Hermstead's Appeal

The opinion of the court was delivered,

by

Sharswood, J.

Mahlon Fox was the assignee of the appellant for the benefit of creditors. He filed his account, which was referred to an auditor, who reported certain facts as appearing upon the examination of the accountant and other evidence before him, upon which he disallowed his claim to commissions. It appeared by the report of the auditor on exceptions that he had taken no notes of the testimony. The court below sustained the exceptions, and allowed the assignee commissions. They say in their opinion, “ Under the circumstances, it is impossible to make a satisfactory review of the auditor’s conclusions. The evidence should have been fully taken down, and returned to the court; and it was the duty of the party relying upon it to see that this was done. The assignee asserts that there is no evidence justifying thejauditor; and in turning to the record we find none.” We cannot assent to the position that it was the duty of the party relying on the testimony to see that it was reduced to writing. It was no more the duty of the one party than the other. It was the duty of the auditor to take notes of all the material evidence —not indeed to return it with his report, for that in a large majority of eases would uselessly encumber the record — but to have it ready to file in case it should be called for by the court. The auditor was the court’s own officer, and it was their duty to see that he performed his duty. The report should have been recommitted to him with directions to rehear the case and reduce the testimony to writing. The court were in error, therefore, in deciding the case on the assumption that there was not sufficient evidence to sustain the finding by the auditor.

*429The auditor reports three facts as the ground of his opinion: First. That no fair or usual account had been kept by the assignee. “ He produced no book of entries to show a correct and satisfactory account of his management of the estate.” This fact is admitted in the opinion of the court. It does not appear that the accountant denied it. It might not of itself he conclusive; but it was undoubtedly negligence. He must in such a case depend upon his memory or upon loose receipts or memoranda. Theife may be quite sufficient to make out the credit side of his account — the disbursements for which he has vouchers. But it leaves him to depend upon his memory or such loose memoranda for the debit side — the amounts received by him and with which he is chargeable. The second fact was, that he had carelessly lost or mislaid the vendue-book. It was not produced before the auditor — but the assignee insisted that he had possession of it when he made out the account, although in this matter the auditor reports that he contradicted himself. The court say: “ In the loss of the vendue-book and the failure to keep full accounts of his transactions, the assignee has failed in his duty.” They nevertheless proceed to allow him commissions. The third fact is, that the assignee had bought up debts of the estate at a discount, and then claimed a credit for them in his account as if paid in full. The fact is not denied, but the court say: “ The auditor concludes that the claims were purchased with the funds of the estate, because he says a calculation (drawn in part, at least, from the same statement of the assignee) renders it manifest that he had or should have had funds of the estate in his hands at the time. But is it safe to draw such a conclusion from such data against the sworn declaration of the assignee, that he did not use the funds of the estate for this purpose? We think not.” Suppose he did not use the funds of the estate, does that help the case of the accountant ? A trustee has no right whatever to speculate upon the probabilities that the estate will pay, for his own private gain. The rule is an inflexible one — funds or no funds: he can honestly claim no credit in his account with his cestui que trust, except for the amount which he has actually disbursed. It would be a strange doctrine to hold that he can screen himself from the consequence of having made such an unjustifiable overcharge, when discovered and exposed, by the plea that he had not used the funds of the estate, but his own funds, in the purchase of the claim. The cestui que trust is compelled to hunt up testimony to falsify the account, and if he should be unable to do so by the death or distance of the witnesses, or if he should be trustful and unsuspicious and institute no inquiry, the trustee would quietly retain in his own pocket the gain which belongs to the estate. It would not only be "impolitic but highly dangerous not to frown upon such misconduct, and visit it with the deserved penalty *430which always attaches to infidelity in a trustee. We cannot therefore concur with the court below in the conclusion at which they arrived upon their own version of the facts.

We see no reason to think that the court were wrong in regard to the item of the sow which forms the subject of the 2d assignment of error.

Decree reversed, and it is ordered that the sum of $270, allowed to the accountant Mahlon Eox for his commissions, be stricken out, and the record be remitted to the court below, that the balance may be distributed according to law.