Scott v. Jones

Bartholomew, C. J.

In 1894 G. A. Grover was doing a general merchandise business at Horace, in Cass county, N. D. On December 19, 1894, he executed a deed of trust of all his property to one Albert E. Jones, for the benefit of his creditors. The deed was executed by Grover, as trustor, and Tones, as trustee, and the creditors of Grover, as beneficiaries. This same deed was before us in Mercantile Co. v. Grover, 7 N. D. 460, 75 N. W. Rep. 911, 41 L. R. A. 252. Pursuant to the deed, Jones took possession of the property, and proceeded with the execution of his trust. In February, 1897, the trustor brought an action against the trustee to compel an accounting, claiming that said trustee was converting the property to his own use, and not properly accounting for the same. Grover being subsequently adjudged a bankrupt, his trustee, H. D. Scott, was substituted as plaintiff. There was an answer in full denial of this claim. The trial resulted in a judgment against Jones for $1,000, and he appeals.

None of the testimony was brought upon the record. The trust deed was made a part of the complaint, and is before us. Appellant urges but one ground for reversal, and that is that the finding of fact does not warrant the conclusions of law. We think the point must be sustained. In the trust deed we find this provision: “The said party of the second part hereby accepts said trusts, and covenants with the said party of the first part, and with each of the parties of the third part, that he shall and will faithfully execute the several trusts hereby established: provided, however, that said party of the second part shall not be liable for errors or mistakes of judg*552ment in the execution thereof.” The court finds that Jones was indebted to the estate in the sum of $2,492.89, but that the estate was indebted to him in the sum of $1,492.89, leaving a balance of $1,000, for which judgment was ordered. The twenty-first finding of fact reads: “That said Jones failed to keep proper books of apcount of his transactions as such trustee. That he kept books of account under a system of double-entry bookkeeping, but the entries therein were so carelessly and improperly made that the books do not show a true record of his business. But the court expressly finds that, in its judgment, from the evidence, defendant, Jones, has not been guilty of any dishonest acts; any delinquency arising being the result of accident, error, and misadventure in the conduct of the business.” It is clear that from the books kept by the trustee, or from evidence aliunde, or from both, the court was able to state to a penny the condition of the account of the trustee, because he finds the exact balance. It is certain, then, that no loss occurred to the estate by reason of careless or negligent bookkeeping. The finding quoted expressly declares that the trustee had been guilty of no dishonest acts, and that the delinquency was the result of accident, error, and misadvertence in the conduct of the business. But, in our judgment, that is exactly the character of delinquency from which the trust deed relieved the trustee when it declared that he should not be held liable for errors or mistakes of judgment in the execution of the trust. Judgment on the findings should be entered dismissing the action as to the defendant Tones. It is so ordered. Reversed. All consur.