Russum, ].,
delivered the opinion of the Court.
William Kolb,.of Frederick County, died in .1889, leaving a will by which inter alia he bequeathed to his son, David Kolb, who was also one of the executors named in the will, fifteen thousand dollars, “ in trust to invest the same in some safe security or securities, either public or private, with full power in said trustee to reinvest-the same from time to time as the exigencies of the trust may re-' quire,” the income to be paid to his daughter, Alice Virginia Gilbert, the appellant, during her .life, and after her death, the corpus of the estate to be paid to her children then- living’ and to the descendants of any child or children who may be living-at her death, to be equally divided between them per stirpes.
There was a mill property known as the “ New London Mills,” which belonged to the testator’s estate, which the executors, in September, 1889, sold .to one Keller, for $3.50°. No part of the purchase money was paid, but the executors conveyed-the property to Keller, and took from him.a mortgage thereon for the entire purchase money at *6335 per cent, interest, and also a mortgage on a farm of 52 acres, subject to a prior mortgage of $1,200, bearing 6 per cent, interest. Keller, the mortgagor, died in 1894, and the trustee, on March 16th, 1895, filed his petition, ex parte, asking the Circuit Court for Frederick County, in Equity, to take jurisdiction of the trust and approve his investments, which was done. Afterwards, the trustee and mortgagee foreclosed the mortgage and sold both properties, buying them in as-trustee, the mill for $2,000, and the farm for $260, subject to the prior mortgage of $1,200. After the foreclosure proceedings were completed, the trustee filed his petition asking to be relieved of the trust, and filed therewith a statement showing a loss of $1,392,1:0 the trusj: estate. On this petition the Court passed- an order releasj ing the trustee from the further execution of the .trust,-and Hammond Urner was substituted as trustee,, upon the petition of the appellant, and the trust estate .transferred to him, except the investment in the Keller mortgage, in relation to which testimony was ordered to be taken; so that the sole question before us is in relation to the Keller investment. The learned and distinguished Judge who decided this case in the Court below, after referring to the difference which may exist between the discretion possessed by a testamentary and a conventional trustee — that is, a trustee appointed under a decree, clearly and correctly lays down the legal principles which control it as follows :
“ Generally speaking, where there are no restrictions imposed by the testator, a trustee named by him is vested with a discretion which a conventional trustee does not ordinarily possess, and where a discretion is expressly conferred by will, its exercise in good faith and with proper diligence, though resulting in a pecuniary loss, presents quite a different situation from that which would arise were the loss to follow from an unauthorized act, or from the exercise of an assumed discretion not entrusted to a- conventional trustee. And this is so because the power of the one is broader than the power of the other, and the accountability of each *634is measured by a totally different standard. Loss resulting from an act of a conventional trustee, though the act were done in the utmost good faith, if it were not an act permitted by the instrument creating or defining the trust, or were done without proper judicial sanction, would fall on the trustee, who having no discretion at all, or a very limited one, is justly held to a rigid accountability without the slighest regard to the motives that may have influenced his action, or the prudence he displayed in performing it. Zimmerman v Fraley, 70 Md. 561. But where the testator has selected a particular person as trustee, and has clothed him with a discretion in regard to making investments, and confided in this behalf to his judgment and integrity, and such trustee in good faith, and with diligence, makes an investment of trust funds, strictly in accordance with the power conferred upon him, or in any way that a Court of Equity would have sanctioned at the time, if advised of the circumstances as the trustee then knew or honestly believed them to be, will be exonerated should a loss ensue, though he failed to invoke the guidance of the Court, or to procure its subsequent ratification of the step he took. Tyson v. Mickle, 2 Gill, 376; Cunningham v. Schley, 6 Gill, 208; Gray v. Lynch, 8 Gill, 403.”
In applying these legal principles to the facts contained in the record we are compelled to differ with the learned Judge below. We are of the opinion that the investment made by David Kolb, trustee, was not a judicious investment, made in the exercise of a fair discretion, such an one as a prudent man would have made dealing with his own affairs, nor such as a Court of Equity would have sanctioned at the time, if advised of the circumstances as the trustee knew them, or had reason to believe them to be, especially as the facts in the record show that the trustee would be benefited as residuary legatee, by getting a large price for the property sold. This view of the case is, we think, fully sustained by the testimony of the trustee. In making the investment he was under the duty to use due diligence *635(i), to see that the title was valid, and (2), that the value of the property at the time of the loan is such as would in all probability be adequate security for the repayment of the loan, whenever the mortgage should be called in. The criterion by which the value is to be ascertained is the estimate of men of ordinary prudence, who would deem it safe to make a loan of the same amount of their own money, on the same property. This is what a Court of Equity would have required of the appellee had it been applied to at the time to sanction the investment. By his own confession the appellee had failed to sell this mill property to Kinna for $3,500, because he could not raise the money on it, and yet he sold it to Keller for that sum, taking as security a mortgage on the property for the full amount, and the additional security of a second mortgage on a farm of 52 acres, subject to a prior lien of $1,200, at 6 per cent, interest, and of the value of which he had no knowledge, except what Keller, the mortgagor, told him. If the testimony of the appellee’s witnesses who knew the property, and are capable of correctly estimating its value be referred to, it clearly appears that, taking a fair average of their estimates, there was, after deducting the first mortgage on the farm-, no such margin as would justify a prudent man in making the investment. At the average valuation of appellee’s witnesses, there was a margin of not exceeding four hundred dollars, when, if common skill, caution and prudence had been exercised, there should have been, at least, three times that amount. This is the most favorable view that can be taken of the appellee’s conduct. The plea that he consulted his solicitor, Mr. Ross, does not aid him, because, by his own admission, he does not know whether Mr. Ross had ever seen either the mill or the farm. It was proper that the appellee should consult Mr. Ross as to the title, and he was justified in relying on his opinion on that subject, but Mr. Ross’ opinion as to the value of the property should not have been relied on anymore than the opinion of any other person who knew nothing of the property. No *636-Court of Equity would have approved an investment where the value .of the property was estimated by persons who had confessedly no knowledge of the property, even with -the superadded estimate of the party to whom the loan was to be made. Such is this case.
(Decided April 30th 1897).
. The appellee has not acted in this matter as a prudent man- -would act in the management of his own affairs. Being the acting executor he used the trust funds to facilitate the sale of the real estate left by the testator, and, by .taking a mortgage for the entire purchase money, obtained a larger price- than he could otherwise have received. His interest.as executor was to swell the estate by large sales ; and, in taking care of that interest, he failed in his duty as trustee by subordinating that duty to his interest as executor. Instead of making the investment required by the will in good faith, and as a prudent man would have done, had he been lending his own money, he risked the trust fund upon an insufficient security, hoping that the good character, steady habits, and capacity of Kelle-r, the -mortgagor, would furnish additional security upon which he could rely for the repayment of the loan. The death of -Mr. Keller made it necessary to sell the mortgaged property, which has resulted in a loss to the trust estate, and having by his own admissions failed in his duty to the cestuis que trust he ought in equity and good conscience be required to assume the loss that has been sustained.
It follows that the decree appealed from must be reversed and the cause remanded for further proceedings in accordance with this opinion.
Decree reversed and cause remanded.