Court Opinion

ID: 6587573
Source: CourtListenerOpinion
Date Created: 2022-07-20 19:50:24.391894+00
Date Added: 2024-06-11T15:57:32.598564
License: Public Domain

Corn, Justice,
(dissenting in part).
I am unable to concur in all of the conclusions reached by a majority of the court in this case, and some of the questions are' of such importance as to require, in my *253opinion, a brief statement of what I deem to be the correct view.
The guardian purchased 177 shares of the stock of the Union Mercantile Company, a private corporation, paying therefor $16,284.00 out of the trust moneys in his hands. He also loaned to Mr. Warren $20,000.00, taking as the only security therefor shares of the Warren Live Stock Company and of the F. E. Warren Mercantile Company, private corporations. The constitution of this state provides that £ ‘ No act of the Legislature shall - authorize the investment of trust funds by executors, administrators, guardians, or trustees, in the bonds or stocks of any private corporation.” Art. 3, Sec. 38.
It is contended, as I understand, that while this provision is an inhibition upon the Legislature, it does not so operate in restraining and controlling the action of the courts. But probate courts take all their powers from the statutes. Grimes v. Norris, 6 Cal., 624; Brodus v. Thompson, 6 H. & G., 126; State v. Warren, 28 Md., 355; Fairfield v. Gullifer, 19 Me., 361; Fowle v. Coe, 63 Me., 248; 1 Woerner Adm., 142. And the case is not different where probate jurisdiction' is conferred upon a common law court. 1 Hill (S. C.), 55. In re Burton’s Est., 63 Cal., 36; Est. of Kimberly, 97 Cal., 281; Smith v. Westerfield, 374. Therefore, as the district court, sitting in probate, has no powers except such as are conferred by statute, it seems to follow necessarily that it cannot be in possession of any powers which the Legislature is prohibited by the constitution from conferring.
It is true, as urged, that some of the States permit, and perhaps encourage, the investment of trust funds in such stocks, the practice having been authorized by legislation, or having grown up with the industrial development of such states. And the right of each State to adopt its own policy in the matter, cannot be questioned. But the provision of our constitution, in my opinion, declares the public policy of this State upon the subject. At the time *254of the adoption of the constitution, many companies had been created for the purpose of raising and dealing in cattle and other live stock, heavy losses had occurred and many of them had failed, or their failure was impending. From the nature of the industry at that time, it was difficult for stockholders or others to ascertain the precise condition and prospects of the business. It is reasonable, I think, to conclude that it was the purpose of the framers of the constitution to forbid the investment of trust funds upon the security of the stocks, or bonds of these or similar companies.
But it is contended that a loan of money to an individual upon the security of such stocks is not an investment in them within the meaning of the constitution; that it is no more an investment in the stocks than a loan of money upon mortgage security is an investment in real estate. And it may be conceded, perhaps, that the latter is not an investment in the real estate represented by the mortgage, and that the former is not an investment in that portion of the property of the company represented by the shares of stock. But, it is, in my opinion, none the less in the one case an investment in the mortgage and in the other an investment in the shares of stock. The definition of the word ‘ ‘ investment ’5 given by the A. & E. Encyclopedia of Law, is as follows:—
‘1 Investment, with reference to money, is the loaning or placing of it to produce interest or profit. With respect to trust funds, it is the loaning or placing of them by the trustee to produce interest or profit for the benefit of the cestui que trust.’’’ 11 Am. & Eng. Ency. of Law, 814.
“A sum is invested whenever it is represented by anything but money.” The Parker Mills vs. Comr’s, 23 N. Y., 242. In any case the guardian or other trustee would be slow to contend that the sum loaned was represented solely by the promissory note of the borrower and not at all by the mortgage or by the shares held as collateral. And the court would be slow to permit him to turn over the note unaccompanied by the security in *255the place of, and as representing, the sum loaned. In my view of it, it is very clear that the investment in the one case is in the note and mortgage, and in the other, in the note and stocks held as collateral.
And the distinction sought to be made is incapable of being practically maintained consistently with the safety of the fund so invested. For, if it should prove necessary for the guardian to dispose of the stocks in order to collect the amount of the indebtedness he would find himself in the position of being compelled to become a purchaser of them out of the trust fund in violation of law, or at the mercy of bidders interested only in obtaining them at the lowest price possible.
In my opinion these investments were in violation of law, and the exceptions of the ward should have been sustained upon that ground.
ON APPLICATION FOR COUNSEL FEES.
Per Curiam.
Plaintiff in error sought a reversal upon proceedings in error of a judgment of the District Court of Laramie County rendered upon exceptions of the Plaintiff in Error to the final report of his Guardian, the Defendant in Error. In this court the judgment was affirmed in part, and reversed in part.
Application is now made by defendant in error for an order to be entered by this court allowing to him as guardian necessary and reasonable expenditures in the employment of counsel in defence of his accounts in the proceedings in error in this court. The jurisdiction of this court in this cause is appellate only. The question before us was whether the district court erred in its judgment rendered herein, and that question we have decided. In respect to the matters in issue between the parties to these proceedings this is not a court of original jurisdiction, and in this kind of case we are of the opinion that authority is not conferred upon this court by law to make an accounting and original allowance for counsel *256fees. As was said in Kingsbury v. Powers, 26 Ill. App., 574: “to determine the proper amount of such allowance would involve the presentation to this court of issues of fact to be maintained by original evidence, and would be in substance an exercise of original as distinguished from appellate jurisdiction.” We think that to be a correct statement of the law.
At the time of making the application, counsel for the defendant in error offered evidence as to the necessary expenditure for counsel fees in this court and the reasonableness thereof. The same was received subject to objection, reserving our decision as to its admissibility for further consideration. For the reasons already stated we think the evidence inadmissible in this court; and for the same reasons the application will be denied.