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proper and legal investments for trust funds, and absolve the trustees from responsibility for the exercise of bad judgment. Neither do I believe it to be a safe thing to rely entirely upon the bond salesman's recommendation nor the reputation of the house he represents. There are other ways of ascertaining whether securities are seasoned, whether they have borne the stress of time and are good and reliable. The rule is very well stated in Matter of Hall, 164 N. Y. 199, 200, where the court said:" The range of so-called 'legal securities' for the investment of trust funds is so narrow in this state that a testator may well be disposed to grant to his executors or trustees greater liberty in placing the funds of the estate. But such a discretion in the absence of words in the will giving greater authority should not be held to authorize investment of the fund in new, speculative or hazardous ventures. If the trustees had invested in the stock of a railroad, manufacturing, banking, or even business corporation, which, by its successful conduct for a long period of time, had achieved a standing in commercial circles and acquired the confidence of investors, their conduct would have been justified, although the investment proved unfortunate. But the distinction between such an investment and the one before us is very marked. Surely there is a mean between a government bond and the stock of an Alaska gold mine, and the fact that a trustee is not limited to the one does not authorize him to invest in the other."

As has already been stated, the securities in question were, in the language of the Hall case, new, speculative and hazardous ventures. They were not the securities of industries which, by their successful conduct for a long period of time, had achieved a standing in commercial circles.

My conclusion is that the trustees did not employ

Misc.] Surrogate's Court, Chemung County, January, 1918.

such vigilance, sagacity, diligence and prudence as, in general, prudent men of discretion and intelligence employ in like matters of their own affairs. In other words, I do not believe a vigilant, sagacious, diligent and prudent man, even under the discretion given the trustees in this will, would have invested $62,970 of trust funds in new ventures. I have made a diligent study of the very excellent brief of the counsel for the trustees and of the many cases cited therein, and I feel certain, under all the circumstances of the whole case, considering the investments held by the testator and the language of his will, that my conclusion, as stated, is correct. Especially is this true as to the voluntary investments in bonds of new concerns in foreign states, when no strong necessity or pressing emergency is shown therefor. Ormiston v. Olcott, 84 N. Y. 343.

As to the objection that the trustees did not act jointly in the purchase of securities and in the management of the trust estate generally, it will perhaps be well to refer to the evidence of each trustee to ascertain to what extent he participated and his co-trustees were consulted.

All three trustees testified that they knew they were acting as trustees. Trustee McDowell testified that he did not consult his co-trustees with reference to the purchase of the Lewiston Land and Water Company bonds. As to the Birmingham, Ensley and Bessemer bonds, he was not sure whether he consulted with his co-trustees with reference to their purchase. He also testified with reference to these bonds that he could not tell whether he would have purchased them if he had known the road was not in operation and that he didn't know whether it would be a good investment or not if the road were not in operation at the time of the purchase. He also testified that he knew that Poor's and

Surrogate's Court, Chemung County, January, 1918. [Vol. 102.

Moody's Manuals were the best publications, but couldn't tell whether he consulted them before or after the purchase of the bonds. The Sacramento Valley Irrigation Company bonds were purchased with the consent of his co-trustees. He had no recollection of consulting with his co-trustees with reference to the purchase of the Empire Lumber Company bonds. All the trustees took part in the purchase of the Rochester, Syracuse and Eastern bonds. With reference to the Gulf, Florida and Alabama Railroad Company bonds he doesn't testify that he consulted his co-trustees. Aside from the purchase of the Rochester, Syracuse and Eastern bonds, trustees Langdon and Decker seem to have no recollection of having taken part in the purchase of any bonds of the estate. Both these trustees knew that the Gulf, Florida and Alabama Railroad Company bonds were being offered for sale by an Elmira firm of brokers but they couldn't swear they were consulted with reference to their purchase for the trust estate. Mr. Langdon testified that all the work of the estate both as executor and trustee was done by Mr. McDowell except the actual countersigning of checks.

I think it fairly appears that all the investments were made by trustee McDowell. In none of the investments did either of the other trustees take the initiative. In the purchase of the Rochester, Syracuse and Eastern bonds alone did trustees Langdon and Decker take part. The funds of the estate were deposited in the bank in the name of "Estate of R. M. McDowell." The checks drawn on this deposit were signed by Mr. McDowell and had to be countersigned by one of the other trustees. Most of the checks that were drawn were for routine payments. In the matter of the exchange of certain securities for some of the new ones that have defaulted, it was not necessary to draw a

Misc.] Surrogate's Court, Chemung County, January, 1918.

check. It was only in those cases where there was something to be paid out on the transaction that one of the other trustees would be asked to countersign the check.

The account shows that the first investment made by the trustees was the purchase of the Rochester, Syracuse and Eastern bonds and the letter written by trustee McDowell to Mr. Fearey, bondsalesman, gives an idea of the attitude of Mr. McDowell, trustee, at the time of the making of this investment.

"MR. THOMAS H. FEAREY,

66

"November 24th, 1909.

Canandaigua, N. Y.:

My DEAR MR. FEAREY: I went out of town the latter part of last week and returned yesterday afternoon to find your communications here.

"After you left and when your letter from New York came I took the matter up with the other trustees and they seemed very cautious. They gave me no answer one way or the other and when I went away they had not made up their minds what to do.

"Today I have been studying the will and find that Uncle has given us trustees full power to invest the funds of the estate as we see fit using our own discretion, leaving the whole matter in our hands. I think now that I can get the other trustees together and show them that we have absolute power over the estate and that there is no liability on our part for any errors in judgment and that they will consent to permit me to make this investment. If they do we will take the bonds. I will try and see them today and let you know.

"In the meantime if you have sold the bonds it is all right. I hope that my unavoidable delay has not caused you any inconvenience or disappointment.

Surrogate's Court, Chemung County, January, 1918. [Vol. 102.

In the letter Mr. McDowell states that after studying the will he finds that the trustees are given full power to invest the funds of the estate as they see fit and use their own discretion, leaving the whole matter in their hands. He then goes on to say he will now be able to "show them," his co-trustees, that they have absolute power over the estate and that "there is no liability on our part for any errors in judgment "and that with that assurance he can obtain their consent to permit him to make the investment. His co-trustees were, however, disposed to be "very cautious" and they did not readily consent to the investment in these bonds. Mr. McDowell from his letter seems to have insisted on the purchase of these bonds and doubtless gave his co-trustees positive assurance that there was no liability in case of loss and that their powers under the will were practically unlimited. He is a lawyer. His co-trustees are not, and this assurance on his part doubtless accounts for his co-trustees thereafter paying so little attention to the matters of the estate. They were given to understand at about the date of this letter, when the matter of making the first investment came up, that there was no need of their being cautious and thereafter the whole matter was left to the judg ment of Mr. McDowell alone, and from that time on practically everything concerning the investment of the funds of the estate and the management of it was left in his hands and to his judgment. This, of course, is contrary to the intention of the testator as appears by the terms of the will. The testator intended that the three trustees should act together in matters pertaining to the estate. If he had not so intended he would have named but one trustee. The law requires that the three trustees should act jointly in estate affairs except perhaps in purely ministerial matters. Fritz v. City Trust Co., 72 App. Div. 532; Jessup