Hardy v. Citizens' National Bank

Stanley, J. It is the duty of the guardian, enforced by the statute, to take care of the person and estate of his ward, and improve his estate frugally and without waste; and he is entitled to the care and management of this estate of his ward. G. L., a. 184, s. 3; c. 185, s. 3. The power to borrow money is not conferred upon the guardian by statute, and if he has it, it results from his *39 relation to the ward. It is conceded that the guardian is in fact a trustee, and that the law applicable to the relation of trustee and cestui que trust applies to guardian and ward. Neither a trustee nor a guardian can bind their cestui que trusts by bills or notes, and if they sign as such they are personally bound. They occupy the same relation to the obligation created by their act of signing, that an agent does who assumes without authority to bind his principal: they bind themselves. In Thacher v. Dinsmore, 5 Mass. 299, it is held that a guardian signing a note as guardian cannot bind the estate of the ward. This doctrine was approved in Forster v. Fuller, 6 Mass. 58,—the court there saying that although the note states that he promises as guardian, yet he is personally bound. To the same effect are Tenney v. Evans, 14 N. H. 343; Jones v. Brewer, 1 Pick. 314; Barnaby v. Barnaby, 1 Pick. 221; Bicknell v. Bicknell, 111 Mass. 266; Thompson v. Boardman, 1 Vt. 367; Dan. Neg. Ins., s. 271; Sch. Dom. Rel. 464; 1 Par. Cont. 136. In Phelps v. Worcester, 11 N. H. 51, 53, the court say,—The rule that the guardian, when he undertakes to act for the ward in contracts with others, should alone be liable, is sustained by the soundest reason. A different rule would subject the ward to numerous suits, the merits of which might be wholly unknown to him. In all expenditures arising under such contracts, the ward should be liable only to his guardian. He is then answerable to but one individual, and then" only on a decree of court, on settlement of his guardianship account.” The guardian could not bind the ward or the trust property by the pledge. He is limited to the purposes of the trust. He has only a naked authority not coupled with an interest. Ham v. Ham, 58 N. H. 70; Wait v. Holt, 58 N. H. 467; Granby v. Amherst, 7 Mass. 1; Manson v. Felton, 13 Pick. 206, 211; Simmons v. Almy, 100 Mass. 239; Wallis v. Bardwell, 126 Mass. 366. If, then, the guardian cannot bind the estate of his ward by note, he cannot bind it by a pledge of the trust property as security for money hired by him. If money is needed by the guardian, the statute points out the way in which he can obtain it, and the existence of this statute is an argument against the power claimed for the guardian at common law. G. L., c. 184, s. 10; c. 185, s. 10; c. 192, s. 2. But the defendants claim that they took the notes in question for a valuable consideration ; that the loans were made by them in good faith, in the ordinary course of their business as bankers, and they are therefore entitled to hold them. This is not enough. In order to give them the right to hold them, they must have taken them without knowledge of the fact that they were trust property. This they did not do. The notes were long over-due, and were payable to Bolster as guardian. This was notice to the defendants that they were trust property, not belonging to Bolster; and, having taken them with this notice, they are charged with knowl *40 edge that he had no right to pledge them. Lyford v. Thurston, 16 N. H. 399 ; Ladd v. Harvey, 27 N. H. 380 ; Hill v. McIntire, 39 N. H. 410; Shaw v. Spencer, 100 Mass. 382; Loring v. Salisbury Mills, 125 Mass. 138; Kinloch v. I'On, 1 Hill Ch. 190; Maples v. Medlin, 1 Mur. 219; Duncan v. Jaudon, 15 Wall. 165; Sto. Eq. Jur., s. 1257, et seq. Especially is this true where the statute directs how personal property shall be sold. Per. Tr., s. 225. The defendants hold the notes as Bolster would, in trust for the rightful owner, who in this case is represented by the plaintiff. Bolster, if he held them, could not refuse to deliver them up, and the defendants do not stand any better. It matters not that the name of the ward was not inserted in the notes. The fact that they were payable to Bolster as guardian was sufficient to put the defendants upon inquiry. Nor is it material that the present guardian was surety for Bolster, his predecessor. The notes which the defendants hold belong to the ward, and it is the plaintiff’s duty, as guardian, to recover them. He stands in the place of the ward, and acts for her. If she were of age she could recover them, regardless of the pledge and of the fact that the bond was sufficient to protect her. McDuffie v. McIntyre, 11 S. C. 551. In Ellis v. Essex Bridge, 2 Pick. 243, the property was sold, not pledged, and the statute authorized a sale without license. As no benefit was derived by the ward or her estate from the contract of her guardian with the defendants, it is not necessary to inquire whether such benefit would have entitled the defendants to any relief. Decree for the plaintiff. Allen, J., did not sit: the others concurred.