" As testator authorized retention of the investment, the burden of proving negligence in retaining it was on the exceptants: Jones Estate, 344 Pa. 100, and cases cited p. 104, 23 A.2d 434. The learned auditing judge held there was no proof to sustain a finding of negligence. The appellants challenge that finding.
In the performance of its duties, including the payment of taxes, inheritance and estate, it is the duty of the fiduciary to exercise common skill, prudence and caution. See: Jones Estate, 400 Pa. 545, 162 A.2d 408 (1960); Huff's Estate, 347 Pa. 53, 59, 31 A.2d 507 (1943); Jones' Estate, 344 Pa. 100, 104, 105, 23 A.2d 434 (1942). We are fully aware of the principle well settled in this area of the law that those who seek to surcharge a fiduciary for breach of trust must bear the burden of proving the particulars of his wrongful conduct.
What the Trust Company contends is that, if it prevail in that action, it will be entitled to recover out of the trust property — justly out of the income rather than the principal — the counsel fees and other expenses incurred by it, and, for that purpose, to have the income impounded so as to insure such reimbursement, it alleging that the expenses of resisting the suit exceed the amount of the presently accumulated income. It is well established that whenever there is an unsuccessful attempt by a beneficiary to surcharge a fiduciary the latter is entitled to an allowance out of the estate to pay for counsel fees and necessary expenditures in defending himself against the attack: Price's Estate, 81 Pa. 263, 273; Biddle's Appeal, 83 Pa. 340, 346; Jones' Estate, 344 Pa. 100, 110, 23 A.2d 434, 439. And to the extent to which he is thus entitled to indemnity he will not be compelled to transfer the trust property until he is properly secured for such expenditures as are necessarily incurred by him in the administration of the trust: Restatement, Trusts, § 182, comment b; § 244, comments b and c; Scott on Trusts, vol. 2, p. 969, § 182. Cf. Sinnott's Estate, 310 Pa. 463, 469, 165 A. 244, 246; Mathues's Estate, 322 Pa. 358, 360, 185 A. 768, 769; Sternberger's Estate, 121 Pa. Super. 50, 182 A. 723. Even if the trust be a spendthrift one he may withhold the income for such purpose: Restatement, Trusts, § 244, comment d. Here appellant, the life-tenant, is attempting to surcharge the trustee; if she be successful the Trust Company will be personally liable to respond in damages and to pay its own costs and counsel fees; if, on the other hand, she be unsuccessful, the Trust Company will, as above stated, be entitled to reimbursement therefor out of the trust estate.
In an opinion by Justice SCHAFFER (later Chief Justice) the principle of Wood's Estate, supra, was re-affirmed. McGraw's Estate, supra, has been cited with approval in Greenawalt's Estate, 343 Pa. 413, 417, 21 A.2d 890; Jones' Estate, 344 Pa. 100, 103, 23 A.2d 434; Hale Estate, 347 Pa. 177, 179, 32 A.2d 20. Appellant apparently concedes the correctness of the above principles. It is his contention that testator did not intend the waiver to include common stocks, but limited investment to "bonds having a rate of interest".
The property, according to the appraisements in evidence, at all times had a value very much in excess of the $3,000 interest, and common sense and business prudence required that the executors protect their investment by acquiring this small interest to which their investment was subordinated. The measure of duty imposed by law on the fiduciary was due care in the circumstances: Jones' Estate, 344 Pa. 100, 104, 23 A.2d 434. It was a salvage operation. If, in advance of the sale, Barclay had asked leave of court to make it, leave would undoubtedly have been granted; to refuse would have been an abuse of discretion.
See Montgomery's Appeal, 77 Pa. 370, 373; Wilbur's Estate, 334 Pa. 45, 55. Nor can we assent to appellant's argument that the adjudications of the executors' account and the two prior accounts of the trustees, showing retention of the non-legal investment, excuses them from failure to convert during the period of the present accounting. In the absence of objection to the administration of the item in question, within five years, confirmation of the last prior account, on January 13, 1930, effectively insulated the trustees against surcharge for failure to convert prior to that date; it did not, however, have any effect as absolving them from liability for any loss owing to their undue retention of the non-legal securities thereafter: Kelch's Estate, 318 Pa. 296, 297, 298; Jones' Estate, 344 Pa. 100, 104. Decree affirmed. Costs to be paid by appellant.
Whether the accountants complied with the rule of due care by investing part of the Crane trust funds in participations in the Penfield mortgage in 1931 and 1932 must be determined in the light of the facts existing when the investments were made.Jones' Estate, 344 Pa. 100, and cases there cited.Heyl's Estate, 331 Pa. 202, 208, 200 A. 617; Saeger Estates, 340 Pa. 73, 75, 16 A.2d 19.
In re Browarsky's Estate, 263 A.2d at 366, quoting Wormley Estate, 59 A.2d 98, 100 (Pa. 1948). However, where objections to an account result in surcharges with respect to some claims, but not others, a court acts within its discretion in choosing whether to award attorneys' fees. See In re Jones' Estate, 23 A.2d 434 (Pa. 1942). Here, we conclude that the Orphans' Court acted within its discretion in denying Mark's request for attorneys' fees related to the surcharge action.
Mereto Estate, 373 Pa. 466, 96 A.2d 115 (1953); Glauser Estate, 350 Pa. 192, 38 A.2d 64 (1944). See also Jones Estate, 344 Pa. 100, 23 A.2d 434 (1942). If a fiduciary has greater skill than that of a man of ordinary prudence, then the fiduciary's standard of care must be judged according to the standard of one having this special skill.