The record-union., 1896-03-10
SUPREME COURT DECISIONS.
4 Question Of Liability Of Guardian
for Interest.
The Judgment of the Lower Court
Charging Him More Than Legal
Interest Reversed.

The Supreme Court has rendered a
decision in the case of the estate of
Henry Cousins, a minor, a Tulare
County case.
1t was an appeal Of ]. M. Fox, guard
ian of the minor, from an order settling
his final account Three exceptions
were urged, all involving the same gem
eral inquiry as to the propriety of the
rate of interest charged by the court
below against the guardian, but relat-
ing to different items and with differ
ent rule of accountability applied to
each
The lower court found substantially
that during the whole time that Fox
was guardian he mingled the money
belonging to his ward with his own,
used it in his business and deposited it
in the bank in his own name, and has
never kept it separate. According to his
testimony, he could not loan the money
all the while, and thought it better to
use it when he could and charge him
self legal interest A great deal of the
time it was not used at all, but under
the advice of his counsel, in making up
his final account, he charged himself
with legal interest.
AAC never lliduG d pIOlAl OA IT. 1AA III
contrary, it was a loss. The court found
that he had acted in good faith and
without any intent to defraud his ward,
and had always supplied money for his
wards maintenance and that the money
was always on hand to do 1t with. It
also found that from 1874 up to the
time of trial, the current rate of inter
est in Tulare County had been from To
to u per cent. per apnum.
AS a conclusion of law, from these
facts the court held that on all the
moneys of his ward thus mingled and
held with his own the guardian was
chargeable with interest at 10 per cent.
per annum, compounded annually, and
in the decree the guardian was charged
accordingly.
The objection urged was that the
rate of interest thus charged is wholly
unauthorized by law, and that upon
the facts found the appellant is only
liable to pay interest at the rate es-
tablished by law.
In this contention the Supreme Court
thinks it very clear that the appellant
must be sustained. The general rule,
now thoroughly established in this
State, as to the liability of a trustee
Tor nl0S1lDS the trust IunuS With HIS
own, and their use in his own business,
where it is not shown that a larger
profit was realized from them, is the
return of the principal, with legal in
terest thereon, compounded annually.
This rule is applicable alike to guardi-
ans and executors as to other trust
relations.
If it could have been proved that the
profit derived from the use of the money
had been greater, different rule would
have applied, but it was not shown
that the money could have been loaned
at a higher rate or that there was a
higher profit.
In regard to the two other items OBJ
jected to, which related to interest on
investments made by the guardian for
the benefit of the ward, but which
were not remunerative, the Supreme
Court holds with the appellant The
judgment is therefore reversed and the
court below directed to settle appel
lant's account in accordance with the
views expressed in the opinion.