Louis Brandeis

“ The form of the trustee's bond was not prescribed by Form 25 of the General Orders and Forms in Bankruptcy, 11 U.S.C.A. following section 53, pursuant to U.S.C., title 11, § 53, 11 U.S.C.A. § 53.
The obligors bound themselves to pay any loss resulting to the estate from failure by Howard, (a) to obey and order of the court, (b) truly and faithfully to account for all moneys, (c) faithfully to perform his official duties as trustee. [1] It is agreed that the condition of the bonds given as receiver was in effect the same.
Howard resigned as trustee or receiver of each estate. ”

“ That the obligors in the bonds are liable only for breach by Howard of an official duty may be assumed. By the common law [2] every trustee or receiver of an estate has the duty of exercising reasonable care in the custody of the fiduciary estate unless relieved of such duty by agreement, statute, or order of court. Obviously, Howard was not relieved of the duty by any agreement. ”

“ Some courts hold that in the absence of such a provision the mere fact that the funds are placed in a duly designated depository is not a complete defense; and that, if the officer acquires knowledge of facts which show the bank to be unsafe, he may be held responsible if he fails to have the funds removed. ”

“ Independent School Dist. v. Flittie, 54 S.D. 526, 223 N.W. 728; Lane Independent School Dist. v. Endahl, 55 S.D. 73, 224 N.W. 951; Cozad v. Thompson, 126 Neb. 79, 252 N.W. 606; see Jordon v. Baker, 252 Ky. ”