been on some such security as binds land, or something to be answerable for it." 3 Swanst. 81, note. Although in one case he held that a trustee, directed by the terms of his trust to invest the trust money in government funds or other good securities, was responsible for a loss caused by his investing it in South Sea stock, and observed that neither South Sea stock nor bank stock was considered a good security, because it depended upon the management of the governor and directors, and the capital might be wholly lost, (Trafford v. Boehm, 3 Atk. 440, 444;) yet, in another case, he declined to charge a trus tee for a loss on South Sea stock, which had fallen in value since the trustee received it, and said that "to compel trustees to make up a deficiency, not' owing to their willful default, is the harshest demand that can be made in a court of equity." Jackson v. Jackson, 1 Atk. 513, 514; S. C. West, Ch. 31, 34. In a later case he said: "Suppose a trustee, having in his hands a considerable sum of money, places it out in the funds, which afterwards sink in their value, or on a security at the time apparently good, which afterwards turns out not to be so, for the benefit of the cestui que trust; was there ever an instance of the trustee's being made to answer the actual sum so placed out? I answer, 'No.' If there is no mala fides, nothing willful in the conduct of the trustee, the court will always favor him; for, as a trust is an office necessary in the concerns between man and man, and which, if faithfully discharged, is attended with no small degree of trouble and anxiety, it is an act of great kindness in any one to accept it. To add hazard or risk to that trouble, and subject a trustee to losses which he could not foresee, and, consequently, not prevent, would be a manifest hardship, and would be deterring every one from accepting so necessary an office." That this opinion was not based upon the fact that in England trustees usually receive no compensation is clearly shown by the chancellor's adding that the same doctrine held good in the case of a receiver, an officer of the court, and paid for his trouble; and the point decided was that a receiver, who paid the amount of rents of estates in his charge to a Bristol tradesman of good credit, taking his bills therefor on London, was not responsible for the loss of the money by his becoming bankrupt. Knight v. Plymouth, 1 Dick. 120, 126, 127; S. C. 3 Atk. 480. And the decision was afterwards cited by Lord HARDWICKE himself as showing that when trustees act by other hands, according to the usage of business, they are not answerable for losses. Ex parte Belchier, 1 Amb. 218, 219; S. C. 1 Kenyon, 38, 47.

In later times, as the amount and variety of English government securities increased, the court of chancery limited trust investments to the public funds, disapproved investments either in bank stock or in mortgages of real estate, and prescribed so strict a rule that parliament interposed; and by the statutes! of 22 & 23 Vict. c. 35, and 23 & 24 Vict. c. 38, and by general orders in chancery, pursuant to those statutes, trustees have been authorized to invest in stock of the bank of England or of Ireland, or upon mortgage of freehold or copyhold estates, as well as in the public funds. Lewin, Trusts, (7th Ed.) 282,283, 287. In a very recent case the court of appeal and the house of lords, following the decisions of Lord HARDWICKE in Knight v. Plymouth and Ex parte Belchier, above cited, held that a trustee investing trust funds, who employed a broker to procure securities authorized by the trust, and paid the purchase money to the broker, if such was the usual and regular course of business of persons acting with reasonable care and prudence on their own account, was not liable for the loss of the money by fraud of the broker. Sir GEORGE JESSEL, M. R., Lord Justice BowEN, and Lord BLACKBURN affirmed the general rule that a trustee is only bound to conduct the business of his trust in the same manner that an ordinarily prudent man of business would conduct his own; Lord BLACKBURN adding the qualification that "a trustee must not choose investments other than those which the terms of his trust permit." Speight v. Gaunt, 22 Ch. Div. 727, 739, 762; 9 App. Cas. 1, 19.

468

In this country there has been a diversity in the laws and usages of the several states upon the subject of trust investments.

In New York, under Chancellor KENT, the rule seems to have been quite undefined. See Smith v. Smith, 4 Johns. Ch. 281, 285; Thompson v. Brown, 4 Johns. Ch. 619, 628, 629, where the chancellor quoted the passage above cited from Lord HARDWICKE's opinion in Knight v. Plymouth. And in Brown v. Campbell, Hopk. Ch. 233, where an executor in good faith made an investment, considered at the time to be advantageous, of the amount of two promissory notes, due to his testator from one manufacturing corpora tion, in the stock of another manufacturing corporation, which afterwards became insolvent, Chancellor SANFORD held that there was no reason to charge him with the loss. But by the later decisions in that state investments in bank or railroad stock have been held to be at the risk of the trustee, and it has been intimated that the only investments that a trustee can safely make without an express order of court are in government or real estate securities. King v. Talbot, 40 N. Y. 76, affirming S. C. 50 Barb. 453; Ackerman v. Emott, 4 Barb. 626; Mills v. Hoffman, 26 Hun, 594; 2 Kent, Comm. 416, note b. So the decisions in New Jersey and Pennsylvania tend to disallow investments in the stock of banks or other business corporations, or otherwise than in the public funds or in mortgages of real estate. Gray v. Fox, Saxt. 259, 268; Halsted v. Meeker, 3 C. E. Green, 136; Lathrop v. Smalley, 8 C. E. Green, 192; Worrell's Appeal, 9 Pa. St. 508, and 23 Pa. St. 44; Hemphill's Appeal, 18 Pa. St. 303; Ihmsen's Appeal, 43 Pa. St. 431. And the New York and Pennsylvania courts have shown a strong disinclination to permit investments in real estate or securities out of their jurisdiction. Ormiston v. Olcott, 84 N. Y. 339; Rush's Estate, 12 Pa. St. 375, 378.

In New England, and in the southern states, the rule has been less strict. In Massachusetts, by a usage of more than half a century, approved by a uniform course of judicial decision, it has come to be regarded as too firmly settled to be changed, except by the legislature, that all that can be required of a trustee to invest is that he shall conduct himself faithfully and exercise a sound discretion, such as men of prudence and intelligence exercise in the permanent disposition of their own funds, having regard, not only to the probable income, but also to the probable safety, of the capital; and that a guardian or trustee is not precluded from investing in the stock of banking, insurance, manufacturing, or railroad corporations within or without the Harvard College v. Amory, 9 Pick. 446, 461; Lovell v. Minot, 20 Pick. 116, 119; Kinmonth v. Brigham, 5 Allen, 270, 277; Clark v. Garfield, 8 Allen, 427; Brown v. French, 125 Mass. 410; Bowker v. Pierce, 130 Mass. 262. In New Hampshire and in Vermont, investments, honestly and prudently made, in securities of any kind that produce income, appear to be allowed. Knowlton v. Bradley, 17 N. H. 458; Kimball v. Reding, 11 Fost. 352, 374; French v. Currier, 47 N. H. 88, 99; Barney v. Parsons, 54 Vt. 623.

state.

In Maryland, good bank stock, as well as government securities and mortgages on real estate, has always been considered a proper investment. Hammond v. Hammond, 2 Bland, 306, 413; Gray v. Lynch, 8 Gill, 403; Murray v. Feinour, 2 Md. Ch. 418. So, in Mississippi, investment in bank stock is allowed. Smyth v. Burns, 25 Miss. 422.

In South Carolina, before the war, no more definite rule appears to have been laid down than that guardians and trustees must manage the funds in their hands as prudent men manage their own affairs. Boggs v. Adger, 4 Rich. Eq. 408, 411; Spear v. Spear, 9 Rich. Eq. 184, 201; Snelling v. McCreary, 14 Rich. Eq. 291, 300.

In Georgia the English rule was never adopted; a statute of 1845, which authorized executors, administrators, guardians, and trustees, holding any trust funds, to invest them in securities of the state, was not considered compulsory; and before January 1, 1863, (when that statute was amended by

adding a provision that any other investment of trust funds must be made under a judicial order, or else be at the risk of the trustee,) those who lent the fund at interest, on what was at the time considered by prudent men to be good security, were not held liable for a loss without their fault. Cobb, Dig. 333; Code 1861, § 2308; Brown v. Wright, 39 Ga. 96; Moses v. Moses, 50 Ga. 9, 33.

In Alabama the supreme court in Bryant v. Craig, 12 Ala. 354, 359, having intimated that a guardian could not safely invest upon either real or personal security without an order of court, the legislature, from 1852, authorized guardians and trustees to invest on bond and mortgage, or on good personal security, with no other limit than fidelity and prudence might require. Code 1852, § 2024; Code 1867, § 2426; Foscue v. Lyon, 55 Ala. 440,

452.

The rules of investment varying so much in the different states, it becomes necessary to consider by what law the management and investment of the ward's property should be governed. As a general rule (with some exceptions not material to the consideration of this case) the law of the domicile! governs the status of a person, and the disposition and management of his movable property. The domicile of an infant is universally held to be the fittest place for the appointment of a guardian of his person and estate; although, for the protection of either, a guardian may be appointed in any state where the person or any property of an infant may be found. On the con. tinent of Europe, the guardian appointed in the state of the domicile of the ward is generally recognized as entitled to the control and dominion of the ward and his movable property every where, and guardians specially appointed in other states are responsible to the principal guardian. By the law of England and of this country, a guardian appointed by the courts of one state has no authority over the ward's person or property in another state, except so far as allowed by the comity of that state, as expressed through its legisla ture or its courts; but the tendency of modern statutes and decisions is to lefer to the law of the domicile, and to support the authority of the guardian appointed there. Hoyt v. Sprague, 103 U. S. 613, 631, and authorities cited; Morrell v. Dickey, 1 Johns. Ch. 153; Woodworth v. Spring, 4 Allen, 321; Milliken v. Pratt, 125 Mass. 374, 377, 378; Leonard v. Putnam, 51 N. H. 247; Com. v. Rhoads, 37 Pa. St. 60; Sims v. Renwick, 25 Ga. 58; Dicey, Dom. 172-176; Westl. Int. Law, (2d Ed.) 48-50; Whart. Confl. Laws, (2d Ed.) §§ 259-268. An infant cannot change his own domicile. As infants have the domicile of their father, he may change their domicile by changing his own; and after his death the mother, while she remains a widow, may likewise, by changing her domicile, change the domicile of the infants; the domicile of the children, in either case, following the independent domicile of their par ent. Kennedy v. Ryall, 67 N. Y. 379; Potinger v. Wightman, 3 Mer. 67; Dedham v. Natick, 16 Mass. 135; Dicey, Dom. 97-99. But when the widow, by marrying again, acquires the domicile of a second husband, she does not, by taking her children by the first husband to live with her there, make the domicile which she derives from the second husband their domicile; and they retain the domicile which they had, before her second marriage, acquired from her or from their father. Cumner v. Milton, 3 Salk. 259; S. C. Holt, 578;' Freetown v. Taunton, 16 Mass. 52; School Directors v. James, 2 Watts & S. 568; Johnson v. Copeland, 35 Ala. 521; Brown v. Lynch, 2 Bradf. 214; Mears v. Sinclair, 1 West Va. 185; Pot. Introduction Generale aux Coutumes, No. 19; 1 Burge, Col. Law, 39; 4 Phillim. Int. Law, (2d Ed.) § 97.

The preference due to the law of the ward's domicile, and the importance of a uniform administration of his whole estate, require that, as a general rule, the management and investment of his property should be governed by the law of the state of his domicile, especially when he actually resides there, rather than by the law of any state in which a guardian may have been appointed

*472

or may have received some property of the ward. If the duties of the guardian were to be exclusively regulated by the law of the state of his appointment, it would follow that in any case in which the temporary residence of the ward was changed from state to state, from considerations of health, education, pleasure, or convenience, and guardians were appointed in each state, the guardians appointed in the different states, even if the same persons, might be held to diverse rules of accounting for different parts of the ward's property. The form of accounting, so far as concerns the remedy only, must, indeed, be according to the law of the court in which relief is sought; but the general rule by which the guardian is to be held responsible for the investment of the ward's property is the law of the place of the domicile of the ward. Bar, Int. Law, § 106, (Gillespie's translation,) p. 438; Whart. Confl. Laws, § 259. It may be suggested that this would enable the guardian, by changing the domicile of his ward, to choose for himself the law by which he should account. Not so. The father, and after his death the widowed mother, being the natural guardian, and the person from whom the ward derives his domicile, may change that domicile. But the ward does not derive a domicile from any other than a natural guardian. A testamentary guardian nominated by the father may have the same control of the ward's domicile that the father had. Wood v. Wood, 5 Paige, 596, 605. And any guardian, appointed in the state of the domicile of the ward, has been generally held to have the power of changing the ward's domicile from one county to another within the same state and under the same law. Cutts v. Haskins, 9 Mass. 543; Holyoke v. Haskins, 5 Pick. 20; Kirkland v. Whately, 4 Allen, 462; Anderson v. Anderson, 42 Vt. 350; Ex parte Bartlett, 4 Bradf. 221; The Queen v. Whitby, L. R. 5 Q. B. 325, 331. But it is very doubtful, to say the least, whether even a guardian appointed in the state of the domicile of the ward (not being the natural guardian or a testamentary guardian) can remove the ward's domicile beyond the limits of the state in which the guardian is appointed, and to which his legal authority is confined. Douglas v. Douglas, L. R. 12 Eq. 617, 625; Daniel v. Hill, 52 Ala. 430; Story, Confl. Laws, § 506, note: Dicey, Dom. 100, 132. And it is quite clear that a guardian appointed in a state in which the ward is temporarily residing, cannot change the ward's permanent domicile from one state to another. The case of such a guardian differs from that of an executor of, or a trustee under, a will. In the one case, the title in the property is in the executor or the trustee; in the other, the title in the property is in the ward, and the guardian has only the custody and management of it, with power to change its investment. The executor or trustee is appointed at the domicile of the testator; the guardian is most fitly appointed at the domicile of the ward, and may be appointed in any state in which the person or any property of the ward is found. The general rule which governs the administration of the property in the one case may be the law of the domicile of the testator; in the other case, it is the law of the domicile of the ward.

As the law of the domicile of the ward has no extraterritorial effect, except by the comity of the state where the property is situated, or where the guardian is appointed, it cannot, of course, prevail against a statute of the state in which the question is presented for adjudication, expressly applicable to the estate of a ward domiciled elsewhere. Hoyt v. Sprague, 103 U. S. 613. Cases may also arise with facts so peculiar or so complicated as to modify the degree of influence that the court in which the guardian is called to account may allow to the law of the domicile of the ward, consistently with doing justice to the parties before it. And a guardian, who had in good faith conformed to the law of the state in which he was appointed, might, perhaps, be excused for not having complied with stricter rules prevailing at the domicile of the ward. But in a case in which the domicile of the ward has always been in a state whose law leaves much to the discretion of the guardian in

the matter of investments, and he has faithfully and prudently exercised that discretion with a view to the pecuniary interests of the ward, it would be inconsistent with the principles of equity to charge him with the amount of the moneys invested, merely because he has not complied with the more rigid rules adopted by the courts of the state in which he was appointed. The domicile of William W. Sims, during his life and at the time of his death in 1850, was in Georgia. This domicile continued to be the domicile of his widow and of their infant children until they acquired new ones. In 1853 the widow, by marrying the Rev. Mr. Ambercrombie, acquired his domicile. But she did not, by taking the infants to the home, at first in New York and afterwards in Connecticut, of her new husband, who was of no kin to the children, was under no legal obligation to support them, and was, in fact, paid for their board out of their property, make his domicile, or the domicile derived by her from him, the domicile of the children of the first husband. Immediately upon her acath in Connecticut, in 1859, these children, both under 10 years of age, were taken back to Georgia to the house of their father's mother and unmarried sister, their own nearest surviving relatives; and they continued to live with their grandmother and aunt in Georgia until the marriage of the aunt in January, 1860, to Mr. Micou, a citizen of Alabama, after which the grandmother and the children resided with Mr. and Mrs. Micou at their domicile in that state.

Upon these facts, the domicile of the children was always in Georgia from their birth until January, 1860, and thenceforth was either in Georgia or in Alabama. As the rules of investment prevailing before 1863 in Georgia and in Alabama did not substantially differ, the question in which of those two states their domicile was is immaterial to the decision of this case; and it is therefore unnecessary to consider whether their grandmother was their natural guardian, and as such had the power to change their domicile from one state to another. See Hargrave's note 66 to Co. Litt. 886; Reeve, Dom. Rel. 315; 2 Kent, Comm. 219; Code Ga. 1861, §§ 1754, 2452; Darden v. Wyatt, 15 Ga. 414. Whether the domicile of Lamar in December, 1855, when he was appointed in New York guardian of the infants, was in New York or in Georgia, does not distinctly appear, and is not material; because, for the reasons already stated, wherever his domicile was, his duties as guardian in the management and investment of the property of his wards were to be regulated by the law of their domicile.

It remains to apply the test of that law to Lamai's acts or omissions with regard to the various kinds of securities in which the property of the wards was invested.

1. The sum which Lamar received in New York in money from Mrs. Abercrombie he invested in 1856 and 1857 in stock of the Bank of the Republic at New York, and of the Bank of Commerce at Savannah, both of which were then, and continued till the breaking out of the war, in sound condition, pay 'ng good dividends. There is nothing to raise a suspicion that Lamar, in making these investments, did not use the highest degree of prudence; and they were such as by the law of Georgia or of Alabama he might properly make. No is there any evidence that he was guilty of neglect in not withdrawing the investment in the stock of the Bank of Commerce at Savannah before it became worthless. He should not, therefore, be charged with the loss of that stock. The investment in the stock of the Bank of the Republic of New York being a proper vestment by the law of the domicile of the wards, and there being no evidence that the sale of that stock by Lamar's order in New York, in 1862, was not judicious, or was for less than its fair market price, he was not responsible for the decrease in its value between the times of its purchase and of its sais. He had the authority, as guardian, without any order of court, to sell personal property of his ward in his own possession, and to reinvest the proceeds. Field, Schieffelin, Johns. Ch.