Premiums paid for investments are to be charged to principal and not to income ; Boy er's Estate, 8 Pa. Dist. It. 613, per Penrose, J.; to the same effect, Bergen v. Valentine, 63 How. Pr. 221; Hite v. Hite, 93 Ky. 257, 20 S. W. 778, 19 L. R. A. 173, 40 Am. St. Rep. 189; contra, New York Life Ins. & Trust Co. v. Baker, 165 N. Y. 484, 59 N. E. 257, 53 L. R. A. 544 ; In re Stevens, 187 N. Y. 471, 80 N. E. 358, 12 L. R. A. (N. S.) 814, 10 Ann. Cas. 511; New England Trust Co. v. Eaton, 140 Mass. 532, 4 N. E. 69, 54 Am. Rep. 493, Holmes, J., dissenting, with the concurrence of the Chief Justice and Allen, J.; the case is strongly criticised in 34 Alb. L. J. 144.
A trustee's discretion, if in good faith, will not be interfered with by a court ; Shelton v. King, 229 U. S. 90, 33 Sup. Ct. 686, 57 L. Ed. 1086.
Ordinarily the law will not permit a trus tee to contract with his cestui que trust for a pecuniary advantage ; to do so, he must first dissolve the fiduciary relation ; Stewart v. Fellows, 128 Ill. 480, 20 N. E. 657.
A writer has deduced the following rules as to investments by trustees (13 Am. L. Reg. N. S. 210): Where there is no express power of sale in the instrument creating a trust, and none is necessarily implied, and the discretion of the trustee is the sole re striction upon investments, he will generally he protected where he has acted bona fide and with reasonable diligence and prudence. But in a state where the trustee is protected from loss which may arise from certain spec ified and so-called legal investments, the rule is much more stringent, and extraordinary care and diligence are required of the trus tee as well as bona fides, and it is dangerous to invest trust funds in any other securities than those thus indicated. But where there is no express power of sale given, and where none such can necessarily be implied from the nature of the trustee's duties, the only safe means of changing an insecure investment, left so by the creator of the trust, is to make the change under the direction of the proper court, and if done without such authority, the trustee will be liable to the cestwi que trust for breach of trust. Where there is no such power of sale and the trustee leaves un changed an investment made by the testator and loss ensues, he will generally be protect ed if acting with bona fides, even in where, if there had been a power of sale and he had neglected to sell, he would have been liable under the first rule laid down above.
A trustee will not be surcharged for a loss which has occurred to the estate if he has exercised common skill, prudence, and cau tion, but he will be held responsible for su pine negligence or wilful default ; In re Bar tors Estate, 182 Pa. 407, 38 Atl. 527. Where a trustee held on to mortgages on agricultur al land in hopes that an apparently tempora ry depression would pass away, it was held that he had committed only an error of judg ment and was not liable for loss ; [1896] 1 Ch. 323.
An act of 1896 in England provides that if a trustee acts honestly and reasonably, he may be relieved wholly or partly from per sonal liability for loss through investments ; [1897] 1 Ch. 536.
The office and duties of trustees being mat ters pf personal confidence, they are not al lowed to delegate these powers unless such a power is expressly given by the authority by which they were created ; but a trustee may appoint an agent where it is usual to do so in the ordinary course of business ; Blight v. Schenck, 10 Pa. 285, 51 Am. Dec. 478 ; Sin clair v. Jackson, 8 Cow. (N. Y.) 543.
A trustee, though remunerated for his serv ices, is not liable to the trust estate for loss caused by the thefts of a servant employed by him, where he has exercised due care in the selection of the servant ; [1893] 1 Ch. 71.
Where a trustee has delegated his trust, there is no question of primary and secon dary liability in respect of a breach of trust, but all are equally liable; 68 Law T. 18.
While the law allows a person named as trustee to disclaim or renounce, he cannot, if he has by any means accepted and entered upon the trust, rid himself of the duties and responsibilities after such acceptance, except by a legal discharge by competent authority ; Shepherd v. McEvers, 4 Johns. Ch. (N. Y.) 136, 8 Am. Dee. 561; 1 My. & K. 195. Dis claimer of a trust may be established by acts, or by non-action long continued ; Brandon v. Carter, 119 Mo. 572, 24 S. W. 1035, 41 Am. St. Rep. 673. Where trustees who hold- church property have seceded from the church, and also been expelled, they have divested them selves of all control of the church property and cannot maintain a bill to enjoin any one from doing anything which affects the prop erty; Garrett v. Nace, 5 Pa. Super. Ct. 475.