In re O'Hara

One Melanchthon L. - Seymour, by his will, appointed the respondent, Mr. O’Hara, his executor and trustee. The trust estate was to be enjoyed by Mr. Warren B. Sage for life, and upon his death was to go to his, Sage’s, appointees. In case of Mr. Sage’s failure to appoint, the principal of the trust estate was then to go to Mr. Sage’s lawful issue. Previous to Seymour’s death, Mr. Sage was himself executor and trustee under the will of Patience W. Seymour, who gave this same estate to Melancthon L. Seymour for life, and upon his death to his, Melancthon’s, appointees. Sage invested the estate in Connecticut in notes secured by mortgage upon Connecticut real estate, and in 1866, upon the death of Melancthon, he turned it over to Mr. O’Hara, who has held it ever since. It is now sought to remove O’Hara, in substance, because he did not reduce the Con

The answer to the main charge is that O’Hara simply continued the Connecticut investment as it came to him from Sage, and that he did so with Sage’s full knowledge and approval. Sage’s denial of such approval is unworthy of serious consideration. He has received the income for upwards of twenty years and he knew perfectly well where it came from. And why, it may be asked, .should he have objected to this investment. It was, in fact, an ■excellent one, 'and it was producing with unfailing regularity an income of from five to seven per cent upon the principal sum. It was also an investment' of his ' own choosing, a trust legacy to O’Hara from Sage himself, as Patience Seymour’s executor and trustee. Por some twenty years this investment was unchanged, but in 1886 the old mortgage was paid off and a new mortgage was given upon the same property, which was then greatly improved and enhanced in value. The present security is, in fact, about twice as valuable as the original. In his answér to the petition, O’Hara further states that he was ready to invest the remainder of the trust fund not covered by the»mortgage in compliance with the directions •of the surrogate.

The investment was greatly to Sage’s advantage, not alone because ■of the large income realized therefrom, but because such income was not diminished by local taxation. Clearly, Mr. Sage cannot now be heard to complain of this investment. If he has altered his mind .about it, and wishes a strictly legal investment, he should, at least, have asked the trustees to make the change before proceeding in this ■summary way. His present position is entirely untenable, for he not only approved of this investment throughout, but, as late as the '25th of September, 1890, approved in writing of the trustee’s •account, based, of course, upon such investment. He has received an excellent income during all these years, and now, without a word of warning, he attacks Mr. O’Hara for retaining the investment which produced that income; an investment, too, which originated with himself, and which has been greatly strengthened since its adoption by O’Hara. It thus appears that the breach of trust has here been

The position of Mr. Sage’s children upon this application is, of course, different from that of their father, but even they have made out no case for removal. They have but a contingent interest in the estate; that is, they take only in case their father fails to exei’cisehis power of appointment. But they undoubtedly have a right to> demand that the estate shall be invested in authorized securities. It does not follow, however, that, because, as against these contingent remaindermen, there has been a technical breach of trust, the trustee is necessarily to be removed. The rule is well stated by Mr. Perry in his work on Trusts (§ 276 [4th ed.]): “ Nor will a trustee be removed for every violation of duty, or even breach of the trust, if the fund is in no danger of being lost. The power of removal of trustees appointed by deed or will ought to be exercised sparingly by the court. There must be a clear necessity for interference to save the trust property. Mere error, or even breach of trust, may not be sufficient; there must be such misconduct as to show want of capacity or of fidelity, putting the trust in jeopardy.”

It is plain that here there has been no such misconduct as the learned author points out. There has been no lack of capacity or fidelity, and the trust has never been in jeopardy. If these contingent remaindermen had requested a change of securities, it would have been Mr. O’Hara’s duty to comply with their request. Had he refused, their request could have been enforced, and, meanwhile, Mr. O’Hara would have been chargeable with all loss caused by the unauthorized investment. He might even have been removed,, especially if his refusal were willful or in bad faith. But we think these applicants, under all the circumstances, owed it to the trustee to Confer with him, to make their complaints and express their wishes before taking so radical a step as is involved in an application for removal.. Mr. O’Hara’s solvency is not questioned, nor is. his character. And he states, under oath, that his financial standing- and responsibility are more than sufficient to meet any demand by reason of the premises. The contingent remaindermen have- not.

“ It is not, indeed, every mistake or neglect of duty or inaccuracy of conduct of trustees which will induce courts of equity to adopt such a course (remove a trustee).” The acts or omissions must be such as to endanger the trust property or to show a want of honesty or of proper capacity or of reasonable fidelity.

None of these derelictions have here been established, and we think, therefore, that the learned surrogate was right in denying the application. The costs were properly charged upon the petitioners. Their application was precipitate and ill-timed. It was certainly lacking in just consideration to a trustee who seems to have served their father faithfully for a great many years. And it was probably quite unnecessary, for doubtless a simple suggestion would have sufficed to bring about' the desired change of securities.

The decree of the surrogate should be affirmed, with costs.

Yan Brunt, P. J., and Ingraham, J., concurred.

Decree affirmed, with costs.