Frost v. Redford

Smith, P. J. — This was an action at law based upon a judgment recovered by the plaintiff against Ebenezer D. Frost, who had previously been, adjudged insane. The petition alleged, amongst other things, that the defendant had been appointed guardian of the person and curator of the estate of said Frost, and had duly qualified as such; that there came into the hands of said defendant, as such curator, the sum of $10,000 in cash and personal property, and that the plaintiff at the time of the defendant’s appointment gave the latter notice of his claim and demanded payment thereof. The answer admitted the defendant’s appointment and qualification as guardian and the recovery of said — 349 — judgment, but denied the other allegations of the petition. There was a submission of the case to the court and a separate finding of facts and conclusions of law by it, which (omitting the facts admitted by the pleadings) was as follows: “That there came into his hands as such guardian and curator' prior to the commencement of this suit in cash and other personal property the sum of $4,216.25. That this suit is based on a debt exisiting due and owing by said E. D. Erost to plaintiff; N. B. Frost at the time he was so adjudged insane, which was reduced to judgment in this court on the seventeenth day of February, 1891, in a suit thereon' against Ebenezer D. Frost, to which action said defend: ant herein (Redford) appeared and defended as guardian, and the amount of said judgment was $2,353.75, bearing interest at the rate of six per cent, per annum.' The court further finds that in December, 1888, or at least prior to January 29, 1889, date of sale, plaintiff N. B. Frost gave the said defendant Redford notice of the said demand so due and owing by said E. D. Frost and demanded payment thereof, which demand was refused by said Redford; that, at the time said E. D. Frost was adjudged insane, he was indebted and owing to divers parties, including this plaintiff, in the aggregate, the sum of $12,069.05. It does not affirmatively appear whether there were any other debts or not, that after notice of plaintiff’s demand, to-wit, between February 16, 1889, and June 5, 1886, defendant paid out on a portion of said indebtedness to some of the creditors the sum of $1,639.87, but paid plaintiff nothing whatever on his demand; that the suit culminating in this judgment of the seventeenth day of February, 1891, herein before referred to was commenced May 25, 1889. The court further finds that the said Redford as guardian distributed and disposed of said • — 350 — assets so received by him belonging to his said ward in the manner, to the persons, in the amounts and at the time as stated in defendant’s answer. The court further finds that on March 30, 1891, the said defendant Bedford as such guardian and curator, made report of his said receipts and distributions to the probate court, except as to the last ten items above named, which said report was by said court approved, but that no notice of any sort to any person whatever was given of said settlement. The court further finds that the probate court-did on February 18, 1889, make an order: “That said guardian keep and set aside $1,000 for the care and keeping of said insane patient, support of family and education of children.” That the defendant, Bedford, has never paid anything to this plaintiff on said demand, nor on the judgment aforesaid; that the same and every part thereof is still due and owing. On the foregoing facts found and the pleadings in the case, the court declares the law to be, that this is an action at law against defendant Bedford as a trustee in charge of a trust fund liable to be applied in payment of plaintiff’s demand, and not against him as guardian. That the report of the probate court of his said disbursement and the approval of the same by the court precludes plaintiff from recovering in this action, although plaintiff was denied any participation in said dividends or disbursements. The court is of the opinion and holds and decides a matter of law, that a guardian and curator of an insane ward’s estate in managing the estate of such -ward especially when authorized or permitted by the probate court might preserve, manage and disburse his personal estate about the same as his ward could, if sane and in control thereof. It follows, that in the absence of fraud the finding and judgment must be again at the plaintiff.” — 351 — The plaintiff has appealed. With the finding of facts there can be found no just ground of complaint. The only question in the case is, whether the conclusion of law is correct. The defendant being the guardian of said insane person occupied the position of trustee for him, as well also, as for his creditors and family. Michael v. Locke, 80 Mo. 551; Perry on 'Trusts, sec. 1097. And so being it was his duty, under the statute (secs. 5526, 5530) to take into his possession the goods, chattels, moneys and effects of the ward, and to collect the debts' due him and to ■adjust, settle and pay off all demands due or becoming due from his ivard, as far as his estate and effects would •extend. Undoubtedly if this language of the statute has any signification whatever, it is that the duty of the .guardian is to pay all the demands against his ward, having regard to priorities, in full, or if the estate is insufficient for that purpose then to pay them pari passu. Of course this would be of difficult accomplishment in every case, in view of section 5544, which provides that judgments may be recovered and executions issued thereon against an insane person. It is plain when we look at the provisions of chapter 86, that the intention of the legislature by the enactment of this statute was to provide an elaborate scheme for the administration of the estates of insane persons. It is true the analogy of this statute to that in respect to •administration of the estates of deceased persons in many essentials is lacking. The generel purpose of the latter statute is to wind up the estate, pay off the debts and turn over the remainder of the property to those entitled to the succession. To that end creditors •are required to prove up their demands within a specified time or be forever barred. In the case of insane persons the ward continues to be the owner of the property. The statute as to his — 352 — debts makes no provision for their presentation, classification or allowance. But while this is true there ought ordinarily to be no difficulty in ascertaining the-demands due by the ward. The notice the guardian is obliged to give of his appointment and the other steps required by the statute to be taken by him would no doubt enable him to discover the creditors of his ward. The creditors of such persons are usually quite swift in making their demands known. There is-always that degree of insecurity and uncertainty felt by creditors of such persons that would prompt them to present their demands to the guardian to be “adjusted, settled and paid.” The very language of the statute just quoted shows that it contemplates a presentation of the claims of creditors to the guardian or else how could the same be “adjusted, settled and paid.” It is probably the duty of the guardian to give notice when necessary to the-creditors to present their demands to him for this purpose. "When the amount of the claims due and to-become due by the ward are ascertained by the guardian, he having charge of the ward’s estate can experience very little trouble in determining under the supervision and orders of the probate court whether the estate is sufficient to pay the claims of all the creditors in full or only a per cent, thereon. In making payment he might exercise the precaution to take a refunding bond in case he should be uncertain as to whether there were other unpresented claims or whether the estate will finally be sufficient to pay each creditor the per cent, which it then seems he can pay. A prudent and careful business man in .charge of the estate of an insane person ought not to have any serious difficulty in administering such an estate under the statute. ' Ordinarily he could provide and protect an estate against sacrifice by a creditor having an exe — 353 — cation. Such an execution creditor might by its levy secure a priority, and in that case the adjustment and payment of the claims of the other creditors having no priority would have to be made with reference to ■ the existing conditions. It follows therefore that the payment by the guardian in this case of a per cent, on all the demands against his ward, except on that of the plaintiff, was a breach of his duty. The measure of his liability undoubtedly is the per cent, that he should have paid plaintiff had he paid all equally and equitably. I do not think, in view of section 5530 and the other sections of chapter 86, that a guardian can prefer the creditors of his ward as the ward could have done himself had he not been insane. I think the scope and language of the statute discountenances this idea. In this case the guardian has exhausted the ward’s estate and has paid the plaintiff no part of his demand, though he could have paid a part of it had he wished to do so. The question now is what is the plaintiff’s remedy. If it is a fact, appearing from the guardian’s settlement or otherwise, that the estate was able to pay any given per cent, on all of its debts and that he had exhausted the estate without doing so, or that any specified sum was in the hands of the guardian held by him for the plaintiff’s use, it could be recovered in an appropriate action at law, or' at any rate in an action for money had and .received. An action against a trustee for money had and received will lie if the trust is closed, but otherwise if there has been no final accounting. Perry on Trusts, sec. 843; Hill on Trustees, *518-847. In this case the guardian shows the estate exhausted — nothing in his hands. It is practically closed so far as creditors are concerned. Gruardians of — 354 — persons non compos mentis stand in the relation of quasi trustee to their ward or principals. They do not hold the title to the property which is the subject of the relation, but their position and obligations are wholly fiduciary. Equity has therefore a general jurisdiction at the suit of the ward or other beneficiaries to compel a performance of the trust duties to relieve against violations of the trust obligations to direct an accounting and final settlement of the quasi trust and to grant other special relief made requisite by the circumstances. Perry on Trusts, sec. 1097; Moody v. Bibb, 50 Ala. 245; Stephens v. Marshall, 23 Hun, 641; Strumph v. Guardian of Pfeiffer, 58 Ind. 472; Coles, Com’r, v. Coles, Adm’r, 8 Gratt. 365. It would be impossible to determine the per cent, to which plaintiff is entitled to recover on his claim until there shall.be an account taken of the administration of said ward’s estate and the amount thus ascertained. To the end that such an account be taken the judgment will be reversed and the cause remanded with leave to plaintiff to amend his petition if he so elects to do. Ellison, J., concurs and Gill, J., dissents in separate opinions.