SECOND DEPARTMENT, JULY TERM, 1898. [Vol. 32. and to give the testimony which was received. There are no other questions in the case which require attention. The judgment should be affirmed, with costs. All concurred. Judgment affirmed, with costs. 32 324 40 610 In the Matter of the Application of MARY J. WESTERFIELD and In the Matter of the Application of MARY J. WESTERFIELD and In the Matter of the Accounting of THOMAS ROGERS and WILLIAM In the Matter of the Judicial Settlement of the Accounts of THOMAS THOMAS ROGERS and Others, Appellants; MARY J. WESTERFIELD Trustee― liability of a trustee, excluded from participation in the management of the fund, for peculations of his co-trustee — decree entered by consent upon a joint accounting by the trustees its effect upon the innocent trustee's right to show facts in his exoneration. Where one trustee of a fund, by the concurrent action of his co-trustee and the cestui que trust, has been excluded from participation in the active management of the estate, he is not required to make active effort to ascertain the condition of the trust, and can only be liable for peculations of his co-trustee, provided he in some manner knew of such peculations in such sense that he could be regarded as a consenting party thereto, or has had such knowledge thereof as devolved upon him a duty of inquiry and active exertion to prevent loss. When, however, such trustee learns of the fact that his co-trustee has misappropriated the trust fund, it becomes his duty to inform the cestui que trust and to prevent his co-trustee from further continuing in the management of the trust App. Div.] SECOND DEPARTMENT, JULY TERM, 1898. estate, and where, with a view to making the fund good, he authorizes, although by advice of counsel, the advance of money from the trust estate upon improper securities, without the knowledge of the cestui que trust, he is responsible for the moneys thus advanced and for their realization from the securities in which they have been invested. * The effect of the trustee joining in an accounting in the Surrogate's Court and consenting to the entry of a decree therein, upon his right to take advantage of facts exempting him from liability for the misappropriation of the funds and for subsequent acts of his co-trustee, considered. APPEAL, in the first above-entitled proceeding, by Thomas Rogers, one of the trustees under the last will and testament of Jason Rogers, deceased, from a decree of the Surrogate's Court of the county of Westchester, made on the 21st day of February, 1898, and entered in said Surrogate's Court, charging the trustees under the last will and testament of Jason Rogers, deceased, with the sums found due the estate under a former decree of said Surrogate's Court, made on the 16th day of March, 1897, settling the accounts of said trustecs up to and including the 1st day of September, 1893, and further imposing liability upon said trustees for additional moneys received since said 1st day of September, 1893, to and including the date of the entry of the last decree. Also an appeal, in the second above-entitled proceeding, by Thomas Rogers and others, from a decree of said Surrogate's Court, made on the 20th day of April, 1898, and entered in said Surrogate's Court, removing Thomas Rogers and William Cauldwell from their positions as trustees under the last will and testament of Jason Rogers, deceased. Also an appeal, in the third above-entitled proceeding, by Thomas Rogers, from a decree of the said Surrogate's Court, made on the 12th day of May, 1898, and entered in said Surrogate's Court, adjudging Thomas Rogers to have been guilty of willful contempt in failing to comply with the above-mentioned decree of March 16, 1897, and directing that said Thomas Rogers pay a fine of $60,000, and be confined in the county jail of the county of Westchester until he should pay the said fine. Also an appeal, in the fourth above-entitled proceeding, by Thomas Rogers, from an order of said Surrogate's Court, made on the 31st day of May, 1898, and entered in said Surrogate's Court, denying a motion made by the said Thomas Rogers to open the decree judi SECOND DEPARTMENT, JULY TERM, 1898. [Vol. 32. cially settling the accounts of Thomas Rogers and William Cauldwell, as trustees under the last will and testament of Jason Rogers, deceased, embracing the proceedings of the trustees up to September 1, 1893, so as to declare that the moneys and property therein recited were in the sole possession of William Cauldwell and not in that of Thomas Rogers, and that the decree to pay over the moneys and property be changed so that it decree that William Cauldwell, and not Thomas Rogers, pay them over. Edward Winslow Paige [Henry L. Stimson and Rastus S. Ransom with him on the brief], for the appellant, Thomas Rogers. William G. Wilson [Hamilton Wallis with him on the brief], for the respondents. HATCH, J.: In refusing to exonerate Thomas Rogers from liability for the devastavit of the estate by his co-trustee Cauldwell, the learned surrogate held that the decree of March 16, 1897, conclusively established the liability of Thomas Rogers to account for the assets then shown to have been in the possession of the trustees. The verified petition which accompanied the account stated that the trustees had possession and control of such assets, and the decree being founded upon such petition and account concluded Thomas Rogers from being heard to question the same. We agree with the learned surrogate that the decree had the effect of establishing the liability of Thomas Rogers to account as therein directed, and so long as the decree stands he may not be heard to question it or his liability under it. (Code Civ. Proc. § 2552, 2743; Matter of Waring, 1 App. Div. 29; Matter of Underhill, 117 N. Y. 471.) While this law is sound, it by no means follows that Thomas Rogers was liable on account of such decree for the devastavit which had taken place, subsequent to the rendition of such account, by the act of his co-trustee, even though the whole sum of the devastavit was known to Thomas Rogers at the time of the entering of the final decree on March 16, 1897. The account was a joint account. The decree entered thereon did not purport to charge or find that the fund was in the possession of one to the exclusion of the other; it did establish a joint possession and liability therefor for the fund App. Div.] SECOND DEPARTMENT, JULY TERM, 1898. as reported at that time. If there was not on hand at such time the amount of money represented by the account and decree, yet the effect of such decree would be to charge conclusively each trustee personally therefor. But if subsequent to such decree the money was misappropriated by one trustee, without the fault or neglect of the other, we think that the trustee without fault might be permitted to show such misappropriation of the funds in existence at the time of the decree, and be relieved from liability on account thereof. In principle such condition would not be different from that which permits one co-trustee to exonerate himself from liability for his co-trustee's devastavit when called upon to account. In any event, the decree would not have the effect of conclusively charging Thomas Rogers for the devastavit of the estate which arose subsequent thereto in the due administration of the estate, by the act of his co-trustee, assuming that he was guilty of no wrong or negligence in the matter. It would then be evidence simply of Thomas Rogers' acts in connection with the administration of the estate as bearing upon the question of his liability for the fault of his co-trustee. At the time when the account was! rendered the amount of money misappropriated by Cauldwell was the sum of $20,000, and for such sum the settlement of that account and the decree entered thereon fixed the liability of Thomas Rogers. But it established it for no more than that sum, so far as a deficit thereafter arose through the misapplication of moneys by Cauldwell. The remainder of the deficit was thereafter created by Cauldwell, and the decree constituted no obstacle to Thomas Rogers in showing facts which exonerated him from liability therefor. This being the operative force of the decree, we are asked to examine the evidence, in order that we may determine whether the decree should be opened to permit proof to be given in exoneration of Thomas Rogers from liability for the $20,000 which the decree establishes, and also to consider if he should be relieved from the whole of his co-trustee's devastavit, and in connection therewith to pass upon the propriety of his commitment for contempt in the present condition of the parties and the trust estate, for not obeying the decree of March 16, 1897. The learned surrogate, in addition to holding that the decree, entered in March, 1897, is a binding adjudication as to the joint SECOND DEPARTMENT, JULY TERM, 1898. [Vol. 32. custody of the trust funds, has gone much farther and held that, independent of such decree, the trustee, Thomas Rogers, is liable for the devastavit of the estate by his co-trustee. In this respect we think the learned surrogate is in error. We think the undisputed facts fairly show that, prior to the 8th of December, 1895, Thomas Rogers is not chargeable with the misapplication of the funds in the hands of his co-trustee, and is not responsible therefor. It appears that after the qualification of Columbus B. and Thomas Rogers as trustees under the will of Jason Rogers, and as early as 1876, Columbus took almost entire charge of the great bulk of the estate, and for all practical purposes excluded Thomas from participation in its management. Thomas Rogers seems to have been regarded by the cestuis que trust as a person of small business capacity, improvident in the management of his own estate, and addicted to habits which to some extent disqualified him from assuming and properly managing a large estate. This is evidenced by a history of his business life, as it appears in the record, quite as much and as satisfactorily as by the oral and written testimony. In an early day he was the treasurer of the Rogers Locomotive Works, but lost this position; then he seems to have tried the railroad business for a short time, in St. Louis, Missouri, but abandoned the place. He again engaged in similar employment at Providence, Rhode Island, and after a short interval surrendered that place. This seems to have covered his active business life, except as he discharged some small duties in connection with his trust. He was twenty-four years of age in 1868 when his father died, and is now about fiftyfour. During this period he has been, at least at times, oppressed with debts incurred for the support of himself and his family, and importuned Columbus B. Rogers, when acting as trustee, to relieve his necessities, and has anticipated his share of the estate to quite a large amount. In one of his letters to Columbus B. Rogers he says: "I have now turned over a new leaf positively for good, & propose to keep untarnished from any disgrace the name of Rogers." J. S. Rogers, a son of Thomas, testified that Mrs. Westerfield stated to him that his father "was a drunkard and a spendthrift; said she recalled his opportunities with the Rogers Locomomotive Works; * -- said he had not taken advantage of them, and wasted all of his own money." This condition makes |