Ellig v. Naglee & Sharp

Burnett, J., delivered the opinion of the Court—Field, J., concurring. The first point made by the plaintiffs’ counsel is that the Chancellor erred in finding that the trustees had fairly discharged the trust.

It appears that Sherman entered under his assignment, on the fourth of April, 1855, and that defendants called upon him for [695]the first time in that month. This delay in calling upon Sher" man was well accounted for, from the fact that the assignment to him was only intended as a mortgage to secure a loan of $5,000, an$ was unknown to the trustees until he entered to receive the rents in April. The rents due on the twelfth of Nov.ember, December, January, February, and March—five months —had not been collected of Brown & Keyser, although they were then solvent. But this delay was justified by the fact that Brown & Keyser were then putting up permanent improvements upon the property, at a cost of some $35,000. These improvements were completed in April, 1855. This indulgence was no doubt given to the lessees to enable them to finish their improvements, and was a prudent and justifiable act on the part of the trustees. From April to October 1, 1855, there were some six months wasted in fruitless attempts to compromise with Sherman. There was a clause in the lease to the effect that if the rent remained unpaid for thirty days after due, then the rent for the whole unexpired portion of the term should become due and payable at once. It appears from the testimony of General McDougall, that about the first of October, 1855, the law firm of which he was a member, consulted about the lease, and the trustees were advised to bring a suit against Sherman for the entire rent of the remaining portion of the term, amounting to some $84,000. The complaint was not filed, however, until June 11,1856, and the suit was determined in December, 1856, against the trustees. It is true, that by a stipulation of the attorneys, the complaint was filed nunc pro tunc, as of December, 1855 j but this stipulation did not cure nor excuse the delay.

It is insisted, by the learned counsel of plaintiffs, that the bringing of the suit for $84,000 against Sherman was not a proper exercise of discretion, and that the delay in bringing the suit was unjustifiable, and the trustees should, therefore, be held responsible for all the losses occasioned by this mismanagement.

It is a general principle applicable to trustees, that when they act with good faith, and without any selfish motive, they are entitled to be treated by a Court of Equity with liberality and indulgence; and, especially, when they act under the advice of counsel. Trustees act for the benefit of others, and not for themselves, and the fair exercise of their judgments should be a protection to them. Very supine negligence, or willful default, will render them liable; but to make them liable for mere errors of judgment would tend to discourage good and prudent men from undertaking any trust. (Garrett v. Noble, 6 Simons, 516; Taylor v. Benham, 5 Haw., 285: Thompson v. Brown, 4 John. Ch. R., 629.)