesworth, in whose place, after his death, he was substituted. The deed required “ the proceeds of the sale of the land to be invested, as soon as practicable, in other lands or negroes, and the property so purchased to be subject to the same uses, trusts, restrictions and limitations as are hereinbefore expressed of, in, and concerning the premises ” thereby conveyed.
Rogers, trustee, was clothed with no discretion as to the trust. The investment of the proceeds of the land was to be made in lands or negroes, and if he had, on the express directions and in-
In the case of Womack vs. Austin, decided at the present Term, (ante, p. 421,) it was adj udged, that where the instrument prescribed the mode of investment, unless it could be shown that, without fault on the part of the trustee, it could not be made, he would not be excused for departing from the terms and directions of the deed or will creating the trust. It was not the announcement of any new rule by which the conduct of those holding fiduciary relations was to be measured, but the application of principles almost coeval with the administration of equity.
Where the judgment of a trustee is unrestrained and unfettered, if he resorts to an investment within the class not disfavored by the Court, and acts with prudence and honesty, he will not be made responsible, if, from circumstances which he .could not control, loss should ensue. Where it is not controlled by the authority in virtue of which he acts, he will be excused for an erroneous exercise of it, provided there is evidence of honest intentions and faithful endeavors to do his duty.- — Mayer vs. Mordecai, 1869, (ante, 383.)
It might be a contradiction in terms to say that there is faithful endeavor by a trustee to perform a duty, where, the impossibility of doing it not being shown, the duty imposed is violated by the very act of not executing the trust according to the intention of the party who created it, and assumed and promised by the party who accepted it.
The bonds of Pawley were for the purchase money of the land, and they were secured by a mortgage of it. They had been due over three years. The proceeds, when collected were to be invested in other lands or negroes. The mortgage was taken as full security for the debt, at a gold rate. Without a necessity for its collection, the defendant called it in, and virtually allowed Pawley to buy the land at an amount, in depreciated currency, nominally equal to the face of the bonds, when the consideration of the purchase then,due and owing was the like sum payable in gold.
It is said, however, that Rogers was obliged to collect, before he could invest in other land. If he had even contracted for a place, to be paid for in Confederate notes, and, on the faith of it, had made the collection, and the sale, by no fault of his, had miscar
He had made no contract for the “Head land,” for he states, in his answer, “that his attempt to secure it having failed, the complainants having no home, he did, in March, 1863, agree to receive from Pawley the amount of his bonds in Confederate money.” If he knew that Pawley was prepared to pay, and was aware of the character of the proposed payment, did not common prudence demand that he should defer the acceptance until he should be satisfied that, with the same notes, he could purchase another piece of land, for the investment in negroes never entered into his contemplation, or that of his cestui que trust ¶ The answer and the testimony furnish the fact “that land had not advanced in proportion to other property.” The inference is, that it was of ready sale, and-yet, knowing that he could procure the means of payment, he converted the bonds into a depreciated currency, without first contracting for land, to the payment for which he could have applied it. The result was, that Pawley, the debtor, gained a large advantage at the expense of the cestui que trust, if the consequent failure of investment in land is to fall upon her.
Generally it is not the duty of trustees to call in money, invested on good real estate, where there is no probable risk. — Howe vs. Earle of Dartmouth, 7 Ves., 150. If, however, as the deed here required the proceeds of the land to be re-invested in the same way, the trustee would have been acting in proper consistency with the obligation imposed upon him, if, either first securing another parcel of land, he had sought payment of the bonds, or if even well convinced that he could do so in a reasonable time. There is no proof that he made such contract, or that, after the acceptance of the Confederate notes, he essayed, in any active manner, to procure with them another tract of land. On the contrary, he retained the notes on deposit for twelve months, and then converted them into Confederate four per cent, certificates. Plis excuse for doing this, he avers, is the fact that, under the Act of the Confederate Government, the holders of such notes were required so to convert them by first of April, 1864, or submit to a large depreciation. This necessity was, however, induced by his own act. If the receipt from Pawley, of the said notes, was voluntary, having placed himself in
The conclusion which we have thus reached does not render it necessary that Ave should say anything on so much of the grounds of appeal as charge the defendant Avith liability, because he received from PaAvley his own notes in part payment of the bonds.
It is proper, hoAvever, that we should briefly state our vieAvs in regard to that transaction, lest Ave might be understood as concurring in those of the appellant.
Where a trustee sells, intending to apply the purchase money to the extinguishment of his own debts, and there is no proof of his means to replenish or acquire an equal sum from other sources, it is a breach of trust.
It was proved that the defendant had on hand abundant means •to pay his notes, and that Pawley Avas willing to receive Confederate notes in satisfaction of them. It amounted, in effect, to exactly the same thing as if he had first paid his debt to PaAvley, and then received from him the very bills in satisfaction of the bonds. There Avould have been a manifest difference had the testimony shown that he Avas AA'ithout the ready ability to meet his notes, for then there would have been a dealing Avith the trust funds for his own private benefit.
It is ordered, that so much of the decree of the Chancellor as adjudges the defendant not responsible for the loss which has resulted from his receipt of the said notes from PaAvley, and his investment in Confederate securities, be reversed. That the case be remanded to the Court of Common Pleas for Darlington County, Avith directions for an account of the said trust estate by the said defendant, on the principles of this opinion, with leave to plaintiff to apply to the said Court for all orders proper and necessary to carry out its results.
