But at this point another factor enters, which is a far more serious one than the one just mentioned, and this is the cost to the trust companies in handling the business pertaining to estates and trusts. The less the company has to pay its employees, the less the cost of administration will be to the company, and, consequently, the greater the profits. But in the use of a cheap man there is a loss of efficiency. The handling of the property of an estate, of a guardianship, of an assignment, of a receivership, of a trust, requires judgment and business capacity to secure the best results; and these cannot be secured in a cheap man. It is the practice of trust companies to secure as cheap assistants as is compatible with the dispatch of business, although they are quick to deny this charge. A fifteen-dollar-a-week clerk is often placed in the actual charge of a difficult business, or in the winding up of an involved estate or trust, which requires the insight and experience of a trained business man-such a man as usually was secured before the trust companies came into the field. The best results cannot be thus attained; the best interests of the estate or trust cannot be thus served. Indeed, there is occasionally a manifest inclination to settle up an estate as quickly as possible, if thereby the cost to the company in handling the estate is lessened and the fees to it are the same as if the administration were longer drawn out; thus, to some extent, making a sacrifice of the estate for the benefit of the trust company. But it is said there is the Board of Directors, who are chosen for their honesty, integrity, and business capacities, and the president for his executive ability, who oversee the business and direct the fifteendollar-a-week clerk what to do. In the case of the Board of Directors there is a divided responsibility, which is often inimical to the best interests of the administration of business, not infrequentAll ly to the honesty of the transaction. men, who have had anything to do with commercial corporations, are only too well aware of this fact. And there is another factor, and that is, that men will do things in business, when acting with others as officers of a corporation, from which they generally shrink if called on personally to face the transaction. Here is the divided responsibility-the shifting of the odium of a transaction from one set of shoulders to other sets as an excuse for conduct, which the shirking individual would never do if he were solely responsible for his own acts. Besides the Board of Directors do not, as a rule, act on their own observations, but on information furnished to them by the employees of the company. In the case of the president, or other managing officers, he too is apt to act on representations made to him by the employees in the immediate charge of the estate or trust, and, of course, the best thus. But results cannot be secured here the president is at another disadvantage. He has many things on band. He must act with celerity, and often on first impressions, in order to get through with the business of the company. Any other course would involve him in endless confusion. He cannot enter into the minute details of the estate or trust—a thing so often necessary to secure its best interests. Where an individual of capacity, who has the best interests of the estate or trust at heart (and that is almost universally the case), is appointed administrator or trustee, all these defects are practically avoided. Trust companies claim that the funds or property entrusted to their custody are safer than if in the hands of individuals, and they use this as an argument to secure business. But it must be borne in mind that these institutions are usually not required to give a bond to secure the faithful administration of the estates and guardianships entrusted to their care while (1) I am not aware whether or not it has ever been decided that a statute permitting a trust company to act as administrator or guar individuals are required to do so; and although individuals have been recreant to the trusts placed in their hands, the percentage of losses is very small in comparison with the amounts administered on. There is a good deal of the "scare crow" business about this claim.2 Trust companies also use the argument that they pay interest on the funds of the estates in their hands, but those who have had much to do with these companies in this connection are painfully made aware of the fact that the amount of interest accounted for in final settlements is quite insignificant-usually three or four per cent, and that by no means running over the entire period that the funds have been in their custody. But there are some things that many trust companies-not a few-do, that are far from desirable. One of these is the "drumming" for business. Many of them are as despicable in their methods of obtaining business as "ambulance lawyers," the only difference. being the difference in the kind of business they seek. Not infrequently the body of the deceased is no more than under the sod until an officer of a trust company is ringing the door bell of his late residence and presenting to the widow and the heirs the advantages of an administration by his dian without giving bond is invalid, because of the fact that individuals appointed as administrators or guardians must give bonds for the faithful accounting of the funds of their trusts. Is this not such discriminatory legislature as renders the statutes permitting trust companies to serve without giving bonds unconstitutional? (2) Trust companies have failed, even very large ones, to the great injury of trusts in their charge. While it is true, losses to estates and trusteeships have been occasioned by the unfaithfulness of those appointed to administer upon them, yet their administrator bonds are usually sufficient to protect the beneficiaries. Of the enormous amount of property and money involved in estate, guardianships, receiverships (really never in these) and the like, the percentage of losses is exceedingly small, although when gathered into one aggregate sum it gives the impression that such trusts are recklessly handled and constantly subject to the prey of those appointed to take charge of them. Trust companies at this point indulge in great exaggeration in setting forth their claims of alleged superiority. company. Even friends of the deceased are sought to obtain their influence with those interested in the estate. This is a complete reversal of the old order of affairs, and a course of conduct that no lawyer of any delicacy, and few of any sense of the fitness and propriety of things, is willing to pursue. It is distinctly a violation of a lawyer's code of ethics as expounded by all writers on that subject. But often these companies are not content to wait until the demise of the owner of the property. They give out that they will write wills for nothing, and will keep them in their vaults without charge; and on such occasions the suggestion that they be appointed executors is very easily made, and usually with successful results. Of course, the fifteen-dollar-a-week employee often writes the will. But what is going to be the result if the will be a complicated one? Nearly every trust company has an invisible connection with a bank-usually a national bank. Officers of these national banks are often on the directorate of the trust companies, or are heavy individual stockholders therein. As is well known, national banks cannot loan their funds on real estate security, but it is very easy to loan the bank's funds to a favorite trust company, which can loan them on real estate security. Thus, there is almost an evasion by the bank, through the convenience of a trust company, of the national banking act. The officers of all trust companies do not confine their activities to the management of the financial affairs of their companies. Instances are well known where they have sought, and successfully, too, to reach the judicial bench. They have been the endorsers and backers of candidates for those high offices, and those running against such candidates have often found that the current set in favor of such persons was a very strong one to stem, not infrequently bringing about their defeat. When the candidate thus backed is successful, the reward of those officers comes in their company being appointed administrators, guardians, receivers, and the like. Lagging trust companies have thus been put to the very front row of success; and instances are known of companies whose stock greatly rose in value after the candidate thus backed had been elected judge of a probate court, for they "owned" him. These are some of the reasons why trust companies are not as desirable in the handling of these kinds of trusts as private individuals are; and instances are not unknown where they have used their powers. to wreck the estates, or to depreciate the value of their assets, while some of their favored stockholders stood ready to reap the advantages thus opened for invest ments. In the latter instances we have only an exhibition too common in the commercial transactions of corporations. It There is another thing in this connection few think of. These trust companies constantly use the funds of estates (not guardianships nor trusteeships), assigneeships and receiverships in their own private business and never account for the profits. is the law, as all know, that if an administrator use the funds of his trust in his own business or in an investment for himself, he must account for all the profits he receives, and the courts will hold him to a strict accounting. Yet trust companies do not account for such profits. They escape under the plea that they are paying interest on the funds of the estate (which is often not true), and therefore have a right to use them in their business; but the rate paid is often two and three per cent only (and then not for the full period the funds are in their custody); and this very money on which they pay this low rate of interest, they, during the period they are paying it, usually loan out at a higher rate of interest, which they convert into their own coffers, thereby making a profit out of the funds by loaning them, a thing a court would not tolerate for an instant in an individual. These trust funds are sometimes invested in real estate adventures, in the name of some proven individual, and thereby a profit Appeal from Circuit Court, Jackson County; Herman Brumback, Judge. Action by John Graff against the William J. Lemp Brewing Company. From a judgment for defendant, plaintiff appeals. Reversed and remanded. JOHNSON, J.: This is a suit by a tenant against his landlord to recover damages for personal injuries which it is alleged were caused by the negligent breach of the landlord's duty to repair the premises. Defendant demurred to the petition on the ground that it failed to state facts constitutive of a cause of action. The demurrer was sustained, plaintiff refused to plead further, and judg ment was rendered for defendant. Plaintiff appealed to this court, and, holding that a good cause of action was pleaded, we reversed the judgment and remanded the cause. At the 130 Mo. App. 618, 109 S. W. 1044. time our opinion was filed, April 8, 1908, our attention had not been called to the opinion of the Supreme Court in Glenn v. Hill, 210 Mo. 291, 109 S. W. 27, 16 L. R. A. (N. S.) 699, which was filed March 17, 1908, three weeks of before the announcement Our opinion. When the cause was again heard in the trial court, defendant renewed its demurrer to the petition, and contended that the doctrine of our decision had been repudiated by the Su preme Court in the Glenn Case. The learned trial judge adopted that view of the two decisions, and, giving controlling effect to that of the Supreme Court, again sustained the demurrer. Plaintiff stood on the petition, judgment was rendered for defendant, and again plaintiff appealed to this court. The prominent features of the present case thus may be stated: At the time of the letting of the premises, the floor of the building not only was defective, but it was in a dangerous condition, and its use by the tenant would be attended by risk of personal injury. With knowledge of this condition, the landlord, as a part of the contract of letting, promised to repair the floor and the tenant relied on the promise. The landlord negligently failed to make the repairs, and the tenant, while properly using the floor, sustained personal injuries in consequence of its defective condition. In our former opinion, we gave complete approval to the doctrine that an action sounding in tort for the recovery of damages for personal injuries sustained by the tenant in consequence of the breach of the landlord's promise to repair could not be maintained, even in cases where the promise was a part of the contract of letting, and held that "the measure of damages in such cases is the expense incurred by the tenant in the doing of the work the landlord agreed to do, but did not, and that personal injuries to the tenant sustained in consequence of the defective condition are a result too remote to be considered as having been in the contemplation of the parties at the time the contract was made." In the Glenn Case this rule was stated in about the same way, and we fail to find anything in that decision which militates against the soundness of the other rule we announced-that while a breach of a mere contractual duty will not afford a cause of action ex delicto, and while ordinarily a breach by a landlord of his promise to repair is to be regarded as a violation of a mere contractual obligation, there are exceptional cases, of which the present is one, where the landlord's failure to perform his promise to repair is more than a mere breach of contract. It is the negligent breach of a duty imposed by the relationship he established with his tenant. That a duty of that nature may be made an integral part of the relationship of landlord and tenant is a proposition recognized as sound by the authorities quoted in the Glenn Case, and we find no intimation in the opinion of the Supreme Court of a disapproval of that proposition. We repeat here the quotation by the Supreme Court from the case of Dustin v. Curtis, 74 N. H. 266, 67 Atl. 220, 11 L. R. A. (N. S.) 504: "It does not follow that this action of tort for negligence can be maintained against the delendant because of her omission in this respect, unless her failure resulted in the breach of a duty imposed by law, as well as the breach of an obligation created by the agreement of the parties. 'Actionable negligence is the neglect of a legal duty. * * To bring the case within the category of actionable negligence, some wrongful act must be shown, or a breach of some positive duty. The duty to do no wrong is a legal duty. The duty to protect against wrong is, generally speaking and excepting certain intimate relations, in the nature of a trust, a moral obligation only, not recognized or enforced by law.' In accordance with the foregoing authorities, it may be stated as a principle of law that, where the only relation between the parties is contractual, the liability of one to the other in an action of tort for negligence must be based upon some positive duty, which the law imposes because of the relationship, or because of the negligent manner in which some act which the contract provides for is done, and that the mere violation of a contract, where there is no general duty, is not the basis of such an action. This being so, and the relation between the parties to this suit being that of landlord and tenant, and it having been decided in Towne v. Thompson, 68 N. H. 317 [44 Atl. 492, 46 L. R. A. 748], that no duty is imposed by law upon a landlord to make repairs upon leased premises for the benefit of his tenant or a member of the tenant's family, it follows that the present action cannot be maintained because of the mere failure of the defendant to keep her agreement to repair." We held that the promise of the landlord to repair a defect of a character so dangerous that it would be a constant menace to the personal safety of the tenant created a duty, the negligent breach of which would constitute a tort. Nothing is said in the Glenn Case at variance with this view, and, since we are "of the same opinion still," it follows we must hold that the trial court erred in sustaining the demurrer to the petition. Accordingly the judgment is reversed, and the cause remanded. All concur. NOTE.-Responsibility of Landlord for Persona! Injuries in Non-Observance of Covenant to Repair. By way of digression we think some allusion may be made to an entanglement between the Kansas City Court of Appeals and the Supreme Court of Missouri, as illustrative of the difficulty there exists under the code system about getting conclusive results from precedents. When the case the opinion treats was on its first appeal, it quoted prior Courts of Appeals decisions of Missouri, that: "Where a covenant creates a duty, the neglect to perform the duty, is a ground for an action in tort"; "When the landlord has agreed to make repairs there is a duty resting on him to do so, and on his failure, the tenant may either sue on his contract, or bring an action on the case founded in tort for neglect of that duty." It summed up authority to the effect that the tenant "must show that there was an apparent necessity for prompt action on the part of the landlord and that the failure of the latter to repair would subject the tenant to the risk of personal injury from using the premises in their defective condition." The court was wondering whether or not it ought "to treat the action only as one arising ex contractu," and seems to have arrived at the conclusion it was not bound to so treat it, but why it does not make clear. Seemingly, however, it came to this conclusion, because what was incidentally alleged informed the court, that plaintiff could, had he so desired, have sued in tort for neglect of a positive duty. The decision by the supreme court to which it alludes, however, whatever the other faults in that decision, was not remiss in failure to say the petition was faulty because it was predicated on a contractual duty. There was fully as much incidental averment in the petition to the effect, that the condition of the premises was dangerous to health as there was in the Graff case that the condition threatened danger to life or limb. Indeed, that feature was stronger in the Glenn than in the Graff case. In the Glenn case the effort to repair increased the danger and the delay in the work was what was alleged to have caused injury. The Supreme Court seems to admit that had plaintiff complained of "negligence in the performance" of what was undertaken, and not because what was undertaken had not been carried out, a good case would have been stated, a distinction almost like dancing on the point of a needle as compared to the broad way in which the Appeals Court construed the petition in the Graff case. Judge Goode, of St. Louis Court of Appeals, in Wernick v. St. Louis & S. F. R. Co., 109 S. W., 1. c. 1029. recognizes the principle invoked by the opinion in the principal case and for which it cites Dustin v. Curtis, supra, but there is nothing in what he says to show that if one sues upon an agreement it cannot be converted into an action in tort, because what is contractually provided for may merely restate a duty imposed by law. On the contrary, as we gather what he says, if one wishes to sue in tort, he must base his action on, a breach of duty imposed by law, and if he aver breach of contract, his action is ex contractu and the measure of damages is accordingly controlled and whether there are any? We cannot find any technicality at common law that stresses more strongly than this, but the Kansas City Court of Appeals seems unaware of its existence. It may be said that the syllabus is confusing and seems to mingle contractual duty with that imposed by law quite indistinguishably and to make the former aid or emphasize the latter, but a reading of the opinion seems to fully justify its form, and this is the error from which it seems the higher state court's decision was ineffectual in rescuing the Appeals Court. There are, however, some cases which disagree with the principle, that a covenant to repair merely creates a contractual relationship. The case of Barron v. Liedloff, 95 Minn. 474, 104 N. W. 289 thus argues, after alluding to the ordinary contractual relationship: "Where the landlord agrees to repair and keep in repair the leased premises, his right to enter and have possession of the premises for that purpose is necessarily implied, and his duties and liabilities are in some respects similar to those of owner and occupant. And if his negligence in making or failing to make, the repairs, results in an unsafe condition of the premises, he is liable for injuries caused thereby to persons lawfully upon the premises, who are not guilty of contributory negligence on their part.' As in accord generally with this case is that of Sontag v. O'Hare, 73 Ill. App. 432, which, however, does not discuss the question particularly. See also Moore v. Stelljes, 69 Fed. 518. In Edwards v. N. Y. & N. H. R. Co., 98 N. Y. 248, 50 Am. Rep. 659, it was said: "If a landlord lets premises and agrees to keep them in repair and he fails to do so, in consequence of which anyone lawfully upon the premises suffers injury, he is responsible for his own negligence to the party injured." All of this seems a singular sort of reasoning, amounting, as it seems to us, to construction that the landlord superadds something to his positive duty in a contractual way, and also that he makes of himself an alter ego of the tenant as to third persons. The great bulk of authority is that the contract is like any other contract and has, within its contemplation for a breach thereof, merely what is generally contemplated by a contract. For cases on this subject see Shackford v. Coffin, 95 Me. 69. 49 Atl. 57; Davis v. Smith. 26 R. I. 129, 58 Atl. 630, 66 L. R. A. 479, 1c6 Am. St. Rep. Tuttle v. Mfg. Co., 145 Mass. 169, 13 N. E. 465: 601 Hanson v. Cruse, 155 Ind. 176. 57 N. E. 904: Thompson v. Clemens, 96 Md. 196, 53 Atl. 919, 60 L. R. A. 581. JETSAM AND FLOTSAM. C. Dear Madam-I have heard of the death of a member of your family. If the deceased left any property or money, it is necessary under the laws of the state of New York first to obtain letters of administration before those who are entitled to it can legally obtain it. I am making a specialty of this branch of the law and am therefore in a position to render you my services in procuring letters of administration at a minimum fee of ten dollars ($10.00), regardless of the amount involved. |