Schmidt v. McBean

Mr. Presiding Justice Freeman delivered the opinion of the court. It is first contended by counsel for appellee, that the guardian had no power to sell or authorize the sale of the judgment, and that the Probate Court had no power to authorize or direct such sale. The statute (Chap. 64, Sec. 17), provides that “ The guardian shall settle all accounts of his ward and demand and sue for, and receive in his own name as guardian, all personal property and demands due the ward, or with the approbation of the court compound for the same, and give a discharge to the debtor upon receiving a fair and just dividend of his estate and effects.” The argument is that this statute is a limitation upon the common law powers of guardians; that if, before the statute, the guardian might have compounded, released or sold the ward’s choses in action, he can now do only what is in accordance with the exact terms of the statute; that the statute now requires him to demand and sue for the ward’s claims, and does not allow him to sell them to third parties at a discount. That a guardian has the power to sell the ward’s personal property without an order of court except where such sale is prohibited by statute, seems to be unquestioned, lie will be liable on his bond for any abuse of this power, but the vendee will take a good title unless he has notice of the guardian’s fraud. The power to sell is said to extend to a note or debt including a mortgage securing the same. (Woerner’s Am. Law of Guardianship, p. 179; Am. Eng. Ency. of Law, Yol. 15, p. 56.) It is argued, however, that inasmuch as the statute of this State above quoted affirmatively requires the guardian to “demand, sue for and receive * * * all personal property and demands due the ward,” these positive requirements exclude the common law right to sell a chose in action. In support of this view reference is had to Hayes v. Mass. Life Ins. Co., 125 Ill. 626. In that case it is held that while at common law, a guardian might have compromised or submitted to arbitration claims and demands due the ward’s estate, “it is manifest that when the legislature in the section referred to, undertook to define the powers and duties of guardians, and expressly provided that as to demands due the ward the guardian might ‘with the approbation of the court compound for the same and give a discharge to the debtor, a change and modification of the common law was intended. If before this statute the guardian might, in the exercise of his own honest discretion, compound and release a demand due his ward, after the passage of this statute he was clearly required to procure the approbation of the proper court before exercising such power;” and it is said that this statutory requirement “was intended by the legislature as an additional safeguard and protection to the ward,” etc. This language is used with reference to the last part of the section referred to, viz., that which authorizes the guardian to “compound” for demands due the ward, with the approbation of the court. The case holds that such composition can not be had under the statute except with the “approbation of the court.” But in the same decision, reference is made to an earlier case (Bond v. Lockwood, 33 Ill. 212), in which it was held the statute in question “was not designed and did not constitute a complete code, and that the purpose of the legislature was to confer upon the Probate Court the power to appoint guardians and to regulate their conduct according to the common law.” In Bond v. Lockwood the court says that “ while some of its (the statutes) provisions were declaratory of the common law and were appropriately introduced in conferring jurisdiction upon a new tribunal, it is evident that many of the powers and duties, rights and liabilities of guardians are not by the statute specifically defined. The statute contains such provisions as were necessary to define the nature of the jurisdiction conferred, prescribe the manner of its exercise, and correct some of the defects of the law as it then existed. In other respects the common law regulating the powers and duties, rights and liabilities of guardians was left in force.” If, then, the common law regulating the powers of guardians was left in force notwithstanding the statute in question, the power of sale, one of these common law powers, must still be regarded as in full force and effect. It is, however, urged that the assignment of the judgment was never delivered by the guardian to Beck, from whom the assignee, Perkins, received it. The evidence upon this point, however, we are compelled to conclude justifies the conclusion apparently reached by the learned chancellor in the Superior Court, that the assignment was left by the guardian in the hands of or at least subject to the disposition of Beck, the president of the casualty company. The latter seems to have represented the guardian in the whole conduct of the case. The guardian was appointed and acted as such at the request, of said Beck, and it was the latter who conducted the negotiations with Perkins, purchaser of the judgment, and made out the assignment. Beck seems to have acted in the matter as the attorney and agent of the guardian all the way through, and while he deceived the guardian afterward and concealed the fact that he had collected the money for which the judgment was sold, yet it does appear that the assignment was in his hands and subject to his control in the same way as were other papers left with the casualty company in cases where Shaver acted as guardian. It is true, the guardian says, that in the event the deal went through, he “ was to receive the papers,” and that Beck was to let him know “if the deal would be consummated.” But he also testifies that “ nothing was said in Beck’s office as to what was to become of those papers if Perkins got ready to consummate the deal; they were simply deposited there for safe keeping.” It is clear, at least, that it was the guardian’s conduct in leaving the assignment with the casualty company under Beck’s control, that made it possible for the loss to occur. “ The principle is that when one of two or more innocent persons must suffer loss, upon him whose conduct made it possible for the loss to occur, must the consequences ultimately rest.” Sroelowitz v. Schultz, 86 Ill. App. 341, 347, and cases cited. It appears that Perkins paid for the assignment of the judgment by a check payable to the order of Beck, and not payable to the order of the guardian. But in view of the conclusion that the guardian fully trusted Beck, and left the assignment with him, so that it might be used in case Perkins should decide to consummate the purchase, the fact that the money was paid directly to Beck, who appeared to have authority to collect, and apparently did have, while perhaps not in a high degree prudent on Perkins’ part, can not be regarded as invalidating the purchase. It is urged that the assignees should not be allowed to retain out of the judgment they purchased more than the actual consideration paid therefor. But if the sale to Perkins was valid, he acquired title thereby to the judgment as it stood. We are unable to find any sufficient ground for depriving his assignees of any part of their purchase. The judgment must be affirmed.