Fortier v. New Orleans Nat'l Bank, 112 U.S. 439 (1884)

“ I, W. T. Houston, judge of the Fourth District Court for p. 441the Parish of Orleans, do hereby certify that on this 14th day of March, 1877", personally came and appeared before me, at chambers, in the city of New Orleans, Mrs. Celestine Louise Labranche, of lawful age, the wife of Polycarpe Fortier, of this city, and by virtue of article 127 of the Revised Civil Code of Louisiana, I did then and there examine the said Mrs. P. Fortier, separate and apart from her said husband, and she stated that she appeared before me for the purpose of obtaining the certificate specified in said article to borrow the sum of ten thousand dollars for her separate benefit and advantage by mortgaging her separate property.

A writ of seizure and sale having issued as prayed for in the bill, Mrs. Fortier filed her plea and a cross-bill. In the latter she prayed for an injunction to restrain the seizure and sale of the mortgaged premises. The grounds upon which she based her defence to the original bill, and the relief prayed by her cross-bill, were as follows: Admitting that at and before the date of the note and mortgage she was separated in property from her husband, Polycarpe Fortier, she averred that she was possessed m her own right, as of a separate estate, of the property described in the mortgage: that the consideration of the note p. 442sued on and secured by the mortgage was in part money lent to her husband by Godchaux, the payee, and in part the payment and satisfaction of a debt due from her husband to Godchaux.

It was shown by the evidence that the mortgage and note were executed in the office of the notary ; that Mr. and Mrs. Fortier and Godchaux, the payee of the note and the mortgagee, were present; that upon the execution and delivery of the papers Godchaux retained from the $10,000, for which the note was given, first, the discount of 10 per cent, on the face o p. 443the note, amounting to 81,025, and, second, the amount of a debt due from Mr. Fortier to him, being the sum of $1,800; that he gave his check to the notary for $1,200 to be applied to the discharge of taxes, &c., which were a lien on the mortgaged premises, and that he paid the residue of the $10,000 by handing to Mrs. Fortier his check on the Union National Bank for $5,975, payable to her order.

This testimony of Godchaux, in reference to his inspection of the property and the statements of Mrs. Fortier, was not directly contradicted by her, although she was examined as a p. 444witness in the case, nor was she questioned by her counsel in reference thereto. She testified that she received no money from Godchaux on the loan made by him, and that she did not receive any money on his check, which she admitted was indorsed by her, and that none of the money loaned was used for her separate benefit.

It is clear, upon an inspection of the whole record, that the p. 445suit was treated by both parties and by the Circuit Court as the suit of the New Orleans National Bank, and not of Albert Baldwin. Every pleading in the case, including the answer and cross-bill filed by the defendant, and every order and decree made by the court, was entitled “ The New Orleans National Bank n . . C. L. FortierB In the appeal bond given by the defendant the case was described in the ^ame manner. The cause of action set out in the petition was the cause of action of the bank. The plea of the defendant to the original bill treated the bank as the complainant by averring that “ the said bank is not the holder of the note for value, and that the note was sued on in the name of the bank merely to give the court jurisdiction.” The answer to the cross-bill was styled the answer of the New Orleans National Bank. It averred that the bank was the holder of the note and mortgage sued on, and that the bill was intended to be, and was, the bill of complaint of the bank and not of Baldwin. There was no replication to this answer. It is plain, therefore, that the defendant carried on the litigation on the theory that the bank was the complainant, and the cause was entertained and decided by the Circuit Court on the same assumption.

We now come to the merits of the case. The contention of the counsel for complainant is, that Mrs. Fortier, having by the authorization of her husband and of. the judge of the Fourth District Court, evidenced by his certificate, been empowered to borrow the money sued for to be used for her separate benefit and advantage, and to mortgage her separate property therefor, is concluded by the certificate of the judge, and cannot be heard to deny that the money was borrowed for her own use, or to assert that it was borrowed to pay her husband’s debts, or for his separate advantage. On the other p. 446hand, the counsel for the defendant insist that the money was in fact borrowed by Mrs. Fortier for the use of and to pay the debts of her husband, which Godchaux, the payee of the note, well knew, and that the money borrowed was so applied by the husband, and that she is not precluded by the certificate of the judge from showing these facts, and that being shown, they are a defence to the suit.

So in Hall v. Wyche, 31 La. Ann. 734, it was held that the authorization of a judge to a married woman to borrow money and execute a mortgage to secure its repayment does not preclude her from proving that with the knowledge of the creditor p. 449the mortgage was given to secure an antecedent debt of the husband due to him.

vol . cxn—29 p. 450timony to attempt to disprove the certificate of the judge and their own authentic declarations in acts of mortgage. Nor will the law authorize the inquiry into the subsequent disposition made of the funds borrowed by married women when properly authorized thereto. The law does not and cannot confer upon the lender in such circumstances the power and authority to watch over and control the acts of the married woman who has borrowed money from him, so as to prevent the improper use of the same.”

This conclusion supports the decree of the Circuit Court. When Godchaux deducted and retained out of the money loaned on the note and mortgage of Mrs. Fortier, the sum of $1,800 to pay a debt due to himself from her husband, and paid over to her, or by her direction, only the residue, he was acting, so far as the sum just mentioned is concerned, m complicity with the husband and in fraud of the law, and he cannot shield himself under the authorization of the judge. This p. 451sum, with the interest thereon, was properly deducted from the amount due on the note and mortgage. The $1,200 paid by Godchaux to the notary, by the direction of Mrs. Fortier, to clear off taxes, with the interest and costs which were a lien upon that property mortgaged by her, was applied for her separate benefit and advantage, and she cannot escape liability for it. As to the $5,975, the residue of the loan, we are of opinion that the defendant has not made it to appear affirmatively by preponderance of proof, as she was bound to do, that the money was borrowed by her with the knowledge or connivance of Godchaux to pay off the debts, or for the use of her husband. Godchaux, therefore, having handed to the defendant a check, payable to her own order, for the residue of the loan, his duty ceased. Under the act of 1855 he was not, as we have seen, bound at his peril to take care that she applied the money to her own separate benefit and advantage. So far, therefore, as the defence to the enforcement of the money paid by the check rested in the averment that the money borrowed of Godchaux was with his complicity borrowed for the use of the husband, and not for the separate advantage of the wife, it must fail.

The defendant removed the case into the Circuit Court of the United States for the Southern District of New York; and there filed an answer, averring that in 1855, when Lamar was appointed guardian of Martha M. Sims, he was a citizen of Georgia, and she was a citizen of Alabama, having a tertiporary residence in the city of New York; that in the spring of 1861 the States of Georgia and Alabama declared themselves to have seceded from the United States, and to constitute members of the so-called Confederate States of America, whereupon a state of war arose between the United States and the Confederate States, which continued to be flagrant for p. 454more than four years after; that Lamar and Martha M. Sims were in the spring of 1861 citizens and residents of the States of Georgia and Alabama respectively, and citizens of the Confederate States, and were engaged in aiding and abetting the State of Georgia and the so-called Confederate States in their rebellion against the United States, and she continued to aid and abet until the time of her death, and he continued to aid and abet till January, 1865 ; that the United States by various public acts declared all his and her property, of any kind, to be liable to seizure and confiscation by the United States, and they both were, by the various acts of Congress of the United States, outlawed and debarred of any access to any court of the United States, whereby it was impossible for Lamar to appear in the Surrogate’s Court of Richmond county to settle and close his accounts there, and to be discharged from his liability as guardian, in consequence whereof the relation of guardian and ward, so far as it depended upon the orders of that court, ceased and determined; that, for the purpose of saving the ward’s property from seizure and confiscation by the United States, Lamar, at the request of the ward and of her natural guardians, all citizens of the State of Alabama, withdrew the funds belonging to her from the city of New York, and invested them for her benefit and account in such securities as by the laws of the States of Alabama and Georgia and of the Confederate States he might lawfully do; that in 1864, upon the death of Martha M. Sims, all her property vested in her sister, Ann 0. Sims, as her next of kin, and any accounting of Lamar for that property was to be made to her; that on March 15, 1867, at the written request of Ann C. Sims and of her natural guardians, Benjamin H. Micou was appointed her legal guardian by the Probate Court of Montgomery County, in the State of Alabama, which was at that time her residence, and Lamar thereupon accounted for and paid over all property, with which he was chargeable as guardian of Martha M. Sims, to Micou as her guardian, and received from him a full release therefor; and that Ann C. Sims when she became of age ratified and confirmed the same. To that answer the plaintiff filed a general replication.

In 1856, several months after Lamar’s appointment as guardian, Mr. and Mrs. Abercrombie removed from Clifton, in the State of New York, to Hartford, in the State of Connecticut, and there resided till her death in the spring of 1859. The children lived with Mr. and Mrs. Abercrombie, Lamar as guardian paying Mr. Abercrombie for their board, at Clifton and at Hartford, from the marriage until her death; and were then removed to Augusta in the State of Georgia, and there lived with their paternal grandmother and her unmarried p. 456daughter and only living child, their aunt; Lamar as guardian continuing to pay their board. After 1856 neither of the children ever resided in the State of New York. On January 18 1860, their aunt was married to Benjamin H. Micou, of Montgomery in the State of Alabama, and the children and their grandmother thereafter lived with Mr. and Mrs. Micou at Montgomery, and the children were educated and supported at Mr. Micou’s expense.

At the time of Lamar’s appointment as guardian, ten shares in the stock of the Mechanics’ Bank of Augusta in the State of Georgia, which had belonged to William W. Sims in his lifetime, stood on the books of the bank in the name of Mrs. Abercrombie as his administratrix, of which one-third belonged to her as his widow, and one-third to each of the infants. In January, 1856, the bank refused a request of Lamar to transfer one-third of that stock to him as guardian of each infant, but afterwards paid to him as guardian from time to time two-thirds of the dividends during the life of Mrs. Abercrombie, and all the dividends after her death until 1865. During the period last named, he also received as guardian the dividends on some other bank stock in Savannah, which Mrs. Abercrombie owned, and to which, on her death, her husband became entitled. Certain facts, relied on as showing that he, immediately after his wife’s death, made a surrender of her interest in the bank shares to Lamar, as guardian of her children, are not p. 457material to the understanding of the decision of this court, but are recapitulated in the opinion of the Circuit Court. 7 Fed. Rep. 180-185.

Martha M. Sims died on November 2, 1834, at the age of fifteen years, unmarried and intestate, leaving her sister Ann C. Sims her next of kin. On January 12, 1867, Lamar, in answer to letters of inquiry from Mr. and Mrs. Micou, wrote to Mrs. Micou that he had saved from the wreck of the property of his mece, Ann C. Sims, surviving her sister, three bonds of the city of Memphis, indorsed by the State of Tennessee, one bond of p. 458the city of Mobile, and one bond of the East Tennessee and Georgia Railroad Company, each for $1,000, and with some coupons past due and uncollected ; and suggested that by reason of his age and failing health, and of the embarrassed state of his own affairs, Mr. Micou should be appointed in Alabama guardian in his stead. Upon the receipt of this letter Mrs, Micou wrote to Lamar, thanking him for the explicit statement of the niece’s affairs, and for the care and trouble he had had with her property ; and Ann C. Sims, then nearly sixteen years old, signed a request, attested by her grandmother and by Mrs, Micou, that her guardianship might be transferred to Mr. Micou, and that he might be appointed her guardian. And on March 15, 1867, he was appointed guardian of her property by the Probate Court of the county of Montgomery and State of Alabama, according to the laws of that State, and gave bond as such.

No objection or complaint was ever made by either of the wards, or their relatives, against Lamar’s transactions or investments as guardian, until July 28, 1874, when Micou wrote to Lamar, informing him that Ann C. Sims desired a settlement of his accounts ; and that he had been advised that no credits could be allowed for the investments in Confederate States bonds, and that Lamar was responsible for the security of the investments in other bonds and bank stock. Lamar was then p. 459sick in New York, and died there on October 5, 1874, without having answered the letter.

Mr. Edward N. Dickerson for appellant.—I. If the two wards had a domicil in the State of New York in 1855, the relation of guardian and ward under the New York appointment was terminated by the change of that domicil in 1856, or before February 9, 1862. A probate court has no jurisdiction of the affairs of an infant except when either the domicil or the property of the infant is within its jurisdiction. The domicil of an infant is the domicil of the father, if living, and if he is dead it is the domicil of the mother. Pennsylvania v. Ravenel, 21 How. 103. It has been held in New York that the acquisition of a new domicil by the widow by re-marriage does not necessarily change the domicil of her minor child. Browns v. Lynch, 2 Bradford, 214. In Massachusetts, a guardian, though not a parent, acting in good faith, may shift the ward’s domicil with his own. Holyoke n . Haskins, 5 Pick. 20. All agree that the rights and powers of guardians are local. Morrell n . Dickery, 1 Johns. Ch. 153 ; Woodworth v. Spring, 4 Allen, 321. Lamar therefore was under no obligation under the laws of New York as to the wards or the property after they left that State. Although not formally released, he doubtless would have been so on application. In equity, acts done in good faith, for which an order would have passed in course on application, will be regarded as ordered. Hunt n . Freeman, 1 Ohio, 490, 2d Ed. 226; Lee v. Stone, 5 Gill & Johns. 1.—II. The guardianship of Lamar, under the laws of New York, terminated in 1861, by reason of the war, and has never been revived. This was the legal effect of a state of war. During its existence a public enemy was denied access to the courts and could not transact business. It terminated contracts and partnerships, and by parity of reasoning terminated such relations as guardian and ward. See Lasere n . Rochereau, 17 Wall. 437; Ketchum v. Mobile de Ohio Railroad Co., 2 Woods, 532.—III. After the commencement of the war, Lamar did everything as to the property, which he could have been required to do had the guardianship continued. The rule in regard to investments of trust funds is not the same everywhere. In England they must be invested in consols. Howe v. Dartmouth, 7 Yes. 137, Holland v. Hughes, 16 Ves. 111. In Massachusetts, the p. 461guardian is to exercise the sound discretion which prudent men show in making permanent investments of funds with reference to the production of income. Harvard College n . Amory, 9 Pick. 446. In New York, he is bound to employ such diligence and prudence as prudent men employ in their own like affairs. King n . Talbot, 40 N. Y. 76. In Georgia, he was at that time bound to keep the money invested, and to do this in good faith upon security undoubted when taken. With the investments before war we have nothing to do. They were prudent, and could have been closed out at a profit when the war began. The passage of the confiscation acts made it Lamar’s duty to transfer the investments. See especially act of July 17,1862, ch. 195, § 6, 12 Stat. 591. When the investments came within the territory dominated by the Confederates, an investment in the bonds of those States became justifiable. See Barton v. Bowen, 27 Grattan, 849 ; Brown v. Wright, 39 Georgia, 96. Horn v. Lockhart, 17 Wall. 570, was decided by a divided court, and ought not to be extended beyond the limits of that case.—IV. The appointment by the Alabama court of Micou as guardian Operated to release Lamar.—V. Micou then, as lawful guardian acting for Miss Sims, gave Lamar a release, and when she became of age she could not deny its effect.—VI. Even if not operative as a receipt when given, it became an absolute release by lapse of time before the ward became of age. VII. Miss Ann Sims is estopped by her conduct, after she became of age, from claiming that Lamar has not fully accounted to her. Kirby v. Taylor, 6 Johns. Ch. 242, 249; Forbes n . Forbes, 5 Gill, 29; McClella/nd v. Kennedy, 8 Maryland, 230.—VIII. Mrs. Micou, the defendant in error, has no better right to recover than Miss Ann Sims would have had.—IX. Whatever may have been Miss Ann Sims’s rights, the defendant in error is not entitled to recover. Although suing as administratrix, the recovery will be really for her own benefit. In February, 867, she approved of what Lamar had done as guardian, and id so again in 1874. What she said could have estopped her bad she herself been the cestui que trust. Mooers v. White, 6 ohns. Ch. 360; Weed v. Small, 7 Paige, 573. See Cairncross V' Lorimer, 7 Jurist, (N. S.), 149 ; Illinois Central Railroad

Mr. Stephen P. -Nash and Mr. George C. Holt for appellee. —I. A retiring guardian can only be discharged by order of a competent court, or by settlement with the ward after the latter attains majority. Perry on Trusts, §§ 921-923—II. Lamar’s duties and obligations are to be measured by the law of New York. Investments in bank stocks were unauthorized by that law. King n . Talbot, 40 N. Y. 76; Adair v. Brimmer, 74 N. Y. 539. The investment in the Georgia bank was further invalid as made out of the State. Ormiston v. Olcott, 84 N. Y. 339.—III. The transfer of the New York investments to investments in Confederate stocks during the war was an act in aid of the rebellion, and was void ; Horn n . Lockhart, 17 Wall. 570; McBurney v. Carson, 99 IT. S. 567; Corker n . Jones, 110 IT. 8. 317; and would have been disallowed in settlement of a guardian’s account in Alabama. Newman v. Reed, 50 Ala. 297; Houston n . Deloach, 43 Ala. 364.—IV. The war did not terminate the guardianship, nor affect the liability of the guardian to account to the ward. War suspends, but does not annul contract obligations. 3 Phillimore International Law, 735; Hanger v. Abbott, 6 Wall. 533; Insura/nce Co. v. Davis, 95 U. S. 425, 430. In the latter case the relation was that of principal and agent, which bears a resemblance to that of guardian and ward.—V. The fact that the ward lived in enemy’s country during the war is immaterial. She was too young to be disloyal except by fiction of law. Even if active disloyalty had been established, that would not have justified the guardians investments. Horn v. Lockhart, 17 Wall. 570; Alexander v. Bryan, 110 IT. S. 414.—VI. The fact that the ward’s property in New York was liable to confiscation is no justification foi its transfer and investment in Southern securities. The rights of Southern enemies to property within the loyal States were not affected unless proceedings were taken for confiscation. Conrad v. Waples, 96 IT. S. 279 ; Airhart v. Massieu, 98 ITS. 491.—VII. The appointment of Micou as guardian of Ann p. 463Sims and Lamar’s transfer to him of the remaining securities were no defence. A guardian continues to retain all his powers and to be subject to all his duties and liabilities till the appointment of a successor by the same court which appointed him. In re Dyer, 5 Paige, 534; In re Nicoll, 1 Johns. Ch. 25. —VIII. The defence of ratification is inapplicable. Martha died before she became of age. She therefore could not ratify. Ann is it is true in some sense the representative of her sister, but she never ratified as representative. The defence of ratification must be clearly proved, and it must appear that the party ratifying had full knowledge of the facts. Adair v. Brimmer, cited above. An administratrix suing is not chargeable with notice acquired before her appointment. 1 Greenl. Ev. § 179; 1 Cowen & Hill Notes to Phil. Ev. Ch. 8, § 10. As Ann and Mrs. Micou at the time of these investments had no interest in Martha’s property, there was nothing for an estoppel to work on. Exparte Smith, 2 Mont. D. & DeG. 113 ; Dillett n . Kemble, 10 C. E. Green, 66; Pla/nt v. McEwen, 4 Conn. 544.—IX. The guardian was chargeable with the full value of the shares in Mechanics’ Bank,*Georgia, standing in the name of Mrs. Abercrombie, as administratrix, and in the shares of the Bank of Commerce standing in her name individually. It is the duty of a guardian to take all reasonable steps to collect and protect the property of his ward, whether situated in the State where he is appointed or not. It is true that a guardianship is a local office, but that does not authorize a guardian to shut his eyes and let his ward’s property in other States go to waste. Taylor v. Bemiss, 110 U. S. 42; Shultz v. Pulver, 3 Paige, 182; affirmed 11 Wend. 361; Matter of Butler, 38 N. Y. 397.—X. There was no error in charging the guardian with interest at six per cent. Ping v. Talbot, cited above. That is the rule in New York; and the United States court will follow the State rule. Suydam n . Williamson, 24 How. 427; Pennington n . Gribson, 16 How. 65.

The authority of the Surrogate’s Court of the county of p. 464Richmond 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 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 p. 465the ward. And admissions in private letters from Mrs. Micou to Lamar could not affect the rights of the ward, or Mrs. Micou’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 Greenl. Ev. § 179.

The Court of Chancery, before the Declaration of Independence, appears to have allowed some latitude to trustees in making investments. The 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. Hyder n . Bickerton, 3 Swanston, 80, note; ä C. 1 Eden, 149, note; Barney v. Saunders, 16 How. 535, 545 ; Perry on Trusts, §453. But in so holding, he said: “ For it should have been on some such security as binds land, or something, to be answerable for it.” 3 Swanston, 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 n . Boehm, 3 Atk. 440, 444; yet in another case he declined to charge a trustee for a loss on South Sea stock which had fallen in value since the trustee received it; and said that “ to compel trustees vol . cxn—30 p. 466to make up a deficiency, not owing to their wilful default, is the harshest demand that can be made in a court of equity.” Jackson v. Jackson, 1 Atk. 513, 514; 8. 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 malafides, nothing wilful 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 Dickens, 120,126, 127; 8. 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 BJ chier, Ambler, 218, 219; N. 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 Viet. ch. 35, and 23 & 24 Viet. ch. 38, and by general p. 467orders 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 (7th ed.) 282, 283, 287.

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 corporation, 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 p. 468only investments that a trustee can safely make without an express order of court are in government or real estate securities. King v. TaTbot, 40 N. Y. 76, affirming & C. 50 Barb. 453; Ackerman v. Emott, 4 Barb. 626; Mills v, Hoffman, 26 Hun, 594; 2 Kent Com. 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. Grap n . Fox, Saxton, 259, 268; Halstead n . Meeker, 3 C. E. Green, 136; Lathrop n . Smalley, 8 C. E. Green, 192; WorrelVs Appeal, 9 Penn. St. 508, and 23 Penn. St. 44; Hemphill's Appeal, 18 Penn. St. 303; Ihmsen's Appeal, 43 Penn. St. 431. And the New York and Pennsylvania courts have shown a strong disinclination to permit investments in real eatate or securities out of their jurisdiction. Ormiston v. Olcatt, 84 N. Y. 339; Kush's Estate, 12 Penn. St. 375, 378.

As a general rule (with some exceptions not material to the consideration of this case) the law of the domicil governs the p. 470status 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 n . Sprague, 103 U. S. 613, 631, and authorities cited; Morrell v. Dickey, 1 Johns. Ch. 153 ; Woodworth n . Spring, 4 Allen, 321; Milliken v. Pratt, 125 Mass. 374, 377, 378 ; Leona/rd v. Put/na/m, 51 N. H. 247; Commonwealth n . Rhoads, 37 Penn. St. 60; Sims v. Renwick, 25 Georgia, 58; Dicey on Domicil, 172-176; Westlake Private International Law (2d ed.) 48-50 ; Wharton Conflict of Laws (2d ed.) §§ 259-268.

It may be suggested that this would enable the guardian, by changing the domicil 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 domicil, may change that domicil. But the ward 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 p. 472Paige, 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. Hankins, 9 Mass. 543; Holyoke n . Haskins, 5 Pick. 20; Kirkland v. Whately, 4 Allen, 462; Anderson v. Anderson, 42 Vermont, 350; Ex parte Bartlett, 4 Bradford, 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 domicil of the ward (not being the natural guardian or a testamentary guardian) can remove the ward’s domicil 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 ; Da/niel n . Hill, 52 Alabama, 430 ; Story Conflict of Laws, § 506, note ; Dicey on Domicil, 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 domicil from one State to another.

As the law of the domicil of the ward has no extra-territorial 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, 163 U. S. 613. Oases may also arise with facts so peculiar or so p. 473complicated 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 domicil 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 domicil of the ward. But in a case in which the domicil 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.

Upon these facts, the domicil of the children was always in Georgia from their birth until January, 1860, and thenceforth p. 474was 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 6; Reeve Domestic Relations, 315; 2 Kent Com. 219; Code of Georgia of 1861, §§ 1754, 2452; Darden v. Wyatt, 15 Georgia, 414.

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 p. 475responsible for the decrease in its value between the 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 n . Schieffelin, 7 Johns. Ch. 150; Ellis v. Essex Merrimack Bridge, 2 Pick. 243. That his motive in selling it was to avoid its being confiscated by the United States does not appear to us to have any bearing on the rights of these parties. And no statute under which it could have been confiscated has been brought to our notice. The act of July 17, 1862, ch. 195, § 6, cited by the appellant, is limited to property of persons engaged in or abetting armed rebellion, which could hardly be predicated of two girls under thirteen years of age. 12 Stat. 591. Whatever liability, criminal or civil, Lamar may have in curred or avoided as towards the United States, there was nothing in his selling this stock, and turning it into money, of which his wards had any right to complain.

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 investino' the funds in his hands in bonds of a railroad o p. 476corporation, 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 104 U. S. 465.

Issue was taken on the pleas, and upon the trial in special term the jury returned a verdict for the plaintiffs, upon which the court rendered judgment. The case was carried, by writ p. 480of error, to the Supreme Court of the District of Columbia, in general term, by which the judgment of the court in special term was affirmed. The writ of error in this case brought up that judgment for review.

§ 716 provides for the recovery, by the person who has paid a greater rate of interest than is allowed by law, upon any agreement or contract, of all interest paid on such contract or agreement, provided he brings suit to recover the same within one year after the unlawful interest shall have been paid. This p. 483section, it is also clear, brings no aid to the plaintiff in error. This is not a suit to recover back usurious interest paid, but to enforce the collection of the note upon which it is contended the usurious interest was received. The plaintiff in error did not pay the unlawful interest, but it was paid by Daniels, and it was paid by him more than a year before this suit was brought, and more than a year before the defence set up by the plaintiff in error. If Daniels himself, who paid the alleged usurious interest, had brought a suit to recover it back, his action would have failed, because not begun within the time prescribed by the statute. The plaintiff in error, therefore, who has paid no interest, legal or illegal, is in no better position, at least, than Daniels, and cannot set up the provisions of § 116 in his defence. Under neither section is the plaintiff in error entitled to any relief.

So in Driesbach v. National Bank, 104 U. S. 52, it was held p. 484that usurious interest paid to a national bank on renewing a series of notes, of which those in suit were the last, could not be applied in satisfaction of the principal of the debt. See also Cook v. Lillo, 103 U. S. 792, and Walsh n . Mayer, 111 U. 8. 31. In the case last cited it was held generally that a statute which prescribes a legal rate of interest, and forbids the taking of a higher rate, under penalty of a forfeiture of the entire interest, and declares that the party paying such higher rate of interest may reedver it back by suit brought within twelve months, confers no authority to apply the usurious interest actually paid to the discharge of the principal debt, and that a suit for its recovery, brought within twelve months, was the exclusive remedy.