Court Opinion

ID: 9807357
Source: CourtListenerOpinion
Date Created: 2023-08-31 20:01:36.857507+00
Date Added: 2024-06-11T11:34:45.343808
License: Public Domain

Clark, C. J.,
concurring. The rule laid down in Carr v. Askew, 94 N. C., 194, and reaffirmed in this case, that when a fiduciary has used the trust funds in his own business he is to be charged with the highest rate of interest, unless he is shown to have made more, when he is chargeable with the actual profits made, is based upon the sound reasons given in the opinion of the Court. It is also sustained by the precedents. In the absence of all evidence as to profits, the fiduciary in such cases is chargeable with the highest permissible rate at which he could have loaned the money, and the burden is on him to show that he made less (3 Williams Exrs., 404, 7 Am. Ed., and cases cited), though in all cases when he himself uses the money he is chargeable not less than the ordinary rate of interest, even though he should not have made so much. Wedderburn v. Wedderburn, 20 Beavan, 100; Treves v. Townshend, 1 Bro. C. C., 384; Heathcote v. Hulme, 3 J. & W. Ch., 135, which last *203directed “an inquiry whether the account of interest or profits will be most advantageous to the infants.” In the English cases three per cent, is taken as the usual and five per cent, as the highest allowable rate (corresponding to the six and eight per cent, under our former statute), and in all cases the fiduciary using trust funds is charged with five per cent, unless his profits therefrom were greater, in which case he is chargeable with them; or unless he shows the profits were less, in which case he is charged therewith, but never less than three per cent., at which it was his duty to have loaned the money. Lord Cramworth in Robinson v. Robinson, 1 DeG., M. & G., 257. Where the fiduciary does not use the money, but merely fails to loan it or to invest it, he is chargeable only with the ordinary and usual rate of interest, the amount which he should have made for the trust fund if he .had not been negligent. Rocke v. Hart, 11 Ves., 61. The whole doctrine is summed up and restated as above by James, L. J., in Vyse v. Foster, L. R. (1872-3), 8 Ch. App., at page 329, and in 3 Williams Exrs., ut supra.