Snyder's Adm'rs v. McComb's Ex'x

Bradley, Justice.

I concur entirely with Judge Wales in the opinion just delivered. There is no question but that McComb held the stock in trust for Snyder. The declaration of trust executed on the 2‘2d of November, 1869, is conclusive on this subject; and it is absolute, having no qualification whatever. The words are:

“I hereby acknowledge to hold in the Southern Railroad Association, as trustee for 0. B. Snyder, under an arrangement with Josiah Bardwell, an original subscription of sixty thousand dollars, on which seventy per cent, has been paid. This notice is in conformity with an arrangement made some months ago between Josiah Bardwell, 0. B. Snyder, and myself.”

Whatever may have been the conditions and qualifications of the trust existing while Bardwell had the beneficial interest, none are claimed in this declaration as between McComb and Snyder. The plea that it was to l)e held by McComb as collateral is an after-thought. No such idea was put forward until several years after the declaration of trust was executed. In all the conferences that took place between McComb and Snyder about the stock, doAvn to July, 1874, the former never suggested that he held it as collateral, or that he had any claim on it. Collateral to what? The pretense now is that it was to be collateral to the debts that Bardwell, the original cestui que trust, owed to McComb. Then why was not that condition expressed in the declaration of trust given to Snyder? No reservation of any such right was made or hinted at. Besides, what debts of Bardwell was it to be collateral for? All the debts that he might ever owe to McComb? Or only those which were due when the stock was subscribed for? The vagueness of the claim, as stated by Mo-Comb himself in his testimony, is strongly presumptive against it. What evidence is there that Bardwell owed a dollar to McComb at the time of the latter’s death? It seems to me that this claim to hold the stock as a collateral paramount to the interest of Snyder as cestui que trust is unsupported by any sufficient proof. Assuming that the trust was an absolute one, it is clear that the stock has never been accounted for to Snyder or to his estate. The transaction in Chicago & Rock Island stock, in the spring and summer of 1869, docs not affect the case in the least, except as being the occasion, perhaps, on which Snyder advanced the money to Bardwell in consideration of which the latter transferred all his interest in the trust stock to Snyder. Besides, this transaction had all passed before the declaration of trust was executed. The relation, then, of trustee, pure and simple, being established against McComb, how can his conduct be excused? In November, 1871, he sold his own stock in the Southern Railroad Association to the Pennsylvania Company for $125 per share, under agreement, it is true, to repurchase it at an advance at the end of two years, at the option of the Pennsylvania Company,—an op*302tion which we do not learn was ever exacted of him. While thus advantageously disposing of his own stock, he did nothing of the kind with that which he held in trust for Snyder, and gave Snyder no notice or information of what he had done with his own, but urged him and persuaded him against his wishes to let the stock held in trust remain as it was, alleging that it was very valuable, was worth twice its par value, and was a first-rate investment. Nor did he inform Snyder that, in his deal with the Pennsylvania Company, he had actually handed over the trust stock to that company to enable them to have full control of the operations in prospect. In June, 1874, Snyder was hard pushed for money, and desired to dispose of the trust stock, and applied to McComb for that purpose. The latter-urged him to keep it, and to put more money into the concern; said that it was a good thing, worth two for one, and all that, never mentioning the fact that the stock was then out of his hands, and in possession of the Pennsylvania Company. This was in June, and yet, on the 1st of July of the same year, the Southern Railroad Association was merged into another company, which assumed its obligations, it is true,.but left its stock out in the cold. McComb himself testified that since that day the stock had had only a nominal value. Prom the large share of control which McComb had in the affairs of the company it cannot be conceived possible that he was not fully aware of the changes to be made, at the very time when he was persuading Snyder to hold on to the stock. It seems to me that there was not a faithful execution of the trust on the part of McComb. He was in a situation to know everything that affected the value of the stock. He was one of the managers and manipulators, if not the principal manager, of the affairs of the association. He was oh the inside, and, having such knowledge as this position gave him, he was bound to exercise entire frankness and good faith towards his cestwi que trust. Instead of doing this, he kept up false appearances, gave glowing views of the value of the stock, discouraged every attempt to dispose of it, or to change it for something else, kept secret the disposition of his own stock, and induced Snyder to believe that the prospects of the association were of the most promising character. However free from liability he may have been towards other stockholders, I think the course he pursued was unjustifiable, to say the least, in relation to Snyder,- for whom he was trustee.

I concur with Judge Wales in the opinion that the estate of McComb is liable to the complainants for the want of a full and faithful fulfillment of the trust on the part of Mr. McComb. I also agree that, in the absence of satisfactory proof of the value which the stock had during the period from 1870 to 1874, when it could have been advantageously disposed of, and when Snyder desired to dispose of it, but was-prevented from so doing by the representations of McComb, the amount paid upon it, with interest, is the most equitable and satisfactory award of compensation that can be made. It would be no relief at all to the complainants to give them a decree for the specific stock. That has long ceased to have any value. The complainants contend that they ought to be allowed the same price which McComb realized for his own stock in *303disposing of it to the Pennsylvania Company, to-wit, §125 per share. But that price is not a fair criterion of its value at the time. The sale was incumbered with an agreement to take the stock back at an advanced price, at the end of two years, if the Pennsylvania Company should so desire. Sales of this kind, in which the purchaser incurs no hazard, are' often effected at fancy prices, and stock is subscribed which the party would never think of taking on his own responsibility and hazard. Besides, another agreement, made at the same time, shows that the transaction was not so much a sale as the joinder of stocks by McComb and the Pennsylvania Company for purposes of mutual profit. I also agree that the offers made by McComb from time to time for portions of the stock are but slight proof of its value. Ho never purchased at those offers, and in one case, where the party a few days afterwards concluded to accept his offer, McComb replied that it was not an open one, and declined to take the stock. I think, with Judge Wales, that those offers were made to satisfy the holders of the stock that it was their interest to keep it. The plea of the statute of limitations, set up by the defendant, does not lie in this case. It is a case of pure trust, subsisting to this hour, and not denied. Pfad the trust been repudiated, the statute might have run from the time of such repudiation; but it has never been repudiated. The relief sought by the cestui que trust is not a legal demand, but a purely equitable one, namely, recompense for a deterioration or unlawful disposition of the trust-estate by the fault of the trustee, and an account of the proceeds or value thereof. The statute of limitations is no defense in such a case. Great lapse of time and unreasonable delay might be; but the present suit is not amenable to that charge. Sufficient reason is shown for any delay that has occurred. The secrecy observed by McComb in his transactions with the Pennsylvania Company,' and the ignorance in which Snyder and his representatives wore kept, are a sufficient answer to the charge of laches and unreasonable delay. The plea of res judicata is equally untenable. Snyder sued McComb in an action at law upon an alleged agreement to take the stock off his hands at any time. That was the only issue tried. It was decided against Snyder. The mere statement is sufficient to show that the question in that case was very different from the question in the present case. The decision simply settled the point that McComb did not make any such agreement. It did not affect the trust on which this suit is based, nor the breach of trust which forms its gravamen.

Let a decree be made for the complainants against the defendant for the sum of $42,000, with interest at 6 per cent, per annum from the 23d day of November, 1869, the date of the declaration of trust.