§ 376. It is the duty of a trustee to keep regular accounts, to collect all debts, to defend all suits brought against the trust property, and to give notice of such suit to his cestui que trust; to keep himself properly informed in respect to all circumstances affecting the trust property, and to use reasonable diligence in executing his trust.5 He will not be liable, if he have not been guilty of more than ordinary negligence, for loss by inevitable accident or force, - such as losses by fire or robbery,1 and he will be allowed to establish the amount lost by his own oath.2 Again, inasmuch as trustees stand in a fiduciary rela-, tion to their cestui que trust, they are not permitted to accept of his bounty, nor to purchase the trust property from him;3 and the reason of this rule is, that the position of the trustee enables him to exercise a commanding influence over his cestui que trust, and affords opportunities for fraudulent or excessive advantage. Yet although, ordinarily, no purchases by a trustee from his cestui que trust are binding, yet if the sale be made with the most entire good faith and openness, and with no circumstances indicating the least advantage taken by the trustee, such sales will be permitted to stand, if the cestui que trust desire it.4 But even in a case of a purchase of trust property without suspicion, the cestui que trust may claim to have it set aside.6 If there be any inequality or inadequacy of price, a fortiori, the sale would not be binding. And the mere fact that a trustee sells property, bought by him of his cestui que trust, for a larger price than he gave for it, would make him a trustee for the overplus.6 But when a cestui que trust, knowing of a purchase of the trust property by his trustee, and of his own right to avoid it, assents to the application of the purchase-money to his own use, such an assent will operate as a ratification of the sale.1
1 Boynton v. Dyer, 18 Pick. 6, and cases cited; The Charitable Corp. ». Sutton, 2 Atk. 406; Clough v. Bond, 3 Myl. & Cr. 490; 1 Story, Eq. Jur. § 465; 2 ib. § 1269, and cases cited; Hart v. Ten Eyck, 2 Johns. Ch. 76; Thompson v. Brown, 4 Johns. Ch. 619; Caffrey v. Darby, 6 Ves. 488; Wilkinson v.. Stafford, 1 Ves. Jr. 32, 41. See Blauvelt v. Ackerman, 5 C. E. Green, 141 (1869).
2 2 Story, Eq. Jur. § 1269; Morley v. Morley, 2 Cas. Ch. 2; Knight v. Lord Plimouth, 3 Atk. 480; Jones v. Lewis, 2 Ves. 240.
4 Ibid.; Ex parte Belchier v. Parsons, Ambl. 219; Knight v. Lord Plimouth, 3 Atk. 480; Clough v. Bond, 3 Myl. & Cr. 490.
5 Freeman v. Fairlie, 3 Meriv. 29, 41; Pearse v. Green, 1 Jac. & Walk. 135, 140; Adams v. Clifton, 1 Russ. 297; Walker v. Symonds, 3 Swanst 58, 73; Boynton v. Dyer, 18 Pick. 6; 1 Story, Eq. Jur. § 465; 2 ib. § 1275; Caffrey v. Darby, 6 Ves. 488.
1 2 Story, Eq. Jur. § 1269; Ex parte Belchier v. Parsons, Ambl. 219.
2 Morley v. Morley, 2 Cas. Ch. 2; Knight v. Lord Plimouth, 3 Atk. 480; Jones v. Lewis, 2 Ves. 240.
3 1 Story, Eq. Jur. § 311, 321; Hatch v. Hatch, 9 Ves. 297; Hylton v. Hylton, 2 Ves. 548; Farnam v. Brooks, 9 Pick. 212; Bulkley v. Wilford, 2 CI. & Finn. 102, 177; Arnold v. Brown, 24 Pick. 89, 96.
4 1 Story, Eq. Jur. § 321, and cases cited; Beeson v. Beeson, 9 Barr, 279; Painter v. Henderson, 7 Barr, 48; Jenkins v. Eldredge, 3 Story, 290.
5 Davoue v. Fanning, 2 Johns. Ch. 252; Campbell v. Walker, 5 Ves. 678; Ex parte Lacey, 6 Ves. 625; Ex parte Bennett, 10 Ves. 381; Whit-comb v. Minchin, 5 Madd. 91; Cane v. Lord Allen, 2 Dow, 289, 299; Edwards v. Meyrick, 2 Hare, 60; 1 Story, Eq. Jur. § 311. In the case of a sale by a client to an attorney, the attorney must prove the entire absence of any advantage taken of the client, and then the sale will be good and binding. Hunter v. Atkins, 3 Myl. & K. 113; 1 Story, Eq. Jur. § 312; Cane v. Lord Allen, 2 Dow, 289; McKinley v. Irvine, 13 Ala. 681.
6 Fox v. Mackreth, 2 Bro. C. C. 400; Prevost v. Gratz, Peters, C. C. 367; 8. c. 6 Wheat. 481; Edwards v. Meyrick, 2 Hare, 60; Hawley v. Cramer, 4 Cow. 717; Slade v. Van Vechten, 11 Paige, 21.
§ 377. But besides these general rules, there are some special acts, in relation to which courts of equity have enlarged the liabilities of a trustee and required a stricter measure of diligence. Thus, it is the duty of a trustee to invest the funds of his cestui que trust, and not to keep them dead in his hands; and if he suffer money belonging to his cestui que trust to remain idle and unproductive for an unreasonable length of time, he will be chargeable with simple interest thereon, and in case of gross delinquency, with compound interest.2 Yet a trustee cannot be surcharged upon evidence of witnesses that the property ought to have yielded more than it did, when there is no evidence as to particulars, and there is evidence that the rents demanded were at fair prices, and every thing received had been accounted for, and the property very much improved under his management.3 But in investing the property in his hands as trustee he is bound to exercise the strictest circumspection and caution;4 and if he put it in the control of persons who ought not to be intrusted with it, or if he invest it in stock in which a court of equity is not accustomed to direct funds in its possession as trustee to be invested, the trustee would be liable for any loss or depreciation in value, although he may have acted in entire good faith.5 But where he acts within the strict line of his duty, and does what a court of equity would order under similar circumstances, he will not be liable.1 If, therefore, he deposit money in the hands of a banker in good credit, who afterwards fails, he would not be responsible.2 The same doctrine obtains where he is forced to do an act from necessity.3
1 Beeson v. Beeson, 9 Barr, 279. See Boerum v. Schenck, 41 N". Y. 182.
2 2 Kent, Comm. lect. 30, p. 230, and cases cited; Boynton v. Dyer, 18 Pick. 7; Raphael v. Boehm, 11 Ves. 92; Green v. Winter, 1 Johns. Ch. 26; Dunscomb v. Dunscomb, 1 Johns. Ch. 508; Phillips v. Phillips, 2 Freem. 11; 2 Story, Eq. Jur. § 1277; Wright v. Wright, 2 M'Cord, Ch. 185; Rev. Stat, of New Jersey, 779, § 11; Evertson v. Tappen, 5 Johns. Ch. 497.