In re Dickinson

• Decision Date: 05 September 1890
• Citation: 152 Mass. 184,25 N.E. 99
• Parties: Appeal of DICKINSON.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

152 Mass. 184

25 N.E. 99

Appeal of DICKINSON.

Supreme Judicial Court of Massachusetts, Hampshire.

Sept. 5, 1890.

Appeal from a decree of the judge of probate for Hampshire county, disallowing, in part, the account of William A. Dickinson, as trustee, under a deed of trust.

Wells & Barnes, for appellant.

Bond & Mason, for Lucius M. Boltwood, appellee.

FIELD, J.

The general principles which should govern a trustee in making investments, when the creator of the trust has given no specific directions concerning investments, have been repeatedly declared by this court. College v. Amory, 9 Pick. 446;Lovell v. Minot, 20 Pick. 116;Brown v. French, 125 Mass. 410;Bowker v. Pierce, 130 Mass. 262; Hunt's Appeal, 141 Mass. 515, 6 N.E.Rep. 554. The rule, in general terms, is that a trustee must, in the investment of the trust-fund, act with good faith and sound discretion, and must “observe how men of prudence, discretion, and intelligencemanage their own affairs, not in regard to speculation, but in regard to the permanent disposition of their funds, considering the probable income, as well as the probable safety, of the capital to be invested.” It is said in the opinion in Brown v. French, supra, that, “if a more strict and precise rule should be deemed expedient, it must be enacted by the legislature. It cannot be introduced by judicial decision without working great hardship and injustice.” It is also said that “the question of the lawfulness and fitness of the investment is to be judged as of the time when it was made, and not by subsequent facts, which could not then have been anticipated.” A trustee in this commonwealth undoubtedly finds it difficult to make satisfactory investments of trust property. The amount of funds seeking investment is very large. The demand for securities which are as safe as is possible in the affairs of this world is great, and the amount of such securities is small when compared with the amount of money to be invested. Trusts frequently provide for the payment of income to certain persons during their lives, as well as for the ultimate transfer of the corpus of the trust property to persons ascertained, or to be ascertained at the termination of the trust; and a trustee must, so far as is reasonably practicable, hold the balance even between the claims of the life-tenants and those of the remainder-men. The life-tenants desire a large income from the trust property, but they are only entitled to such an income as it can earn when invested in such securities as a prudent man, investing his own money, and having regard to the permanent disposition of the fund, would consider safe. A prudent man, possessed of considerable wealth, in investing a small part of his property, may wisely enough take risks which a trustee would not be justified in taking. A trustee, whose duty it is to keep the trust-fund safely invested in productive property, ought not to hazard the safety of the property under any temptation to make extraordinary profits. Our cases, however, show that trustees in this commonwealth are permitted to invest portions of trust-funds in dividend-paying...