Opinion
October, 1893.
Arnoux, Ritch Woodford, for the administrator.
Porte V. Ransom, special guardian.
Amongst the assets which came into the possession of the administrators herein were shares of stock in various corporations of a speculative character. Instead of disposing of these, they took the risk of retaining them. One block of fifty shares in an ice company, which was appraised at $5,000, brought into the estate nearly $11,000 of dividends, and was afterwards sold for $8,300. Another lot, appraised at $1,000, earned in dividends nearly $80,000, and the stock is still retained by the estate. Some other of the stock paid dividends for a time and then ceased; others never brought in any income whatever. Taking the estate as a whole, the administrators have disposed of and collected a little more than the entire inventoried value, while they have received for interest on balances and dividends nearly $150,000. Among the securities so held by the administrators were 100 shares of the stock of a mining company, the par value of which was $10,000, and which was appraised at $5,000; this stock has never been sold. Dividends to the amount of $1,500 have been received. The evidence shows and the referee finds that the stock has always been unsalable. The accountant, however, claims credit for a subscription of $5,000 of the bonds of the company, which he purchased for the purpose of protecting the stock holding of the estate. An objection was made to the allowance of this sum by the special guardian and was sustained by the referee, who charges the administrators therefor, and with interest thereon from the time of payment. The court deals with executors and administrators with much greater liberality where investments which result disastrously come into their hands from the deceased. They are only required to act in good faith and to exercise a sound discretion. "Although by the light of subsequent events the course determined on may appear unwise, he cannot be held liable for any loss or depreciation of stock unless it be found that he acted carelessly or in bad faith. If the testator has given no directions in his will the ordinary rules of prudence and diligence apply, and the fact that he has invested his property in particular stocks, shares or corporations, mortgages or securities, will go far in justifying his executor in continuing them. Woerner's Law of Administration, vol. 2, p. 710, and cases cited. In the case at bar no question whatever is made as to the good faith of the accountant. In pursuing a settled and consistent policy, with reference to the speculative securities of different kinds which came into his possession, he acted with rare good judgment. Had he looked only to his own protection from risk and a speedy settlement of the estate and consequent shifting of responsibility from his shoulders, the infants in whose behalf complaint is now being made would have been deprived of the enormous advantages which have accrued from his management. To permit a distributee to select an investment out of others more fortunate, though the executor's conduct with reference to all has been actuated from the same motives and in the exercise of the same discretion, would be a gross injustice. It is a familiar maxim "that he who seeks equity must do equity," and infants are not more relieved from this rule than adults. Upon a survey of the entire administration of this accountant, I think that his judgment is to be commended; that his good faith is beyond question; and still it is seriously urged that I must, nevertheless, mulct him in a large sum of money because of a technical violation of law, although the persons seeking thus to penalize him have been by just such violation largely benefited. Such a claim does not recommend itself to my notions of equity, and I refuse to give the support of my opinion to such construction of the law. In the respects above alluded to, the exception to the referee's report is sustained, and in all other respects the report is confirmed.