delivered the opinion of the court. He recited the facts as above stated, and continued :
The authority of the Surrogate’s Court of the county of Rich *464 mond - and State of^ New York to appoint Lamar guardian of the persons and property of infants at the time within that county, and the authority of the Supreme Court of the State of New York, in which this suit was originally brought, being a court of general equity jurisdiction, to take cognizance thereof, are not disputed; and upon the facts agreed it is quite clear that none of the defences set up in the answer afford any ground for dismissing the bill.
The war of the rebellion, and the residence of both ward and guardian within the territory controlled
hy
the insurgents, did not ^discharge the guardian, from his responsibility to accbunt, after the war, for property of the wards which had at any time come into his hands, or which he might by the exercise of due care have obtained possession of. A state of war does not put an end to pre-existing obligations, or transfer the property of wards to tEeir guardians, or release the latter from the duty to- keep it safely, but suspends until the return of peace the right of any one residing in the enemy’s country to sue in our courts.
Ward
v.
Smith,
The appointment of Micou. in 1867 by a court of Alabama to be guardian of the surviving ward, then residing in that State, did not terminate Lamar’s liability for property of his ■wards which he previously had’or ought to have taken posséssion of. The receipt given by Micou was only for the securities and money actually handed over to him by Lamar; and if Micou had any authority to discharge Lamar from liability for past mismanagement of either ward’s property, he never assumed to do so.
The suggestion in the answer, that the surviving ward, upon coming of age, ratified and approved the acts of Lamar as guardian, finds no support in the facts of the case.
The further grounds of defence, set up in the cross bill, that Micou participated in Lamar’s investments, and that Mrs. Micou approved them, are equally unavailing. The acts of ' Micou, before his own appointment as guardian, could not bind *465 the ward; And admissions in private letters from Mrs. Micou to Lamar could not affect the rights of the ward, Or^Mrs. Mi.cou’s authority, upon being afterwards appointed administratrix of the ward, to maintain this bill as such against Lamar’s representative, even if the amount recovered will inure to her own benefit as the ward’s next of kin. 1 G-reenl. Ev. § 179.
The extent of Lamar’s liability presents more difficult questions of law, now* for the first time brought before this court.
The general rule is everywhere recognized, that a guardian or trustee, when investing property in his hands, is bound to act honestly-and faithfully, and to exercise a sound discretion, such as men of ordinary prudence and intelligence use in their own affairs. In some jurisdictions, no attempt has been made to establish a more definite rule; in others, the discretion has been confined, by the legislature or the courts, within strict limits.
The' Court of Chancery, before the Declaration of Independence, appears to have allowed some latitude to trustees in making investnients. Thfe best evidence of this is to be found in the judgments of Lord Hardwicke. He held, indeed, in accordance with the clear weight of authority before and since, that money lent on a mere personal obligation, like a promissory note, without security, was at the risk of the trustee.
Ryder
v. Bickerton, 3 Swanston, 80, note;
S. C.
1 Eden, 149, note;
Barney
v.
Saunders,
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. ch. 35, and 23 & 24 Vict. ch. 38, and by general *467 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 on Trusts (1th ed.) 282, 283, 281.
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 Belehier, 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 Jhstice 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 ordinary 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. D. 727, 739, 762; 9 App. Cas. 1, 19.
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,
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 State.
Harvard College
v.
Amory,
*469
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,
In South Carolina, before the war, no more definite rule appears to have beenjaid down than that guardians and'trustees must manage the funds in their hands as prudent men manage their own affairs.
Boggs
v.
Adger,
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’s Digest, 333; Code of 1861, § 2308; Brown v. Wright, 39 Georgia, 96; Moses v. Moses, 50 Georgia, 9, 33.
In Alabama, the Sujireme Court, in Bryant v. Craig, 12 Alabama, 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 of 1852, § 2024; Code of 1867, § 2426; Foscue v. Lyon, 55 Alabama, 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 seme exceptions not material to the consideration of this case) the law of the domicil governs the
*470
status of a person, and the disposition and management of his movable property. The domicil 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 continent of Europe, the guardian appointed in the State of the domicil of the ward is generally recognized as entitled to the control and dominion of the ward and his movable property everywhere, 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 legislature or its courts ; but the tendency of modern statutes and decisions is to defer to the law of the domicil, and to support the authority of the guardian appointed there.
Hoyt
v. Sprague,
An infant cannot change his own domicil. As infants have the domicil of their father, he may change their domicil by changing his own; and after his death the mother, while she remains a widow, may likewise, by changing her domicil, change the domicil of the infants; the domicil of the children, in either case, following the independent domicil of their parent.
Kennedy
v.
Ryall,
Tbe preference due to the law of the ward’s' domicil, 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 domicil, especially when he actually resides there, rather than by the law of any State in which a guardian may have been appointed or may have received some property of the Avard. If the duties of the guardian were to be exclusively regulated by the law of the State of his appointment, it Avould follow that in any case in Avhich the temporary residence of the ward Avas 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 Avhich the guardian is to be held responsible for the investment of the Avard’s property is the laAV of the place of the domicil of the ward. Bar International Law, §.106 (Gillespie’s translation), 438; Wharton Conflict of LaAvs, § 259.
It may bel suggested that this would enable the guardian, by changing the domicil of his ward, to choose for himself the laAV 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 domicil, may change that domicil. But the Avard does not derive a domicil from any other than- a natural guardian. A testamentary guardian nominated by the father may have the same control of the ward’s domicil that the father had.
Wood
v.
Wood,
5
*472
Paige, 596, 605. And any guardian, appointed in the State of the domicil of the ward, has been generally held to have the power of changing the ward’s domicil from one county to another within the same State and under the same law.
Cutts
v.
Haskins,
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 domicil of the testator; the guardian is most fitly appointed at the domicil of the ward, and may be appointed in any State in which the person or any property of the Avard is found. The general rule which governs the administration of -the property in the one case may be the laAv of the domicil of the testator; in the other case, it is the laAv of- the domicil of the Avard.
As the laAv of the domicil of the ward has no extra-territorial effect, except by the comity of the State Avhere 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,
The domicil of William W. Sims ^during his life and at the time of his death in 1850 was in Georgia. This domicil continued to be the domicil of his widow and of their infant children until they acquired new ones. In 1853, the widow, by marrying the Rev. Mr. Abercrombie, acquired his domicil. 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 domicil, or the domicil derived by hgrJrom him, the domicil of the children of the first husband. Immediately upon her death in Connecticut, in 1859, these children, both under ten 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 domicil in that State.
Upon these facts, the domicil of the children was always in Georgia from their birth until January, 1860, and thenceforth *474 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 domicil 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 domicil from one State to another. See Hargrave’s note 66 to Co. Lit. 88 b; Reeve Domestic Relations, 315; 2 Kent Com. 219; Code of Georgia of 1861, §§ 1754, 2452; D arden v. Wyatt, 15 Georgia, 414.
Whether the domicil 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 domicil 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 domicil.
It remains to apply the test of that law to Lamar’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, paying 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. Nor 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 investment by the law of the domicil 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
*475
responsible for tbe decrease in its value between tbe times of its purchase and of its sale. 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
v.
Schieffelin,
As to the sum received from the sale of the stock in the Bank of the Republic, we find nothing in the facts agreed by the parties, upon which the case was heard, to ■ support the argument that Lamar, under color of protecting his wards’ interests, allowed the funds to be lent to cities and other corporations which were aiding'in the rebellion. On the contrary, it is agreed that that sum was applied to the purchase in New York of guaranteed bonds of the cities of New Orleans, Memphis and Mobile, and of the East Tennessee and Georgia Railroad Company; and the description of those bonds, in. the receipt afterwards given by Micou to Lamar, shows that the bonds of that railroad company, and of the cities of New Orleans and Memphis, at least, were issued some years before the breaking out of- the rebellion, and that the bonds of- the city of Memphis and of the railroad company were at the time of their issue indorsed by the State of Tennessee. The company had its charter from that State, and its road was partly in Tennessee and partly in Georgia. Tenn. Stat. 1848, ch. 169. Under the discretion allowed to a guardian or trustee by the law of Georgia and of Alabama, he was not precluded from investing the funds in his hands in bonds of a railroad
*476
corporation, indorsed by the State by which it was chartered, or in bonds of a city. As Lamar, in making these investments, appears to have used due care and prudence, having regard to ^the best pecuniary interests of his wards, the sum so invested should be credited to him in this case, unless, as suggested at the argument, the requisite allowance has already been made in the final decree of the Circuit Court in the suit brought by the representative of the other ward, an appeal from which was dismissed by this court for want of jurisdiction in
,2.- Other moneys of the wards in Lamar’s hands, arising either from dividends which he had received on their behalf, or from interest with which he charged himself upon sums not invested, were used in the purchase of' bonds of the Confederate States, and of the State of Alabama.
The investment in bonds of the Confederate States was clearly unlawful, and no legislative act or judicial decree or decision of any State could justify it. The so-called Confederate government was in no sense a lawful government, but was .a mere government of force, having its origin and foundation in rebellion against the United States. The notes and bonds issued in» its name and for its support had no legal value as money or property, except by agreement or acceptance of parties capable of contracting .with each other, and can never be regarded by a court sitting under the authority .of the United States as securities in which trust funds might be lawfully invested.
Thorington
v.
Smith,
*477 Neither the date nor the purpose of the issue of the bonds of the State of- Alabama is shown, and it is unnecessary to’ consider the lawfulness of the investment in those bonds, because Lamar appears to have sold them for as .much as he had paid for them; and to have invested the proceeds in additional Confederate States bqads, and for the amount thereby lost to the estate he was accountable.
3. The stock in the Mechanics’ Bank of Georgia, which had belonged to 'William W. Sims in his lifetime, and stood on the books of the bank in the name of his administratrix, and of which one-third belonged to her as his widow, and one-third to each of the infants,'never came into Lamar’s possession; and upon' a request made by him, the very next month after his appointment, the bank refused to transfer to him any part.of it. He did receive and account for the dividends; and he could not, under the law of Georgia concerning foreign guardians, have obtained possession of property of his wards within that State without the .consent of the ordinary. Code of 1861, §§ 1834-1839. The attempt t© charge him for the value of the principal of the stock' must fail for two reasons: First. This very stock had not only belonged to the father of the wards in his lifetime, but it was such stock- as a guardian or trustee might properly invest in by the law of Georgia. Second. No reason is shown why this stock, being in Georgia, the domicil’ of the wards, should have been transferred to a guardian who had been appointed in New York during their temporary residence there.
The same reasons are conclusive against charging him with the value of the bank stock in Georgia, which was owned by Mrs. Abercrombie in her own right, and to which Mr. Abercrombie became entitled upon her death. It is therefore unnecessary to consider whether there is sufficient evidence of an immediate surrender by him of her interest to her children.
The result is, that
Both the .decrees of the Circuit Court in this case must he reversed, and the case remanded forfurther proceedings. in conformity with this opinion..