curred, for it would be very hard to transact business if every cheque should be signed by all the executors. The mode in which the account has been kept brings it, in effect, I admit, almost to the same thing as paying it directly to the co-executor; but each executor has full dominion, and may deal with the general fund as he thinks proper, without making his co-executor chargeable for a devastavit (u).” However, his Lordship admitted that "if there were any fraud or collusion, wilful default, or gross neglect, or if the executor had any reason to put a stop to the mismanagement by the co-executor, the case would be altered (x)." But even with this qualification the doctrine is so contrary to the principle of other cases that no trustee or executor could be advised to rely upon it in practice.

III. Where the trust money cannot be applied, either immediately or by a short day, to the purposes of the trust, it is the duty of the trustee to make the fund productive to the cestui que trust by the investment of it on some proper security.

It was the opinion of Lord Northington that a trustee might be justified in lending on personal credit. "The true touchstone," he said, " by which the case is to be tried is, whether the trustee has been guilty of a breach of trust or not. If he has been guilty of a gross negligence, it is as bad in its consequences as a fraud, and is a breach of trust. The lending money on a note is not a breach of trust, without other circumstances crassæ negligentiæ (y)." But the case from which this dictum is taken

(u) Kilbee v. Sneyd, 2 Moll. 186; see 200, 213.

(y) Harden v. Parsons, 1 Ed.

148.

(x) Id. 203, 213.

has been called by Lord Eldon, from the extraordinary doctrines contained in it, "a curious document in the history of trusts (2);" and certainly it is now indisputably settled that a trustee cannot lend on personal security (a). Lord Hardwicke said, " a promissory note is evidence of a debt, but no security for it (b);" and Baron Hotham observed, that "lending on personal credit for the purpose of gaining a larger interest was a species of gaming (c);" and Lord Kenyon said, that "no rule was better established than that a trustee could not lend on mere personal security, and it ought to be rung in the ears of every one who acted in the character of trustee (d).” And it will not alter the case that the money is lent on the joint security of several obligors (e).

Of course a trustee may lend on personal security, where he is expressly empowered to do so by the instrument creating the trust (f). But no such authority is communicated by a direction to place out the money at interest at the trustee's discretion (g), or on such good security as the trustee can procure, and may think safe (h). And if joint trustees be empowered to lend on

62.

(z) Walker v. Symonds, 3 Sw.

(a) Adye v. Feuilleteau, 1 Cox, 24; Holmes v. Dring, 2 Cox, 1; Terry v. Terry, Pr. Ch. 273; Ryder v. Bickerston, cited Harden v. Parsons, 1 Ed. 149, note (a); and more fully Walker v. Symonds, 3 Sw. 80, note (a); Vigrase v. Binfield, 3 Mad. 62; Walker v. Symonds, 3 Sw. 63; Keble v. Thompson, 3 B. C. C. 112; Wilkes v. Steward, Coop. 6; Lofft, 492; and see Pocock v.

personal security, they may not lend to one of themselves, for the settlor must be taken to rely upon the united vigilance of all the trustees with respect to the solvency of the borrower (i).

And where the trustees of a sum of money for A. for life, remainder to her children, were authorised by the settlement to lend the trust fund upon real or personal security as should be thought good and sufficient, and the trustees lent it to a person in trade whom A. had married, and the money was lost, they were made responsible for the amount. Sir William Grant said, "The authority did not extend to an accommodation: it was evident the trustees had, upon the marriage, been induced to accommodate the husband with the sum, which they had no power to do (k)." But where the trustees were empowered to lend money to the husband on his personal security, to be used by him in business, and the trustees advanced 600l. to the husband, and he became insolvent, and the trustees received a dividend of 70%., and they afterwards lent this sum to the husband on his recommencing business upon the security of his bond, and the money was lost, Sir L. Shadwell held that the trustees were not to be punished for the discretion they had exercised, for it did not follow, that, if a person once became insolvent, he was never again to be trusted (7).

Upon a marriage the wife's portion was settled upon the intended husband and wife for their respective lives, remainder to the issue, and a power was given to the trustees to "call in and lay out the money at greater interest

(i) v. Walker, 5 Russ. 7; and see Stickney v. Sewell, 1 M. & C. 14.

(k) Langston v. Ollivant, Coop.

33.

(1) Burt v. Ingram, 15 July, 1835. V. C. MS.

if they could." The trustees sold out stock to the amount of 4007., and laid it out in the purchase of an annuity for one life, and had the life insured. Lord Manners said the purchase of the annuity was not a proper disposition of a trust-fund settled as this was (m).

If trustees be authorised to invest in stock or real security, and they lend on personal security, and the money is lost, they shall be answerable, not for the amount of the stock which might have been purchased, but for the principal money lost. If real security had been taken, the principal only would have been forthcoming to the trust, and the want of real security is all that is imputable to the trustees (n).

A trustee may not invest the trust-fund in the stock of any private company, as South Sea Stock, Bank Stock, &c., for the capital depends upon the management of the governors and directors, and is subject to losses. The South Sea Company, for instance, might trade away their whole capital, provided they kept within the terms of their charter (0). "Bank stock," said Lord Eldon, "is as safe, I trust and believe, as any government security; but it is not government security, and therefore this

Court does not lay out or leave property in Bank stock; and what this Court will decree it expects from trustees and executors (p).”

With respect to investments upon mortgage, Lord Harcourt said, "The case of an executor's laying out money without the indemnity of a decree, if it were on a real security and one that there was no ground at the time to suspect, had not been settled; but it was his opinion the executor, under such circumstances, was not liable to account for the loss (q)". And Lord Hardwicke (r), and Lord Alvanley (s), appear likewise to have held that a trustee or executor would be justified in laying out the trust-fund upon well secured real estates. But at the present day, when there is such a facility of investing upon government security through the medium of the public funds, a trustee or executor could scarcely be advised to make an investment upon mortgage where no authority was expressly given him. The practice of the Court, which ought to regulate the conduct of trustees, is now clearly established. Upon application to Lord Thurlow to have part of a lunatic's estate invested upon landed security, his Lordship said, "Though he felt perfectly convinced by what was stated to him that the security was unexceptionable, yet he would not permit such a precedent to be made. In latter times the Court had considered it as improper to invest any part of the lunatic's estate upon private security (t)." And Sir John Leach refused a similar appli

(p) Howe v. Earl of Dartmouth, 7 Ves. 150.

(q) Brown v. Litton, 1 P. W.

141.

(r) Knight v. Earl of Plymouth,

1 Dick. 126.

(s) Pocock v. Reddington, 5 Ves. 800.

(t) Ex parte Cathorpe, 1 Cox, 182; Ex parte Ellice, Jac. 234.