Case ID: tenn_19/html/0175-01.html
Source: Caselaw Access Project
Author: {"author": "Green, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Caplinger vs. Stokes.
    Chancery. Guardian and ward — Purchase with ward's money. Property purchased by a guardian, in his own name, with his ward’s money, stands charged with the same trust as did the money; and the ward, on coming of age, may, at his option, take the money or the property; and if, with full knowledge of the facts and of his rights, he elects the money, the property, discharged of the trust, vests in the guardian absolutely.
    GUARDIAN AND Ward. Settlement — limitation. A settlement between guardian and ward, after the ward’s majority, determines the trust, and the time of prescription is counted from the date of the settlement, so as to perfect the guardian’s title to property purchased with the ward’s money, and on the settlement assigned to, and thenceforward held and claimed by the guardian.as his own.
    The pleadings in this cause consisted of a bill filed in the Chancery court at Carthage, on the 16th of April, 1835, by Samuel Caplinger, against John T. Stokes and Spencer Kelly, and a cross-bill, filed in the same court, on the' 24th of May, 1837, by Stokes against Caplinger, and the answers, &c. And from these pleadings and the proof, the following facts appear.
    
      In the year 1830, the county court of Smith, having removed William Sullivan from his guardianship of John T. Stokes, appointed Samuel Caplinger in his stead. In February, 1831, Caplinger received from Sullivan $2,492 32 cents and a half of Stoke’s estate, and afterwards down to November, 1833, various other sums for interest and hire of slaves. In the interval between February, 1831, and the 25th of November, 1833, Stokes, having married, became desirous to go into business as a merchant, and wished Cap-linger to pay his funds into his own hands, which Caplinger agreed to do, and did, Spencer Kelly, Stokes’ father-in-law, agreeing to indemnify him. Stokes became of age on the 27th of September, 1833, and on the 25th of November afterwards, Caplinger settled with him, by the intervention of O. B. Hubbard, Esq. of Carthage, and a balance was found in Caplinger’s hands of $ 367 36 cents, of which sum he paid down in a note, $310, leaving due Stokes $57 36 cents. In July preceding, Caplinger had obtained a decree in chancery in behalf of Stokes against Sullivan, for $312 66 cents. When the bill in that suit was filed, it was agreed between Caplinger and Kelly — the latter of whom had been appointed guardian of two of Stokes’ younger brothers, instead of Sullivan, in whose hands their estates also remained — that Kelly should pay half the costs of that suit, since by ascertaining the balance due Stokes, which would be done in the suit, the balance would also be ascertained which would be due to Kelly’s wards. The costs which Caplinger had to pay in that suit amounted to $61 66J cents, and the county court of Smith allowed him out of Stokes’ estate for his trouble and expenses in managing it, $98 50 cents. This sum and the costs just mentioned make the sum of $150 16¿ cents, which Caplinger claimed from Stokes and Kelly, but which they refused to pay. About the time of the settlement between Caplinger and Stokes, the former gave the latter his note for $35, the hire of a slave, a transaction not connected with their relation of guardian and ward. On this note Stokes sued Caplinger, who tried to set off his above mentioned demand, but failing, and a judgment having been rendered against him for said note and interest, $50 6S cents, he filed the original bill in this cause for an account, and thereupon to be allowed $150 16& cents, and for an injunction against the judgment for the $50 68 cents. The bill was taken for confessed against Kelly, and Stokes answered it, admitting all the above facts, — but insisting, that he ought only to pay half the costs paid by Caplinger in the suit against Sullivan, and that Caplinger ought not to be allowed any thing for his guardianship.
    December 5, 6.
    In his cross bill he sets up a claim which is also hinted at in his answer; namely, that Sullivan paid Caplinger $1100, part of his estate, in several slaves, whom Caplinger had kept, accounting to him for the money only, whereas the ne-groes and their increase are worth much more.
    Caplinger answered the bill, stating that this affair happened at the time when Stokes was anxious to realise his estate in money to be used in trade; that Stokes himself received from Sullivan, at the same time, some negroes, whom he immediately converted into money to be thus used; that he received from him as his guardian the value of the negroes in question, $1100, being the price asked for them by Sullivan himself; that Sullivan had offered Stokes the negroes at $1100 dollars, hut he refused them, saying he wanted money, whereupon the negroes were sold to Caplinger, who paid the price of them to Stokes, the transaction being designed to put Stokes in immediate possession of his property^ in the shape most desired by himself.
    The cause was heard on the 10th of July, 1838, by his Honor Chancellor Williams, of the eastern division, who dismissed the cross hill and pronounced a decree on .the original bill in favor of Caplinger against Stokes for $124 33 cents, and against Kelly for $25 83 cents. Stokes appealed in error.
    Hubbard and Meigs for Caplinger
    insisted that as Stokes admitted in his answer the correctness of the settlement made by Hubbard he was precluded from disturbing it now, to which purpose they cited Fonbl. Eq. 445, top page Laus-sat’s Ed. note (‡), and Prevost vs. Gratz, 1 Peter’s C. C. R. 368, and contended, that having made this .settlement after he came of age, it amounted to a deliberate confirmatiOn of the transaction whereby the negroes had been sold to Caplinger by Sullivan, and was something more than simply an acquiescence, which, nevertheless would itself be sufficient to bar his present claim. Moreover they distinguished this case from the ordinary case of dealing between trustee and beneficiary, because the negroes had never been the property of Stokes, but were Sullivan’s who simply paid ‡ 1100' of his debt to Stokesby a sale of the negroes.
    They further insisted, that as Stokes came of age on the 27 th of September, 1833, and the cross bill, in which he Brakes claim to the negroes, was not filed till May 24, 1837, more than three years after the removal of his disability, he was barred by the statute of limitations from setting up the present demand; and to this point they cited 14 Serg. & Rawle, 394; Fonblq. Eq. Laussat’s Ed. top page 246, 247 and note.
    R. L. Caruthers, for Stokes,
    said that a guardian’s--trust is one of obligation and duty, not of speculation and profit. He can reap no benefit from the use of the ward’s money. He cannot act for his own benefit in any contract, purchase or sale; The advantage of any trade or purchase is to accrue entirely to the benefit of the ward. 2 Kent’s Com. 229. Here it appears from the proof that the negroes and their increase are worth $3000 dollars. Shall this speculation come to the benefit of the guardian? It is said, however, that the ward was present at the settlement between Cap-linger and Sullivan, and took such negroes as he wanted, and refused to take those which were transferred to Caplinger, and preferred receiving the money. But he was a minor, and no act of his could, in the least affect his legal rights. Nor is it conceived, that the fact of his receiving part of his estate on the settlement a month after his majority, will estop him from now asserting his rights. Any advantage taken of a ward soon after he comes of age, when he is presumed to be under the influence of the guardian, will be corrected by a court of chancery. He says in his answer he did not agree to the 'settlement but disputed it.
    The statute of limitations does riot apply to a case of this description. It does not run between an administrator and distributee, as was admitted last term in the case of Moore vs. Crutcher and Douglass, 10 Yer. 406. In that case the administrators had paid over the money, six years before the suit was brought, to the trustees of Campbell Academy, who claimed it as their own, and appropriated it. A suit for g legacy is not bound by the statute. 3 Haywood, 221. When the relation of trustee and cestui que trust exists in fact, not by implication, the statute of limitations does not rn». 3 Yer. 201. In this case, the transactions of the guardianship are not closed, nor were they at the filing of his cross bill* Stokes has never waved his claim to the negroes; and though be received a few hundred dollars after he came of age, y,et at that time he claimed the slaves or their value. Caplinger never had any title to the slaves, because .any title that he might procure with the ward’s money, in equity enures to the benefit of the ward, and is his title and not that of the guardian.
   Green, J.

delivered the opinion of the court.

It is certainly true, that if a guardian purchases property with his ward’s money, although he take the title in his own name, he does not thereby, acquire an absolute right to the ownership of it. He cannot reap a benefit from the use of his ward’s money. The advantage of any trade or purchase accrues to the benefit of the infant. 2 Kent’s Com. 229. But the ward, when he arrives at age, is not hound to regard the purchase, as for his benefit, and to take the property no obtained. It is his property, only at his election. If k,e elect to take the money he may do so, and the title to the property becomes absolute in his guardian.

In the case before us, Stokes, the ward, married when about nineteen years old, and received from his guardian, Jn money, much the larger proportion of his estate. He entered into business, and transacted his own affairs until he was of age. A few months after he became of age, he settled with his guardian, and although he spoke of his claim to the negroes, he waved his right and received the balance of his estate in money. This settlement, we think, constitutes an election on the part of Stokes, to take the money and not the negroes.

It is true, the dealing of a guardian with a young ward, shortly after he becomes of age, is looked upon with suspicion, on account of the influence the guardian is supposed to exercise, and he will not be permitted to retain any advantage, he may have derived from such dealing. But the circumstances of the parties must be looked at in these, as well as all other cases, where the fact of imposition is to be inferred from their general relation to each other. We think that the acts of a young ward, just arrived of age, who has acted long for himself, who has not been under the immediate control of his guardian, and who is well acquainted with the description and value of his estate, are to be taken much more strongly against him than in cases where none of these means of resisting the influence of his guardian and preventing imposition exist. In this view of the case, we are of opinion, that Stokes’ retention of the money, paid him before he was of age, and receipt of the balance after he was of age, with a full knowledge of all the facts, having acted for himself for several years, removed, as he was, from the influence of his guardian, constitute an election to take the money and not the negroes, by which he is bound.

But if this were not so, the statute of limitations is a bar to his recovery. Caplinger has certainly held adversely to him ever since the settlement. He then claimed the negroes as his own, and resisted the claim set up by Stokes. This adverse holding for himself, with the knowledge of Stokes, puts an end to the relation of trustee and cestui que trust.

From the date of this settlement the statute of limitations commenced running, and ás this bill was not brought in three years from that time, the bar is formed.

The decree must be affirmed.