It is insisted by the counsel for the appellant, that & petition, was so far an inappropriate, remedy, that even jurisdiction was., not acquired by the court? and the, proceedings should, therefore, be dismissed, and. the party required to seek relief by action, Notwithstanding the able argument submitted by the learned counsel for the. appellant, we are not convinced that the proceeding, is fatally defective. The parties appeared and investigated the merits without raising this question until an appeal was taken; under such circumstances the objection should not be. regarded with favor. If the court acquired jurisdiction of the person it is ■sufficient, as there can be ,no reasonable doubt but that it possessed jurisdiction of the subject-matter. If the party against whom the proceeding was instituted had deemed an action necessary, or that other pai-ties should be represented, he. shoiild have, .promptly applied to, the, court for such relief; and. having omitted, *392:to do so, nothing short of an inexorable rulo requiring it should induce the court to dismiss the proceeding after so much time has been occupied and money expended iu this controversy. The subject-matter of this investigation is a trust created by will, and in regard to which a court of equity possesses jurisdiction. (Gott v. Cook, 7 Paige Chy., 521; Kane v. Gott, 24 Wend., 641.
Any party who is interested in the trust may apply to the court for relief in regard to the fund or the management thereof by the trustee. Such application may be made iu any form, which the law sanctions. In matters of equitable cognizance, proceeding by petition is as old as jurisprudence, and has beeii favored rather than discouraged by the courts. It is difficult, if not absolutely impossible, to indicate an unvarying rule by which to determine in equity cases when an action is indispensable, avo think it must mainly be left to the sound discretion of the court to be exercised in view of the circumstances of the particular case. In this case Ave perceive no practical difficulty in determining the questions involved, and settling the rights of the parties without abandoning this proceeding and incurring the delay and expense of an action.. The real question to be settled was Avhethcr Anthony L. Hoguet had so far violated his duty, in regard to the proper investment of the fund, as to render him liable for the loss which had occurred. It does not folloiv that his estate is to be excused, because the other trustees may have become liable in consequence of failure to discharge their duty in respect to this' trust; nor is it indispensable that their liability be determined iu this proceeding. We conclude that this objection should not prevail. (2 Barb. Chy. Prac. [revised], 579; 2 Harrs. Chy., 25; Godwise v. Gelston, 10 Johns., 507, 521; Quackenboss v. Southwick, 41 N. Y., 117; In the Matter of the Mechanics' Bank, 2 Barb., 446; In the Matter of the Petition of Livingston, 34 N. Y., 555; The People ex rel. Jennys v. Brennan, 3 Hun, 666; People v. Norton, 9 N. Y., 176; Sheldon v. Fortescue, 3 Wills., 104; Fisher v. Hepburn, 48 N. Y., 41.)
The appellant further contends that, upon the merits, the re- ‘ port of the referee should not have been confirmed by the Special Term. James Foster, Jr., died in the year 1854, leaving a last ' will and testament, by AArhioh he gave in trust to Gabriel Mead *393and William A. Carter $30,000, the income of which he directed paid to his daughter, Mary E. Foster, now Mary E. Whittelsey, during her natural life, and the principal to be paid, at her decease, to hrr lawful issue, and in cuse she left none, to other parties specified in such will. The said Mead and' Carter refused, to execute the trust and were discharged, and Anthony L. Iloguet and Andrew C. Getty were appointed- trustees by the court in January, 1856. Iloguet received the '$30,000 -in cash, and .assumed the exclusive care and control’ thereof. The- facts established upon the hearing, and which were-fully- discussed by the referee, show a disregard of the rule prescribed- by the courts in regard to the investment - of crust funds. -If-a trustee departs from such rule, he does so at his peril, and becomes personally-responsible for any loss occasioned thereby. In this case Hoguet received the fund in money, and therefore was not embarrassed by any previous investment, or by any express direction in the will in regard thereto. His duty was clear, and the departure ■therefrom voluntary. (King v. Talbot, 40 N. Y., 76; Ackerman v. Emott, 4 Barb., 626; 2 Story’s Eq. Jur., 640, § 1275.) If Hoguet had passed over to 1ns successors, money or such securities as the law required, ho could properly claim exemption from liability for any loss which subsequently occurred to the fund. But having delivered such securities as the law did not recognize as a valid investment, he continued responsible for the security of the fund until it became legally invested or converted into money. It is not the duty of the court to speculate in regard to what the result would probably have been, if the investments had been such as the law required. The party interested in the fund was not required to investigate all the transactions in regard to ifs management, with a view to establish which of the trustees had been most in fault. The formal discharge of Anthony L. Hoguet should not have the effect, under the circumstances, to shield him or his estate from liability. It appears that Mary E. Whittelsey, the cestui que trust, was not informed in regard to the manner the fund was managed by Anthony L. Hoguet, and she should not be chargeable with the knowledge which the attorney Genet possessed in regard to the matter. ■ (Mandeville v. Reynolds, 68 N. Y., 529, 540.) Especially so as she is only *394entitled to the income of the fund during her natural life. We .conclude that the- decision of the- referee was correct m regard to the portion of 'the fund included in the mortgages and the note of $15,000. In.reference to the note of .Henry Hoguet for.$5,000, the referee finds that it was delivered with the other securities to Getty, the trustee, and that it was subsequently paid by the maker. Wo-are of opinion that the delivery of such note to Getty under the order- of the -court, coupled with the- actual payment thereof, had-the effect to free Anthony L. Hoguet from all liability for the portion of the -fund embraced in such note. The subsequent diversion of the iiote • by Getty, or his associate trustee Genet; sliould: not have- the effect to charge Anthony L. Hoguet any more than, if ho had paid over the money, and the same had been lost in consequence-of the negligence or misconduct of such trustees. By the payment of the note, the fund, to that extent, became converted into money. It is immaterial to whom such payment was made, as -it appears to have boon made after the delivery of the note to Getty, and without'.any connivance on the part of Anthony L. Hoguet. The omission to invest trust- funds in the manner required: by law charges the trustee, only in case the security which, lie-does take fails to produce the money. In this case no such result followed, as the note was paid. We faff to, perceive upon what ground Anthony L.. Hoguet or his estate could be- made liable for that portion of the fund. The rule adopted by the courts in regard to the investment of trust funds is unquesti.onably-sound', and calculated to produce salutary results; but the doctrine should not be carried so far as to do positive-injustice to a trustee in a case where it appears that such omission of duty- has not contributed to the injury complained of. Wc are satisfied that as to the portion of the fund which was, embraced in said note of Henry Hoguet, the referee erred in holding the estate' of Anthony L. Hoguet liable, and that his report, to that extent, should not have been confirmed. The, order of the-Special Term should-be modified by affirming it in' all respects, except, in regard to the portion cf the fund embraced in the- note of. Henry Hoguet, as to that it should be reversed. Neither' party should have costs of this appeal, as neither wholly prevail.
*395Potter, J., concurred. Present— Ingalls; .P. J., .and PotteRv J.0rder modified as-directed in the - opinion,, without.- costa, to either party.