The opinion of the court was delivered by
Ross, J.The referee has stated the account of the defendant as guardian of the plaintiff, subject to the opinion of the court upon the facts stated. The only question made on this statement of the account is, whether the defendant, on the facts found, is to be charged with simple interest as cast by the referee, or with annual interest as ordered by the court below. The Only facts found bearing upon this question are, that at the time the defendant was appointed guardian, he received some securities bearing interest annually ; afterwards, from the sale of real estate, he received in. *681payment, notes on demand bearing simple interest, but soon — tbe exact time is not stated — collected all said notes, and mingled the money with his own ; that he has rendered no account of the exact amount of interest he received before he mingled the ward’s funds with his own ; and that he has made some investments in stocks and real estate, from the money arising from the ward’s funds commingled with his own, from which he has received considerably more than six per cent., but the ward’s funds could not be traced by the referee, directly and wholly, into any of these investments. The duties of a guardian are specific-and well defined. He is to keep the ward’s funds separate and distinct from all other funds. He is to keep them securely invested, and as profitably for the ward as he can consistently with the exercise of that degree of prudence with regard to their security, which a prudent man would exercise in regard to his own funds which he desires to keep, and keep invested securely. He is to be prepared, at all times, to account for the funds received and invested, with all the profits derived therefrom. He is bound to collect funds that are unproductive, and invest them where they will be productive, so far as he consistently can without endangering the safety of the fund. It might not always be Ms duty to collect a debt which is due and bearing simple interest, and invest it at annual interest. That would depend upon whether he could do so, retaining equal security for the payment of the debt. He is not bound to speculate, nor to demand nor take more than lawful interest. He might not be bound to collect the interest each year, on debts bearing annual interest. The amounts might be .so small that what he could lawfully obtain above simple interest by reinvestment, would not pay for the trouble of collecting. For this service he is to receive reasonable compensation. The trust is not to be made a source of profit to him above this reasonable compensation. The fund belongs to the ward, and all the profits issuing from it by being thus invested. When the guardian fails to account for what profits he has received, or has himself become the borrower of the fund, he has, by his own fault and by a breach of Ms trust, put himself in condition where he cannot complain if he is charged with the highest rate of interest allowed by the *682law of the land where he administers his trust. To charge him, under such- circumstances, with a rate of interest less than the highest legal rate, would be to hold out inducements to guardians either to become borrowers of the ward’s funds, or to refuse to account for the profits actually received. Courts have, in case of a breaph of the trust, to make it certain that the ward received all the profits, charged the guardian with compound interest, and sometimes with a rate of interest higher than the legal rate. Universally, where the funds have been used in speculations, and can ■be traced, and more than the legal rates have been realized, courts charge the trustee or guardian with all the profits realized, because they belong to the ward: although, if the speculation" proves disastrous to the ward’s interest, the guardian will be charged with the loss, as he has made the loss his own by a disregard of his duty. The referee has allowed the guardian for taking care of the fund while he was himself the borrower. We do not understand that this is allowable under ordinary circumstances! To allow him for taking care of the funds while he was himself the borrower, would also be an inducement for him to become such borrower. The referee has found it was reasonable in this case, and no question is raised in regard to it. We have thought it best, however, to suggest a caution, that the allowance in this case may not be regarded as a precedent for the establishment of such a rule.
Judgment affirmed.