Pensyl's Appeal

A testatrix, by her will, directed her executor to put her money at interest, or in bank stock, or in any way most beneficial to her children. The testatrix’s entire estate consisted of some $600 loaned to the executor. Before the death of the testatrix, efforts had been made to establish a bank in the neighborhood, and the testatrix had declared that she desired that her money should be invested in its stock. After her death, the bank was established and the executor subscribed for stock to the amount of $1,000, subject further to the liability of an assessment in favor of creditors to the full par value of the stock. Fifty per cent, of the par value was payable immediately and was paid by the executor, who gave his individual note for payment of balance on subscription of stock, if required by any future assessment. The stock was made out in the individual name of the executor and inclosed in an envelope by the cashier of the bank, and put aside in the bank in a pigeon-hole, where it remained until the executor was ready to prepare his account in this case. The dividends were deposited to the executor’s account as executor, but were afterwards used to pay an assessment on the stock. Before the account was filed, the bank became insolvent. The executor maintained that the stock was subscribed for as an investment for the trust estate, and accordingly claimed credit therefor in his account, to which exception wastaken. The auditor found, from parol evidence submitted, that the stock was subscribed for and held on account of the estate. The court below refused to decree a surcharge of the executor with the loss on the stock. Held, that the decree should be affirmed.

Appeal, No. 28, July T., 1887, from a decree of O. C. Northumberland Co., dismissing exceptions to an auditor’s report on exceptions to the account of Wm. Pensyl, executor of Mary Ann Pensyl, deceased. Trunkey and Clark, JJ., absent. On Aug. 13, 1883, the executor filed his account charging himself with the amount of the inventory filed, being a debt owing by him to the testatrix; also dividends on ten shares of capital stock in the Mt. Carmel Savings Bank, interest, etc.; and claimed credit for ten shares of the bank stock subscribed, assessments, etc. Exceptions were filed to these items of debit and credit, on the ground that interest on the whole estate was not accounted for, and that credit should not be allowed for the bank stock, as the stock was taken in the executor’s individual name; and, as a trust investment, it would be improvident. The exceptants were children and legatees of the decedent. The exceptions were referred to C. J. Bruner, Esq., as auditor. He filed a report sustaining the exceptions, which report was referred back to him' to take further testimony. He filed a second report again sustaining the exceptions. On exceptions, Mr. Bruner having died in the meantime, the court made the following order: “ And now, to wit, April 27, 1885, the report of the auditor is set aside, and Wm. I. Greenough, Esq., is appointed auditor to audit the exceptions de novo, and restate the account.” [1] The auditor reported as follows: “ The contest in this case arises upon a credit taken in his account by the executor, William Pensyl, for money invested by him in ten shares of the Mt. Carmel bank. The exceptants say, the investment, if made on behalf of the estate, was unauthorized and illegal, but that, in fact, it was made by William Pensyl in his own name, and for and on his own behalf; and the credit therefore should be stricken out of the account. “ The exceptants called two witnesses, Samuel Pensyl and his wife, Julia, who both state that, in a conversation had with William Pensyl, about a year after the death of Mary Ann Pensyl, he stated that he had taken the stock in his own name and for himself. The accountant called a number of witnesses, who testified that the reputation of Julia Pensyl, among those who knew her, for truth and veracity, was bad; and the exceptants called about an equal number of witnesses, who testified that her reputation for truth and veracity was good. As these witnesses are in conflict, and the reputation of Samuel Pensyl, who corroborates her testimony, is unimpeached, the auditor regards Mrs. Julia Pensyl as a credible witness. “ The Mt. Carmel bank was in good repute and standing in the community from the time of its organization in May, 1872, to the time in 1878, when its cashier committed suicide. After his death, the officers reduced the capital stock 50 per centum, and made an assessment of 10 per cent, upon the stockholders. Before the death of the cashier, the bank did a prosperous and paying business, and declared large dividends, and since his death it has carried on a like business, but with a reduced capital. The shares of stock are not of the value they were before the reduction, and are not of the original par value. This loss causes this contest, as the stock is not wanted by either party. “ The auditor finds the facts from the evidence, as follows: “ The accountant, William Pensyl, borrowed from Mrs. Mary Ann Pensyl, the testatrix, the sum of six hundred and fifteeirdollars, and for it executed to her his note, dated April 1, 1870. The same money had been bon-owed from Mrs. Mary Ann Pensyl by Hull & Pensyl, partners, and, upon the dissolution of the firm, William Pensyl assumed the debt and gave his note, as above stated, for the then amount of principal and interest. This money constituted the whole of the estate of testatrix. “Mrs. Pensyl made her will on May 22, 1871. Before and after that date, she expressed to William Pensyl and others a desire to have the money in William Pensyl’s hands invested in bank stock, and requested William Pensyl to sell to her some of his Danville bank stock, but he declined to sell. The will contains no material clause, except the appointment of William Pensyl, executor, and a request to him ‘ to put said money on interest, or in bank stock, or any way most beneficial for ( her) my three children.’ Mrs. Pensyl died the fall of 1871; the will was proved Nov. 20,1871, and letters testamentary were then issued to William Pensyl. “In the summer of 1871, it was known in the neighborhood of Mrs. Pensyl, and to her, that efforts were being made to establish a bank at Mt. Carmel, Nothumberland county, Pennsylvania. Amos Vastine, Joseph Reeder, S. A. Bergstresser, and others, residents of the same neighborhood, and well known to her, were engaged in the enterprise. They were all highly esteemed by the public for integrity, intelligence and good business qualities, and were so esteemed by the testatrix. Amos Vastine, a relation of her’s, was then regarded as the future president of the institution. “ The Act of Assembly incorporating the bank, under the name of the Mount Carmel Savings Bank, was approved April 5, 1872. The bank was organized and commenced business in May, 1872. One hundred dollars was the par value of the stock, but only fifty dollars per share was called for then and paid; for the other fifty dollars per share a note of the shareholder was taken, called a guarantee note, which was subject to assessment or call. And after the suicide of the cashier, in 1878, and loss of part of the capital paid in, the bank made an assessment, or call, on the guarantee notes, of 10 per centum. “ After the execution of Mary Ann Pensyl’s will, Amos Vastine, as also others, went about through the neighborhood to ascertain who would become subscribers to the stock, in case the incorporation was procured. While so engaged, Amos Vastine called on Mrs. Pensyl, at her home, a short time before her death, and informed her of his errand. She told him she wanted bank stock for the money in William Pensyl’s hands, for the benefit of her children; that she wanted stock in the Mt. Carmel bank for her executor, Wm. Pensyl, for the use of her children; and he then promised her to get her the stock. Mrs. Pensyl also, verbally, instructed William Pensyl, as her executor, to take stock in the Mt. Carmel bank with the money in his hands for her children. After the death of Mary Ann Pensyl, which occurred in the fall of 1871, about a month after the interview with Vastine, and when Joseph Reader and Amos Vastine were going about to get subscribers to the stock, Amos Vastine told Wm. Pensyl, now was the time to come and get the stock that Mrs. Pensyl had spoken about. Reader and Vastine carried a small book, called a pass-book, in which were entered the names of those offering to take stock. There was no promise or contract of subscription in it; their object was to get an approximation to what might be expected. . Subscriptions in the handwriting of the takers of stock were not sought; some of the names were written by the takers, some by Reeder and Vastine; some of the persons afterwards took more shares than were put down to them, others took a less number. The actual subscriptions were determined afterwards by the payment of the installment required. These pass-books were not regarded as binding or constituting a contract, and have been lost or destroyed. Reeder and Vastine called on William Pensyl, as executor of Mrs. Pensyl, to take the stock for the children, as she had requested. His name was put down for ten shares. Whether written by himself or by Reader does not appear, nor is it shown whether his name was entered as the representative of the estate or individually; but it was the understanding and intention of himself, Reeder and Vastine at that timé’that he took the shares in his representative capacity, with the trust-money, for the benefit of the children. When the time came for paying the installment of 50 per cent, on the stock, William Pensyl, as executor, sent the amount, to Joseph Reeder, a director, of the stock, to take to the bank at Mt. Carmel. The money was paid over by Reeder. No receipt was given for it by the bank, nor had one been given by Reeder to Pensyl. To this point there were no papers or writing relating to the subscription or payment of the installment, except the entry in the lost pass-book. All the transactions were verbal, and by and with William Pensyl as executor. But after Reeder delivered the money sent by Pensyl, a certificate of stock for the ten shares was made out by the cashier in William Pensyl’s own name, without any reference therein to his representative capacity. [This certificate was then enclosed by the cashier in an envelope and put aside in the bank in a pigeon-hole, where it remained undelivered and unseen by William Pensyl until he was about fixing his account in this case. Until then he did not know that the certificate was to him individually, and not to him as executor. From the time he first consented to take the stock to the time he discovered it was in his own name, he regarded it and the dividends thereon as the property of the children of Mary Ann Pensyl,] [a] and so stated to others and to the children at different times during that period ; and the President, Vice President, the Directors and Cashier of the bank also always regarded the stock and the dividends as the property of the estate and children of Mary Ann Pensyl. The stub in the certificate book, not, however, receipted or signed by Wm. Pensyl, is in his name. As the certificate is in his own name, the dividends were necessarily carried out in the dividend book in his own name, and he receipted in the dividend book for some of them. When he receipted for these dividends he at once deposited the sums, without actually receiving them in cash, to his credit in the bank ‘ as executor,’ and received certificates of deposit. These certificates of deposit were for the ‘ dividends ’ deposited and not for cash. The first one is dated Feb. 28, 1873, and the other certificate of deposit is dated Sept. 29, 1874.' [All the dividends, as well those not receipted for and deposited to the credit of ‘ William Pensyl, executor,’ were allowed by him to remain in the bank on interest for the benefit of the children.] [b] William Pensyl also signed his own name to the ‘ guarantee note,’ dated July 23, 1872, for the uncalled 50 per cent, of the par value of the stock. “ If, at the time Joseph Reeder paid over the money sent for the ten shares, the cashier had carried out Wm. Pensyl’s expressed intention, by issuing the certificate of stock to him as executor or trustee, the dividends and his receipts therefor, would, doubtless, have been in his name ‘ as executor; ’ and in that case the guarantee note, as he and the bank agreed, might have been signed by him individually or as ‘ executor.’ Perhaps an executor signing such a note with ‘ executor ’ affixed to his name, would find himself personally liable, and the affix of his representative capacity only matter of description. However, the fact was that the dividends, and his receipt for some of them, were in his individual name; and his attention was called to that fact, for he immediately placed the dividends receipted for to his credit as ‘ executor; ’ he probably attached no importance to the entry of the dividends in his own name, but it was before him and ought, perhaps, to be regarded as notice that the certificate of stock was also in his own name. “ In Morris v. Wallace, 3 Pa. 319.it is held that ‘an investment by a trustee of trust funds in his individual name,’ without the addition of his character as trustee, ‘ is a legal fraud, liable to all the consequences as such, without regard to the intention or integrity of the trustee, or the honesty and good faith of the particular transaction.’ See also Stanley’s Appeal, 8 Pa. 431 ■; McAllister v. Commonwealth, 30 Pa. 537-8. If there is no exception to this rule, and every investment of trust funds, however made, which appears in the individual name of the trustee is a legal fraud, there is no room for question in this case. This investment of trust funds does appear in the individual name of Wm. Pensyl, and without the addition of his character as trustee, both in the certificate of stock and the dividend book. If nothing else is to be considered, he is chargeable with the money and its interest. [But, strictly, Wm. Pensyl did not make the investment in his own name, he made it as executor or trustee. He acted openly in his representative character, and as trustee, throughout the whole transaction, and in that character sent the money for the investment. The cashier of the bank, in his absence and without his knowledge or consent, made the erroneous entries. Of this error no actual notice was given to Wm. Pensyl until shortly before filing his account, and nothing occurred to put him upon inquiry for about nine months after the investment was concluded. This error of the cashier has not placed the children of Mary Ann Pensyl in any worse position than they would be in if the affix of the words ‘executor’ or ‘trustee’ to Wm. Pensyl’s name had been in the certificate of stock and on the dividend list. And, further, the declarations of Wm. Pensyl, respecting the ownership of the stock, made at the time of the investment, and afterwards, would prevent him from claiming it as his own against the demand of the children.] [c] No person would be willing to be trustee if he is to be held for the errors of other persons as well as his own. [The auditor thinks the accountant ought not to be held liable merely because his individual name appears in the undelivered certificate of stock and in the dividend book, as all his efforts and steps toward the investment were in his representative capacity.] [c] “ The fact that the dividend list was in his own name was before him about nine months after-the investment. This would be notice to him in a controversy with one injured by his failure to correct the error. The children have not been injured by the omission, they are in no worse position than they would be if the change had been made by adding his representative capacity to his name in the list and certificate. If the accountant is not liable, as hereinbefore held, on the original investment, the omission to make the change in líame will not make him liable. “ It is also claimed by the exceptants that the investment in the Mt. Carrtiel bank stock was unauthorized and illegal, as the Mt. Carmel bank was not an existing bank at the time, and because the par of the stock was double the amount of the money invested, and was therefore subject to calls under the guarantee note. “ The will authorized an investment in ‘ bank stock.’ The testatrix, before making the will, had made efforts to invest the money in the stock of existing banks, but had failed to do so. It is likely that, at the time of making the will, she had such banks in view, and not any to be organized as new ones. But soon after the date of the will, efforts were made by her relations and acquaintances, in whom she had confidence, to establish a bank at Mt. Carmel. She knew of these efforts, and she desired to have this money invested in that stock. Whether any explanations, as to what would probably be done or be required from those taking stock, at the organization, were made to her or not by those persons does not appear in the evidence. But the expression by her of her desire to so invest the money was repeated, clear and positive, and she engaged from Amos Vastine, then occupied in securing subscribers to the stock, enough of the stock for her money in Wm. Pensyl’s hands. Amos Vastine was then regarded as the future president of the bank, and she instructed, verbally, Wm. Pensyl, who was nominated executor in her will, to take the stock, and she told others that she had so instructed him. There is enough in this to justify the executor in making the investment. If he had failed to do so, and the bank had continued as prosperous and the stock as valuable as it was for five to six years after the organization, he would have no just excuse for his failure and omission to make the investment. Wm. Pensyl gave his individual guarantee note for the uncalled 50 per cent, of the par value of the stock, and made himself personally liable for the amount of it. The calls or assessment would be enforced through the note, and he would be obliged to see to the payment of the sums demanded. The stock already paid for would not be forfeited upon his failure to pay the assessment. The manner and conditions of the organization of the bank were not subject of bargain and contract between him and the bank. They were beyond his control. Any one taking stock must conform to the requirements prescribed by the shareholders. [The accountant was authorized and specially instructed by the testatrix to take the stock, and he did that in the way prescribed by the shareholders, and for so doing he ought not to be held liable. “ The auditor therefore overrules the exceptions and sustains the account as filed; the costs to be paid by exceptants.] [d] The exceptions filed to the auditor’s report, averred, inter alia, that the auditor erred: “ 1. In considering and giving undue weight to the parol evidence offered by the accountant, under objections, tending to the contradiction and alteration of the written instruments, books and papers in evidence — such as the certificate of stock, the book entries of the bank, the will of testatrix, the ‘ guarantee note ’ of the accountant, the receipts for dividends, the certificates of deposit and the endorsement thereon, and the receipt ofuH. A. Pensyl, one of the legatees, for two hundred dollars paid by the accountant to him on account of his share in the estate of the testatrix in 1875, before the partial failure of the bank was disclosed, — and in thereupon finding and reporting that the investment in question was made by the accountant in the Mt. Carmel bank by direction or request of the testatrix, and that it was the intention of the accountant'to have made it, not in his individual name, but in the name of the estate of his testatrix.” [2] “ 2. In finding and reporting, as a fact, as contained in brackets a. Instead thereof, the auditor is now respectfully requested to find and report that William Pensyl had notice that the investment was in his individual name immediately upon and after the stock was taken by him, and that it was so by him intended at the time. ForWm. Pensyl himself swears: ‘I first learned what he [Reeder who took the subscription,] had done with the money when I received my papers. . . . The papers I refer to was the certificate of stock now shown me. This was in my possession immediately after it was issued. . . . Think Mr. Reeder handed the certificate to me; I looked at it, etc.’ “ And the ‘ guarantee note ’ is signed by Wm. Pensyl, not as executor, and bears the same date of the certificate of stock. The receipts on the bank books for dividends show the same thing. “ He signed his own name for the dividends, and then deposited these dividends at once, under contract to receive interest on the deposit, taking care to have the certificate of deposit made to him ‘ as executor,’ thus severing the stock or coi-pus of the investment from the profits or dividends, with which he hoped to pay the legatees and have the stock clear to himself. Such is the effect of the proof by Samuel Pensyl, Julia Pensyl and Francis Pensyl, as well as by accountant himself, and the written evidence referred to. And so also is the settlement of his assessment amount by Wm.' Pensyl, when, in 1881, he endorsed these certificates of deposit and passed them to his individual credit upon the books of the bank. And there is no competent or satisfactory evidence to the contrary. “The magnitude of the investment itself tends to the same conclusion. The accountant had but a little over five hundred dollars of the money of the testatrix in his hands. Under his individual contract attending the investment, he was bound to pay in on call, under his note, five hundred dollars more, and under the charter of the bank, one thousand dollars additional still, in all, charging or incumbering the investment to nearly four times the amount in his hands as executor, by his contract of investment so made in his own name.” [3] “ 3. In concluding and reporting as contained in brackets b. And the auditor in now respectfully requested to find and report that, instead of being allowed by Wm. Pensyl to remain in the bank on interest for the benefit of his wards, these dividends were used by him and passed to his individual credit on the books of the bank, to pay the assessments upon or against the ten shares of the capital stock thereof, taken and held by him in his individual name and right. The settlement by such appropriation and use of these dividends was formally concluded March 25, 1881, though the basis of such_ settlement was agreed upon, perhaps, in 1878, soon after the suicide of the cashier, when an assessment was called. - “ The certificates of deposit, though made out to Wm. Pensyl, as executor, were at that time endorsed by him as executor, and then thereunder in his individual name, whereupon his stock assessment account was credited with the same. The dividends, therefore, instead of’going to the use or benefit of the children of the testatrix, were, in fact, used and appropriated by the accountant to the payment of his individual debt, assessed under or upon his individual note or obligation, against the stock standing in his individual name, of which he had notice when, on July 23, 1873, he gave his ‘ guarantee note,’ and received his certificate, in his own name, as the completion of the original investment, if not before. Such original investment was therefore the accountant’s own, and was made as by him so adopted, in his individual name and capacity, and must have been so by him intended.” “ 4. In finding and reporting, as of the facts, as contained in brackets c. Instead, thereof, from the weight of the evidence, it is submitted, the contrary, of right, ought to have been found, and the auditor is now requested so to find and report on review thereof. To the contrary, stand the book entries, the certificate of stock and the amount thereof taken; the pass-book or subscription list, now lost or destroyed, wherein William Pensyl swears he thinks he subscribed for the stock in question; the ‘guarantee note ’ executed and delivered by Wm. Pensyl in his individual name, under date July 23,^1872, very soon after the payment of the money; the stockholders’ book and the dividend book, in which he receipted in the same way for the dividends, at divers time, when declared; the deposit of the dividends, immediately after receipting for them individually, to the credit of an account by him at the same time opened with the bank in his representative capacity; the testimony of Samuel Pensyl, Julia Pensyl and Francis Pensyl, as well as that of the accountant himself, where he says : ‘ This [the certificate of stock] was in my possession immediately after it was issued,’ which was July 23, 1872, the same day he gave the guarantee note, and that he ‘ looked at it; ’ he ‘ thinks Reeder handed it to him,’ and ‘ I treated the payment of the two hundred dollars, as shown by the receipt, as so much money on account of Hatton’s distributive share,’ which was in 1875, before the bank failed or became embarrassed; the settlement of the assessment account in 1881; the endorsements on the certificate of deposit; the declaration of the accountant to the children ‘ and neighbors,’ contrary to the fact, after, and not before, the embarrassment or so-called failure of the bank in 1878, to the effect that the stock was in their name and had been taken for their use or benefit; his acts and declarations to the contrary, before such failure, so far as he was heard to speak or act. And so stands also the contract attending the investment, as well as its burdens or incumbrances under such contract, and the act of incorporation of the bank in question. Nor, in support of the findings can there be found any direct, positive, competent or satisfactory evidence, at least, to overcome the written evidence. Such conclusions rest upon inference only, or upon the recent declarations of the accountant, but contrary to his previous acts and declarations in the same premises. And, if resisted, the demand of the children of testatrix to have the stock could doubtfully have bgen enforced after expensive legislation in a court of justice. It was his money, and not theirs, which the accountant in fact invested in this stock.” [5] “5. In concluding and reporting as contained in brackets d. [6] “ 9. In that he considered and gave effect to the pretended loose, idle and uncertain declarations of the testatrix, while living and yet competent to have changed her will, if then already made, orto have made it different in direction, if before the making of her will, to the impeachment or prejudice of the provisions of such written instrument; the latter itself should be the sole guide, and was the commission of the accountant. But he disregarded both such pretended directions and requests lying in parol and those of the written instrument, when he took at least twice as much stock as he had money in his hands of his testatrix, in his own name in a bank not yet incorporated, or its exactions or requirements, as a condition of investment in its capital stock, and which the stockholder must contract to perform, not yet known to anybody, when the testatrix died. “ It was gross negligence in the accountant, if what he now sets up to charge his disastrous adventure upon his wards be true, and a legal, if not actual, fraud upon them, now to allow his pretense. It was not their mistake or misadventure, if his pretenses were true, but his; and he accepted the trust under the will, when it became his duty to look more carefully after the investment, if intended as he now alleges. And when Hatton, the first of the minors to come of age, arrived at maturity, according to the will, the accountant did not offer him the stock, or any part of it, but promptly paid him the money. This was in 1875, as before stated, under other exceptions, before threats of disaster to the bank. “ The auditor is hereupon requested to find and report according to the tenor and effect hereof.” [7] “ 10. And the auditor is requested to find and report from the weight of the evidence that, whether the accountant originally subscribed for the ten shares of stock in his individual name or not, he had notice that the stock was taken in his individual name, and held for his own use and benefit, at least as early as July 23, 1872, at which time the certificate issued to him upon his giving his ‘ guarantee note ’ of that date to answer assessments or calls for balance of par value, to wit: one thousand dollars, signed in his individual name and by him delivered to the bank under the provisions of the charter and the contract of investment. If Reeder had made a mistake when he, as the accountant’s agent, delivered the money to the bank officers, according to the original subscription, it was gross negligence in accountant not to have discovered such mistake when he made and delivered his ‘ guarantee note,’ under his own contract of investment, and ‘ took and looked at ’ the certificate of stock at the same time issued to him and put into his possession. And the accountant must therefore be held to have ratified and approved the act of his agent, and by the then yet initiate contract by his agent, he adopted it as his own. The original investment therefore was in the name and intended for the exclusive benefit of the accountant himself, and it is a fraud in him now to insist upon shifting its misadventure and cumbrous burdens upon his wards, or upon any of them. It is to their injury that the ten shares of stock were taken in the manner and in the bank, upon the terms and subject to the conditions they were, if to be now treated as theirs.” [7] “ II. And the learned auditor is further requested to find and report that the whole estate of testatrix consisted of a promissory note of the accountant as a security for money lent by her in her lifetime to him; that, after her death, at time of appraisement, it amounted to the sum of $654.98; that, in fact, the accountant never changed the investment of this fund, as such, from that made by the testatrix by loan inter vivos; and that, by the terms of the investment made in his own name in the Mt. Carmel bank under its charter, the accountant created possible liabilities in the nature of incumbrances against such investment, to the extent of nearly four times the fund so in his own hands on loan by testatrix inter vivos; i. e., by the terms of his investment the accountant, in his individual name, contracted to take and pay for ten shares of the capital stock of that bank, the par value of which is fixed by the charter at one hundred dollars each, and then, by the charter, the stockholders are made individually liable to the creditors of the bank to the extent of 100 per cent, of the par value of the stock held respectively by them. The excess of the investment over the fund of the estate, whereby the incumbrance or possible burdens of the investment were unreasonably created, itself would be a fraud upon the minor children of testatrix, though such investment had been in the name of the estate or of the accountant ‘ as executor,’ which, in fact, it is not, and never was intended to be.” [7] “ 12. And the learned auditor is now further respectfully requested to find and report that the excessive investment referred to by the accountant had the effect to subject it to the charges and incumbrances, under his individual contract and charter of the institution in which it was so made by him, which characterizes it as an improvident investment, and, in this contest, must be held as the result of gross negligence in the case, and management of his ward’s estate; if made in his own name by mistake of anybody, it was the result of the mistake of his agent, and the disastrous consequences cannot now be visited upon the minor children of the accountant’s testatrix, the care and custody of whose estate had been committed to him by will, which trust he accepted upon the terms therein named; and these required the equal division of the money already in the lifetime of the testatrix placed in his hands upon loan, and thereupon a payment or distribution by the accountant to and among them as they should respectively arrive ‘ at legal age.’ ” [7] “ 13. Under all the evidence and upon the law of this case, the learned auditor is now respectfully requested to review and so modify his report as now prepared by him, as that the exceptions to the account of the said executor shall be sustained as filed, and that the costs shall be paid by the accountant instead of by the exceptants.” [7] The auditor reported on the exceptions as follows: “ 1st exception. The investment in the Mt. Carmel bank stock was not made through the proper medium. They were prepared and made a considerable time after the investment was consummated. The testatrix expressed her wish respecting that stock, and engaged it for her executor after she had made her will. The evidence does not alter or contradict the writings. [2] “ 2d exception. The evidence referred to was fully considered with the other evidence produced in reaching the conclusion recited. The auditor adheres to his findings. The payment of the first assessment, which consummated the investment, was made on Tuesday, May 21, 1872. The ‘guarantee note’ and certificate of stock are both of them dated July 23, 1872. The charter of incorporation of the bank is in evidence, and as fully before the court as if copied in the report. [3] “3d exception. The dividends on these ten shares of stock, placed to the credit of ‘ Wm. Pensyl, executor,’ were used to pay the assessment made in 1878, after the death of the cashier. This appropriation was made on May 25, 1881, by means of the endorsement of the certificate of deposit by ‘ Wm. Pensyl, executor,’ and thereunder ‘ Wm. Pensyl.’ There is no proof, however, of a previous agreement to make that appropriation. The auditor adheres to the conclusions excepted to in this exception. [4] “ 4th exception. All the evidence referred to was considered in arriving at the conclusion recited in this exception, and the auditor sees no reason to now find differently. The investment was made by, and at the time of, the first payment on the stock. Wm. Pensyl was not present when the money was paid to the cashier. The certificate was made out not less than two months later, without the knowledge or consent of Wm. Pensyl, and was not delivered; and the evidence in the case is convincing that the certificate of stock is not in accordance with the intention of Wm. Pensyl, at the time of consenting to take the stock or of making the payment; that the money was the money of the estate, paid by him as executor for stock to be held for the benefit of the children. The auditor declines to find that the evidence recited in this exception and relied on by exceptants, is conclusive proof that Wm. Pensyl intended to take the stock in his own name and for his own use and benefit. [5] “ 5th exception. The conclusion is still regarded as correct.” [6] “9th, 10th, nth, 12th, and 13th exceptions. The auditor thinks he has considered and reported upon the matters in these exceptions, and that his findings are correct.” [7] The opinion of the court setting aside the report of the former auditor and appointing the present auditor to audit the exceptions de novo and restate the account, was partly as follows, by Rockefeller, P. J.: “The evidence of the accountant was not offered for the purpose of varying or contradicting the written evidence, that is, the will, the certificate of stock and the books, in the sense those terms are generally used, butto show a mistake on the part of the officers of the bank in making out the certificate and entering the stock on the books of the bank in the name of the accountant individually, instead of entering it in his name as executor of Mary Ann Pensyl, for the use of her children, etc. Evidence, such as was offered in this case, we think, was admissible and entitled to be considered. Generally, mistakes are proved by parol evidence, and often can be proved in no other way. The auditor seems to have thought, and so decided, that such proof could not be received, ‘ because it tended to vary or contradict the written evidence,’ and we think the rejection of it, so far as it tended to show a mistake, was error. In regard to that part of the report in which the auditor says, he ‘ cannot find the fact stated in the third paragraph, for the reason that they are only to be found in the testimony of William Pensyl, the executor/ I think it is very clear that he forgot the evidence of Alvin D. Hughes, Esq., and Amos Vastine, taken at the first audit. The evidence of William Schwenk was also important as tending to show that the accountant was mistaken when he said he had seen the certificate of stock, and this upon the question as to whether there was a mistake. “ It is clear to my mind that there was material and competent evidence on the part of the accountant tending to show that he intended to invest the fund in his representative capacity for the benefit of the children of the testatrix in the stock of the bank, and that the entering of the same on the books and issuing the certificate in his name, was a mistake, and the auditor should have considered it and given it whatever weight he thought it was entitled to. It was his province to determine all questions as to the credibility of the witnesses, and the weight and effect to be given to all the evidence in the case. “ It must be admitted that there was also legal and competent evidence before the auditor tending to show that the accountant invested the funds in the stock of the bank in his own name, or at least, that he knew that it stood in his own name, and if the auditor, after having duly considered all the evidence in the case on both sides, had found the facts in favor of the exceptants, in my opinion, no one could have any legal grounds for complaint. “ It has lately been held by the supreme court that ' where it clearly appears that an auditor has not only found the facts against the weight of the evidence, but has disregarded the evidence, and thereby reached an unjust result, his findings of law and fact, though confirmed by the court below, will be reversed.’ Thomas Miller’s Ap., 102 Pa. 544. I do not now decide that the auditor in the present case found facts against the weight of the evidence, but it is plain that he disregarded material and competent evidence through a mistaken idea as to the law. If he had believed such evidence legal and competent, I cannot tell what his decision as to the principal question in the case would have been. Where the evidence is contradictory, as it seems to be in this case, or at least there is evidence tending to prove the version of both sides, it is not usual for the court to set aside the findings of an auditor as to facts. Pie, like a jury, generally has the witnesses face to face, and can better judge of the probability and truthfulness of their evidence than one who is not present. Where the auditor is intelligent and honest, as we believe in this case he was, we would not reverse or set aside his finding of facts, and it is only for the error of law that we feel compelled to give the parties another hearing.” The opinion of the court on exceptions to the present auditor’s report was as follows, by Rockefeller, P. J.: ' “ It is well settled that an investment by a trustee of trust funds in his individual name is a legal fraud. The contest in this case has been as to whether the accountant actually did invest the funds of the estate in his own name. The auditor finds as a fact that he did not so make the investment, but made it as executor or trustee. That he acted openly in his representative character and as trustee throughout the whole transaction, and in that character sent the money for the investment. That the cashier of the bank, in his absence and without his knowledge or consent, made the erroneous entries. That the certificate of stock was never delivered, and ’ of the error no actual notice was given to the accountant until shortly before filing his áccount, and nothing occurred to put him on inquiry for some nine months after the investment was concluded, etc. It does seem that the dividends were placed to accountant’s credit in his individual name, but when they were receipted for, without drawing the money, he had them placed to his credit as ‘ executor.’ He is a plain farmer, and one can easily see how such a person would place but little importance to the manner of keeping the accounts. Under all the facts and circumstances of the case, as detailed in the evidence and found by the auditor, I have come to the conclusion not to disturb his report. If there had been no mistake, and the accountant had intentionally put and kept the investment in his individual name, the case might be different. In that case it would have been a legal fraud, without regard to the intention or integrity of the trustee, or the honesty and good faith of the transaction. “ The report is confirmed.” The assignments of error specified the action of the court, i, in refusing to confirm and setting aside the report of C. J. Bruner, auditor, and in making the order of April 27, 1885, quoting the order; 2-7, in dismissing the exceptions to the report of W. I. Greenough, auditor, quoting the exceptions and the auditor’s rulings upon them, as indicated above; 8, in sustaining the auditor’s action in overruling the exceptions to the account, and decreeing the costs to be paid by exceptants, quoting the account, the exceptions to the account and the last paragraph of the auditor’s report enclosed within brackets d. When the merits of the controversy were fully developed by the reports of the former auditor, the additional expense of a reference de novo ought not to have been inflicted upon the parties. The Act of April 5, 1872, P. L. 974, incorporating the bank, rendered the stock'holders liable to assessments to double the amount of the stock. This is not the kind of trust estate the law will compel a cestui que trust to take, in an account with his guardian or trustee. Under the facts of this case, the accountant is liable to the children of the testatrix for the loss arising from the investment in the bank stock. Investment in the individual name of the trustee is a breach of trust. Morris v. Wallace, 3 Pa. 319; Stanley’s Ap., 8 Pa. 431; Robinett’s Ap., 36 Pa. 174; Parker’s Est., 64 Pa. 307; Hess’s Est., 68 Pa. 454; Norris’Ap., 71 Pa. 106; Gilbert’s Ap., 78 Pa. 266; Gable’s Est., 36 Pa. 395 ; Clauser’s Est, 84 Pa. 51; Stehman’s Ap., 5 Pa. 413; Swartswalter’s Account, 4 Watts, 77 ; Berryhill’s Ap., 35 Pa. 245 ; Lamb’s Ap., 58 Pa. 142; Nyce’s Est., 5 W. & S. 254; Pray’s Ap., 34 Pa., 100; Worrell’s Ap., 9 Pa. 508; Ihmsen’s Ap., 43 Pa. 431; Parshall’s Ap., 65 Pa. 224; McCauseland’s Ap., 38 Pa. 466; Witman’s Ap., 28 Pa. 376; Holman’s Ap., 24 Pa. 175; Landes v. Scott, 32 Pa. 495 ; Plughes’ Minors’ Ap., 53 Pa. 500 ; Milligan’s Ap., 97 525. There was no error in referring the account to an auditor to audit it de novo. “ Upon a reference back to an auditor, the whole case is necessarily reopened, and all parties before the auditor are bound to take notice of it.” Thoma and Blandy’s Est., 76 Pa. 40. So much of the testimony of Wm. Pensyl as related to the certificate of stock and the time of receiving the same, as given before auditor Bruner and reduced to writing by him, was excluded, by agreement, from the other evidence read in evidence before auditor Greenough, yet it is chiefly relied upon by appellant in his assignments. The accountant was justified in making the investment from the express terms of the will, and from the known wishes of the testatrix. Hill, Trustees, 537; Rush’s Est., 12 Pa. 375 ; McNair’s Ap., 4 Rawle, 148; Dundas’ Ap., 64 Pa. 325 ; Williams’s Ap., 73 Pa. 249; Ploge v. Hoge, 1 Watts, 163 ; Church v. Ruland, 64 Pa. 432; Han-best’s Ap., 92 Pa. 482; Pleasant’s Ap., 77 Pa. 356; Witmer’s Ap., 87 Pa. 123 ; Morley v. Morley, 2 Ch. Ca. 2 ; Lewin on Trusts, *299; Fahnestock’s Ap., 104 Pa. 46 ; Konigrnacher v. Kimmel, 1 P. & W. 207. Common skill, common prudence and common caution are all that courts require from trustees. Pleasonton’s Ap., 99 Pa. 362; Cline’s Ap., 106 Pa. 617; Springer’s Est., 51 Pa. 342; Neff’s Ap., 57 Pa. 91; Getz’s Est, 6 W. N. C. 416; Thomas’ Est, 11 Luz. L. Reg. 286; Bowker v. Pierce, 130 Mass. 262; Hunt’s Ap., 141 Mass. 515.