BROWN, Justice.
This appeal is from a decree of the probate court entered on December 27, 1933, passing and approving the accounts and vouchers of the appellee on the final settlement of his guardianship of the estate of the appellant, Vernon A. White, a person non compos mentis, and the case was submitted on the motion of the appellee to dismiss the appeal, and on the merits.
It appears from the record that the appeal was taken on the 24th of March, 1934; that the citation of appeal was issued on the 26th of March, 1934, and service thereof accepted by the appellee’s attorney on the 28th of March, 1934; that the bill of exceptions was presented to and approved by the trial judge on March 24, 1934.
On the 18th of March, 1935, the appellee filed a certificate of the appeal, and a motion to dismiss.
The record was filed on March 30, 1935, and the case was submitted on the 2d day of April, 1935, at the first call of the division to which the case belongs after the motion to dismiss was made, and on the submission the appellant made proof by affidavit going to show that the delay in filing the record was occasioned by the delay in its completion until after the first of the year 1935, and was not delivered to appellant until the 18th of February, 1935.
Counteraffidavit was filed by appellee, but it is not made to appear that appellee has suffered detriment by the delay.
The appeal is by a non compos mentis, through his guardian ad litem, and the questions presented are in respect to the alleged mismanagement of his estate, and in view of the circumstances and the nature of the appeal, we are of opinion that the motion to dismiss should be denied and the case considered on its merits. Let this order be entered. Campbell v. Sowell, ante, p. 109, 159 So. 813.
In October, 1928, the exact date does not appear, appellee invested $12,139.35 of his ward’s money in bonds issued by the Continental Mortgage Company, a private corporation, organized and existing under the laws of the state of North Carolina, with its home office in the city of Asheville. The sum paid for the bonds was par value with accrued interest. Some time later, appellee invested $3,000 of his ward’s money in like bonds of the same corporation.
On the final settlement, the probate court, over the objection and protest of the guardian ad litem that said expenditures were unauthorized and against the public policy of this state as declared by section 74 of the Constitution of 1901, approved these expenditures and allowed the guardian credit therefor.
The guardian ad litem renews his objection and protest here.
The appellee offered evidence going to show that before the money of the ward was invested in said bonds, he had sought the advice and approval of the “Regional Attorney of the United States Veterans’ Bureau of Birmingham, Alabama,” as to whether it would approve an investment in “first mortgage bonds guaranteed by one of the large surety companies,” and was advised that said “office does approve the purchase of such first mortgage bonds as mentioned in your letter. Such form of investment is permitted by the State law.”
He also offered evidence showing that before making the investment he sought the advice and approval of the Union Indemnity Company, the surety on his guardian’s bond, who has a“joint control agreement” with the guardian as to the management of the estate of the ward, and was advised through its local agent that “The investment in first mortgage bonds, if guaranteed by a reputable Surety company and approved by the Veterans’ Bureau, will likewise be acceptable to us. We would bring to your attention, however, that when these securities are put-chased that they should be held under your joint control just as effectively as the cash in bank was handled.”
He also offered evidence showing that he sought and received the advice of different financial institutions and agencies as to the advisability of such investment, and that same met their approval; that he also invested some of his individual money in bonds of said Continental Mortgage Company.
The evidence shows that the Central Bank
&
Trust Company of Asheville, N. C., was named as trustee, and, under the trust agreement, “the Board of Directors of the Continental Mortgage Company could designate to be pledged with the Trustee as security for each issue of bonds * :|! * (a) cash; (b) and/or United States Bonds; (c) and/or First Mortgages and/or instruments of like legal effect, and/or (d) obligations of similar mortgage companies.”
The trust indenture also provides: “That the Board of Directors at the time of authorizing each series of bonds may restrict the security to that described in either of the preceding forms, clauses or in any two or three of them, ‘and the security designated by said Board of Directors for each series of bonds shall be described by appropriate language in all of the bonds of such series issued hereunder and none other than that so designated by the said Board of Directors at the túne, of authorizing the issue of each series of bonds shall be deposited and pledged by the Company with the Trustee or accepted by the Trustee as security for any such bond of such series.’ Reference to a description of the bonds of the series purchased by the appellee, shows that the security pledged for payment of his bonds was
restricted to
cash,
United States bonds and first mortgages on real estate and/or 'instruments of like legal
effect.” (Italics supplied.)
The trustee allowed cash upward of $200,000 to accumulate in its hands, affecting the issue of the series of $1,000,000 of bonds, to which the bonds purchased by appellee belonged, and with this money on deposit closed its doors, forcing the Continental Mortgage Company into liquidation, entailing a loss to the bondholders of upward of 60 per cent, of their investments.
It is conceded that the expenditures here involved were made in the utmost of good faith, and appellee’s major contention is that the United States has retained supervision and control over the investment of funds paid to guardians under the War Risk Insurance Act of Congress, through the Veterans’ Bureau, as a government agency, and inasmuch as the purchase of the bonds was approved by the Regional Attorney of the Veterans’ Bureau, he is not chargeable with the loss.
In support of this contention, section 450, USCA, title 38, pages 215, 216, is cited. That section provides: “Where any payment under this chapter is to be made to a minor, other than a person in the military or naval forces of the United States, or to a person mentally incompetent, or under other legal disability adjudged by a court of competent jurisdiction, such payment may be made to the person who is constituted guardian, curator, or conservator by-the laws of the State or residence of claimant, or is otherwise -legally vested with responsibility or care of the claimant or his estate:
Provided,
That prior to receipt of notice by the bureau that any such person is under such other legal disability adjudged by some court of competent jurisdiction, payment may be made to such person direct:
Provided further,
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BROWN, Justice.
This appeal is from a decree of the probate court entered on December 27, 1933, passing and approving the accounts and vouchers of the appellee on the final settlement of his guardianship of the estate of the appellant, Vernon A. White, a person non compos mentis, and the case was submitted on the motion of the appellee to dismiss the appeal, and on the merits.
It appears from the record that the appeal was taken on the 24th of March, 1934; that the citation of appeal was issued on the 26th of March, 1934, and service thereof accepted by the appellee’s attorney on the 28th of March, 1934; that the bill of exceptions was presented to and approved by the trial judge on March 24, 1934.
On the 18th of March, 1935, the appellee filed a certificate of the appeal, and a motion to dismiss.
The record was filed on March 30, 1935, and the case was submitted on the 2d day of April, 1935, at the first call of the division to which the case belongs after the motion to dismiss was made, and on the submission the appellant made proof by affidavit going to show that the delay in filing the record was occasioned by the delay in its completion until after the first of the year 1935, and was not delivered to appellant until the 18th of February, 1935.
Counteraffidavit was filed by appellee, but it is not made to appear that appellee has suffered detriment by the delay.
The appeal is by a non compos mentis, through his guardian ad litem, and the questions presented are in respect to the alleged mismanagement of his estate, and in view of the circumstances and the nature of the appeal, we are of opinion that the motion to dismiss should be denied and the case considered on its merits. Let this order be entered. Campbell v. Sowell, ante, p. 109, 159 So. 813.
In October, 1928, the exact date does not appear, appellee invested $12,139.35 of his ward’s money in bonds issued by the Continental Mortgage Company, a private corporation, organized and existing under the laws of the state of North Carolina, with its home office in the city of Asheville. The sum paid for the bonds was par value with accrued interest. Some time later, appellee invested $3,000 of his ward’s money in like bonds of the same corporation.
On the final settlement, the probate court, over the objection and protest of the guardian ad litem that said expenditures were unauthorized and against the public policy of this state as declared by section 74 of the Constitution of 1901, approved these expenditures and allowed the guardian credit therefor.
The guardian ad litem renews his objection and protest here.
The appellee offered evidence going to show that before the money of the ward was invested in said bonds, he had sought the advice and approval of the “Regional Attorney of the United States Veterans’ Bureau of Birmingham, Alabama,” as to whether it would approve an investment in “first mortgage bonds guaranteed by one of the large surety companies,” and was advised that said “office does approve the purchase of such first mortgage bonds as mentioned in your letter. Such form of investment is permitted by the State law.”
He also offered evidence showing that before making the investment he sought the advice and approval of the Union Indemnity Company, the surety on his guardian’s bond, who has a“joint control agreement” with the guardian as to the management of the estate of the ward, and was advised through its local agent that “The investment in first mortgage bonds, if guaranteed by a reputable Surety company and approved by the Veterans’ Bureau, will likewise be acceptable to us. We would bring to your attention, however, that when these securities are put-chased that they should be held under your joint control just as effectively as the cash in bank was handled.”
He also offered evidence showing that he sought and received the advice of different financial institutions and agencies as to the advisability of such investment, and that same met their approval; that he also invested some of his individual money in bonds of said Continental Mortgage Company.
The evidence shows that the Central Bank
&
Trust Company of Asheville, N. C., was named as trustee, and, under the trust agreement, “the Board of Directors of the Continental Mortgage Company could designate to be pledged with the Trustee as security for each issue of bonds * :|! * (a) cash; (b) and/or United States Bonds; (c) and/or First Mortgages and/or instruments of like legal effect, and/or (d) obligations of similar mortgage companies.”
The trust indenture also provides: “That the Board of Directors at the time of authorizing each series of bonds may restrict the security to that described in either of the preceding forms, clauses or in any two or three of them, ‘and the security designated by said Board of Directors for each series of bonds shall be described by appropriate language in all of the bonds of such series issued hereunder and none other than that so designated by the said Board of Directors at the túne, of authorizing the issue of each series of bonds shall be deposited and pledged by the Company with the Trustee or accepted by the Trustee as security for any such bond of such series.’ Reference to a description of the bonds of the series purchased by the appellee, shows that the security pledged for payment of his bonds was
restricted to
cash,
United States bonds and first mortgages on real estate and/or 'instruments of like legal
effect.” (Italics supplied.)
The trustee allowed cash upward of $200,000 to accumulate in its hands, affecting the issue of the series of $1,000,000 of bonds, to which the bonds purchased by appellee belonged, and with this money on deposit closed its doors, forcing the Continental Mortgage Company into liquidation, entailing a loss to the bondholders of upward of 60 per cent, of their investments.
It is conceded that the expenditures here involved were made in the utmost of good faith, and appellee’s major contention is that the United States has retained supervision and control over the investment of funds paid to guardians under the War Risk Insurance Act of Congress, through the Veterans’ Bureau, as a government agency, and inasmuch as the purchase of the bonds was approved by the Regional Attorney of the Veterans’ Bureau, he is not chargeable with the loss.
In support of this contention, section 450, USCA, title 38, pages 215, 216, is cited. That section provides: “Where any payment under this chapter is to be made to a minor, other than a person in the military or naval forces of the United States, or to a person mentally incompetent, or under other legal disability adjudged by a court of competent jurisdiction, such payment may be made to the person who is constituted guardian, curator, or conservator by-the laws of the State or residence of claimant, or is otherwise -legally vested with responsibility or care of the claimant or his estate:
Provided,
That prior to receipt of notice by the bureau that any such person is under such other legal disability adjudged by some court of competent jurisdiction, payment may be made to such person direct:
Provided further,
That for the purpose of payments of benefits under Part II of this chapter, where no guardian, curator, or conservator of the person under a legal disability has been appointed under the laws of the State or residence of the claimant, the director shall determine the person who is otherwise legally vested with responsibility or care of the claimant or his estate:
And provided further,
That the director, in his discretion, may suspend such payments to any such guardian, curator, conservator, or other person who shall neglect or refuse, after reasonable notice, to render an account to the director from time to time showing the application of such payments for the benefit of such minor or incompetent beneficiary. (June 7, 1924, c. 320, § 21, 43 Stat. 613.)”
There is nothing in the provisions of this section to indicate that it was the intent of the Congress to confer on the Veterans’ Bureau any control or authority over such funds after they have come into the custody, possession, and control of a guardian, curator, or conservator, or to relieve, in any respect, the guardian, curator, or conservator of the responsibility imposed on such statutory trustees by the laws of the state under which they are appointed. The right of the director, “in his discretion,” to suspend payment to any such “guardian, curator or conservator,” does not connote an intent that supervision shall be retained after the money comes into the possession of such guardian, curator, or conservator.
The acts of Congress in respect to trust funds and trust estates, resulting from the payment of money by the government under the War Risk Insurance Act, clearly evince the policy that such trust shall be administered and distributed under and in accordance with the laws of the state in which the beneficiary or cestui que trust has his residence, with the single exception that in case of the death of a beneficiary there remains unpaid installments, and he leaves no heirs or distributees entitled to take, such unpaid installments escheat to the United States instead of the State. USCA, title 38, § 451, page 216; First Nat. Bank of Chattanooga, Tenn., et al. v. Forester, 223 Ala. 218, 135 So. 167; McGilvary et al. v. Reynolds et al., 224 Ala. 435, 140 So. 417.
The next contention of appellee is, that at the time he invested his ward’s money in said bonds of the Continental Mortgage Company, he was a special guardian under the provisions of sections 8120-8134 of the Code 1923.
If appellee was such special guardian, he cleaidy exceeded his statutory power. He was without authority to invest the funds of the ward in any sort of property. The statute provides, that: “The sole power of the guardian so appointed * * * shall be to receive any money or moneys due the beneficiary under the said act of congress, and to distribute same for the benefit of the said beneficiary * * * to receive for the account of the said beneficiary any money or moneys due from the United States government in the way of arrears of pay, bonus, or other sums due by reason of his or her service (or the service of the person through whom the beneficiary claims).” Code 1923, § 8125; Gerald and wife v. Bunkley, 17 Ala. 170.
The record shows that appellee was appointed as guardian of the person and estate of said Vernon A. White after said Vernon A. White had, on an inquisition of lunacy, been adjudged insane, and after the estate of said ward had been in process of administration by a former guardi
an, who had died, and final settlement made by the deceased guardian’s personal representative.
In these circumstances, said section 8120 et seq. are without application, and the appellee’s liability is governed by the law applicable, generally, to guardianships.
Where the character of investment or loan which a guardian may make is prescribed by statute, the guardian may lawfully invest only in such security as is prescribed, and if he receives, as guardian, securities of other kinds, he does so at his peril. 28 C. J. 1141, § 236; Thompson v. Thompson, 92 Ala. 545, 9 So. 465; Meyers et al. v. Martinez et al., 172 Ala. 641, 55 So. 498.
The Constitution of 1875, article 4, § 35 (vol. 1, Code 1923, p. 290), declared that: “No act of the General Assembly shall authorize the investment of any trust-funds by executors, administrators, guardians, and other trustees, in the bonds or stock of any private corporation; and any such acts now existing are avoided, saving investments heretofore made.” These provisions were carried into the present Constitution, 1901, as § 74, declaring: “No act of the Legislature shall authorize the investment of any trust funds by executors, administrators, guardians or other trustees in the bonds or stocks of any private corporation; and any such acts now existing are avoided, saving investments heretofore made.”
This section of the Constitution is not only a limitation on the power of the Legislature, but its provisions declare and establish the public policy of the state in respect to the investment of trust funds in stocks and bonds of private corporations, and such investment is unauthorized, certainly in the absence of express authority conferred by the instrument creating the trust. Randolph v. East Birmingham Land Co. et al., 104 Ala. 355, 16 So. 126, 53 Am. St. Rep. 64; Davis v. State, 68 Ala. 58, 62, 44 Am. Rep. 128; License Tax Cases (United States v. Vassar), 5 Wall. 462, 18 L. Ed. 497; 4 Mayfield’s Dig. 597, § 1; 28 C. J. 1141, § 236.
This section of the Constitution leaves no room for appellee’s further contention that bonds of a private corporation are within the influence of section 8149 of the Code, which provides that: “It is the duty of the guardian to manage the estate of his ward frugally, and to improve it to the best of his skill and ability. He must, if practicable, lend out all surplus money of the ward
on bond
and mortgage, or.on good personal security,
and, if the bond is not renezved annually,
require the interest to be paid at the end of each year.” (Italics supplied.)
It is well settled that the ward, who has become sui juris, may, on final settlement of the guardianship, ratify an unauthorized investment by the guardian and claim the benefits thereof, or may repudiate such investment and charge the guardian with the money invested, with interest, with the result that the property so acquired is the property of the guardian. Meyers et al. v. Martinez et al., 172 Ala. 641, 55 So. 498; Martinez v. Meyers (fourth appeal), 181 Ala. 293, 61 So. 810; Waring v. Lewis et al., 53 Ala. 615, 633.
The appellant in this case, however, was not competent (being non compos mentis) to make such election, and the guardian ad litem was without authority to so elect.
Our judgment, therefore, is that the probate court erred in allowing the appellee. credit for the money of the ward invested by him in said bonds, and not charging him therefor with interest.
The decree of the probate court is reversed, and the cause remanded.
Reversed and remanded.
GARDNER, THOMAS, and KNIGHT, JJ., concur.