Court Opinion

ID: 6673689
Source: CourtListenerOpinion
Date Created: 2022-07-20 21:14:14.722368+00
Date Added: 2024-06-11T16:00:37.700360
License: Public Domain

The opinion of the Court was delived by
Willard, C. J.
The nature of the present question and the circumstances under which it arises are sufficiently stated in the opinion of the Circuit Judge.
The decree appealed from establishes certain assets in the hands of the plaintiff administrator as trust funds, withdrawing them from the general funds of the insolvent intestate estate, subject to ratable distribution among creditors, and devotes them to the satisfaction of the trusts thus established. It holds that the funds in controversy represent the estate of a ward of whom the intestate was guardian, and that they retain that character in the hands of the administrator of the intestate guardian.
The precise question is whether a settlement that took place between the guardian in his lifetime and the executor of the ward operated to extinguish the fiduciary relation of guardian and ward as affecting the portion of the estate of the guardian in the hands of the administrator that originally formed part of the ward’s estate.
The principal assets formerly belonging to the ward’s estate that came into the hands of the administrator was a judgment recovered by the guardian on a note in which his ward’s money was invested.
An accounting, purporting in form to be a final accounting, took place between the guardian and the executor of the ward in the office'of the Commissioner in Equity, at which time the guardian gave his individual note for the amount of the estate of the ward, including the amount due on the judgment, whereupon the following receipt was signed by the executor of the ward :
South Carolina, Lancaster County.
Received from Moses Chappel Heath, the Chancery guardian of James Daniel Steele, deceased, $2,213.45 in full, the sum or amount due by said M. C. Heath, guardian, as aforesaid, to James Daniel Steele, deceased, agreeable to the returns of said Pleath, filed in the *92Commissioner’s office, and settlement by said Commissioner’. Received by me, John M. Steele, executor of said James Daniel Steele, deceased.
John M. Steele, Executor.
October 16, 1860.
The foregoing receipt was delivered to the guardian and placed on file in the office of the Commissioner in Equity with the guardian’s returns. The receipt is not in itself conclusive proof of the fact of payment, but parol evidence may be admitted to contradict or modify it.— Wardlaw vs. Gray, 2 Hill Ch., 644; Tobey vs. Barber, 5 Johns. Rep., 68; House vs. Low, 2 Johns. Rep., 379; Putnam vs. Lewis, 8 Johns. Rep., 389.
In itself a receipt does not express the terms of any contract or uniting of the minds of the parties between whom it has passed, but merely evidences by way of admission the fact stated in it; consequently it is not governed by the rules that prescribe the effect of instruments adopted by parties as the special means of evidencing some compact or understanding had between them, but, like evidence, not enjoying any special privilege, it is capable of being contradicted or modified by other classes of evidences.
The question then is, whether there is evidence to show that the guardian and. the executor of his ward agreed, upon consideration, that the individual note of the guardian should be taken in full discharge of all claims upon him in behalf of the ward’s estate. Such an agreement is competent to discharge the pre-existing obligation by the substitution of a new obligation therefor.' — Townsend vs. Stephenson, 4 Rich., 59; Burton vs. Pressley, Cheves Eq., 1.
But, independent of such an agreement, supported by consideration, the mere fact of taking a note of the debtor, or, perhaps, even of a third person, does not discharge the pre-existing debt, but the new obligation is treated as a collateral security. — Barretti vs. Brown, 1 McC., 449; Wardlaw vs. Gray, 2 Hill Ch., 644; Tobey vs. Barber, 5 John. Rep., 68; Bank vs. Bobo, 9 Rich., 31; Putnam vs. Lewis, 8 Johns. Rep., 389.
On this question the receipt is entitled to weight, though not con-' elusive. Its language clearly expresses an understanding on the part of the executor of the ward, who signed it in accordance with the idea that the note of the guardian was taken in lieu of all other demands, present or future, against the guardian on account of the estate of his ward thatcame into his hands.
*93No evidence of a direct character has been introduced to impeach the receipt as to it truthfully representing the intentions of the parties. The note given by the guardian was in excess of what was then due from him to the executor of the ward.
The judgment was still unpaid to a large extent, yet the note given in settlement included the whole amo.unt of the judgment, without regard to what was paid or unpaid.
If the statement of the receipt is accepted, then the intention of this transaction is obvious; for in that case it would amount to a substitution, by the parties, of the absolute personal obligation of the guardian for any demand that the executor of the ward might have for the estate of the ward or its proceeds in the hands of the guardian. If the view of the case presented by the receipt be rejected, then the action of the guardian in assuming an obligation in excess of that imposed upon him by law is unintelligible. The giving of the note by the guardian must then be regarded as supporting the statement that the parties agreed that such note should be taken in lieu of all other claims against the guardian, and it is also proof of an adequate consideration to support such agreement. The holder of the note, as such, under such circumstances, has no greater claim upon the administrator of the guardian than other creditors of the same class and must come in ratably with them.
No question is made in this case whether the parties are entitled to resort to the bond of the guardian in case of non-payment of the note, and therefore has not been considered.
It is not necessary to examine the question as to the Statute of Limitations in its application to the present case, which would have been appropriate had the parties representing the ward’s estate interposed with a direct application to vacate the settlement upon grounds cognizable in equity. The present question does not involve the validity of that settlement, but merely the intention of the parties in making it.
The order appealed from must be set aside, and the case remanded to the Circuit Court for an order allowing the petitioners, the respondents, to come upon the assets of the intestate estate subject to distribution ratably with other creditors of the same class with themselves.
McIver, A. J., and Haskell, A. J., concurred.