Court Opinion

ID: 8008747
Source: CourtListenerOpinion
Date Created: 2022-09-09 01:55:52.665654+00
Date Added: 2024-06-11T16:35:59.137480
License: Public Domain

Black, J.
In 1871, Joseph H. Locke was found to be of unsound mind, and incapable of managing his affairs, and, thereupon, the probate court of St. Louis county appointed Jones guardian of his person and estate. The guardian gave bond as required by law. By order of that court, Jones gave a new bond in April, 1874, with Howard and others as sureties. In 1878 the court ordered the guardian to procure and file another bond, and for failure to comply with that order the court revoked the former appointment, and appointed R. D. Lancaster guardian of the insane person. The deposed guardian failed to make settlement of his accounts, and Lancaster brought this suit on the second bond, assigning various breaches. Locke, it appears, at and prior to the inquisition, had been engaged in selling cement and lime, and'.in manufacturing lime ; the business had a reputation of considerable value. Jones, as guardian, in addition to collecting debts due to and paying *476those due from the ward, carried on the business just as it had been previously conducted by the ward. The profits thus accruing to the estate, from 1871 to 1876, amounted to $52,376.66. There were losses in 1877, of a little over one thousand dollars. The referee, by whom the cause was heard, debited the late guardian with $160,634.53. This amount includes the item of profits before noted. In the annual settlement, made in the probate court the guardian had allowed to him, from time to time, compensation of five per cent, on disbursements, amounting in all to about eighteen thousand dollars. On the trial, plaintiff conceded to defendants credit for commissions at five per cent., on the amount with which the guardian was debited by the referee, amounting to about eight thousand dollars. The difference of ten thousand dollars constitutes one of the items now in dispute. The defendants, it will be seen,- had credit by the refereee for commissions on the profits. But in making those profits the late guardian bought and sold merchandise, paid laborers, and the like, large ■sums of money ; these transactions amounted to over two hundred thousand dollars, and appear on the one ■side and the other of the accounts filed in the probate court, but do not appear in the statement of the account as made by the referee. He takes account of the profits made, but not of the volume of business transacted by ■which those profits were realized, and hence the difference in the result.
1. The referee and court denied any compensation on the volume of business done, on the theory that the guardian had no right, with or without an order of the probate court, to carry on the business of the ward, and that every dollar thus invested was a breach of trust. That the guardian conducted the business with ability and perfect honesty, is not disputed. In determining the powers and duties of a guardian of an insane person, it will not do to follow closely, by analogy, the law with *477respect to the administration of estates of deceased persons. There - the general purpose of the law is to wind up the estate, pay off the debts and turn over the remainder of the property to those entitled to the same in succession. To that end creditors must prove up these 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. He and his family are to be supported, his children educated, and it is not practicable to close up his business affairs. Hence the bond of the guardian is conditioned to “manage and administer his estate,” etc. Section 5805, Revised Statutes, provides that the probate court “may make an order for the restraint, support and safe keeping of such person, for the management of his estate, and for the support and maintenance of his family and education of his children, out of the proceeds of such estate ; -to set apart and reserve for payment of debts, and to let, sell or mortgage any part of such estate, real or personal, when necessary, for any of the purposes above specified.” Other sections point out more in detail when real estate may be leased, mortgaged, or sold, and the proceeding to be taken therefor.
The power conferred upon the court to make an order for the “management of his estate” must be construed in the light of the other sections, and the nature of the subject matter with which the statute deals. The insanity is often of short duration, and the law contemplates cases where such persons may even make contracts, with the consent of the guardian. Section 5816. When restored to his right mind, it is made the duty of the guardian to yield up the property to his former ward. It is rather the duty of the guardian to protect and preserve the business affairs of the ward than to wind them up. To that end the statute, has invested the probate court with large discretionary powers. In the exercise of these powers the court should not, for any. considerable length of time, continue a hazardous manu*478facturing or mercantile business. But it is within the power of the court to direct and order the continuance of the business of the ward, and in many cases it would be the plain and obvious duty of the court to make such an order. Michael v. Locke, 80 Mo. 548, so far as it •conflicts with what is here said, is overruled.
* It has been held that the approval of an administrator’s sale of real estate need not appear by a formal entry; it is sufficient if it appears from the whole record. Grayson v. Weddle, 63 Mo. 525; Henry v. McKerlie, 78 Mo. 430. The annual - settlements and the orders of approval made thereon, in this case, were competent evidence to show, and they do show that the business was carried on under the eye and supervision of the court, and that is sufficient, though no previous order therefor was procured. It follows, from what has been said, that the guardian made no breach of his trust in the matter under consideration. So far as commissions are concerned it does not follow that he is entitled to five per cent, on all disbursements. The statute does not fix the amount of compensation. The rule, made applicable to administrators, would seem to be proper enough as to the collection and payment of debts existing at the date ■of the appointment, but for continuing a business and receiving and paying out moneys in that behalf, reasonable compensation, and that only, should be allowed. Indeed the five per cent, rule should only be adopted when, under the circumstances, it is reasonable for the services rendered.
2. The further claim is that these annual settlements are conclusive. The law is well settled in this state that annual settlements of administrators, and of guardians and curators of minors, are not conclusive. They are subject to review and correction at the final settlement. Picot v. O'Fallon, 35 Mo. 29; State to use v. Hoster, 61 Mo. 544; State to use v. Roeper, 82 Mo. 58; Folger v. Heidel, 60 Mo. 284; Seymour v. Seymour, *47967 Mo. 303; West v. West, 75 Mo. 203. As to administrators and guardians of minors, a clear distinction is made by the statute between annual and final settlements, and in final settlements, notice thereof must be given. In case of insane persons, the guardian “ shall, once a year, or oftener, if required by the court appointing him, render to such court a just and true account of his guardianship, and make settlement with the court.” R. S., sec. 5815. If the ward’s mind be restored “the guardian shall immediately settle his account, and restore to such person all things remaining in his hands belonging to the ward.” R. S., sec. 5824. And upon the ward’s death “the guardian'shall immediately settle his accounts and deliver the estate and •effects of his ward to his personal representatives.” R. S., sec. 5825. The statute, it will be seen, does not in "terms provide for a final settlement, nor is any notice required to be given, still when the ward is restored to reason the property must be delivered to him, when he dies, to his representatives, and when the guardian is removed, to the successor. In all these cases there is some competent person with whom the guardian must account, and in this respect his settlements are more analogous to those of an administrator pendente lite. These annual settlements are made without any one but "the court to inquire of their correctness; they are, in part at least, made to enable the court to make proper orders in the estate. It would be dangerous to give to these settlements the force and effect of final judgments .and thus put it out of the power of the court to correct mistakes and over-charges, and we conclude the statute does not contemplate such results, and that they are only prima faeie evidence of their correctness.
3. The next question is whether these sureties on the second bond should be held liable for any excessive ■commissions retained by and allowed to the guardian in the previous annual settlements. The probate court has *480power to require the guardian “to give a new bond, or additional security.” The bond in this case is a new one and it is conditioned that said Jones “shall take-due and proper care of said Jas. H. Locke and manage- and administer his estate,” etc. The general rule is-that sureties are not liable for past defaults unless made so by the terms of the bond. Farrar v. United States, 5 Peters, 373; Murfree on Official Bonds, sec. 300. This rule evidently applies when the bonds are given during the same appointment or term of office, as well as where there are different bonds under successive appointments. There is nothing in this bond, or the statute under which it was made, which gives to it a retrospective operation. The plaintiff cites several cases in this court, to show that there was a default after as well as before the date of the second bond. State to use v. Fields, 53 Mo. 474, and Haskell v. Farrar, 56 Mo. 497, only hold that sureties on the first bond are not relieved by a second, given upon an order made by the court of its own motion. In State to use v. Drury, 36 Mo. 282, the curator made breach of the first bond by converting the-money of the ward to his own use. He gave a second bond and carried the amount of money before converted into his subsequent settlements, so that the sureties on that bond had been held liable and a judgment had been rendered against them; all this it was held did not relieve the first sureties because the breach was made under the first bond. In State to use v. Berning, 74 Mo. 88, the executor pledged certain notes of the estate with a bank to secure his personal debt; after that he gave a second bond and the notes were with the bank and not paid until long after that bond was given. The sureties on the first bond were held liable though the bank took no title to tfie notes, and though there was a breach of the second bond also for a failure on the part of the executor to reclaim and recover the notes as he might and ought to have done. Now in the case at bar the *481commissions allowed before the execution of the second bond were claimed and allowed in the previous settlements. That was an open declaration of the guardian, that the money was his own, and an appropriation thereof to his own use. These allowed commissions were never carried into any subsequent settlement. To. hold these second sureties liable therefor, under these-circumstances, is to wholly disregard the rule that sureties are not liable for a past default. Prima faciethe allowances were correct, and the sureties had a right to assume that they were correct. If it should be found that those commissions, set apart in the settlement before the execution of the- second bond, are excessive, still these sureties should not be held liable therefor.
4. Other exceptions were taken to the report of the referee because of a refusal to allow certain notes and due-bills as a credit, which came to the guardian when first appointed, and which, it is claimed, could not be collected with diligence. The-difficulty, and it seems to be recognized by counsel for defendants, arose fiom the peculiar state of the pleadings, and the failure of defendants to make proof of the matters alleged in the answer and put in issue by the reply. As the judgment must be reversed and the cause remanded for new trial, for the reasons before stated, this exception need not be considered. The proof can be made and the pleadings reformed if desired. . The judgment is reversed and the cause remanded for a new trial.
All concur, except Sherwood, J., who dissents.