Case ID: ad_135/html/0013-01.html
Source: Caselaw Access Project
Author: {"author": "McLaughlin, J.:", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Emily Heiter, an Infant, by William Heiter, Her Guardian ad Litem, Respondent, v. Adrian H. Joline and Douglas Robinson, as Receivers of the Metropolitan Street Railway Company, Appellants.
    First Department,
    December 3, 1909.
    Guardian and ward—payment to guardian ad litem without approval of bond—fraudulent settlement of action — payment to attorney of guardian ad litem — cause restored to calendar.
    A defendant settling a cause of action with the guardian ad litem of an infant plaintiff is bound to know whether the guardian’s bond has been approved as required by section 474 of the Code of Civil Procedure and rule 51 of the General Rules of Practice.
    Where such bond was not approved and the order permitting a compromise and settlement was a forgery, a payment by the defendant to the attorney of the guardian ad litem is not good as against the infant when the attorney cashed the check and appropriated the proceeds. When' the attorney of á guardian ad litem receives money due the infant it is the act of the guardian.
    Hence, although the defendant in making such settlement' acted in good faith, the court will set it aside and restore the cause to the calendar.
    Appeal by the defendants, Adrian H. Joline and another, as receivers, etc., from an order of the Supreme Court, made at the Hew York Special Term and entered in the office of the clerk of 'the county of Hew York on the 7th day of June, 1909, removing' William Heiter, as.guardian ad litem of Emily Heiter, and also removing her attorney, and substituting others in their places, canceling a consent to an order of discontinuance, enjoining defendants from using the same and restoring the case to the calendar for trial.
    
      
      Joseph P. Brennan, for the appellants.
    
      Herman A. Heydt, for the respondent.
   McLaughlin, J.:

The-, plaintiff, an infant six years of age, was run over by one of the defendants’ ears, and sustained injuries resulting in the loss of one of her feet. Immediately following the accident her father was induced by two men, who gave their names as Remington and Mason, to retain James A. Howard, an attorney of this court, to bring actions against the defendants for the damages sustained. Two days later, through Howard, William Heiter, the girl’s father, was appointed her guardian ad litem, and the following day two actions against defendants were commenced, one by him as guardian ■ ad litem to recover $75,000 for the injury to his daughter, and the other in his individual capacity to recover $25,000 for loss of her services. After issues had been joined negotiations were had which, resulted in a settlement,- defendants giving- to. Howard’s representative, Mason, a check for $4,000, drawn to the order of William. Heiter, as guardian ad litem of Emily Heiter, or James A. Howard, attorney,.and Mason delivered in return what purported to be general releases of both causes of action, a copy of a bond in the penal suni of $8,000 given by the guardian, and an order purporting to have been granted at Special Term permitting the guardian to compromise and settle the actions, and stipulations for the discontinuance, without costs, of both actions. Remington had a power of attorney, from Howard to iñdorse checks, etc., and he and Mason cashed the check and then absconded, taking the money with them. Howard has since been disbarred.

The order permitting the compromise and settlement was a forgery, and the bond obtained by Heiter was never filed or approved as required by section 474 of the Code of Civil Procedure. Hponproof of these facts the order appealed from was made removing Heiter as guardian ad litem and substituting the plaintiff’s mother in his stead, removing Howard as attorney and substituting other attorneys in his place, canceling and enjoining the use of the con-, sent given by Howard to the discontinuance of this action upon which no order had been entered, and permitting the plaintiff to put the case upon the calendar for trial.

Section 474 of the Code of Civil Procedure provides that the guardian ad litem of an infant shall not be permitted to receive money or property of the infant * * '. * until he has given suffi-

cient security, approved by a judge of the court or a county, judge, to account for and apply the same, under the direction of the court.” Pule 51 of the General Pules of Practice contains a similar provision. The bond of the guardian ad litem, when the $4,000 was paid,'had never been approved and he could not legally have received the money. This the defendants were bound to know or make the payment at their peril. If the guardian ad litem could not legally receive, they could not legally pay. The attorney of a guardian ad litem has no greater power than the guardian ad litem himself. . A receipt of money by the attorney is the act'of the guardian, unless it is to be regarded as the act of a stranger, and in neither case, unless the bond were given, would it be a protection.

In Calmbacher v. Neuman (28 Abb. N. C. 155) it was held that where a judgment had been obtained by an infant and his guardian ad litem was unable to give such security, the defendant, might pay the money into court.

In Wileman v. Metropolitan St. R. Co. (80 App. Div. 53) where the plaintiff, in an action brought by her guardian ad litem, recovered a money judgment, it was held that neither the guardian ad litem nor her attorney could take a single step towards enforcing the collection of the judgment, either by issuing execution or otherwise, until the guardian ad litem had given the required security.-

In Wuesthoff v. Germania life Ins. Co. (107 N. Y. 580) it was held that while an obligation due an infant may be discharged by payment to the guardian of the infant, it is with the qualification that the guardian is authorized to receive the payment.

Here the fact is not disputed that the guardian ad litem had not given the security required by law, and this was or ought to have been known to the defendants. The guardian ad litem was not authorized to receive any money in settlement of the cause of action, and Howard, the attorney, had no more authority or power than he had. If this conclusion be correct, then the payment by the defendants to Howard was of no effect whatever, so far as the rights of the plaintiff are concerned. Indeed, it may well be doubted whether the guardian ad litem could compromise and settle the action at all without an order of the court. (Edsall v. Vandemark, 39 Barb. 589.) Tiie parties seem to have recognized this by the delivery and-acceptance of what purported to be an order to that effect.

It is strenuously urged that Howard had.power, as an attorney,, to consent to a discontinuance of the action and that the consent which he gave is binding upon the plaintiff. Whether or not he had such power the court unquestionably, when all the facts were laid before it, had the power to' set aside the stipulation or enjoin its use. The stipulation had not been acted , upon, and I think it would have made no difference if it had, that is, no order of discontinuance had been entered, and the party aggrieved is an' infant, the ward of the court. The court never hesitates to set aside a stipulation procured by fraud, when the party asking the relief-is himself free from fault. '' The case for the defendants is a hard one; they seem to have acted in the utmost good faith in making the payment, but, nevertheless, we think they did not take the precaution which the law requires and, therefore, the loss, whatever it may be, should fall upon them and not upon the innocent party.

The order appealed from is, therefore, affirmed,'with ten dollars costs and disbursements.

Ingraham, Clarke, Houghton and Scott, JJ., concurred.

Order affirmed, with ten dollars costs and disbursements.