Opinion,
Mr. Justice Clark:
This is an appeal by the Philadelphia Finance Company, surety upon the guardianship bond of Henry W. Scott, guardian of William W. Law, from the adjudication by the Orphans’ Court of Philadelphia county, upon the account of said guardian. On January 29,1890, Scott received $3,839.12 of the money of his ward, and immediately deposited the same in the Bank of America. The accountant had kept his personal account, as a depositor, in the same institution for several years, and had been advised by an officer of the finance company, which latter company was surety on his bond as guardian, that the Bank of America was entirely solvent and safe. The deposit was in a separate account, in the name of the guardian as such. No certificate was issued; the whole transaction was evidenced only by an entry of credit upon the books of the bank in the usual form. The accountant was in search of an investment, and the deposit was to remain only until he could find one. The bank agreed to allow him three per cent interest, but he was to give two weeks’ notice before withdrawing it. The bank failed on the thirtieth day of April following. At the time of the deposit the bank was in good repute, and there is no allegation of bad faith, or want of due care or diligence. The only question for our consideration is whether or not, under such circumstances, the trustee is responsible for the amount of the deposit.
As a general rule, the measure of care and diligence required ' of a trustee is such as would be pursued by a man of ordinary prudence and skill, in the management of his own estate: Fahnestock’s Appeal, 104 Pa. 46. It is equally well settled, however, that a trustee who invests the funds belonging to a trust on personal security does so at his own risk. This is so well settled that a citation of authorities is unnecessary.
Trustees are not bound to transact personally such business [506]*506connected with the trust as, according to general usage, prudent persons, acting for themselves, would ordinarily transact through mercantile agents. Upon this principle it has been held that a trustee investing trust funds is justified in employing a broker to procure securities authorized by the trust, and in paying the purchase money to a broker, if he follows the usual and regular course of business adopted by ordinarily prudent men in making such investments. So, also, executors, trustees, or guardians will not be liable if, in the ordinary discharge of their duty, they deposit the assets temporarily in a bank, although the bank may fail. But the trustee must be careful to make the deposits in the name of the trust-estate, and not to his personal credit, and not to mix the trust funds with his own; otherwise, he will be liable: Commonwealth v. McAlister, 28 Pa. 486; Rees v. Berrington, 2 White & T. L. C. 986, 987. “ If the subject of the trust be money, it may be deposited for temporary purposes in some responsible banking house, but in such a manner that the cestui que trust may follow the fund into the hands of the bankers; and it is no objection that the bank allows interest on the deposits..... If the trustee put the money to his own credit, and not to the separate account of the trust-estate, or if he allow the drafts of another person to be honored, who draws upon the account and misapplies the money, the trustee will be personally liable for the consequences : ” Lewin on Trusts, 417. Banks of deposit are a recognized necessity in the commercial world. A trustee who would continuously keep for any considerable length of time a large sum of money about his person or in his house, rather than deposit it for safe-keeping in a solvent and reputable bank or trust company, where all the precautions may be exercised for its safety, might justly be regarded as derelict in duty. No one would be accredited with the exercise of common prudence who would keep his own money in this way; and a trustee, as we have said, is held generally for such care and diligence as an ordinarily prudent man would exercise in the conduct and management of his own business. “ A trustee will not be liable for the failure of a bank in which trust funds have been deposited, if he has suffered them to remain there only for a reasonable time; but if he allows them to lie there by way of investment, he will be liable to make good the loss. But he must [507]*507be careful to make tbe deposit in tbe name of tbe trust-estate, and not to his own credit, and not to mix the. trust funds with his own; otherwise, he will be liable: ” Bispham’s Eq., 139; Perry on Trusts, § 443. Of course, there is no duty to convert securities if, by the terms of the trust instrument, there is sufficient indication that the cestui que trust was intended to enjoy the interest, income, or dividends of the specific securities: Perry on Trusts, 450 ; Hill on Trustees, 582; Bispham’s Eq., 139.
Was this transaction with the Bank of America a deposit of the money, or was it a loan or investment of it ? A deposit is where a sum of money is left with a banker for safe-keeping, subject to order, and payable, not in the specific money deposited, but in an equal sum. It may or may not bear interest, according to the agreement. Whilst the relation between the depositor and his banker is that of debtor or creditor simply, the transaction cannot in any proper sense be regarded as a loan, unless the money is left, not for safe-keeping but for a fixed period at interest, in which case the transaction assumes all the characteristics of a loan. The Orphans’ Court decided this case upon the rulings of this court in Frankenfield’s App., 11 W. N. 373, and Baer’s App., 127 Pa. 360; but we think these cases are readily distinguishable from the case at bar. In Frankenfield’s Appeal, supra, there was a loan by the trustee of two thousand dollars of trust funds to the Franklin Savings Bank for three months, with interest at six per cent; thirty days’ notice to be given of the trustee’s intention to withdraw the deposit. The bank was in good repute, and there was no evidence of bad faith or want of care on the part of the trustee. Our Brother Green, in the opinion filed, said: “ If it had been an ordinary deposit, subject to the check of the depositor from the day it was made, the appellant would probably not have been liable; but it was not a deposit, it was a loan upon merely personal security for a fixed period, at interest; and during that period the money, because of the loan, was entirely beyond the trustee’s control. The twenty-fifth section of the act of June 12, 1836, expressly provides that such investments must be made under the direction of the Court of Common Pleas, and only exempts the trustee from liability when he pursues this course in good faith.” In Baer’s Appeal, supra, [508]*508the banker’s certificate of deposit was substantially in the same form as in Frankenfield’s Appeal, supra, .excepting that there was no stipulation for notice of the withdrawal of the deposit. The transaction possessed all the qualities of a loan of money for a year at four per cent interest. It is of no consequence that the borrower is a bank, for a bank may borrow money. Parties engaged in the banking business, whether as individuals or as members of a partnership or of a corporation, may take a loan of money for a fixed period of time at interest, with like effect as persons engaged in other pursuits. The transaction may be termed a time deposit, but it is none the less a loan, and subjects the lender to that degree of responsibility.
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Opinion,
Mr. Justice Clark:
This is an appeal by the Philadelphia Finance Company, surety upon the guardianship bond of Henry W. Scott, guardian of William W. Law, from the adjudication by the Orphans’ Court of Philadelphia county, upon the account of said guardian. On January 29,1890, Scott received $3,839.12 of the money of his ward, and immediately deposited the same in the Bank of America. The accountant had kept his personal account, as a depositor, in the same institution for several years, and had been advised by an officer of the finance company, which latter company was surety on his bond as guardian, that the Bank of America was entirely solvent and safe. The deposit was in a separate account, in the name of the guardian as such. No certificate was issued; the whole transaction was evidenced only by an entry of credit upon the books of the bank in the usual form. The accountant was in search of an investment, and the deposit was to remain only until he could find one. The bank agreed to allow him three per cent interest, but he was to give two weeks’ notice before withdrawing it. The bank failed on the thirtieth day of April following. At the time of the deposit the bank was in good repute, and there is no allegation of bad faith, or want of due care or diligence. The only question for our consideration is whether or not, under such circumstances, the trustee is responsible for the amount of the deposit.
As a general rule, the measure of care and diligence required ' of a trustee is such as would be pursued by a man of ordinary prudence and skill, in the management of his own estate: Fahnestock’s Appeal, 104 Pa. 46. It is equally well settled, however, that a trustee who invests the funds belonging to a trust on personal security does so at his own risk. This is so well settled that a citation of authorities is unnecessary.
Trustees are not bound to transact personally such business [506]*506connected with the trust as, according to general usage, prudent persons, acting for themselves, would ordinarily transact through mercantile agents. Upon this principle it has been held that a trustee investing trust funds is justified in employing a broker to procure securities authorized by the trust, and in paying the purchase money to a broker, if he follows the usual and regular course of business adopted by ordinarily prudent men in making such investments. So, also, executors, trustees, or guardians will not be liable if, in the ordinary discharge of their duty, they deposit the assets temporarily in a bank, although the bank may fail. But the trustee must be careful to make the deposits in the name of the trust-estate, and not to his personal credit, and not to mix the trust funds with his own; otherwise, he will be liable: Commonwealth v. McAlister, 28 Pa. 486; Rees v. Berrington, 2 White & T. L. C. 986, 987. “ If the subject of the trust be money, it may be deposited for temporary purposes in some responsible banking house, but in such a manner that the cestui que trust may follow the fund into the hands of the bankers; and it is no objection that the bank allows interest on the deposits..... If the trustee put the money to his own credit, and not to the separate account of the trust-estate, or if he allow the drafts of another person to be honored, who draws upon the account and misapplies the money, the trustee will be personally liable for the consequences : ” Lewin on Trusts, 417. Banks of deposit are a recognized necessity in the commercial world. A trustee who would continuously keep for any considerable length of time a large sum of money about his person or in his house, rather than deposit it for safe-keeping in a solvent and reputable bank or trust company, where all the precautions may be exercised for its safety, might justly be regarded as derelict in duty. No one would be accredited with the exercise of common prudence who would keep his own money in this way; and a trustee, as we have said, is held generally for such care and diligence as an ordinarily prudent man would exercise in the conduct and management of his own business. “ A trustee will not be liable for the failure of a bank in which trust funds have been deposited, if he has suffered them to remain there only for a reasonable time; but if he allows them to lie there by way of investment, he will be liable to make good the loss. But he must [507]*507be careful to make tbe deposit in tbe name of tbe trust-estate, and not to his own credit, and not to mix the. trust funds with his own; otherwise, he will be liable: ” Bispham’s Eq., 139; Perry on Trusts, § 443. Of course, there is no duty to convert securities if, by the terms of the trust instrument, there is sufficient indication that the cestui que trust was intended to enjoy the interest, income, or dividends of the specific securities: Perry on Trusts, 450 ; Hill on Trustees, 582; Bispham’s Eq., 139.
Was this transaction with the Bank of America a deposit of the money, or was it a loan or investment of it ? A deposit is where a sum of money is left with a banker for safe-keeping, subject to order, and payable, not in the specific money deposited, but in an equal sum. It may or may not bear interest, according to the agreement. Whilst the relation between the depositor and his banker is that of debtor or creditor simply, the transaction cannot in any proper sense be regarded as a loan, unless the money is left, not for safe-keeping but for a fixed period at interest, in which case the transaction assumes all the characteristics of a loan. The Orphans’ Court decided this case upon the rulings of this court in Frankenfield’s App., 11 W. N. 373, and Baer’s App., 127 Pa. 360; but we think these cases are readily distinguishable from the case at bar. In Frankenfield’s Appeal, supra, there was a loan by the trustee of two thousand dollars of trust funds to the Franklin Savings Bank for three months, with interest at six per cent; thirty days’ notice to be given of the trustee’s intention to withdraw the deposit. The bank was in good repute, and there was no evidence of bad faith or want of care on the part of the trustee. Our Brother Green, in the opinion filed, said: “ If it had been an ordinary deposit, subject to the check of the depositor from the day it was made, the appellant would probably not have been liable; but it was not a deposit, it was a loan upon merely personal security for a fixed period, at interest; and during that period the money, because of the loan, was entirely beyond the trustee’s control. The twenty-fifth section of the act of June 12, 1836, expressly provides that such investments must be made under the direction of the Court of Common Pleas, and only exempts the trustee from liability when he pursues this course in good faith.” In Baer’s Appeal, supra, [508]*508the banker’s certificate of deposit was substantially in the same form as in Frankenfield’s Appeal, supra, .excepting that there was no stipulation for notice of the withdrawal of the deposit. The transaction possessed all the qualities of a loan of money for a year at four per cent interest. It is of no consequence that the borrower is a bank, for a bank may borrow money. Parties engaged in the banking business, whether as individuals or as members of a partnership or of a corporation, may take a loan of money for a fixed period of time at interest, with like effect as persons engaged in other pursuits. The transaction may be termed a time deposit, but it is none the less a loan, and subjects the lender to that degree of responsibility.
In the present case, the money was placed in the bank, not as an investment for any fixed period, but merely for safekeeping, and at a small rate of interest until a suitable investment could be found. This was the express understanding of both parties at the time. The transaction was entered upon the books of the bank as a deposit merely. It was treated as a temporary, provisional, or precautionary arrangement. No person would speak of this as an investment; an investment carries with it a greater or less degree of permanency, which does not characterize this transaction. It is true that two weeks’ notice was to be given of the withdrawal of the deposit, but this was a reasonable provision and not inconsistent with a bank deposit. Almost all savings institutions stipulate for notice of withdrawal with their depositors, and such a stipulation is for the benefit not only of the bank, but also of its depositors ; the reasonableness of the time is a question in each case to be determined by the court. It is said the trustee thereby loses control of the money; but that is not the true test. The depositor always, in a certain sense, loses control of the money when he places it in bank; for the bank may refuse payment of his checks, and, as he then has no claim upon the specific money, he stands upon the footing of a creditor merely. It is true, a trustee, as a general rule, is not allowed to part with the control of trust money: Salway v. Salway, 2 Russ. & M. 215 ; but he may do so by way of precaution against loss, by a deposit in a solvent and reputable bank. A deposit, as we have said, is a temporary disposition of money for safekeeping ; and it is upon this ground alone that the trustee is [509]*509justified in depositing trust funds in bank, and it is upon tbe same ground that a deposit is distinguishable from an investment.
We are of opinion, for the reasons stated, that the trustee was not properly chargeable with this loss;
The decree of the Orphans’ Court is reversed, and the record remitted in order that the account may be restated and a decree entered in accordance with this opinion; the appellee to pay the costs of this appeal.