The herald., 1897-03-20

that ornelas attempted to execute arc
lease OF an incumbrance held by. him ~
trustee upon his own property. Without
consideration moving to the ward. AZ
| guardian he is not permitted to deal with
| the wards property for his own benefit.
and every violation of his duty is q
fraud against the beneficiary, ard all
| transactions between trustee and his
beneficiary during the existence OF the
trust are presumed to be entered into
without consideration. These are pros
visions Of our civil code, and are but
the avowal OF principles old as equity
itself, or these things Martin was
bound TO take notice, as we'll as the fall
ure to procure an order OF the probate
court in connection with such release.
ut Is a universal rule that If a man
purchases property of trustee, with
notice OF the trust, he shall be charged
with the same trust In respect to the
property as the trustee from whom he
purchased, and even II he pays,a valua-
BILE consideration, with notice OF the
equitable rights OF third person, he
shall hold the property subject to the
equitable interest of such person.
Martin when he purchased these
premises knew that Orrelas was re-
which he held the legal title. He Is
chargeable With notice thai nc, order OF
court was made authorizing him. so 10
do. He knew that the ward was OBJ
tanning no benefit on account of such
release. He knew OF the adverse in
terests of the guardian. ard that the
trustee, for the purpose of obtaining
money to pay his own private debts.
was executing a release of a mortgage
belonging to his child. He was one OF
the creditors, himself, OF Ornelas, ard
was a member of O. firm also creditors
of Ornelas Under these circumstances
the guadian possessed no authority to
release the mortgage. The execution OF
the release and Its record were inefrect-
ual and void, OF which Martin must be
charged with notice when he paid the
money.
"Ths mortgage then stards as though
no release was ever attempted ard
Martin occupies the position as the
purchaser OF premises subject to an ex-
isting mortgage, which, II not barred by
the statute OF limitations. may be fore
closed in this action.
I'VE attach no Importance to the ex-
ecutlon Of the second mortgage by the
wife of defendant Ornelas. Even II that
second mortgage were in existence, II it
were ample security. II was taken with
out any authority OF court, and the
plaintiff in this action Is not bound by
the act of the guardian. and can and
has properly elected to avail herself OF
the original note and mortgage. and to
disregard the attempted substitution.
without authority. by her guardian. This
right, we believe, has never been dis
puted 1t Is but the exercise of the
same right which a ward has always
been permitted to exercise where
guardian has invested her funds In prop
erty without an order of courts ana
where she is permitted to take the prop
f... 4.sl do af hop c1
rs this action then barred by the
statute of limitations Of this state? 1t
is insisted by counsel for defendant
Martin that the fact that the note was
payable to Ornelas as an individual, the
mortgage executed In the same manner,
with the stipulation heretofore referred
to- as to the ownership OF the rote,
created an express trust ard that as
trustee thereof, Ornelas could nave
maintained an action at all times.
While this may be accepted as the rule.
as affecting express trusts. where the
cause of action vests in the trustee, and
such trustee has neglected TO bring
suit, yet 1t has never been held, In this
state, to apply to ward, where guard
ian has neglected like duty. guard
ian is not the trustee otan express trust.
(Fox VS.. Minor. SO Cal, III; O'Shea VS..
Wilkinson, 95 Cal. 456.) AS such guard
ian, he is not the real party in interest
The cause of action does not vest In him.
(Justice vS. OFT. 81 Cal, $780, Emeric VS..
Alvarado, GA Cal, 593) True, the note
was executed TO him as an individual.
but 1t was secured by mortgage, which
declared to whom the property belonged.
No action could have been maintained
on this note by anyone except by fore
closure of the mortgage under section
726.
Taking the whole of this transaction
together. the mortgage, the note, AMI
the circumstances of its execution, the
receipt OF the distributive share, all In
dicate that this note was taken. In fact,
by Ornelas as guardian that its possess
sion was at all times held by him az
guardian, and that the only action which
could have been maintained thereon was
by the child. through its regular guard
ian or a guardian ad litem. He did not
take note and mortgage in his own
name for the benefit of the child, but
took note and mortgage declaring that
1t was the property of the child and, in
my opinion. was not the trustee of an ex-
press trust. If this be correct, then thu
party in whom the right OF action at all
times vested. being a minor. came under
the exception of the statute. and can
maintain this action, notwithstanding
the lapse of four years from the matur-
ity of the note.
Findings and Judgment are ordered
for the plaintiff"