CARVER. A Treatise on the Law Relating to the Carriage of Goods by Sea. By T. G. CARVER. 8vo., pp. 784. London: Stevens & Sons.

COBBETT.-Leading Cases and Opinions on International Law, Collected and Digested from English and Foreign Reports, Official Documents, Parliamentary Papers, and other Sources. With Notes and Excursus, containing the Views of the Text Writers, on the Topics referred to, together with Supplementary Cases, Treatises and Statutes. By PITT COBBETT. 8vo., pp. 280. London: Stevens & Haynes.

CURTIS-WEBSTER.-A Digest of the Laws of the United States, governing the Granting of Army and Navy Pensions and Bounty-Land Warrants; Decisions of the Secretary of the Interior, and Rulings and Orders of the Commissioner of Pensions thereunder. Compiled by Order of the Commissioner of Pensions, under the authority of the Secretary of the Interior, by F. B. CURTIS and W. H. WEBSTER. 8vo., pp. 636. Washington: Government Printing Office.

JONES.-Forms in Conveyancing, comprising Precedents for Ordinary Use, and Clauses adapted to Special and Unusual Cases. With Practical Notes. By L. A. JONES. 8vo., pp. 826. Boston and New York: Houghton, Mifflin & Co.

LEWIN. A Practical Treatise on the Law of Trusts. By T. LEWIN. 8th ed., by F. A. LEWIN. 8vo., pp. 1239. London: Wm. Maxwell & Son.

LEWIS.-Law of Shipping, being a Treatise on the Law respecting the Inland and Sea-Coast Shipping of Canada and the United States. By E. N. LEWIS. 8vo., pp. 512. Toronto, Canada: Carswell & Co.

PIGGOTT.-Principles of the Law of Torts. By F. T. PIGGOTT. 8vo., pp. 416. London: Wm. Clowes & Sons, Limited.

POLLOCK-WALK.-Principles of Contract at Law and in Equity, being a Treatise on the General Principles concerning the Validity of Agreements, with a Special View to the Comparison of Law and Equity. By F. POLLOCK. 2d Am. from the 4th Eng. ed. With Notes by G. H. WALK. 8vo., pp. 762.

MARTINDALE.-A Treatise on the Examination of Titles to Real Estate, and the Preparation of Abstracts, with an Appendix of Forms. By W. B. MARTINDALE. 8vo., pp. 200. St. Louis: Win. H. Stevenson.

MCCONNELL.-A Treatise on Trustee Process as administered in the New England States, at Law and in Equity. By G. W. McCONNELL. Svo., pp. 378. Boston and New York: Houghton, Mifflin & Co.

RALSTON. The Principles of the Law relating to the Discharge of Contracts. By ROBERT RALSTON. 8vo., pp. 68. Philadelphia: T. & J. W. Johnson & Co.

SEDGWICK-TAIT.-A Treatise on the Trial of Title to Land, including Ejectment, Trespass to try Title. Writs of Entry, and Statutory Remedies for the recovery of Real Property: Embracing Legal and Equitable Titles and Defences. By A. G. SEDGWICK and F. S. TAIT. 2d ed., Revised and Enlarged. 8vo., pp. 884. New York: Baker, Voorhis & Co.

WILLIAMS.-Principles of the Law of Real Property. Intended as a First Book for the Use of Students in Conveyancing. By J. WILLIAMS. 6th Am. ed., with Notes and References by W. H. RAWLE and J. T. MITCHELL, and Additional Notes and References, by E. C. MITCHELL. 8vo., pp. 437. Philadelphia: T. & J. W. Johnson & Co.

WINTHROP.-Military Law. By L. Col. W. WINTHROP. 2 vols., 8vo., pp. Washington: W. H. Morrison.

1511.

THE

AMERICAN LAW REGISTER.

APRIL 1886.

INVESTMENT OF TRUST FUNDS.

THE LAW IN ENGLAND.-The strictness of the English law upon the question is well known. Lord COTTENHAM thus states the rule: "It will be found to be the result of all the best authorities upon the subject, that although a personal representative, acting strictly within the line of his duty, and exercising reasonable care and diligence, will not be responsible for the failure or depreciation of the fund in which any part of the estate may be invested, or for the insolvency or misconduct of any person who may have possessed it; yet, if that line of duty be not strictly pursued, and any part of the property be invested by such personal representative, in funds or securities, not authorized, or be put within the control of persons who ought not to be entrusted with it, and a loss be thereby eventually sustained, such personal representative will be liable to make it good, however unexpected the result, however little likely to arise from the course adopted, and however free such course may have been from any improper motive:" Clough v. Bond, 3 Mylne & Craig 490. Similar comments have been made by other English judges: "No rule is better established than that a trustee cannot lend on mere personal security, and it ought to be rung in the ears of every one who acted in the character of trustee." Lord KENYON in Holmes v. Dring, 2 Cox 1: "The court will always discourage lending trust moneys on private security, though large interest may be given. It becomes a species of gambling." Lord Commissioner NOTHAM, Adye v. Feuilleteau, 1 Cox 24; s. c. 3 Swanst. 84. The course of decision which has led up to this conclusion in England, is worthy of note. In Trafford v. Boehm, 3

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Atk. 444, as early as 1746, Lord HARDWICKE decided that investing the trust funds in South Sea stock would not protect the trustee against personal liability for the loss; and the Lord Chancellor remarked that "Neither South Sea stock nor bank stock is considered a good security, because it depends on the management of the governors and directors, and is subject to losses." And in the same case he held that an investment" in South Sea or bank annuities, where the directors have nothing to do with the principal, and were only to pay the dividends and interest, until such time as the government pay off the capital, would be good security," In Hancom v. Allen, 2 Dickens 498, it was held in 1774, that if a trustee lay out trust money in a fund which the court does not adopt, and such fund afterwards sink in value, the court, though there was no mala fides, will throw the loss upon the trustee. Otherwise, if laid out in the fund which the court adopts: Peat v. Crane, 2 Dickens 498, note. In Adye v. Feuilleteau, 1 Cox 24; s. c. 3 Swanst. 84, decided in 1783, Lord LOUGHBOROUGH held that where an executor lends money of his testator, upon bond, he shall be personally answerable if the security prove defective, though the testator was in the habit of lending money on such security. Counsel attempted in this case to rely upon Harden v. Parsons, 1 Eden's Cas. 145, but that case was overruled by Lord ELDON in Walker v. Symonds, 3 Swanst. 62, and has never since been relied upon as an authority. In Holmes v. Dring, 2 Cox 1, decided in 1787, the executors had loaned the trust money of an infant on a bond with security. The obligors were in "ample circumstances" when the money was lent, but afterward became insolvent. The Master of the Rolls said that "it was never heard that a trustee could lend an infant's money on private security," and directed the executors

to pay the money, and interest and costs. In Wilkes v. Steward, Cooper's Ch. Rep. 6, decided in 1801, the executors were empow ered to lay out the legacy in the funds, "or in such other good security as they could procure and think safe." It was none the less held, that they could not lend it on personal security. In Powell v. Evans (1801), it was held that executors who neglected to call in money lent by the testator on a bond, should be charged with the loss that might be sustained by the subsequent failure of the obligors.

In Ackerman v. Emott, 4 Barb. (N. Y.) 636, it is said to be the well-settled rule of the English Court of Chancery, that the trustee

can only protect himself against risk, by investing the trust fund in real or government securities. He must either take security on real estate, or invest in a fund approved by the court; and no other fund is there approved by the court, except the public funds: Vigrass v. Binfield, 3 Mad. 62; Walker v. Symonds, 3 Swanst. 1; Howe v. Earl of Dartmouth, 7 Ves. 150; Holland v. Hughes, 16 Id. 111; Tebbs v. Carpenter, 1 Madd. 290; Clough v. Bond, 3 Mylne & Craig 490; Darke v. Martyn, 1 Beav. 525; Keble v. Thompson, 3 Cro. Ch. 112; Wilkes v. Steward, George Coop. 6; Pocock v. Reddington. 5 Ves. 799: Collis v. Collis, 2 Sim. 365; Blackwood v. Borrowes, 2 Conn. & Laws 477; Watts v. Girdlestone, 6 Beav. 188; Geaves v. Strahan, 8 DeG., M. & G. 291; Fowler v. Reynal, 3 Mac. & G. 500.

Whether or not this was at any time a perfectly accurate statement of the English law governing the investment of trust funds, it is certain that later statutes and decisions have made important and significant changes. By Lord St. Leonards' Act, 22 & 23 Vict. c. 65, sect. 32, trustees, executors and administrators, where not expressly forbidden by the instrument creating the trust, are authorized to invest trust funds in the stock of the Bank of England, or Ireland, or in East India stock; but the act does not apply where a particular fund is settled specifically, and there is no power of varying securities. By 23 & 24 Vict. c. 38, sect. 12, the original act was made retrospective, and the Court of Chancery was authorized to issue general orders pointing out certain securities which met with the court's approval. In pursuance of the authority thus granted a general order was issued in 1861 and modified in 1883 as follows: "Cash under the control of, or subject to the order of, the court may be invested in Bank stock, East India stock, Exchequer bills, and 27. 108. per cent. annuities, and upon mortgage of freehold and copyhold estates, respectively in England and Wales, as well as on consolidated, reduced and new 37. per cent. annuities." By the combined operation of sects. 21 and 32, of the Settled Land Act 1882, all moneys in court which are liable to be laid out in the purchase of land to be made subject to a settlement may be "invested in government securities, or on other securities on which the trustees of the settlement, are by the settlement or by law authorized to invest trust money of the settlement, or on the security of the bonds, mortgages, or debentures, or in the purchase of the debenture stock of any railway company in Great Britain or

Ireland, incorporated by special Act of Parliament, and having for ten years next before the date of investment, paid a dividend on its ordinary stock or shares." It is said in Brown v. Brown, 4 K. & J. 704, that “in order to come within the description government or parliamentary stock or funds,' a fund ought to be either managed by Parliament, or paid out of the resources of the British Government, or at least guaranteed by that government." It is enacted by 30 & 31 Vict. c. 132, sect. 2, that it shall be lawful for any trustee, executor, or administrator to invest any trust fund in his possession or under his control in any securities, the interest of which is or shall be guaranteed by Parliament." By 34 & 35 Vict. c. 47, sect. 13, a trustee, executor or other person empowered to invest money in public stocks or funds, or other government securities, may, unless forbidden by the will or other instrument under which he acts, whether prior in date to the act or not, invest the same in consolidated stock created by the Metropolitan Board of Works.

Prior to these statutes, while the question was in some doubt, loans upon mortgages were not permitted, or were certainly not encouraged: Ex parte Cathorpe, 1 Cox 182; Ex parte Ellice, Jacob 234; Norbury v. Norbury, 4 Mad. 191; Widdowson v. Duck, 2 Mer. 494; Ex parte Fust, 1 C. P. Cooper, T. Cott. 157, note (e); Ex parte Franklin, 1 De G. & Sm. 531; Barry v. Marriott, 2 Id. 491; Ex parte Johnson, 1 Moll. 128; Ex parte Ridgway, 1 Hag. 309; Lewin on Trusts (8th ed.) 312; Perry on Trusts, § 457. But see Brown v. Litton, 1 P. Wms. 141; Lyse v. Kingdon, 1 Coll. 188; Knight v. Plymouth, 1 Dick. 126; Bocock v. Reddington, 5 Ves. 800. Justification was found for this rule in Barry v. Marriott, 2 De G. & Sm. 491, as follows: That even where an express power existed to lend on real security, the court would refuse to exercise it by sanctioning a loan on mortgage, on the ground that in ninetynine cases out of a hundred, the expense of the mortgage more than counterbalanced the increase of income. Now, however, by Lord St. Leonards' Act, "when a trustee, executor or administrator shall not by some instrument creating his trust be expressly forbidden to invest any trust fund in real securities in any part of the United Kingdom," he is at liberty to make such investment, provided it be in other respects reasonable and proper: Lewin on Trusts (8th ed.) 313; Perry on Trusts, § 457.

In spite of the care exercised by the English courts to protect the interests of the ward, that purpose is not permitted to do injus