The Pacific commercial advertiser. [volume] (Honolulu, Hawaiian Islands) 1885-1921, 1894-03-31


that the duty of trustee In max
ing investments Is to employ sncn
diligence and such prudence as IN
general prudent men OF discretion
and intelligence in such matters
employ in their own like AFFAIRS
x x And while no rule OF proper
responsibility should be relaxed, YET
where he acts honestly and IN good
faith and with reasonable prudence
and discretion, he should not be held
liable for unfortunate results when
he could not be expected to forsee
and was powerless TO prevent.
In King V. Talbot, 40 n. Y. %,
Woodruff J said: "The real enquiry
therefore is in my Judgment in the
case before us and in all like cases,
has the administration of the trust
created by the will of Charles hing
for the benefit of the plaintiff, been
governed by fidelity, diligence and
prudence. If it has the defendants
are not liable for the losses which
nevertheless have happened.
NV own Judgment, after an ex-
animation of the subject, and bear
ing in mind the nature of the office,
its Importance and the considera
tions which alone induce men OF
suitable experience, capacity ana
responsibility to accept It's usually
thankless burden Is that the just ana
true rule is that the trustee Is bound
to employ such diligence and such
prudence in the care and manage
ment as in general prudent men of
discretion and intelligence I'D such
matters employ in their own like
affairs"
AS to the class of securities that
have been held to be safe and proper
investments for moneys held IL trust.
The English decisions are almost
unit in declaring that the pubic
funds and loans upon real estate sec
urity are the only ones that will be
sanctioned. In the New York cases
above cited, although the Courts
have rather disclaimed the binding
force of the English common law IN
that State yet they have almost
without exception adopted the Eng
lish rule; while the Massachusetts
Courts have taken decidedly broad
er view of the matter The preced
ent established by the case OF Har
ward College V. Amory, 9 Pick. 400,
is somewhat weakened by the ex
press provision IN the will that the
executor might invest the funds IN
safe and productive stocks, but this
rule is citid, approved and followed
in the case of Lowell V. Minot, 20
Pick. 119. In that case college v.
Amory) the Court approved OF the
following Investments:
rs shares in n. E. Bank
stock ...... -. ....-....9 5000 %
DAT shares Fire and Marine
Insurance Company......... 1886 81
9 shares in Boston Manutac-
turing Company, and
shares in Merrimack Man
ufacturing Company; say
IS shares of $1,000 at 40
per cent. advance. -.......... 2o,2Oo w
Total $50, 900 90
In Lowell v. Minot, the guardian
made loan upon a promlssory note
secured by shares in manufactur,
ing corporation; the maker failed
and also the endorsers and the stock
became deprecated below the face
of the note. Shaw, @. j. said REFER
ing to the College v. Amory: ''Tak
ing this to be the rule, the Court are
of opinion that the guardian act
ed in good faith and with sound
discretion in making the In
yestment which he did. He
took the note of a person then
in good credit, with a pledge of
stock as collateral security at the
rate of about three quarters of its
par value and less than three quar-
tiers of its market value
The subsequent transaction In the
sale of these shares Is open to the
same considerations. 1t was conduc-
ted with good faith and sound dis
erection, and though as events turned
out ia consequence of the failure OF
the purchaser and of his two endor
sers and of the debtor on the mort
! gage given for collateral security
| 1t would have been better and for
| the interest of the ward If the shares
had not been sold yet this could not
! be forseep, and is no proof Of negll-
gence or want of sound discretion
Both of the above cases are cited and
approved by the court in Brown "
| French, l25 Mass. AS. Ia that case
| boEds of q railroad company III
course of construction were hello
under the circumstances TO be pro
per investment.
Has Mr.. Allen acted with SOUND
discretion in making the investmeut
complained of. In determining this
question L adopt the rule as laid dowl
in the cases before cited, but decline
to be bound by the specific preference
manifested in those decisions, eXcep
so far as by parity of reasons au'
conditions l find them useful as
, guide We are an isolated commu
nifty: NOT only almost entirely depend
,, ent upon our internal resources, bI
subject to outside Influences, largely
not quite beyond our control. a man
actions are necessarily governed b.
his opportunities, and a criterio
J. that might be just i'll another couhtr
D., might not be true standard TO Judg