The first question, arising in the case, is,
whether the defendant has rightfully charged the plaintiff with the losses, growing out of his business connection with Huntington & Day.
By the terms of the original conveyance, the defendant, for the purpose of raising money, to pay the debts assumed by him, was authorized to sell and dispose of the personal property assigned to him, as he saw fit.
Under that authority, he had a right to sell them iron, and upon credit, if necessary, and, had a loss arisen upon such sale, fairly made, it might, undoubtedly, have been charged to the plaintiff: so far, he might be considered as acting within the scope of his authority, as originally conferred.
But he has gone further, and not only sold them iron, but loaned them money, indorsed their notes, and guaranteed the payment of their orders, to enable them to carry on their business. No such power was conferred upon him, by the instruments creating the trust, and, had the plaintiff done nothing more, he would not be liable for any loss, beyond such as arose from the sale of iron.
*310But, although the defendant acted originally without authority, yet, if his acts were done for the benefit of the trust, and were subsequently ratified by the plaintiff, with full knowledge of them, such ratification will bind him. And, so far as the defendant’s transactions with Huntington & Day, are concerned, down to April 15th, 1850, we are inclined to think, they have been ratified by the plaintiff’s bond, of that date. That instrument was given, that the defendant might be indemnified for his liabilities, incurred in the execution of the trust. And, among the liabilities thus enumerated, is the one growing out of the Huntington & Day business. The language of the condition of the bond is, that, whereas the defendant, for the benefit of the trust business, has indorsed and become surety for Huntington <$• Day, to the amount of some seven or eight thousand dollars, thereby recognizing the defendant’s liability, as indorser and surety, as having been incurred for the benefit, and in execution of the trust, and against which the plaintiff agreed to indemnify him.
The defendant continued his business with them, as it had previously been conducted, until the third day of June, following, when they failed, and a new and different arrangement was made with them. The loss, growing out of that business, down to that period, amounting to $1,206.42, we think, may rightfully be charged against the plaintiff, in consequence of the ratification contained in his bond, given a short time previous.
But, after that time, the defendant, instead of aiding Huntington & Day, with means to carry on their business, took their furnace into His possession, and continued the operation of it, for more than a year afterward. We discover nothing, in any of the documents, or in any act of the plaintiff, authorizing this to be done at his expense.
He indeed knew of the mortgage from Day to the defendant, and supposed it was given for his benefit, that is, to secure those liabilities, for which the plaintiff had rendered *311himself liable, by virtue of his bond ; but, at the same time, supposed that the defendant, in the management of their furnace, was acting as their agent, and, in that capacity, accountable to him for the iron used in the business,—a conclusion that any person, under such circumstances, would naturally have drawn, especially as it is not claimed, that the defendant ever consulted with the plaintiff, respecting the last arrangement.
Besides, the mortgage from Day was given to the defendant, in his own name, without any reference to his character, as trustee for the plaintiff,—a strong circumstance, indicating that it was then his intention to act for himself, and not for the plaintiff. But, as a heavy loss has been sustained in that business, he now claims a right to throw that loss upon the plaintiff.
Had the business been profitable, there is nothing in the case, showing that the plaintiff had any right to share in the profits. We think the defendant had no right, in the faithful execution of his trust, to place himself in such an equivocal position, that, if the business of operating the furnace of Huntington & Day, should prove successful, he could pocket the profits, and if unfortunate, charge the loss to the plaintiff. He should have either confined himself within the scope of the authority conferred upon him, or sought new power from the plaintiff.
The loss sustained by the defendant, in carrying on the furnace of Huntington & Day, subsequent to the 3d of June, 1850, amounting to $6,515.15, we think, ought to be stricken from his account.
2. Is the defendant entitled to the amount charged for his services'? Although he informed the plaintiff, when the original writings were drawn, that, as the trouble to which he might be subjected, could not then be known, and he preferred that $1,5.00, per annum, should be inserted as his salary, yet he should not expect to charge that amount, unless he was subjected to unforeseen losses and unexpected *312trouble ; and the committee have found, that his ^services from April 1, 1848, to the middle of May, 1849, while the plaintiff and Pierce were running the furnace under his charge, were not reasonably worth more than at the rate of $800 per annum, yet we think the stipulated salary, during that period, must be allowed. It was the duty of the plaintiff, if he meant to have the salary a conditional one, so to have expressed it in the contract. In the absence of fraud, on the part of the defendant, (and none is found,) the amount of salary, as prescribed in the contract, must furnish the rule.
But the salary, by the terms of the contract, was to continue, only during the time of operating the furnace : business was continued by him only to the 15th of April, 1850, when the furnace, with other real estate, was re-conveyed to the plaintiff. After that period, he was entitled only to a reasonable compensation, which the committee have found to be at the rate of $1,500 per annum.
But they have further found, that the trust might then have been closed, as contemplated by the parties, when the bond of the 15th of April was executed, had it not been for operating the furnace of Huntington & Day, and that, as we have already seen, was a matter between the defendant and them, and not falling within the legitimate business of the trust. The defendant’s salary, therefore, while attending to their business, must stand, as a matter between him and them, and ought not to be charged to the plaintiff.
3. The defendant had a. right to charge the amount paid by H. Chapin & Co., of which firm he was a member, for the purchase of the two claims against the plaintiff, and no more. It is perfectly well settled, that, if he alone had made the purchase, he could charge only the amount actually paid. His rights are not enlarged, by associating others with him in the purchase. It would open a door to numerous frauds, on the part of trustees, were the rule otherwise.
*3134. The plaintiff consented, that there might be a deduction of $42 from the price of the goods sold. It was, therefore, proper, that the balance only should be credited. It seems, that interest was not allowed upon the price of the goods, until some time after the sale. The reason why that was done, is not given. We are, therefore, not furnished with sufficient data to enable us to say, whether that postponement was rightfully made or not.
5. The plaintiff, in his contract with the defendant, agreed that, if the latter should be obliged 'to sell any of his own property, at a loss, to raise funds to pay the debts of the plaintiff, such loss should be reimbursed to him. The fair construction of that agreement is, that the loss contemplated by the parties, was the difference between the actual value of the property, and the price obtained, upon the sale of it.
But the defendant, under this agreement, claims a right to charge, not only the difference between the price obtained, and the value at the time of the sale, but at some future period, thereby talcing advantage of any rise, subsequent to the sale. He also claims a right to charge the difference between six per cent, interest, and the interest payable on the railroad bonds, and the dividends paid upon the stock, up to a subsequent period.
Such losses are not within the fair meaning of the contract. The amount of interest payable on the bonds, and of the dividends upon the stock, are circumstances to be considered, in determining their value. A bond, bearing seven per cent, interest, would be considered more valuable than one of the same amount, at five per cent., and would probably sell for more in market. The sums, thus charged, we think, should be expunged from the defendant’s account. But the sum paid for broker’s fees, on the sales, ought, in some form, to be allowed, as that amount may fairly be considered as lost, by the sale.
6. There is nothing shown, in the report of the commit*314tee, which justified the charge of the defendant, for his expenses in the suit. His right even to taxable costs, if a balance should ultimately be found in his favor, will depend upon the manner in which it shall be found, that the trust has been executed. It is in the discretion of the court, to allow or refuse them, and it ought to be exercised, as it shall appear that the conduct of the defendant has been faithful or unfaithful.
7. The plaintiff conveyed his property to the defendant, that it might be converted into money, and his debts thereby paid. It was originally supposed, that the trust could be closed, in from six to twelve months. But the defendant went on with the business, for a period of more than two years, at a high salary, until the plaintiff and his creditors became alarmed, and the closing of the trust was apparently as distant, as when it was created.
Under these circumstances, in April, 1850, the plaintiff’s bond of indemnity was substituted for the real estate mortgaged to the defendant, and in that bond it is expressly stated, that it was understood, that the defendant would convert the personal property in his possession, into money, as fast as it could conveniently be done, that it might be applied, in payment of the debts and liabilities, which it was then supposed by all parties, might be accomplished in from four to six months.
It was the duty of the defendant, under these circumstances, with all reasonable diligence, to convert the property into money, and pay off the debts. Instead of doing so, the committee find him, some six months afterward, disposing of $2,000 of the assets, in the purchase of railroad stock, which he subsequently keeps on hand, some nine months, receiving the dividends. This, in our opinion, was not a faithful execution of the trust, as contemplated by the parties, when the bond was given. He ought to have sold the iron, and not have used it, for the purpose of speculating in stocks. And, even if he could be justified in exchanging it *315for such property, it was his duty to have sold the stock, within a reasonable time ; and it is fair to presume, that it might have been done, as it is found, that it was taken at its marketable value. The loss, incurred under such circumstances, in our opinion, is not justly chargeable to the plaintiff.
8. The expenses in those suits against him, in which he was charged as being the trustee and debtor of Huntington & Day, stand upon the same ground as his claim for losses in running their furnace. At least, no sufficient reasons are shown for making a distinction. In taking a conveyance of their property, and operating their furnace, he must be considered as acting for them, and not as the agent of the plaintiff, and if, in so doing, he induced a belief, on the part of their creditors, that he was covering up their property, in consequence of which, he was sued, as being their trustee and debtor, the expenses thereby incurred, are a matter entirely between him and them, and do not concern the plaintiff.
9. The only remaining inquiry is, whether the defendant is justified in defending the suit in favor of Pierce, and charging the expenses to the plaintiff. And why should he defend, and attempt to set off a pretended debt, due from Pierce, to Pierce and the plaintiff, when they were in partnership ? Pierce had sold out to the plaintiff all his interest in that partnership, and, in consideration thereof, the plaintiff and defendant had given him their notes, to the amount of $5,000, and their bond to indemnify him against the partnership debts.
In that arrangement, the plaintiff had agreed that Pierce’s debt should be discharged. And why should it have been done otherwise ? He had purchased of him all his interest in the concern, and agreed to pay him $5,000, and assume all the debts. If there was a balance due from Pierce to the partnership, it would be natural for the parties to take *316that into consideration, in fixing the price that Pierce should receive for his interest in the concern.
It seems, that the business was so arranged, and the defendant was notified of the fact, before Pierce’s suit was commenced. The only ground upon which the defendant could be justified, in making such a defence, is, that it was done either for the benefit of the plaintiff, or for the protection of the defendant; neither of which is shown. The plaintiff, surely, could not wish to defeat a just debt, by setting off a claim, which he knew had been satisfied. And there is no evidence, that he ever even countenanced the defence.
And as to the defendant, he, at that time, held a bond of indemnity, signed by numerous individuals, which the committee have found, \yas a satisfactory one, and no claim has been made, that he was not amply secured by that bond. It is not, therefore, shown, that the defence was either sanctioned by the plaintiff, or was necessary for the protection of the defendant; and, in our opinion, the expenses were unnecessarily incurred, and ought not to be charged to the plaintiff.
Our advice, therefore, is, that the balance, found due the defendant, by the committee, be corrected in. the several particulars herein mentioned, and that a decree be made in conformity thereto.
In this-opinion, the other judges concurred.
Decree accordingly.