WOOD V. HONEYMAN
169 P2d 131 (1946)

PROCEDURAL POSTURE: Defendants, trustee and wife, sought review of a decision of the Circuit Court for Multnomah County (Oregon), which determined that the trustee wrongfully breached the terms of a trust created by plaintiffs, creator and beneficiaries, and converted certain trust funds to his own use.

FACTS: Colonel Wood, the settlor, and those who signed the writing did not make a gift to D of the $15,000 fund by signing the trust paper The document refers to D as the trustee and repeatedly uses the word trust Although the legal title to the fund was in D, the beneficial interest was not in him but the three beneficiaries D was given discretion concerning the investment of the trust Based on his violation of trust duties, the trial court removed D, held him liable for conversion and denied him payment for services This appeal resulted

ISSUE: Is a trustee under a duty to account to the court such that the records of his transactions are so complete and accurate that he can show by them his faithfulness to his trust?

HOLDING:Suit by Charles Erskine Scott Wood and others against David T. Honeyman to remove the defendant from office of trustee, for an accounting of two trusts, and to recover amounts converted, wherein Nan Wood Honeyman and another were made parties defendant and wherein Elisa Wood Smith and others were made parties plaintiff. From a decree removing defendant David T. Honeyman from office of trustee and entering money judgment against him, David T. Honeyman and Nan Wood Honeyman appeal.

RULE OF LAW: A trustee is under a duty to account to the court such that the records of his transactions are so complete and accurate that he can show by them his faithfulness to his trust.

ANALYSIS: The creator and beneficiaries repeatedly demanded that the trustee distribute the trust res for two trusts and render an accounting, but the trustee refused without justification. The reviewing court upheld the judgment below. It rejected the trustee's argument that the creators' summons was insufficient. The proceeding was not instituted under the act upon which the trustee and wife relied, so it was not necessary for the summons to contain the words quoted in O.C.L.A § 9-803; nor was it necessary for the creator and beneficiaries to file the bond required by O.C.L.A. § 9-817. Amendments to the prayer and the addition of certain indispensable parties were permitted, so no error was committed. The fact that the creator was at liberty to waste money belonging to himself did not mean that the trustee was free to convert those funds to his own use. The beneficiaries were not barred by laches from holding the trustee liable because the trustee and wife made no claim that the beneficiaries and creator failed to promptly file the suit upon becoming apprised of the state of affairs.