Knowlton v. Bradley

Parker, C. J. A trustee is not answerable for losses occurring without any fault or negligence on his part. The rule that a trustee cannot in any case invest funds in his hands upon personal security, has not been adopted in this State. But generally, security should be obtained, for any except small sums, by mortgage, or deposit in a savings bank, or by a surety upon a note; apd if a trustee [460] neglect to invest or to take security in some mode, a good reason should be shown. 4 Johns. Ch. 281, Smith v. Smith. If a guardian lends the funds of his ward to a merchant in business, without a surety, and suffers them to remain for any length of time, that is such negligence as will make him answerable for losses occurring from such loan. If he take a0note payable to himself individually, without a designation of his official character, he cannot be admitted to show, on the failure of the debtor, that it was taken for the funds of his ward. If a guardian or trustee keeps the funds of his trust separate from his own, and accounts for the interest received, he is not to be charged when the money lies idle, except for his neglect; and it cannot be considered neglect if a sum sufficient to meet contingent expenses be kept on hand, or if a sum* so small that a prudent person would not seek an investment for it lies idle. But if he mixes the money with his own and keeps no separate account, he must be charged with interest at five per cent, annually, at least (8 N. H. 455, Gordon v. West), and his bondsmen may be liable in case of loss. If the guardian is obliged to disburse money from time to time, he may charge a reasonable sum for these seiwices, according to their amount and character. There is nothing before us to show any services, nor does it appear that the decree of the judge of probate is otherwise unjust or burdensome. Decree affirmed.