Depositary

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DEPOSITARY, contracts. He with whom a deposit is confided or made.
     2. It is, the essence of the contract of deposits that it should be gratuitous on the part 'of the depositary. 9 M. R. 470. Being a bailee without reward, the depositary is bound to slight diligence only, and he is not therefore answerable except for gross neglect. 1 Dane's Abr. c. 17, art. 2. But in every case good faith requires that he should take reasonable care; and what is reasonable care, must materially depend upon the nature and quality of the thing, the circumstances under which it is deposited, and sometimes upon the character and confidence, and particular dealing of the parties. See 14 Serg. & Rawle, 275. The degree of care and diligence is not altered by the fact, that the depositary is the joint owner of the goods with the depositor; for in such a case, if the possessor is guilty of gross negligence, he will still be responsible, in the same manner as a common depositary, having no interest in the thing. Jones' Bailm. 82, 83. As to the care which. a depositary is bound to use, see 2 Ld. Raym. 900, 914; 1 Ld. Raym. 655; 2 Kent's Com. 438; 17 Mass. R. 479, 499; 4 Burr.. 2298; 14 Serg. & Rawle, 275; Jones' Bailm. 8; Story on Bailm. Sec. 63, 64.
     3. The depositary is bound to return the deposit in individuo, and in the same state in which he received it; if it is lost, or injured, or spoiled, by his fraud or gross negligence, he is responsible to the extent of the loss or injury. Jones' Bailm. 36, 46, 120; 17 Mass. R. 479; 2 Hawk. N. Car. R. 145; 1 Dane's Abr. c. 17, art. 1 and 2. He is also bound to restore, not only the thing deposited, but any increase or profits which may have accrued from it; if an animal deposited bear young, the latter are to be delivered to the owner. Story on Bailm. Sec. 99.
     4. In general it may be laid down that a depositary has no, right to use the thing deposited. Bac. Abr. Bailm. D; Jones' Bailm. 81, 82; 1 Dane's Abr. c. 17, art. 11, Sec. 2. But this proposition must be received with many qualifications. There are certain cases, in which the use of the thing may be necessary for the due preservation of the deposit. There are others, again, where it would be mischievous; and others again, where it would be, if not beneficial, at least indifferent. Jones' Bailm. 81, 82; Owen's R. 123, 124; 2 Salk. 522; 2 Kent's Com. 450. The best general rule on the subject, is to consider whether there may or may not be an implied consent, on the part of the owner, to the use. If the use would be for the benefit of the deposit, the assent of the owner may well be presumed; if to his injury, or perilous, it ought not to be presumed; if the use would be indifferent, and other circumstances, do not incline either way, the use may be deemed not allowable. Jones' Bailm. 80, 81; Story on Bailm. Sec. 90; 1 Bouv. Inst. n. 1008, et seq.

References in periodicals archive ?
With its proposal, the Commission spells out, clarifies and toughens rules on the obligations of depositaries (including the delegation of these functions to sub-depositaries) and above all on their liability.
For the Commission, it is clear that existing regulations give the member states too much leeway on interpreting the obligations and liability of depositaries, who are the custodians entrusted with the safekeeping of the assets and monitoring and oversight of the lawfulness of the UCITS' decisions (functions provided by credit institutions or insurance companies).
In 2009, the Commission also noted that depositaries for several UCITS funds (four) had delegated assets to entities run by Madoff, resulting in substantial losses for investors.
After the Ponzi scheme went bust, regulators discovered that depositaries keeping hold of four UCITS funds had entrusted assets worth 1.6 billion to Madoff entities.
A common interpretation of the principal duty of depositaries (namely to keep assets safe) should be established, as well as the specific control duties assigned to them.