TRUSTS-RIGHT OF TRUSTEE TO REIMBURSEMENT FOR TORT LIABILITY

Authors

Abstract

The recent New York case, In re Lathers presents the question seldom before raised whether a trustee may be reimbursed from the trust estate for tort liability to a third person through his negligence in management of the estate. In that case, as a result of fire in an apartment building of the trust property, the trustee suffered judgments for $62,000 plus costs. The rooms of one apartment, rented by the trustee's agent, had been closed off by the lessee to form several small apartments. For the one subleased to the tort creditor, access to fire escapes, adequate normally, was blocked by the locked door of an intervening sub-apartment. This condition was known to trustee's agent. On such violation of the tenement house law regarding access to fire escapes," the culpability of the trustee was based. The trustee carried $10,000 insurance to cover such liability The premises had been frequently inspected by public authorities; and, at the time of the fire, no orders or violations had been filed against them. Held, the trustee had done all a reasonably prudent man would do in the conduct of his own affairs, and was entitled to reimbursement.

Recommended Citation

TRUSTS-RIGHT OF TRUSTEE TO REIMBURSEMENT FOR TORT LIABILITY, 29 Mich. L. Rev. 469 (1931).
Available at: https://repository.law.umich.edu/mlr/vol29/iss4/5