Appellant’s learned counsel seeks to justify the investments outside of the State of Hew York in' lands in Denver in the State of Colorado, under the 4th clause found in the will of the testatrix. That clause is as follows: “ To enable my executor to conveniently carry out this will, I hereby bequeath and devise to said executor all iny real and .personal property of which I shall die seized and owner, but in trust, however, for the purpose of this will, with power to sell and convey any and all my real estate, and until sold to rent, repair and alter same and ■ to keep my personal property *200invested at interest in such manner and upon such security and at such rate of interest as to him in his discretion shall Seem proper and suitable.”
We think the language used by the testatrix does not authorize the executor to transcend the rule in respect to trust investments.
In Pocock v. Reddington (5 Ves. 794) it appeared that the testator gave all the residue of his personal estate to trustees upon trust to convert-his effects into ready money “and place the same out at interest at their discretion.” In that case the trustees sold public funds which were left by the testator, instead of permitting the property to lie there, and it was said : “He. had very imprudently, and I must say, very improperly, taken upon himself to lend the money of his wards to his own friends, and upon personal security ;; and- for that purpose he sold out stock, still charging himself with-'the dividends as before; ” and the master of the rolls said : “ That is a transaction that it is impossible to permit to pass without animadversion and without reprobating it in the strongest manner. Admitting he did not mean that any loss should be. incurred, but intended to replace it, as it is said, that is an argument which has been, made use of in a very different case from this, and has cost, those, who trusted to it their lives. He had no right to put it in. that hazard. No man is justified in putting the property of which, he is trustee in jeopardy r'.Even if he had lent it to himself, giving real security, I should have looked with very jealous eves upon "it. Therefore, he must answer for that, with what he may be supposed reasonably to have inade; and if he made more, he must answer for that too. * * * The role upon this subject is, that when an executor or trustee, instead of executing the trust as he ought by laying out-the property either "in well-secured real estates- or upon government securities, takes upon him to dispose of it in another manner, the cestuys que trust may call him to an account either way, having an option to make him replace it, or, if it is for their benefit, to affirm his conduct and take what Ire has sold it for.”
In that case the trustee was charged with the proceeds of the-sales made by him, and with interest thereon from the time the sales were received.
In King v. Talbot (40 N. Y. 76) the defendant and another were appointed executors, and in the will the following language was-*201used, “ entrusting to their discretion the settlement of my affairs and the investment of my estate for-the benefit of my heirs.” The trustees made investments in canal and insurance stocks, and it was held that such investment was a violation of duty. It was further held that a trustee holding funds for investment “ must invest in government or real estate securities. Any other investment would be a breach of duty and the trustee personally liable.” In the course of the opinion of Woodruff, J., speaking of the language confiding a discretion-to trustees, he says“ Thisdast' clause neither added to, nor in. any wise affected the duty or responsibility of these executoi's; without it they were clothed with discretion; with it their discretion was to be exercised with all the care and prudence belonging to their trust relation to the beneficiaries. Such is the distinct' doctrine of the cases very largely cited by the counsel for the parties, and is, I think, the necessary conclusion from the' just rule of duty T have stated.” .
We think' the language found in the will before us conferred upon the trustee a general discretion and no more. It did hot authorize him to make any specific investments, and it did not authorize him to transcend the general rule applicable' to the duties of trustees. (Adair v. Brimmer, 71 N. Y. 539; Matter of James, 146 id. 103.)
In Adair v. Brimmer (supra) power was given 'to invest the proceeds of the property sold in “ other lands or buildings, or bonds and mortgages, or in such other securities as they shall deem safe and for the greatest benefit of my said daughtersand it was held that the executors were not authorized to make a disposition of the proceeds contrary to the general rule relating' to trustees.
We think the case of Denike v. Harris (84 N. Y. 89) does not aid the contention of the appellant. In that case there was a discretion in the executor to retain a specified investment, and the language of the will differs very essentially from that in the will before us.
It is claimed in behalf of the trustee that he informed his daughter of the investments and that she approved of the same. However, the testimony given by him in that respect is denied by her, and the trustee’s evidence was apparently not credited by the surrogate.
*202In Adair v. Brimmer (supra) it was held that to establish a ratification by the cestxd .que trust “ the ratification must not only be clearly proved, but it must be shown that it was made with full knowledge of all the material facts, and also that the cestui, que. trust was fully apprised of their effect and, of his or her legal rights in the premises.”
No such case as the rule requires was established by the appellant at the hearing in the Surrogate’s Court.
(2) It is contended in behalf of the appellant that, regardless of the authority expressed in the will, the investments made by the appellant outside óf the State should be upheld, and he calls our attention to Ormiston v. Olcott (84 N. Y. 339). In that case it was laid down as a general rule .that investments by trustees “ "which take those funds beyond the jurisdiction of the court will not be sustained, and the trustee who so invests does so at the peril of being held responsible for the safety of the investments. This rule, however, "is not so rigid as to admit of no possible exceptions, although the case must be very rare and the circumstances very unusual and peculiar to make it ail exception.”
In the course of the opinion delivered by Finch, J., he said: “ While, therefore, we aré not disposed to say that an investment by a trustee in another State can never be consistent with the prudence and diligence required of-bim by the law, we still feel bound to say that such an investment, which takes the trust fund beyond our own jurisdiction, subjects it to other laws and the risk and inconvenience of distance and of foreign tribunals, will not be upheld by us as a general rule, and never unless in the presence of a clear and strong necessity or a very pressing emergency. The cases in our court's have quite clearly recognized the rule that an executor must invest in government or real estate securities.”
That learned judge expressly states that.the rule relates to voluntary investments made By the trustee. In that case the trustee was not held liable because the court determined that it was not a voluntary investment, but “ of collection ” and that the trustee “ stood in the presence of an emergency which required him to do not so much what he preferred as what he could.”
The rule laid down in the case from which we have just quoted was recognized in Matter of Denton v. Sanford (103 N. Y. 607), *203where it was said that the facts disclosed were such as to bring the case within the exceptions to the rule. There was land belonging to the estate and the trustee sold it, and, not being able to obtain cash, took a first mortgage, which he supposed to be ample security to represent the trust. The court says': “ They did not take available funds, and carry them out of the State, and there invest them in real estate; but they invested the trust funds in a mortgage' which regularly and legitimately came to them upon laud belonging to the estate which they sold, and we cannot say that it was a breach, of duty on their part so to invest them.”
The evidence tending to show*the speculative condition of aflairs in the suburbs of, Denver at the time the trustee made his venture there is not such as should persuade us that the trustee was war-' ranted in transgressing the rule, or that, in carrying the funds of the estate into that venture, he was acting in obedience to that strict rule which has been laid down to govern trustees in their dealings with trust funds.
Evidently he had become infatuated with a desire to make a speculative venture himself, and having borrowed some of the trust funds for the purpose of fostering his own venture, he subsequently determined to use other portions of the fund to acquire an interest in the property with which the parties with whom he had dealt were connected. His conduct in making the investment there is such that we cannot say that his venture falls within the exception laid down to the rale to which xwe have referred.
The Anderson mortgage was upon unimproved property and .apparently was a loan made for some speculative purpose. The real estate was located in Omaha, ¡Neb., and was not such an investment as a discreet trustee should have ventured to make. ■
(3) We think the executor was properly chargeable with the proceeds of the sale of the Michigan Central bonds and with interest thereon' from the dates of the sales. The surrogate seems to have properly charged the trustee with interest on the funds received by him, with annual - rests, and to have charged him with interest at six per cent. The rule adopted by the surrogate seems to be in accordance with the rule laid- down in King v. Talbot (40 N. Y. 76) and in Adair v. Brimmer (74 id. 539) and in Cook v. Lowry (95 id. 103). In the latter case, at page 113, Andrews, *204J., said : “ We think there was no legal error in charging the defendant interest on the fund in his hands at the rate of seven per cent per annum, the legal rate of interest, with annual rests. The case presented by the evidence and by the findings exhibits gross dereliction of duty by the trustee. He kept no account of the trust fund, or.of the income. He used the securities in his own business, changing them from timé to time and realizing profits therefrom, of which he rendered no account. * * ' *' 'It is not, usual to charge a trustee", with the highest rate of interest where-he has acted in good faith, without gross negligence, but each case must depend to a considerable degree -on its own circumstances.” (Citing Raphael v. Boehm, 11 Ves. 92; Barney v. Saunders, 16 How. [U. S.] 535; 2 Kent Com. 230, note, and cases cited.)
Upon the evidence in the Surrogate’s Court we are of the opinion that he kept within the rule laid down by the Court of Appeals. "
■ (4) Commissions on the income at five per cent were credited to the executor, in the account stated, by the surrogate.
The executor had never had a final accounting and a separation of the functions of the executor and the trustee, either by a decree of the Surrogate’s Court or by any independent act of the trustee. He kept, his account, what little there was of it, from the first as an executor’s account, without any attempt to separate the funds or to set up any distinct- trust for any legatee. He has never been discharged as executor.
In Matter of Estate of Hood (98 N. Y. 363) it was held that- “ even where by the terms of a will an executor may become a. trustee simply, his liability as executor continues until there has been a final accounting, and a discharge by decree of the surrogate, or a direction in such decree that he hold the fund thereafter as trustee,, and an entering by him upon the duties of trustee as distinct- and-separate from those of executor.” ■
In Matter of Accounting of Mason (98 N. Y. 527) it appeared that the accounts of the executors, as such, “ were fully apd finally-settled, and the trtist funds were separated by the decree of the.surrogate on such accounting,” and it was there held “ that tbereafter the executors acted simply as trustees, and were entitled to com-! *205missions, as such, in addition to those received by them as executors.”
We think the trustee was entitled to no further allowances than the surrogate has included in the accounts as stated.
We think the language used by Judge Andrews in Cook v. Lowry (95 N. Y. 114) is appropriate to the case in hand. He said : “ The trust in this case was. never executed. The trustee, in substance, •converted the securities to his own use. He kept no proper account and rendered an account in many 'respects untrue, and subjected the cestui que trust to great difficulty and expense in attempting to unravel it. Commissions are allowed to trustees as a compensation for services in the execution of the trust, and in a case of gross neglect or of unfaithfulness, we think, the court may properly disallow them.” (Citing 3 Redf. Wills, 554, and cases cited.)
Some minor questions are discussed in the brief of the appellant. We do not find any specific exceptions presenting error requiring us to interfere with the .decision of the surrogate. (Drake v. New York Iron Mine, 156 N. Y. 91.)
We are inclined to the opinion that the surrogate was warranted in refusing to credit overpayments which were charged to Mrs. Stevens. The trustee had no right to encroach upon the principal, •and he gave no notice that he was doing so to her until the account was filed ; and a portion of the charge which he attempts to make .against his daughter apparently accrued during her infancy, when it was his duty, as a father, to support and maintain her, as he was a man of means, and, under the circumstances, he was not warranted in extending the amount which the will authorized him to expend on her account. (Beardsley v. Hotchkiss, 96 N. Y. 201.) She rendered substantial services in her father’s household, and there is some evidence tending to show that they were worth, at least, the sum of two dollars and fifty cents per week in addition to her board.
The surrogate has rendered no affirmative judgment against the executor, although the value of the services exceed the amount of the alleged overpayments. The executor was allowed all payments that he made to his daughter after her marriage and departure from his house in JSTovember, 1891.
Upon all the facts disclosed in the record, we are of the opinion *206that-the surrogate dealt ■ properly .-with'the trustee in stating the accounts and adj udging his liabilities, and. that the decree of the surrogate should be sustained.
All concurred.
• Decree of the Surrogate’s Court affirmed, with, costs against the appellant personally, and proceedings remitted to the Surrogate’s Court, with power to modify, as stated in the stipulation of Frank B. Reed, tiled in this court on the argument. (See mem. tiled with the clerk.)