Spaulding v. Wakefield's Estate

The opinion of the court was delivered by Ross, J. It is well settled that the measure of care and diligence which an executor or administrator is bound to bring to the management and closing of the estate, is that which a prudent man would exercise under like circumstances. However much of good faith and honest intention he may exercise in the discharge of his trust duties, unless he also exercises this degree of care and diligence, and the estate suffers from the lack of it, he is bound to make the loss good to the estate. Measured by this standard, we think, the delivery of a $1000 U. S. 5-20 bond, worth at the time in all the markets of the country $1200, to each of the three legatees in payment of a legacy to each of $1000 was negligence, and rendered the plaintiff liable to account for the loss to the estate. We cannot yield to the claim of the plaintiff’s counsel, that his duty was discharged when he obtained the value placed upon the [663] bonds by the appraisers, or the amount which the government promised to pay the holder. The very fact which he urges, to wit: that such obligations were fluctuating in the market, bound, him to keep informed in regard to their market value, and to use the diligence of a prudent man to take advantage of the market, and realize the most possible for the estate. Nor does what the Probate Court told the plaintiff, at all lessen the measure of care and diligence he was bound to exercise in the discharge of his duties. He was bound to know the law, and if he had doubts about his knowledge, or ability, to obtain accurate knowledge of the degree of care and diligence which he was bound to exercise, he should have declined the trust. What the Probate Court told him would have an important bearing upon his good faith in the transaction, if that were the only element entering into the determination of his liability. As these bonds were interest bearing securities, the plaintiff was properly charged with interest on the amount of the over-payment of the legacies. Besides, it would have been his duty to have exercised this same degree of care and diligence to have kept the overplus at interest. His act which occasioned the loss, put it out of his power to exercise this degree of care and diligence in placing the overplus, at interest. The same considerations apply in regard to charging him with the premium on the $800 bond. It is contended that the interest on the premium on this bond stands on a different basis from the interest on the premiums on the other bonds. He claims that he deposited that bond in the bank where he kept his individual deposits to create a fund upon which to draw to pay the expenses of settling the estate. The commissioner has not found that the creation of such a fund was necessary or proper in the settlement of this estate. He would be bound to the same measure of care and diligence in regard to this as to all other matters in the settlement of the estate. When asking to have the decision of the commissioner and County Court reversed in regard to this item, it is for him to establish that the creation of such a fund was required. On other grounds the decision of the commissioner and of the County Court in this particular can be upheld. He was called upon by the Probate Court to account for this bond, and [664] was there charged with the premium and interest thereon. The case was brought to the County Court, and he was again called upon to account for the same. Knowing just what he had done with the bond, and having the means, by applying to the bank to ascertain, and inform the commissioner just what he received for the bond, and what interest, if any had been allowed him for the money derived from the sale, he has wholly failed to inform the commissioner in these respects, as well as whether the bond was in fact sold by the bank, and whether, if sold, the avails were mingled with his individual funds on deposit in the bank. His so-called accounting is substantial silence on the vital matters involved. On these facts he was entitled to no leniency at the hands of the court. In such case it is usual to charge the trustee with the highest market value of the fund, and the highest rate of interest allowable by the law of the land, and to disallow all claims for services for care of the property not accounted • for. Farwell v. Steen, 46 Vt. 678. If any other rule should be adopted, all an administrator, or executor, or other trustee, would have to do to cover up his gains on the trust property, would be to remain silent when called upon to render an account of his stewardship. There was no error in charging him interest on this item. The charge for personal services on the farm after it had passed into the possession and control of the life-tenant, Chandler Wakefield, were properly disallowed. They were not performed for the benefit of the estate, but for the benefit of the life-tenant, who should pay for them, if any one.. The judgment of the County Court is affirmed.