Brown v. Silsby

Parker, C. J.* The assignment being invalid against creditors, and the assignees having been summoned as trustees of the principal debtor while the goods received under it remained in their hands, it was their duty to hold those goods [524] until the determination of the action ; and upon the issuing of the execution against them as trustees it would have been their duty to deliver them over, that they might be sold and the avails applied in satisfaction of the debt. They have not done this, but have sold them, and cannot now perform that duty. They are, therefore, chargeable with the value. And they cannot complain if the value is taken to be the amount of sales, unless a greater sum was obtained by selling on credit. If there was, it is for them to show it. If they could show this distinctly, it might avail to reduce the amount; and so it might be shown that the sale was for less than the value. Having sold the goods without authority of law, and being answerable for the value, the credits were given at their risk. The trustees are answerable also for the money received on the notes and accounts. The fact that they have loaned this money, or a part of it, cannot operate to exonerate them. 9 Pick. R. 435, Hooper vs. Hills & Trustee. And they must be held chargeable for such interest as they may have received or secured on the sales of the goods, or upon money loaned. The fund being held in trust, they are not entitled to make a profit upon it to themselves. By the mere change of the security, taking notes to themselves for debts previously due, they cannot be held as trustees, unless, by thus taking the notes to themselves, they have made the debts their own. 5 N. H. Rep. 502, Stone vs. Dean & Trustee; 8 Pick. R. 298, Lupton vs. Cutter & Trustee; 12 Pick. R. 22. Tucker vs. Clisby & Trustee. We think that is not necessarily the effect of such a change of the security. 4 Greenl. R. 47, Rundlet vs. Jordan & Trustee; 11 Pick. R. 101, Guild vs. Holbrook & Trustee. The trustees are of course to be allowed for necessary services and expenses, in taking care of the property which is in their hands. They may perhaps have no strictly legal claim for services in selling the goods ; but if it is made to appear, affirmatively, that the sale was advantageous, it will [525] be but equitable that they should receive a compensation for what has been in fact a benefit to the creditors. They would have been entitled to be allowed for custody and storage had they retained the goods. They must be allowed a reasonable compensation for the care and custody of money received. It is immaterial whether this is called “commissions,” or compensation for their services in collecting and paying over the money. 11 Pick. 101 They cannot be allowed for “ counsel fees” in the suits against them as trustees. For the fees and expenses in these suits, the costs must be deemed a satisfaction, 8 Pick. R. 260, Adams vs. Cordis, Trustee of Williams. If they had taken counsel respecting the trust under the assignment, before the trustee suits were commenced, under such circumstances that the amount paid would have been a proper charge against the fund, in case the assignment had been good, it might perhaps have been allowed. 11 Pick. R. 101; 8 N. H. Rep. 453. Trustees charged. Footnotes [*] Gilchrist, J., having been of counsel did not sit.