The opinion of the court was delivered by
Horton, C. J.:Statement of the case. On the 11th of March 1870, the creditors ■of Bancroft Bros. & Company, who were in failing circumstances, at Columbus, Ohio, entered into an arrangement in writing with the firm to the effect, that if they would assign a11 the Property they possessed, (describing it,) to William Jamison, in trust for their benefit, and that if Harvey Bancroft and wife would also give to Jamison, as trustee, a mortgage on two certain lots in the city of Emporia, (describing them,) conditioned to make good any deficiency that might occur in the assets of said firm toward the payment of the creditors, then that they would extend the time for payment of their respective claims, one, two, and three years. Thereupon said Bancroft Bros. & Company did convey and assign to said Jamison, (the plaintiff,) in trust for said creditors the assets of said partnership, and *179Harvey Bancroft and wife did execute and deliver to said Jamison, as trustee, a mortgage on the said lots in Emporia, in which they referred to the said written agreement (of March 11th 1870) of the creditors with Bancroft Bros. & Company, and further set forth, that if the said Jamison should well and truly discharge the duties of his trust, and collect, dispose of, and properly apply'the proceeds of such collections and sales to the liabilities.of said firm, if any portion of said indebtedness should still remain unpaid, and if said firm, after reasonable notice of the amount so unpaid, should fail to pay the same, “then the said Harvey Bancroft' and Harriet N. Bancroft, agree to pay such deficiency in three equal annual payments after the date thereof,” and that in case of their failure to pay, then the said trustee was to sell the mortgaged premises, and out of the money arising from the sale to retain the amount which remained unpaid, upon the said indebtedness of the firm.
This suit was brought in the court below to foreclose' the conveyance of said Harvey Bancroft and his wife. The original petition set forth the agreement of the creditors with the firm, of March 11th 1870 — the conveyance of the lots in the city of Emporia — and alleged, that after a proper application of the assets of the firm on its indebtedness, and after reasonable notice thereof to the firm, there remained unpaid and due the creditors $12,286.74, with interest thereon from August 1871, with the usual averments in such petitions, and a demand for personal judgment against Bancroft and wife, and for the foreclosure of the mortgage, etc. On motion of the defendants, Bancroft and wife and W. T. Soden, the court struck out of the petition the allegation “that said Bancroft and wife agreed and promised to pay the deficiency in three equal annual payments,” and the demand for a personal judgment. Afterward the petition was amended to conform to the ruling of the court, and the said defendants answered by general denial. The case was tried to the court, a jury being waived, and the plaintiff requested the court to *180find the conclusions of fact and law separately. The follo.wing are the findings of fact:
1st. — At the city of Columbus, in the state of Ohio, on the 11th of March 1870, the plaintiff, William Jamison, was by instrument of writing duly appointed a trustee by certain creditors of the late firm of Bancroft Brothers & Company, for the purposes set out and described in exhibit “A” attached to plaintiff’s petition. Said plaintiff as such trustee immediately qualified and entered upon the discharge of the duties of said trust.
2d.-Immediately upon the acceptance of said trust by said plaintiff, the said firm of Bancroft Bros. & Co. conveyed to said trustee, and put him in the possession of all the property, real and personal, set forth and described in exhibit “A” attached to plaintiff’s petition, for the purposes therein expressed. ■
3d. — On the 28th of March 1870, the defendants Harvey Bancroft and Harriet N. Bancroft his wife, executed and delivered to said plaintiff, trustee aforesaid, their mortgage deed, and thereby conveyed to him lots Nos. 133'aud 135, Commercial street, in the city of Emporia, Lyon county, Kansas, for the purposes, and upon the conditions set forth and described in said mortgage deed, a copy of which is attached to plaintiff’s petition and marked exhibit “B.” At the time of the execution of said mortgage deed by said Harvey Bancroft and his wife, the premises therein conveyed were and for a long time prior thereto had been their homestead.
4th.-On the 5th of October 1874, the said plaintiff as such trustee caused a written notice to be served on Harvey Bancroft and Robt. D. McCarter, members of the firm of Bancroft Bros. & Co., and Harriet N. Bancroft, notifying them that he had collected all the accounts and bills receivable, as far as he had been able to collect the same, and had converted the real estate transferred to him as such trustee into money, and had applied all the proceeds of said accounts, bills receivable, and real estate, upon the indebtedness of said firm of Bancroft Bros. & Co., and that there remained due and unpaid to the creditors of said firm of Bancroft Bros. & Co. the sum of $12,127.74, with interest thereon from August 3d 187T.
5th.-On the 30th of October 1873, the said plaintiff, as such trustee, caused a written notice to be served on Robert *181E. Sheldon and Carl N. Bancroft, members of the firm of Bancroft Bros. & Co., notifying them that he h'ad, on the 29th of September 1873, completed the collections of all the accounts and bills receivable of Bancroft Bros. & Co., and had converted all the real estate transferred to him as trustee for the benefit of the creditors of Bancroft Bros. & Co., and had applied the proceeds of said collections and sales upon the indebtedness of said firm of Bancroft Bros. & Co., and that after deducting his expenses as trustee, and applying said proceeds upon said indebtedness, there remained still due and unpaid-to the various creditors (naming, them) of said firm of Bancroft Bros. & Co., the sum of $12,286.74, with interest thereon from 3d August 1871.
6th. — Said plaintiff, as trustee aforesaid, has realized out of the assets of the said firm of Bancroft Bros. & Co. the sum of $9,527.92.
7th.-Said plaintiff, as trustee aforesaid, has paid and expended, in expenses and in payment of incumbrances on the property conveyed to him as trustee, the sum of $4,128.94. Said plaintiff, as trustee aforesaid, has paid to the creditors of the firm of Bancroft Bros. & Co. the sum of $5,411.73.
8th.-At the commencement of this action, there remained due-and unpaid to the creditors of the late firm of Bancroft Bros. & Co. the sum of $12,200.74, with interest from August 1st 1871.
9th.-The said creditors of the said firm of Bancroft Bros. & Co., mentioned and set out in the mortgage in question, did, in accordance with the conditions therein contained, extend the time of payment of their said claims against the said firm of Bancroft Bros. & Co. one-third in one year, one-third in two years, and one-third in three years, from the 11th of March 1870.
10th — The sum of $660 is a reasonable attorney-fee for the foreclosure of the mortgage in this action.
11th. — Said plaintiff, as trustee of the creditors of'the firm of Bancroft Bros. & Co., has not well and truly discharged the duties of his said trust, and has not fairly and properly collected, sold, or disposed of the bills receivable, and other property transferred to him as such trustee, with a due regard for the interests of the said firm of Bancroft Bros. & Co.
12th. — On the 29th of September 1873, the said plaintiff, as trustee aforesaid, for the purpose of closing said trust, sold that portion of the bills receivable and accounts in his hands as such trustee, and .not theretofore disposed of, amounting *182to about $1,700, at public auction, to one Shedd, for $40, and said Shedd failing to take the same under said sale, said plaintiff himself took said bills receivable and accounts, and charged himself in his account with said trust the sum of $60, and credited the trust funds with that amount.
13th.-Among said bills receivable was a note of $200, not then due, and fully secured by mortgage on real estate, which note was afterward, and subsequently to the giving of the notices hereinbefore mentioned, collected by said plaintiff the amount being about $212, and said plaintiff now claims, that he still holds said amount for the benefit of the creditors named in said trust.
14th.-A large proportion of the accounts, bills receivable, and real estate mentioned in said trust-deed, were collected and converted into money by said plaintiff, as such trustee, subsequent to the 11th of March 1871, and prior to the 29th of September 1873.
15th.-The firm of Bancroft Bros. & Company consisted of Harvey Bancroft, Carl N. Bancroft, Robert E. Sheldon, and Robert D. McCarter.
The court thereon found the following conclusions of law:
lst.-The plaintiff, as trustee aforesaid, failed to give reasonable notice to the defendants Harvey Bancroft, Robert D. McCarter, and Harriet N. Bancroft, as to the manner in which he had discharged the duties of his said trust, required of him by the terms of the mortgage sought to be foreclosed in this action.
2d. — The plaintiff is not entitled to a judgment and decree in this action foreclosing the mortgage in question.
3d.-The defendants Harvey Bancroft and Harriet N. Bancroft are entitled to a judgment for their costs herein expended.
The plaintiff requested the court to find the additional amount that might have been realized or secured for the creditors by the exercise of proper diligence in the management of the estate, which the court refused to do. Exceptions were taken to this refusal, to the findings of fact, and of law, by the plaintiff, and the case is brought here by him for review.
*1831. Trust deed; terms and conditions, construed. *182The main question of the case is, the legal effect of the *183llth finding of fact, that, “The said plaintiff, as trustee of the creditors of the firm of Bancroft Brosf & Co., has not well and truly discharged the duties of said trust, and has not fairly and properly collected, sold, or disposed of the bills receivable, and other property transferred to him as such trustee, with a due regard for the interests of the said firm of Bancroft Bros. & Co.” Involved in this, is the character of the written instrument executed by Bancroft and wife,, and set forth in the petition. It is insisted by the counsel of Bancroft and wife, that this instrument is in the nature of a guaranty; that the promise of the latter is conditioned upon Jamison’s faithful discharge of his trust, etc., and the failure of Bancroft Bros. & Co., after due notice, to pay; and that plaintiff’s right to resort to the premises in suit is conditioned upon the plaintiff’s faithfulness, Bancroft Bros. & Co.’s failure to pay, after due notice, and the mortgagors’ own failure to pay; in other words, that the conditions required to be performed by the plaintiff by the agreement of March llth 1870, and the instrument executed by Bancroft and wife, are all conditions precedent to the right to foreclose and sell the premises. This view of the case was upheld and maintained by the trial court, we should judge, from the result and the refusal to make the additional finding asked by the plaintiff. In our judgment, the instrument sued on will not bear this construction. The agreement of March llth 1870, is referred to and made a part of the conveyance executed by Bancroft and wife; and the instrument thus executed and accepted created an obligation upon the plaintiff arising out of a confidence reposed in him to apply the property named faithfully, and according to such confidence. The trust, although conditional, is an express one, as the property, persons, and the purposes of the trust, are specifically pointed out. In dealing with trusts of this character, courts will not allow the trust to fail, or to be defeated, by the refusal or neglect of the trustee to execute the same; nor for any act or omission of the trustee; nor even for want of a trustee. If. the trustee dies, or refuses to accept *184the trust, or is incapable of performing it, a court of equity will give to the eestuis que trust the proper relief, either by executing it, or appointing a trustee for that purpose. Trust deeds for the payment of debts have always been favorably regarded in equity, and they will be supported, if possible, notwithstanding any informality which might have invalidated them at law. As far as possible the intention of the parties is to be pursued, and the general object and purpose of the trust will be carried out. No technical construction will be permitted to defeat the interests of the beneficiaries, nor can- the trustee after having accepted the trust defeat the same by his own act. Tested by these elementary principles, we must hold the failure of the trustee to properly appropriate the $212 collected on a note belonging to the trust fund not a cause to prevent the execution of the trust.. Even if a greater sum had been retained, or losses have occurred by his action, that is a question between the trustee, Bancroft Bros. & Co., and the creditors. It can make no difference to Bancroft Bros. & Co. how much was retained or lost, if any, by the wrongful action of the trustee, if the firm get credit for it, and the same is applied to reduce their indebtedness, provided of course (as in this case) no claim is made that the misappropriation or loss is in excess of the debts. Bancroft and wife are not any the more injured, nor is the deficiency to be paid any greater, whether the trustee well and truly discharges his trust, and the proceeds of all the property mentioned, in the agreement of March 11th 1870 are applied to lessen the firm’s debts, or the proceeds appropriated by the trustee are charged to him and deducted from the amount of the firm’s indebtedness. In either case, the deficiency, if any, would be the same, and the liability of Bancroft and wife not increased. If the theory of the counsel for the defendants is sustained, then, after the firm has succeeded in getting an extension of the time • for payment of their debts by the transfer and pledge of certain assets, the creditors could be prevented from obtaining the benefits of the trust fund, if the trustee, against their wishes, wrongfully *185appropriated to himself a single dollar, or a less sum. Such a technical construction cannot be adopted in this case. If the trustee has been unfaithful, he must be held to account for any losses thereby arising. But the trust must be executed, and in no manner made heavier or more burdensome to the grantors by the acts of the trustee. If losses have accrued by his action, or non-action, they are to be deducted from any deficiency claimed. These are to be charged to the trustee, and cannot be collected, from the trust fund described in the instrument sued on. The court below having found that the trustee had not well and truly discharged the duties of his trust, etc., should not have stopped thus short, and so defeated the trust, or held it in abeyance; but that it might be executed, should have further found the amount retained by the trustee, if any, and the losses which occurred by his acts, if any. It clearly committed error in refusing to make the additional finding demanded by the plaintiff. The amount that might have been secured to the creditors, in addition to the sums reported, by the exercise of proper diligence in the management of the estate, could then have been deducted from said $12,127.74.
2. Constructionof contract, or deed. Thus much, upon the assumption that there was a loss by the conduct and neglect of the trustee in closing up the business of the firm, and that the premises mortgaged are to be treated as a conditional trust fund in the hands oí a court oi equity, which looks to substance rather than forms, and exacts equity rather than the performance of every minute particular of a condition. But in view of the claim for a personal judgment against Bancroft, who was one of the members of the firm, and also against the wife, who only became liable by the execution of the instrument signed by her, it is necessary to further refer to the findings, as to the matters in which neglect of duty is asserted. As to their personal liability, it may be conceded that this rests upon the strict construction of a court of law, and not a court of equity. The question then arises, have the conditions of the trust deed, on which the personal *186liability of Bancroft and wife depends, been substantially performed? The statement in the 11th finding of fact, that the trustee “has not well and truly discharged the duties oí the trust,” is apparently explained and limited by the findings which immediately follow. The unfaithfulness of the trustee is based upon the following facts: On September 29th 1873, for the purpose of closing the trust, he sold that portion of the bills receivable and accounts in his hands, of the face of $1,700, at public auction to one Shedd for $40, and Shedd failing to take the same under the sale, the trustee took said bills receivable and accounts, and charged himself in his account with the trust, the sum of $60, and credited the trust funds with the amount. He afterward collected (and subsequent to the notices given to the firm of his disposition of the assets) $212 on a note, among said bills receivable, and holds the amount for the benefit of the creditors of the trust. Further, a large proportion of the accounts, bills receivable, and real estate mentioned in the trust, were collected and converted into money by the trustee subsequent to the 11th March 1871, and prior to September 29th 1873. Certainly, the trustee had no legal right to buy in any of the accounts or bills receivable; but as he has collected all that he could from them, and holds the same for the creditors, and no finding having been made that the balance are of any value, and the fact being apparent that one purchaser refused to pay $40 and take them, there seems good reason to conclude that the said $212 is all that can be obtained from them. This, the court can easily deduct from the $12,127.74, and apply to the creditors. Then, as no loss is shown by the delay of the trustee prior to September 29th 1873, either to the trust fund, or to Bancroft and wife, this finding is immaterial, of at least does not affect the issues, even if the estate should have been all settled by March 11th 1871. In this light, the conditions precedent to the personal liability of Bancroft and wife have been substantially complied with. The mere fact, that the trustee has not actually paid over the $212, although he reports that he holds it for *187the creditors, and is ready to apply it to the indebtedness of the firm, is a mere technical noncompliance, as the court in the case had the right to have the application fully made before judgment. If the findings of fact have been in any way too liberally construed in favor of a compliance of the precedent conditions set forth in the deed of trust on the part of the trustee, by the writer of this opinion, the statement cannot affect the defendants in error injuriously, as a new trial is awarded, and on the re-trial no personal judgment will be allowed under our decision against Bancroft or wife unless the trial court shall find a substantial compliance with these conditions.
3 Notice of execution of trust. Mortgage on homestead. The court committed error in its first conclusion of law, concerning its finding of want of reasonable notice to the firm. The conclusion of law is not sustained by the findings of fact. Prior to the commencement of this action, written notice was served (on 30th October 1873j on two members of the firm, and on 5th October 1871 like notice was served on the other members of the firm; and it appears that the trustee did not close up the trust till about September 29th 1873. If there was unnecessary delay in disposing of the trust fund, or assets, and in giving the notice required by the papers, so long as the same was given prior to the suit, and the firm has refused all this time to pay any of the deficiency, and no loss is shown to the fund, or any of the parties, such delay is no reason for a refusal of a sale of the premises in controversy, or a personal judgment for any deficiency. The instrument executed by Bancroft and wife expressly stipulates that they will pay the deficiency of the indebtedness remaining unpaid, after the- application of certain assets to the indebtedness of the firm, and certain notices are given. The court likewise committed error in striking from the petition the averment of such agreement, and that portion of the prayer making a demand for personal judgment. The consideration ^ £rusj- ¿¡eed was ample; and the fact that the real estate was a homestead, cuts no figure in this case. *188If A. for a sufficient consideration gives a note, secured by a real-estate mortgage on his homestead, and the note and mortgage are voluntarily and duly executed by A. and his wife, it is no defense to either, that the husband received all the consideration; nor can a sale of the mortgaged premises be defeated solely because it includes their homestead. The wife in this case voluntarily signed the conveyance, or deed of trust, and thus assumed alike with her husband all the deficiency of the firm not paid by them or from their assets; and if She thoughtlessly or improvidently executed the instrument, we have no power to relieve her from her misfortune.
A question might be presented, whether the filing of the amended petition did not waive the errors complained of, which caused the modification of the petition before the trial; but as there seems to be some question whether the said $212 was the only sum to be deducted from the $Í2,127.74, and as the plaintiff asked for (but failed to obtain) an additional finding, to which he was entitled, the ease must go back to the court below, and there the error, as to the suppression of a part of the original petition, can be remedied by inserting, with leave of the court, in the amended petition, the portions stricken from the original.
The plaintiff in error asks us to reverse the judgment of the court below, to direct that court to find the amount, if any, that the trustee should account for in addition to that already accounted for, to deduct that sum from the $12,127.74 found to be still due the creditors, also deducting the $212, to render personal judgment against Bancroft and wife for balance, if any, and order the real estate contained in the deed of trust to be sold to pay the same. All of this, considering the record, we cannot do. No judgment will be directed by us to be entered on the findings, in view of the general character of the one relating to the trustee’s unfaithfulness. If the court had found the additional fact asked, and such sum had been, with the $212, less than the $12,200.74 reported, we could have directed judgment for the plaintiff. We can*189not refer the cause to the court below to make additional findings, without a new trial. We can reverse the judgment for erroneous conclusions of law, and for the error committed in the refusal to make all necessary findings demanded, and we can state the law, as applicable to the case now presented, as direction on another trial. This is all.
The judgment of the district court will be reversed, and a new trial awarded.
All the Justices concurring.