Bennett v. Pierce

• Court: Supreme Judicial Court of Massachusetts
• Writing for the Court: BRALEY, J.
• Citation: Bennett v. Pierce, 188 Mass. 186, 74 N.E. 360 (Mass. 1905)
• Decision Date: 19 May 1905
• Parties: BENNETT et al. v. PIERCE.

188 Mass. 186

74 N.E. 360

BENNETT et al. v. PIERCE.

Supreme Judicial Court of Massachusetts, Suffolk.

May 19, 1905

COUNSEL

John O. Teele and Frank E. Gerry, for appellants.

Chas S. Rackemann, guardian ad litem

Julian Codman and Warren, Perry & Codman, for respondent.

OPINION

BRALEY J.

The discretionary powers given to the trustees under the will of Moses Day to invest and reinvest the trust estate were before this court for consideration in Davis, Appt., 183 Mass. 499 502, 67 N.E. 604, where it was held (affirming the decree of the probate court) that certain investments in the stock and bonds of the Atchison, Topeka & Santa Fé Railroad Company made by him as a predecessor in office of the appellants, were unauthorized. From the record of that case, and the recitals in the claim of appeal in the present case, it is to be assumed that pending his appeal Davis died testate, and that the appellants are the duly appointed executors of his will. It was there decreed that the loss caused to the principal fund by the depreciation in value of the stocks and bonds must be restored by the trustee out of his own property, with simple interest on the deficiency from the respective dates of purchase. This decree never has been modified, and still is in full force and effect. McCooey v. New York, New Haven & Hartford Railroad Co., 182 Mass. 205, 65 N.E. 62; Rev. Laws, c. 162, § 2. In obedience to its terms, it became the duty of the present trustees, upon their appointment, to cause the impairment of the principal to be made good, and the accrued interest which was intended to repair the loss of income to be paid by the executors of the will of the delinquent trustee. If their failure to act was found to be unjustifiable, it was a breach of their trust, and in equity they could be held chargeable with the payment of both. Blake v. Pegram, 109 Mass. 541, 552; Dodd v. Winship, 144 Mass. 461, 465, 11 N.E. 588. Under a partial compliance with this decree, they presented for allowance the account now before us, in which they charge themselves as trustees with an amount received from themselves as executors sufficient to make whole the impairment of the principal. But they have failed thus far to account for the interest as decreed.

The present appeal is from a decree on their account, which following the former decree, charged them with the interest then allowed, and with interest on that amount that has since accrued. In justification of their conduct, they now contend that the appellee, a daughter of the testator, and beneficiary for life under the trust, with remainder to her minor children, is estopped from making any lawful demand for what is now by force of the decree to be treated as an asset of the estate. Kimball v. Perkins, 130 Mass. 141; Dodd v. Winship, 133 Mass. 359. Their position is grounded on the fact that as she assented in writing to preceding accounts of the former trustee or trustees, which showed the purchase of these stocks and bonds, and especially because of such an assent by her to the fourteenth account covered by the first decree, where the trustees asked to be relieved from any loss made by them because of such purchase, she is precluded from asserting any claim for the interest. Whatever may have been shown in the accounts prior to the fourteenth as to these particular investments, it does not appear that she knew anything of their sound value, or that there was any reason which would cause her to look with distrust on the conduct or judgment of the trustees. If she had examined carefully the schedules itemizing the trust property, they would not have disclosed that the reinvestments made by exchanging bonds of one series for those of another, but all emanating from the same system of railroads, had resulted in any diminution of the fund. But when the fourteenth account was presented for her acceptance it appeared for the first time that such a loss had been made, from which the trustees asked to be relieved. Under this account, when it came before the court, there was no controversy between the appellee and the accountants to be determined, and the decision finally made, notwithstanding her assent, that they must make good the loss, was not the adjustment of any dispute between her and them which would require permission from the court before she could reopen the matter upon the...