Case Name: N. B. Frost, Appellant, v. A. J. Redford, Respondent
Court: Kansas City Court of Appeals
Jurisdiction: Missouri
Decision Date: 1893-05-15
Citations: 54 Mo. App. 345
Docket Number: 
Parties: N. B. Frost, Appellant, v. A. J. Redford, Respondent.
Judges: Ellison, J., concurs and Gill, J., dissents in separate opinions.
Reporter: Missouri Appeal Reports
Volume: 54
Pages: 345–364

Head Matter:
N. B. Frost, Appellant, v. A. J. Redford, Respondent.
Kansas City Court of Appeals,
May 15, 1893.
1. Insane Persons: guardians: trustee: effects: debts. The guardian, of an insane person occupies the position of trustee for him as well also as for his creditors and family, and should take possession of his affects and should adjust, settle and pay his debts as far as his effects extend, having regard to priorities, and if the estate is insufficient then pari passu.
2. -: presentation of debts: notice: statute. The statute contemplates a presentation of claims to the guardian, and when necessary it is the probable duty of the guardian to give notice to creditors to present their demands for adjustment and payment.
3. -: PREFERENCE AMONG CREDITORS: PAYMENT: MEASURE OF DAMAGES. The guardian of an insane person cannot prefer the creditors of his wards as his ward could; and his payment of a per cent, on all demands excepts that of plaintiff of which he had notice was a breach of his duty; and the measure of his liability is the per cent, he should have paid plaintiff nad he paid all equally and equitably. Gill, J., dissenting.
■i. -: REMEDY OF PRETERMITTED CREDITOR AGAINST GUARDIAN: money had and received: ACCOUNTING. An action against a trustee for money had and received will lie if the trust is closed, but it is otherwise if there has been no final accounting. But where the estate is exhausted, — practically closed,- — equity has a general jurisdiction of the guardian of an insane person whose position and obligation are wholly fiduciary and will direct an accounting and final settlement to determine the amount of his liability.
5. -: COMMON LAW: STATUTE: ALLOWANCE FOR SUPPORT: EQUITY: PREFERENCE: EXECUTION: SETTLEMENT: RES AD JUDICATA.
Per JElUson, J., Conewring.
(X) At common law the king as parens patries had the protection in a peculiar manner of all those who by reason of their inability and want of understanding are incapable of taking care of themselves, and this protection was administered through the chancellor and a committee of the person and estate of the insane person. The first and paramount duty of this protection was to provide for the personal ease and comfort of the lunatic to the exclusion of the payment of his debts. '
(2) Under the Missouri statute the guardian can use his ward’s estate for the payment of his debts to the exhaustion of the estate except as it is protected by homestead and exemption laws, and the ultimate maintenance of the ward may fall upon the county.
(3) An allowance cannot, if timely objection be made, be regularly set apart for the support of the lunatic, but if said allowance is made it will protect the guardian.
(4) Such guardian in paying the debts and administering the estate of a lunatic is governed by principles of equity and cannot prefer a creditor, since equity means equality.
(5) The real and personal property of a lunatic is not subject to'an execution at the suit of a creditor who has obtained his judgment in an independent jurisdiction as it would amount to a. preference and interfere with the jurisdiction of the probate court.
(6) A settlement made by the guardian in the probate court, wherein plaintiff’s claim is not mentioned, does not affect plaintiff’s claim.
(7) The fact that plaintiff brought suit against the lunatic naming defendant as his guardian and recovering the judgment he sues on in this action, does not make the subject-matter res adjuclieata in this action.
Appeal from the Johnson Circuit Cou/rt. — Hon. O. W. Sloan, Judge.
Reversed and remanded.
J. W. Suddath and Samuel P. Sparks, for appellant.
(1) Guardians of insane persons are trustees and are governed by the law pertaining to trustees. Michael v. Loche, 80 Mo. 551;State to use v. Jones, 89 Mo. 478. (2) Trust funds in the hands of trustees.are to be managed and disposed of by them for the equal benefit of all creditors. State ex rel v. Brockman, 39 Mo. App. 131, and cases cited. (3) A power given to a trustee to pay such creditors and prefer such claims as he pleased would render the trust void. 2 Perry on Trusts [2 Ed.] sec. 600. (4) The statute makes it the duty of the guardian of an insane person to pay all debts due from his ward so far as his estate and effects will extend. Revised Statutes, 1889, sec. 5530; Conant v. Kendal,21 Pick. (Mass.) 36-41.
O. L. Bouts, for respondent.
(1) Guardian of insane person, chargeable as trustee at suit of creditor of the 'ward until there has been an accounting and a balance found in the guardian’s hands. Davis v. Drew, 6 N. H. 399; s. c., 25 Am. Dec. 467, And certainly when as in the case at bar there' has been an accounting and a balance found due respondent from the estate of his ward respondent is not liable to appellant, a creditor of the ward. (3) The statutes of this state do not authorize a recovery in this suit, nor do they require the guardian of an insane person to pay the debts of his ward pro rata, or provide for the probate classification or priority of the debts of an insane person. Revised Statutes, 1879, ch. 86; State to use v. Jones, 89 Mo. 470 (overruling Michael .v. Locke, 80 Mo. 548.) Statute specifically provides thát no process shall go against a guardian for the debt of his ward, but against the property of the insane per- soil only. Revised Statutes, sec. 5544; Crow v.Weidmer, 36 Mo. 412; Collier v. Cairns, 6 Mo. App. 188; Revised Statutes, 1889, secs. 64, 67, and note; Revised Statutes, 1879, sec. 65. (3) If appellanthas a right of actionhe has mistaken his remedy. He should have issued execution on his judgment and levied on the property of E. D. Frost, the insane person, if .he had any, or garnisheed respondent. Revised Statutes, sec. 5544. Action on respondent’s bond is the only action at law that appellant could probably maintain. The only duty respondent could in any way Pwe appellant grows out of the obligation of the bond. (4) Respondent does not, in his conception, need the benefit of the proposition, but he insists that the ease of N. B. Frost v. F. D. Frost and A. J. Bedford, this respondent is res adjudicata as to every issue in this case. In that case appellant sued respondent and asked judgment against him, and was defeated on the original and same cause of action he now sues on, the note on which the judgment was founded. If appellant was entitled to recover against respondent, he could have recovered as well on his note as on his judgment.

Opinion:
Smith, P. J.
— This was an action at law based upon a judgment recovered by the plaintiff against Ebenezer D. Frost, who had previously been, adjudged insane. The petition alleged, amongst other things, that the defendant had been appointed guardian of the person and curator of the estate of said Frost, and had duly qualified as such; that there came into the hands of said defendant, as such curator, the sum of $10,000 in cash and personal property, and that the plaintiff at the time of the defendant's appointment gave the latter notice of his claim and demanded payment thereof. The answer admitted the defendant's appointment and qualification as guardian and the recovery of said judgment, but denied the other allegations of the petition.
There was a submission of the case to the court and a separate finding of facts and conclusions of law by it, which (omitting the facts admitted by the pleadings) was as follows: "That there came into his hands as such guardian and curator' prior to the commencement of this suit in cash and other personal property the sum of $4,216.25. That this suit is based on a debt exisiting due and owing by said E. D. Erost to plaintiff; N. B. Frost at the time he was so adjudged insane, which was reduced to judgment in this court on the seventeenth day of February, 1891, in a suit thereon' against Ebenezer D. Frost, to which action said defend: ant herein (Redford) appeared and defended as guardian, and the amount of said judgment was $2,353.75, bearing interest at the rate of six per cent, per annum.'
The court further finds that in December, 1888, or at least prior to January 29, 1889, date of sale, plaintiff N. B. Frost gave the said defendant Redford notice of the said demand so due and owing by said E. D. Frost and demanded payment thereof, which demand was refused by said Redford; that, at the time said E. D. Frost was adjudged insane, he was indebted and owing to divers parties, including this plaintiff, in the aggregate, the sum of $12,069.05. It does not affirmatively appear whether there were any other debts or not, that after notice of plaintiff's demand, to-wit, between February 16, 1889, and June 5, 1886, defendant paid out on a portion of said indebtedness to some of the creditors the sum of $1,639.87, but paid plaintiff nothing whatever on his demand; that the suit culminating in this judgment of the seventeenth day of February, 1891, herein before referred to was commenced May 25, 1889. The court further finds that the said Redford as guardian distributed and disposed of said • assets so received by him belonging to his said ward in the manner, to the persons, in the amounts and at the time as stated in defendant's answer. The court further finds that on March 30, 1891, the said defendant Bedford as such guardian and curator, made report of his said receipts and distributions to the probate court, except as to the last ten items above named, which said report was by said court approved, but that no notice of any sort to any person whatever was given of said settlement. The court further finds that the probate court-did on February 18, 1889, make an order: "That said guardian keep and set aside $1,000 for the care and keeping of said insane patient, support of family and education of children."
That the defendant, Bedford, has never paid anything to this plaintiff on said demand, nor on the judgment aforesaid; that the same and every part thereof is still due and owing.
On the foregoing facts found and the pleadings in the case, the court declares the law to be, that this is an action at law against defendant Bedford as a trustee in charge of a trust fund liable to be applied in payment of plaintiff's demand, and not against him as guardian. That the report of the probate court of his said disbursement and the approval of the same by the court precludes plaintiff from recovering in this action, although plaintiff was denied any participation in said dividends or disbursements. The court is of the opinion and holds and decides a matter of law, that a guardian and curator of an insane ward's estate in managing the estate of such -ward especially when authorized or permitted by the probate court might preserve, manage and disburse his personal estate about the same as his ward could, if sane and in control thereof. It follows, that in the absence of fraud the finding and judgment must be again at the plaintiff."
The plaintiff has appealed. With the finding of facts there can be found no just ground of complaint.
The only question in the case is, whether the conclusion of law is correct. The defendant being the guardian of said insane person occupied the position of trustee for him, as well also, as for his creditors and family. Michael v. Locke, 80 Mo. 551; Perry on 'Trusts, sec. 1097. And so being it was his duty, under the statute (secs. 5526, 5530) to take into his possession the goods, chattels, moneys and effects of the ward, and to collect the debts' due him and to adjust, settle and pay off all demands due or becoming due from his ivard, as far as his estate and effects would •extend. Undoubtedly if this language of the statute has any signification whatever, it is that the duty of the .guardian is to pay all the demands against his ward, having regard to priorities, in full, or if the estate is insufficient for that purpose then to pay them pari passu. Of course this would be of difficult accomplishment in every case, in view of section 5544, which provides that judgments may be recovered and executions issued thereon against an insane person. It is plain when we look at the provisions of chapter 86, that the intention of the legislature by the enactment of this statute was to provide an elaborate scheme for the administration of the estates of insane persons. It is true the analogy of this statute to that in respect to •administration of the estates of deceased persons in many essentials is lacking. The generel purpose of the latter statute is to wind up the estate, pay off the debts and turn over the remainder of the property to those entitled to the succession. To that end creditors •are required to prove up their demands within a specified time or be forever barred.
In the case of insane persons the ward continues to be the owner of the property. The statute as to his debts makes no provision for their presentation, classification or allowance. But while this is true there ought ordinarily to be no difficulty in ascertaining the-demands due by the ward. The notice the guardian is obliged to give of his appointment and the other steps required by the statute to be taken by him would no doubt enable him to discover the creditors of his ward. The creditors of such persons are usually quite swift in making their demands known. There is-always that degree of insecurity and uncertainty felt by creditors of such persons that would prompt them to present their demands to the guardian to be "adjusted, settled and paid."
The very language of the statute just quoted shows that it contemplates a presentation of the claims of creditors to the guardian or else how could the same be "adjusted, settled and paid." It is probably the duty of the guardian to give notice when necessary to the-creditors to present their demands to him for this purpose. "When the amount of the claims due and to-become due by the ward are ascertained by the guardian, he having charge of the ward's estate can experience very little trouble in determining under the supervision and orders of the probate court whether the estate is sufficient to pay the claims of all the creditors in full or only a per cent, thereon. In making payment he might exercise the precaution to take a refunding bond in case he should be uncertain as to whether there were other unpresented claims or whether the estate will finally be sufficient to pay each creditor the per cent, which it then seems he can pay.
A prudent and careful business man in .charge of the estate of an insane person ought not to have any serious difficulty in administering such an estate under the statute. ' Ordinarily he could provide and protect an estate against sacrifice by a creditor having an exe cation. Such an execution creditor might by its levy secure a priority, and in that case the adjustment and payment of the claims of the other creditors having no priority would have to be made with reference to the existing conditions. It follows therefore that the payment by the guardian in this case of a per cent, on all the demands against his ward, except on that of the plaintiff, was a breach of his duty. The measure of his liability undoubtedly is the per cent, that he should have paid plaintiff had he paid all equally and equitably.
I do not think, in view of section 5530 and the other sections of chapter 86, that a guardian can prefer the creditors of his ward as the ward could have done himself had he not been insane. I think the scope and language of the statute discountenances this idea. In this case the guardian has exhausted the ward's estate and has paid the plaintiff no part of his demand, though he could have paid a part of it had he wished to do so. The question now is what is the plaintiff's remedy. If it is a fact, appearing from the guardian's settlement or otherwise, that the estate was able to pay any given per cent, on all of its debts and that he had exhausted the estate without doing so, or that any specified sum was in the hands of the guardian held by him for the plaintiff's use, it could be recovered in an appropriate action at law, or' at any rate in an action for money had and .received. An action against a trustee for money had and received will lie if the trust is closed, but otherwise if there has been no final accounting. Perry on Trusts, sec. 843; Hill on Trustees, *518-847.
In this case the guardian shows the estate exhausted — nothing in his hands. It is practically closed so far as creditors are concerned. Gruardians of persons non compos mentis stand in the relation of quasi trustee to their ward or principals. They do not hold the title to the property which is the subject of the relation, but their position and obligations are wholly fiduciary. Equity has therefore a general jurisdiction at the suit of the ward or other beneficiaries to compel a performance of the trust duties to relieve against violations of the trust obligations to direct an accounting and final settlement of the quasi trust and to grant other special relief made requisite by the circumstances. Perry on Trusts, sec. 1097; Moody v. Bibb, 50 Ala. 245; Stephens v. Marshall, 23 Hun, 641; Strumph v. Guardian of Pfeiffer, 58 Ind. 472; Coles, Com'r, v. Coles, Adm'r, 8 Gratt. 365.
It would be impossible to determine the per cent, to which plaintiff is entitled to recover on his claim until there shall.be an account taken of the administration of said ward's estate and the amount thus ascertained.
To the end that such an account be taken the judgment will be reversed and the cause remanded with leave to plaintiff to amend his petition if he so elects to do.
Ellison, J., concurs and Gill, J., dissents in separate opinions.