Grafflin v. Robb

Fowler, J., delivered the opinion of the Court-: This is a clear case, although it has been somewhat complicated by a most ingenious and elaborate attempt to fasten a liability upon the appellee, when, as we think, agreeing fully in that respect with the learned Judge below, none whatever exists. Nearly thirty years ago Henry C. Wysham was appointed trustee to sell the real and personal property of Jacob Grafflin upon the terms -and conditions and for the ⁴⁵² purposes set forth in a deed of trust from said Grafflin to Hugh Davey Evans and others. In pursuance of the decree of the Circuit Court of Baltimore City so appointing him, Wysham sold the trust property and reported his sales which were subsequently ratified by that Court. He also filed several auditor’s accounts by which the net proceeds of said sales were distributed according to the provisions of said deed of trust among the numerous children and grandchildren of the grantor.

It appears, however, that some of the distributees desired to have their shares of the proceeds of sale invested, and for that purpose various applications by petition were made by them to the Court. But in every instance in which such investments were authorized to be made the property to be purchased was- particularly described, and the power to make the investment .was conferred upon Wysham. Otherwise he would have been without authority in that respect, having ■been appointed as trustee for the sole purpose of sale and distribution of the proceeds thereof. It also appears that certain investments in ground rents were made by Wysham in trust, for Charles G. and Christopher L. Grafflin and their children respectively; but we have found no orders of Court authorizing such investments.

The deeds, however, recite such orders, and it may be assumed, perhaps, that they were passed. But whether this be so or not is not material here, for the beneficiaries accepted the rents, and no complaint appears to have been made by them in respect to this action of Wysham. After making the investment in ground rents just mentioned it is claimed that there was a balance of $700 due each to Charles G. and Christopher L. or their children. And it is those two sums which it is sought to recover from the Mayor and City Council of Baltimore by these proceedings by the' appellant, who, fifteen years ago was appointed trustee in the place of Wysham, who about that time left this State and has never since then returned.

The ground upon which this claim against the city is based is that these two sums of $700 each were, on ⁴⁵³ or about the month of November, 1870, invested in the purchase of two certificates of Baltimore City water stock, each for $700, both of which were issued to said Wysham, trustee, and that they were subsequently sold by him to the appellant, Robb, Register of said city, and by him transferred to the Mayor and City Council for the purposes of the sinking fund. It is conceded that full value was paid to the trustee, but the proceeds having been appropriated by him to his own use, the claim is that the city must again pay the value of said water stock to the appellant trustee for the beneficiaries claiming in these proceedings, because of the fact that the stock stood in the name of the trustee, Wysham, which, together with the proceedings of record in the Circuit Court of Baltimore City in the matter of the trust estate of Jacob Grafflin, was 'sufficient to put the city as purchaser upon inquiry, and to impute to it knowledge of the object and purpose of the trust, and to give it notice that Wysham was about to commit a breach of trust. While the law very properly requires all persons dealing with trustees, in reference to the sale or purchase of trust property, to exercise reasonable care to ascertain if such trustee is acting within the limits of his power, yet it does not establish an arbitrary rule which is or may be impossible to obey. Each case involving a transaction like the one before us must be considered and determined in the light of the facts therein presented.

In some cases it would be gross negligence for a purchaser to deal with a trustee without making the most careful investigation—especially when ample and easily accessible information is spread out upon the records of the Courts having jurisdiction of trustees. But when such information cannot be so had, the mere failure to make the attempt to obtain it, which, if made, would be of no avail, ought not, we think, subject the purchaser to punishment. This Court has not yet said that the word “trustee” alone in any and every case in which a trustee proves recreant to his duty by selling the trust property and appropriating the proceeds shall be suffi ⁴⁵⁴ cient to-give notice to the purchaser that a breach of trust is about to be committed. On the contrary our predecessors said in- Albert's case, 2 Md: 159, that the proper