Ross v. Southwestern Railroad

McCay, Judge. ■ To say that the decree taken in 1889, is a void decree, simply because no formal order ivas taken making Mrs Nelson, the mother of these plaintiffs, their guardian ad litem, notwithstanding the whole proceeding was in good faith, is to pass a very harsh and technical judgment. It must be remembered that the litigation was commenced by a bill filed in the name of the minors, by Mr. and Mrs. Nelson, as their next friends, and on this bill an injunction was granted. Before any final action was taken on this bill, the executor filed a bill for direction, etc., asking that guardians ad litem, should be appointed for the minors, if the court should think it necessary. Service was acknowledged by Mrs. Nelson as the guar■dian of the children, appointed by the New York court, and the court made no formal appointment of a guardian ad litem. W e are not prepared to say that a decree taken against an infant, under such eircumstences, is ipso facto, void. By the chancery practice in England, an infant may be sued and, ordinarily, must be served. But it has been held that the service may be on the parent: Smith vs. Marshall, 2 Atk., 70. The appointment of a guardian ad litem is not necessary to give the court jurisdiction, to entertain the suit. As to infants, Mr. Daniel says: “There are individuals, — 528 — who, though they may be sued alone upon the record, yet, are incapable from want of maturity or weakness of their intellectual faculties, of conducting their own defense, and must, therefore, apply for and obtain the assistance of others to do it for them:” Daniel’s Chan. Prac., 174, 1 vol. The failure to appoint a guardian ad litem, in a regular chancery suit, would seem, therefore, rather an irregularity than a defect, like want of service. It appears from the evidence; indeed, it is not denied, that the whole proceeding was not only in the very best of faith, but to the advantage of the minors. "What evil has come, has been the effect of subsequent action, and had this decree not been taken, it is probable the effects would have been lost by the waste of the executor. Jt is clear that the infant’s rights were defended, counsel, employed of high character, that a guardian did appear, that such guardian was, in fact, recognized by the court, and that the object of the whole proceeding, (though in form, the minors Avere defendants,) was to protect their estate by getting it out of the hands of an insolvent executor, Avho had already wasted much of it. The court, who Avas, by consent, made the judge of both the law and the facts, has, in terms, found the proceedings complained of, to have been instituted in good faith, and to have been for the benefit of the minors, and this finding is, in our judgment, supported by the evidence. But we agree Avith Judge Hill in his holding that the proceedings under the bill of Mrs. Nelson, filed in August, 1870, to which these plaintiffs, as Avell as all other parties at interest, Avere parties, and fully represented, ratified the decree of November, 1867, under which Mrs. Nelson got the control of this stock. The bill filed in that case expressly prayed a review of the decree of November, 1867. The decree, under the bill of 1870, ratifies the decree of 1867. It treats the property got by the decree of 1867 as the property of the minors in theJiands of Mi’s. Nelson, as their guardian, and charges her securities for the waste of it. Can the plaintiff be permitted to treat a foreign guardian as such for one purpose, and repudiate her as such for another purpose? Surely these securities on her — 529 — New York guardianship, cannot, be legally charged with her receipt of property under this decree of 1867, if she did not, under the-law, have a right to get that possession. Nor was it competent, in our opinion, for the plaintiffs to thus ratify the decree of 1867, and then reserve the right to go on those defendants, with the privilege of repudiating the guardianship of Mrs. Nelson in this suit. There was in this cross-bill of 1870, a special prayer for a review of the decree of 1867, and Moughon, the complainant in the bill of 1867, was made a -party to the cross-bill. The whole case, including the cross-bill, went to trial in 1871, without any service or appearance by Moughon, and the decree, without any reservation, of the review, treats Mrs. Nelson and her securities as guardians, and liable for what she received and got possession of under the decree in the bill filed by Moughon. It seems to us that this was not a setting aside of the decree of 1867, but an abandonment of the prayer for review. The decree of 1867, was on Moughon’s bill for direction and for leave to settle up the estate in a particular way. The decree on the bill and cross-bill of 1870, accepts much of this 1867 decree as to be accounted for by Mrs. Nelson and her sureties, and charges the property of the security in this state for her waste'of it. And whilst there is a reservation, as against Mrs. Nelson, of the right to charge her in the future with the railroad stock, there is no reservation of the right to review the decree of 1869. Nor is it clear that in this reservation anything else was intended to be reserved, but the liability of Mrs. Nelson, as guardian, to account for the Southwestern Railroad stock. There is no express reservation of any right to ask a decree against Taylor or either of the railroad companies, and if it be considered that in the decree that was taken, Mrs. Nelson is treated as the guardian of the minors, and her securities as such guafdian, charged with her default, it is saying a good deal, to insist that it was the intent of this reservation to hold up the right to follow this stock, as a specific thing, into the hands of the defendants? Taylor and the Central Railroad Company. Whatever may — 530 — be the rule as to the power of a widow who has married again, to change the residence of her first husband’s children, so as t) affect any of their legal rights to property, or of inheritance, the fact is undisputed that the actual residence of these was changed, and that their persons were in the state of New York. It seems to us that if the persons of minors are in a jurisdiction there is a right and duty, in the courts of that jurisdiction, to appoint a guardian over their persons and any property they may have there. The appointment does not clothe the guardian with any authority extra-territorial. But it is not a void appointment, it is good for acts done in the jurisdiction, as to property actually there. As to this stock a simple statement of the facts is: It stood on the books of the Southwestern Railroad Company, in the name of Bond’s executors. Under the power given Mrs. Nelson, as guardian, by the decree of 1867, it was transferred on those books to her, was by her sold, as guardian, in New York, under the laws of New York, to Moses Taylor, who paid her for it, and who had no notice of any irregularity, or any defect of the title of Mrs. Nelson, as such New York guardian. The transfer of the stock on the books, was by Moughon, as executor, to Mrs. Nelson, as guardian of these minors. Mr. Taylor had no ■actual notice at the time of his purchase, of even any irregularity in the decree of 1867, nor did he have any actual notice from whence Mrs. Nelson, the guardian, obtained the stock. It is contended tiiat he is charged with notice by the books of the corporation; that these books showed the stock had stood in the name of Bond’s executors, and were transferred to Mrs. Nelson, guardian of Bond’s children, and that these facts charged him with notice of Bond’s will, and of the decree of 1867, and that he had these for constructive notice of all the plaintiffs’ claim. As we have said, we do not think the decree of 1867 void. It was had before a court having jurisdiction of the subject matter, and certainly of some of the defendants. The plaintiffs to this suit were parties to the bill of 1867. Their mother appeared by acknowledgment of service, as their guardian, and by eminent counsel. The — 531 — only defect so far as the parties are concerned, was that no formal order was passed appointing a .guardian ad litem. A guardian did appear, the court recognized tl%iat guardian, and throughout the whole proceedings the rights of the infants were taken care of. If there was a fault of the court by which the guardian was permitted to get possession, without security, that was not a fault which affected the jurisdiction and would not vitiate the title of Mr. Taylor, admitting that he is charged with notice of the decree. Put the case as though he had seen the decree : Pie finds, 1st, a bill filed in the name of these minors, by their next friend and mother, Mrs. Nelson, and others, against Moughon, asking an injunction and praying a distribution; he finds that injunction granted. Nothing appears in the record disposing of that bill except the proceeding on the second bill. 2d. He finds the bill filed by Moughon, an acknowledgement of service by Mrs. Nelson, as guardian, and finds her recognized as such by the court in its decree, and the stock ordered to be turned over to her as such guardian. In our judgment, had he seen all this it would not invalidate his purchase. The decree was not void, and a purchaser charged with notice of it, may be nevertheless an innocent purchaser. Nothing unfair appears; in fact, the ]n-oceedings show, as well as the evidence produced on the present trial, that the decree was for the benefit of the minors. The loss has not come from the decree, but from the mistake of the judge in permitting Mrs. Nelson to take the property Avithout security. Nor are we prepared to say that Avhat appeared on the books of the railroad company Avas constructive notice to Taylor that Moughon had no right to transfer to the guardian. Nothing on the books showed by what authority Mrs. Nelson Avas anthorized to receive it. That the stock stood in the name of Moughon, as executor, might, perhaps, put a purchaser on notice to examine the Avill. But that Avill clearly leaves theiuvestment with the executor. The stocks are to be safe, and it Avould be the undoubted right and duty of the executor to keep them safe. This case is not like the case of Nutting et al. vs. Thomason et al., 46th Georgia, 34. — 532 — There the stock stood in the name of the deceased. Here it stood in the name of the executor. • The purchaser from Mrs. Nelson could only be bound to inquire into the authority of Moughon to transfer; certainly he cannot be held to inquire whether the transfer was a wise one. How could he know that this was not a sale to Mrs. Nelson, and (hat the executor had sought a safer investment? As against everybody except the railroad company, the title to the stock passed by the sale to and payment by Taylor. Such is, we believe', the well established rule. The sale and transfer of the stock, with an order to transfer it, passes the title; the transfer on t[ie books is only to protect the company who may have liens upon it: Angell & Ames on Corp., 568, 571. If Taylor, then, was an innocent purchaser at the time he bought and paid his money, no subsequent notice, either to him or his vendees, could affect his or their rights. Stocks in railroads are personal property,'(see Code section 233,) and if legally sold by a foreign guardian, accordingto the laws of the state of the guardianship, and the possession thereof is transferred, the title is passed. Our act of March 6th, 1856, recognizes the right of sale and transfer by a foreign guardian, and there is nothing in the Code inconsistent therewith. Upon the whole, whilst it is a sad thing that this fine estate has been so largely squandered, yet, courts are bound to see to it that innocent purchasers be also protected and whilst it would give us great jfieasure to see these children fully in possession of their father’s bounty, we do not feel that the rules of law justify us in reversing the decree of the judge below, whose full finding forms a part of the record. Judgment affirmed.