a personal interest in the successful administration of an estate. Not only is the success of the institution itself dependent on the good-will of those for whom it acts, but the success of the officer in charge of the work of the trust department is based upon his ability to please the customers of the department, and likewise upon the successful handling of the matters entrusted to his care.

§ 497. Relation of Trustee to Beneficiaries

The fiduciary should be in confidential relations with the beneficiaries of a trust. It is the experience of officers in charge of trust departments of the various banking institutions, that the beneficiaries consult those officers with regard to many things not always within the scope of that particular trust. This often results in very friendly personal relations between the individual beneficiaries and the fiduciary, just as it would where an individual was acting as the fiduciary.

In view of the generally admitted fact that the majority of people would have greater confidence in the opinion of a bank or a trust company than in that of a private citizen, it follows that the individual beneficiary is more likely to consult with the officer in charge of the trust department in regard to his personal affairs. In all cases the transactions are between individuals. In other words, the bank or the trust company is of necessity represented by its trust officer, an individual.

Another answer to the criticism that an institution lacks personal interest in the matter is that where such personal interest is greatly to be desired, and the testator does not believe that the bank or the trust company would possess sufficient personal interest, and the extra expense does not deter, he may appoint a co-executor. For instance, he might appoint his wife or son or friend as a co-executor. Banks and trust companies often advise the appointing of a co-executor, espe

cially where a testator is engaged in an active business which is to be continued after his death. It is then advisable to appoint as a co-executor or trustee a responsible person familar with the particular business in which the testator was engaged during his life and which is to be continued after his death.

§ 498. A Corporate Fiduciary Will Keep Adequate Records

One of the very important and even essential duties of a fiduciary is keeping adequate records of all the transactions in connection with the administration and distribution of an estate. Probably anyone who has had any experience at all in connection with the administration of estates knows only too well how very inadequate the records that the average individual keeps would be. Lawyers have spent many hours and had much anxiety in trying to work out the accounting schedules from such records as the individual usually keeps. In one such case, which is typical of many, the executor kept whatever records he had in his check-book; in other words, he used the check-book as his journal, cash book, and ledger. There were innumerable cross-references from the stub side of the checkbook to the deposit side, and vice versa. A clerk in the office of the attorney who represented the executor attempted to make up the accounting schedules. After several days' work resulting in his inability to prove the accounts, he gave it up. Finally the matter was referred to an accountant who proceeded at once to open a set of books, using the check-book as the source of information. It took considerable time to make up the books, but when that was done no difficulty was experienced in making up correct schedules for the judicial accounting.

It is well known that a bank or a trust company always makes complete, adequate, and correct records of all its transactions. The proper entries are made promptly at the time the transactions take place. The questions which are forever

springing up as to whether an item is an administration expense or a debt of the testator, or whether the charge should be made against income or principal, are not guessed at or decided by chance. They are decided by someone who is an expert and knows how they ought to be charged.

In the case of a bank or a trust company the records are subject to numerous official examinations, including in the case of a national bank in New York, the national bank examiners, official inspectors of the federal reserve bank, the clearing house, the state bank examiners, and the examination of its own directors, and are always subject to audit and examination by its own auditing department.

Being subject to all these examinations, of which those concerned have no advance notice, the assets and affairs of every estate for which the bank may be acting would seem to be extremely well guarded. There are, however, further safeguards, namely: (1) that all entries must prove every day, and (2) that the systems used by banks and trust companies contain every known check against error or wrongdoing.

§ 499. Caring for the Assets of an Estate

One of the many considerations that should be taken into account at the time when an individual is selecting an executor or a trustee, and a fact which is seldom if ever in the testator's mind, is the question of the facilities that the proposed executor has for caring for the assets of the estate. The offhand answer that most people would give to this question, is that the executor should rent a safe-deposit box. Sometimes no safe-deposit company exists in the locality where the executor maintains his office or place of business. If, however, the executor maintains an office in a large city, of course there are a number of safe-deposit companies ready to rent boxes to fiduciaries. But in this case the securities are not in a convenient and accessible place; at least they are not so accessible

as if the executor had them in his office at all times. A great deal of danger arises from this very situation, and there have been many cases where the fiduciary's accounts have been surcharged by reason of an alleged loss of assets of the estate because the executor lacked adequate means for safe-keeping the securities.

§ 500. Cases on Care of Funds

In one case an administrator explained a shortage by saying that his pocket had been picked and that thereby he had lost $1,000 belonging to the estate. He was compelled to reimburse the estate for the loss because the court considered that he was guilty of negligence in carrying the money around in his pocket. In some cases of loss, however, there is no negligence, and the fiduciary cannot be held personally liable.

In another case the administrator explained a discrepancy in his accounts by alleging that he had been robbed of $3,000 in cash. The facts showed that the administrator lived in the country some distance from any bank and that he had kept the money in his house until it was convenient for him to go to the county seat for the purpose of settling his accounts. He stated that on his way he was attacked by armed men and the money stolen from him. In this case the court held that there was no negligence by reason of the fact that it did not appear that the money was lost because of the administrator's failure. to put the money in the bank immediately, but that the same kind of attack might have been made where there had been no such delay in bringing the money to a safe place.1

Sometimes executors and administrators have safes in their offices where they are in the habit of keeping securities or money. This is an unsafe place in which to keep anything of value, and there are cases where such safes have been broken

1 Lehman v. Robertson, 84 Ala. 489.

into and the contents stolen. In one such case the executor kept money in an iron office safe, such as is supposed to be ordinarily proof against burglary and fire. However, thieves entered the office during the absence of the proprietor and blew open the safe and stole some money belonging to an estate. In this case the court did not hold the administrator personally liable for the reason that there had been no negligence. The court thought that in view of the fact that the money had been placed in a safe the administrator had used due care.2

In another case the assets of an estate consisting of cash were kept in a trunk in the house of the administratrix. Sometime during the course of her administration of the estate, a thief broke into the house and the money was stolen. The court held that this was gross negligence and that the accounts of the administratrix should be surcharged.3

It may be said that these losses are not always honest and that in some cases the fiduciary has not been true to his trust and has used the money for his own purposes. However, there can be no doubt that there are losses of the nature described in the several cases cited.

§ 501. How a Corporate Trustee Keeps Funds

If a bank were acting in any of these various fiduciary capacities, such occurrences could scarcely happen. Most banks have very adequate facilities for taking care of the assets of an estate. They maintain vaults which are actually burglar-proof, in the construction of which every known modern device to prevent breaking into has been used. In addition, the vaults are guarded at all times of the day and night so that it is practically impossible for bank vaults to be entered. Furthermore, there is no reason of inconvenience—such as in the case of an individual whose place of business or residence is far removed

2 Stevens v. Gage, 55 N. H. 175.

Cornell v. Deck, 6 Hun. (N. Y.) 22.