Bava Metzia, Chapter 3, Mishnah 10. The topic of the Mishnah is the level of guarding required of an unpaid guardian - a guardian who does not receive payment - who was entrusted with another's money.
The First Case - "Tzararan vehifshilan le'achorav":
The Mishnah begins: "Hamafkid ma'os etzel chaveiro" - a person who gives money to his friend for safekeeping. And the guardian "tzararan vehifshilan le'achorav" - tied the coins in a cloth, which is the normal way to store money (our equivalent of a wallet), but hung the bundle behind his back, and from there the money was lost or stolen. In this case, the guardian is obligated to pay, even though an unpaid guardian is generally exempt from theft and loss, and the reason is: "shelo shamar kederech hashomerim" - since he did not guard it in the expected manner of guardians.
In other words: this is too negligent a way to guard money. How should he have acted? He should have held the bundle in his hand, in a way that no one could reach it.
The Continuation of the Mishnah - Giving it to His Minor Son or Daughter:
The Mishnah continues: "O shemasaran livno ulvito haktanim" - after the guardian received the money, he gave it to his children who had not yet reached the age of mitzvos. According to Rashi, this refers to only one case, and according to other commentators, it refers to two additional cases.
According to Rashi, the continuation "vena'al bifneihem shelo chara'ui" is part of the very same case: the guardian locked the children in the house, but not in a way that prevented them from leaving. The children indeed went out, took the money with them, and lost it. Here too, the guardian is obligated, because this is considered negligence; since an unpaid guardian is exempt from theft and loss only on the condition that he was not negligent and did not act carelessly.
A Guardian Who Entrusted to a Guardian:
We have already learned that a guardian who entrusted to a guardian - one who was appointed to guard and entrusted the deposit to another guardian - acted improperly, and even if the second one is more trustworthy, wiser, or a paid guardian. This does not matter. The reason for this: the depositor can claim, "I do not rely on him as a guardian, I rely on you," or "I do not rely on his oath that the object is missing, but only on your oath."
However, it goes without saying that one entrusted with guarding an object is permitted to entrust the guarding to his household members: upon leaving the house, he leaves his wife or his children responsible for the matter, and this is not included in "a guardian who entrusted to a guardian" without permission. But this only applies to adult household members, who have reached the age of mitzvos. Minors are not responsible, and the depositor never expected nor agreed, not even implicitly, that the guardian's minor children would be the guardians - and therefore this is considered negligence.
According to other commentators, the Mishnah lists a third case here: they broke into his house after he did not lock the door properly - and this too is negligence.
In all these cases, whether two or three in number, the unpaid guardian is obligated because he was negligent, "shelo shamar kederech hashomerim". And conversely: "ve'im shamar kederech hashomerim - patur" - if he guarded the money in the manner expected of guardians to guard money, he is exempt.
The Required Level of Safeguarding - An Unpaid Watchman and a Paid Watchman:
The Gemara explains the standard practice of watchmen when safeguarding money in a house, even for an unpaid watchman: to hide it within the walls, either close to the ground or high up near the ceiling. This way, even if someone comes and knocks on the walls to search for what is hidden in them, he will not succeed in discovering it, since the echo is not heard properly close to the ground.
For a paid watchman, the standard is even higher, and even this level of safeguarding is insufficient. There are various opinions regarding the required measure of safeguarding, and some maintain that he must keep the deposit on his person at all times: either holding it in his hands, or burying it in the ground in a place where it cannot be found, all depending on the situation.
Obviously, nowadays we do not do this in practice, even though hiding things inside walls is presumably still an effective hiding place. The point that emerges from the Mishnah is that a watchman is expected to safeguard a deposit even more carefully than he safeguards his own belongings, and to ensure that no one can reach it. If a watchman did not act this way, his safeguarding is defined as deviating from the standard practice of watchmen - and if the object is stolen or lost, he will be obligated to pay.