Case Name: James B. Adams and Margaret E., his wife, vs. C. H. Lathan, Executor
Court: South Carolina Court of Appeals
Jurisdiction: South Carolina
Decision Date: 1868-05
Citations: 14 Rich. Eq. 304
Docket Number: 
Parties: James B. Adams and Margaret E., his wife, vs. C. H. Lathan, Executor.
Judges: Dunkin, 0. J., and Warelaw, A. J., concurred.
Reporter: South Carolina Equity Reports
Volume: 35
Pages: 304–310

Head Matter:
James B. Adams and Margaret E., his wife, vs. C. H. Lathan, Executor.
Guardian — Account—Interest—Evidence—Commissions.
"Where a guardian charged himself in his annual return with a gross amount received “ in notes,” his estate after his death was held properly chargeable with the amount as so much cash received, and with interest thereon from the end of the year, his executor not being able to show how much, if any, of the amount was interest due on the notes.
As a general rule, a guardian should be charged interest on'casli received only from the end of the year on the balance then in hand, and even where, in an exceptional case, he is charged interest before the end of the year, in the absence of proof that interest had, in fact, been made, some reasonable time for making an investment should be allowed, and no interest charged during that time.
A guardian received $1,147.47 on 33d February : there being no need to retain any part of this sum in hand, held that he was chargeable with interest from the 1st June of the same year.
Where a guardian delivered money to A., declaring at the time that it belonged to his ward, and requesting A. to purchase with it Confederate bonds as an investment for his ward, and further stating, at the same time, that he had previously made an investment for his ward in Confederate bonds, which his son had sold by mistake, and that the money now produced was the proceeds of that sale, held that so much of the declarations as stated that the money belonged to the ward, and the guardian’s object in making the purchase, was admissible, as part of the res gestee, for the purpose of showing that the guardian was entitled to credit for the investment, but that so much as related to the past alleged transactions was inadmissible.
Under the Act of 1859 the estate of a guardian is entitled to commissions on his executor’s paying to the ward a balance which remained in the guardian’s hands at his death.
BEFORE LESESNE, OH., AT LANCASTER, JUNE, 1867.
The plaintiff, Margaret E., had been tbe ward of Samuel Faulkner, wbo died in 1865. The defendant is his executor, and this bill was for an account of the estate of the ward which came to the hands of her said guardian. The testator had also been guardian of Jesse C. and James P. McDow, two brothers of Margaret E., who both died during the period of his guardianship.
The accounts of the testator were referred to the Commissioner who made a report, dated 25th June, 1866, by which, amongst other things, he charged the guardian with the following items taken from his returns as guardian, and with interest thereon as stated at the foot of each item :
“1851, November 15. Eeceived by guardian in -notes from administrator of John J. McDow ” (father of Margaret E.) “ full share of Margaret E. in personal estate............$1,225 66
“ By commissions on above at 2-J per cent......................................... 30 64
1,195 02
“ Interest from 15th November, 1851, to 25th June, 1866..................... 1,222 23 --$2,417 25
“1853, July 15. Eeceived share of Margaret E. in estate of her deceased brother Jesse C., being one-third thereof.............................. $421 38
“Interest from 15th July, 1853, to 25th June, 1866......................... 381 81 -- 803 19
“ 1863, February 23. Eeceived share of Margaret E. in estate of her deceased brother James P., being one • half thereof..............................$1,147 47
“Interest from 23d February, 1863, to 25th June, 1866......................... 268 18
The Commissioner then credited the estate of the guardian with$3,000, invested in Confederate bonds, and with interest thereon from 1st January, 1865, and after deducting other credits stated, the balance due by- the estate on 25th June, 1866, to be $785.25, and on this balance he allowed no commissions.
The guardian had not credited himself in his annual returns with the $3,000 alleged to have been invested by him for his ward, at 90 cents in the dollar, in Confederate bonds to the amount of $3,300, but to prove that such investment had, in fact, been made, bonds to that amount, which the testator held at his death, were produced, and a number of witnesses examined. Among the witnesses was Dr. J. J. Williams, who testified that in the year 1865,'some time after 1st July, the testator delivered to him $3,000, and requested him to purchase that amount in Confederate 8 per cent, bonds; said the money belonged to the plaintiff, Margaret E., and he wanted the bonds as an investment for her ; that some time before then he had made an investment for her in Confederate bonds, but his son had sold the bonds by mistake; that the money he then handed to the witness was the produce of those bonds, and that he wanted to purchase other bonds to replace those his son had sold, The witness further testified that he purchased bonds as requested in Charlotte, North Carolina, at 90 cents on the dollar, and delivered them to the testator. Other witnesses testified to similar declarations made by the testator at other times.
All the declarations of the testator were objected by the plaintiffs as incompetent, but the Commissioner held that so much of the declarations to Dr. Williams as stated to whom the money belonged and for whom the investment was to be made, was competent as part of the res gestse, all the rest being inadmissible.
The case came before the Circuit Court on exceptions to the report on all the points above indicated. His Honor sustained the ruling of the Commissioner on the questions of interest, commissions, and evidence, but overruled him on the question as to the investment iii Confederate bonds.
The defendant appealed, and all the points above stated were brought by the appeal before this court.
Williams & Allison, for appellant.
Moore, contra.

Opinion:
The opinion of the Court was delivered by
Inglis, A. J.
If the shares of the ward in the several estates of her father, and her brothers, Jesse C. and James P., or any of them, were received by the guardian, in whole or in part, in promissory notes or other choses in action, bearing interest, and such shares, as charged to the guardian, embraced interest then in arrear on any or all of such notes, &c., it was incumbent on the guardian to have distinguished in his appropriate return between the principal and such interest, or, at least, upon those who now represent him to have shown definitely at the hearing what part of such receipts, if any, was interest. In the absence of such showing at the proper time, it is not seen how the Commissioner could have done otherwise than he has done in charging the gross amount of each share as cash received, at its proper date. The very truth of things would certainly have required that the guardian, in his annual return next after the receipt thereof, should have stated exactly in what form the share of the ward came into his hands, and have charged and credited himself only with his actual cash receipts and disbursements, at the proper date of each. Not having done this, he must abide by the only means of information'which he has furnished.
The general rule of accounting is that the guardian, &c., is not to be charged with interest on sums of money received for his ward during the year in which-they are received, but only on the balance found to remain in his hands upon making up his account at the end of the year. But this rule is subject to some qualifications and exceptions, under peculiar circumstances. "When sums of money, large compared with the current expenditures of the estate, are received, and there is no occasion to retain them to meet claims upon them, they ought to be invested, and not suffered to lie idle and unproductive. A reasonable time will, however, be allowed the guardian for making such investment, varying of course according to circumstances; and interest should be charged only after such time, unless it appear that interest has in fact been made sooner. (Baker vs. Lafitte, 4 Rich. 392.) In the present case, the sum of $1,195.02, received on the 15th November, 1851, within less than two months from the end of the year, and the sum of $421.38, received on the 15th July, 1853, ought not to bear interest from the date of receipt respectively, but only the annual balance appearing due at the end of that year thenceforward. The sum of $1,147.47, representing the share of the ward in the estate of her brother, James P., was received so early in the year 1863, as on the 23d February. From the account contained in the brief, it appears that there was at that time already in the guardian's hands an interest-bearing fund of more than two thousand dollars, ($2,000,) the annual income from which far exceeded the current expenditures of each year, and there was therefore no need to retain any part of this considerable sum of money in hand. It ought to have been invested within a reasonable time, and, in the absence of any proof of special circumstances affecting his ability to obtain proper investments, a period of three months may fairly be allowed for this purpose. On this sum of $1,147.47, the guardian ought to be charged with interest only from the 1st June following its receipt, (1863,) and not from 23d February, tbe day of its receipt.
Under tbe express provisions of tbe Act of Assembly of 1859, (12 Stat. 825,) the estate of the guardian ought to have been allowed the usual commissions, for the payment over by his executor of the balance of the ward's money remaining in his hands at his death, inasmuch as the payment here is to be directly to the ward, and not to another guardian.
The declarations or statements of the guardian to the witness, J. J. Williams, when commissioning him to purchase Confederate bonds, in reference to-the proprietorship of the funds with which,- and tbe use for which, they were to be purchased, were properly admitted in evidence as part of the res pesias,-accompanying and giving character to the act. Put the recital of past transactions, though-having some relation to the act, was properly excluded. (Haynes vs. Rutter, 24 Pick. 242.) There is no j ust ground of exception to the Chancellor's ruling in this particular.
In order to determine the fact and also the legal propriety, if made, of the alleged investment in Confederate bonds, it seems to tbe Court important, in the circumstances of this - case, that the precise time, when it is claimed the ward's funds were originally so invested, should be ascertained. The Chancellor, in his decree, says this was in 1863, and refers for his authority for this statement to the return made after the guardian's death by his executor in December, 1865. But upon examining the account of the guardianship contained in the brief, made up, it is presumed, from the guardian's returns, it is found that ho date whatever is there assigned to this investment. Important parts of the testimony seem to make it probable that the original purchase of Confederate bonds, if any such was made at all for the ward's estate, was in the spring of 1864. It would be unfortunate if the interest of either party should be prejudiced by a mere inadvertence or mistake of fact on the part of the Chancellor touching the date of a transaction. Further inquiry on this point must be had.
It is ordered that the Commissioner of the Court of Equity for Lancaster District, where this cause is pending, restate the account of the guardianship in respect to the items of interest and commissions herein mentioned, in conformity with this opinion, and that he inquire and report to the Circuit Court particularly concerning the fact, and the dates and propriety of the investment, if made, of the ward's funds in Confederate bonds, originally«and subsequently, and any special matter touching the same; and that the cause be remanded to the said Circuit Court for a further hearing and judgment on the matter,thus opened.
Circuit decree modified, and cause remanded.
Dunkin, 0. J., and Warelaw, A. J., concurred.
Decree modified.