Fidelity & Deposit Co. v. Freud

³¹ Urner, J., delivered the opinion of the Court.. The Orphans’ Court of Baltimore City, with one of its members dissenting, passed an order authorizing the appellee as guardian to invest in a promissory note to be executed by himself individually the sum of fifteen hundred dollars of the money of his ward. This appeal is taken from a subsequent order of that Court overruling the appellant’s objections, as surety on the guardian’s bond, to the recognition of the loan as an investment. The single question to be considered is whether the Orphans’ Court had jurisdiction to permit the guardian to borrow a part of the fund committed to his care.

If it was possessed of such discretion under the law, it is clear that the passage of the order would serve as a protection to the guardian and his bond in reference to the act thus authorized. Carlysle v. Carlysle, 10 Md. 447 ; O’Hara v. Shepherd, 3 Md., Ch. 306. The right of the appellant, therefore, to question this particular transaction must be sustained, if at all, upon the theory that it was not within the power of the Court below to sanction such a disposition of the guardianship funds as the one here involved. It is a familiar principle that Orphans’ Courts in this State are tribunals of special and limited jurisdiction and have only such authority as is conferred by statute.

Snook v. Munday, 90 Md. 701 ; Stanley v. Safe Deposit Co., 87 Md. 450 ; Bowie v. Ghiselin, 30 Md. 553 ; Grant Coal Co. v. Clary, 59 Md. 445 ; Code, Art. 93, see. 260. The primary inquiry must accordingly be- directed to the statutory provisions relating to the powers and duties of - these Courts with respect to guardianship investments. They are directed by section 171 of Article 93 of the Code to “order the guardian who has received * * * * * moneys belonging to his ward, to invest the same in mortgages on unincumbered real estate, worth at least double the amount loaned, or such public stock, permanent funds, or other good securities to be selected by said guardian, as will yield the highest rate of interest that can reasonably be had, or they may, when it is clearly for the benefit of the ward, order the same to be ³² invested in.land; and the investment selected shall he reported to the Court for its.approval before becoming-permanent, and the increase or surplus income of such investment * * * shall be invested in like manner under the direction and' approval of the Court.” . By section 1Y2 of the same Article it is provided that “All moneys invested under the preceding section shall be invested in the name of the ward, and shall be transferable only under the order of the Orphans’ Court; and all transfers without such order shall be void; and whenever the.Orphans’ Court shall in its discretion authorize a. guardian to invest or .mortgage the proceeds of the sale of real estate belonging to his ward and sold by a trustee in equity, the affidavit of consideration of such mortgage shall be made by the guardian of such ward.” Section 166 empowers dhe Court to order the proceeds of the sale of leasehold estates of the ward to be invested in “bank stock or any other good security.” It is provided by section 241 that the Court may in its discretion order any administrator or guardian “to bring into Court, or place in bank, or invest in bank or other incorporated stock, or any other good security, any money or funds received by such administrator or guardian; and the Court shall direct the manner and form- in which 'such money or funds shall be placed in bank or invested, and.the same shall at all times be subject to the order and control of the Court.” In sections 189 and 192, which are concerned with the transfer of the estate to .a substituted guardian or to. the wax-d at majority, the delivery is required to include “bonds, notes and evidences of debt” and “bonds and other securities.” These- provisions fully authorize the Orphans’ Court to direct investments by guardians in such good security as they may approve in the exercise of a sound judicial discretion, but the question hei'e to be determined is whether an order for the loan of -the wax*d’s xnoney -to the guax’dian himself is within the.power thus, conferred.

We can have no hestitation in answering this question in the negative.- An ³³ investment, if such it may be called, in which the guardian has a personal interest adverse to that of the ward is manifestly not entitled to be regarded as a “good security.” One of the rules universally recognized as applicable to every fiduciary is that which prohibits him from borrowing the trust funds “or going through the form of borrowing for his own use.” 2 Pomeroy Eg. Jur., sec. 1076; Perry on Trusts & Trustees, 6th ed., secs. 461 and 464. It was said by Lord Ellenborough, in 1 Camp. 537, as quoted in Ricketts v. Montgomery, 15 Md. 51 , that “Ho man should be allowed