Simmons v. Oliver

• Decision Date: 05 November 1889
• Parties: SIMMONS v. OLIVER ET AL.
• Court: Wisconsin Supreme Court

74 Wis. 633

43 N.W. 561

SIMMONS

v.OLIVER ET AL.

Supreme Court of Wisconsin.

Nov. 5, 1889.

Appeal from circuit court, Fond du Lac county; N. S. GILSON, Judge.

Accounting and petition to be discharged by M. W. Simmons, trustee of the estate of William Oliver, deceased. Elizabeth Oliver and others, beneficiaries, objected to the account, and opposed the petition. From a judgment holding the trustee liable for certain losses, he appeals.Knowles & Phelps, for appellant.

N. C. Giffin, for respondents.

COLE, C. J.

M. W. Simmons, as trustee, received the funds mentioned in his account from the former trustee, Smith, to invest and to keep invested for the benefit of the beneficiaries named. The income was to be paid to the widow during her life, and $1,000 was to be paid the children in equal portions when the youngest should arrive at age. No directions were given in the order appointing Simmons as to how the trust funds should be invested. It appears that in 1883 the trustee loaned to the McDonald Manufacturing Companya portion of the fund, taking its indorsed note, which note was taken up in February, 1884, by a new note for the amount of the loan unpaid, such note running one year, which was indorsed by the president and secretary of the company. The company at this time was in good financial standing, and the indorsers were reputed to be perfectly responsible, and men of ample means. In a few months, however, the company failed, and turned over its property to a trustee, and the president, who was supposed to have the most property of either of the indorsers, became unable to pay his debts. The claims against the manufacturing company were finally compromised at 50 cents on the dollar, in cash and notes, and 50 cents in mining stock at $5 a share. Simmons at first declined to take the mining stock, not considering it of any value, but after a few months, thinking it might turn out to be worth something, decided to take it and pay an assessment of $50 upon it, for which it was advertised for sale. The testimony clearly shows that the compromise made by the creditors of the manufacturing company was the best that could be realized at the time; and that the mining stock, which proved to be worthless, was considered of some value. The trustee, in his account filed, wishes to be credited and allowed for the mining stock at its face value and interest thereon since June 22, 1888, and the amount paid upon it as an assessment, together with another small item of $11. The beneficiaries object to the allowance of these items, and the court below decided that the estate of the trustee must make good the loss resulting to the trust-estate by reason of the loan to the manufacturing company.

We think the circuit court was clearly right in holding the trustee liable for the loss of the trust funds under the circumstances. He made a loan to a manufacturing company upon its note and the personal security of two indorsers. It is true, when the note for the amount of the loan unpaid was given in February, 1884, in addition to the security of the indorsers, the...