Court Opinion

ID: 6674251
Source: CourtListenerOpinion
Date Created: 2022-07-20 21:14:34.995518+00
Date Added: 2024-06-11T16:00:39.028093
License: Public Domain

The opinion of the court was delivered , by
Willard, C. J.
The action was, in its original form, in the nature of an action at law upon a money bond. But Isabella M. Hickson was, subsequently to the commencement of the action, made a party, and she interposed a defence, alleging, in substance, that the bond in suit is her individual property, improperly transferred by her guardian to the plaintiff. The propriety of making Isabella M. Hickson a party, and the character of her answer, are not questioned before us. The case has, therefore, assumed the character of one in the nature of interpleader between the plaintiff and the defendant Isabella, the other defendants, the obligors on the bond, making no objection to pay the party found entitled to the bond. Although not in form a strict interpleader, the case is such in substance, and the issues *171must be disposed of on the principles of interpleader. It is, therefore, an equitable proceeding.
The court is satisfied with the conclusions of fact found by the referee, so far as the same are material to the view of the law of. the case here presented. The facts are as follows : The bond in suit was the property of the defendant Isabella, held by J. W. Wilson, her guardian, secured by a mortgage. The bond and .mortgage were originally made to the Probate judge officially, by whom the bond was delivered without assignment to the-guardian as of the estate of his ward, and at the same time the mortgage was duly assigned to such guardian. Subsequently the guardian transferred the bond without assignment to the plaintiff, Willalonga, as security for a personal indebtedness of the guardian to the said plaintiff. The mortgage was never transferred to the plaintiff.
The transfer of the bond to the guardian passed the beneficial interest in the bond, not to the guardian, but to the ward. Had the bond been assigned in form to the guardian, he wo.uld have, no doubt, taken the legal title as trustee for his ward. But as there was no assignment effectual to pass the title directly, it could only pass by operation of law; that is to say, the ward having the beneficial interest would be regarded as clothed with the right of property in the bond, both at law and in equity; prior to the code, in the name of the obligee to her use, and in equity to her own use; and since the code, both at law and in equity, in her own name. It is not material to inquire whether the guardian had authority, as such, to transfer the legal title to the bond to the plaintiff, for he has not done so.
The deposit of the bond as collateral security for his individual debt, could only transfer the title to the bond as by operation of law, but the law will not operate such a transfer of interest as against the clear legal and equitable rights of the party having-the best right to the property. Assuming that she had merely an equitable interest in the bond, such as she would have had in case the legal title had been transferred to her guardian, but impressed with a trust in her favor; in that ease the only way in which the plaintiff could defeat that equity would be by showring that he had become a bona fide purchaser for value without *172notice. But he does not occupy that position, for he has not succeeded in clothing himself with the legal title, and that is of the essence of the equitable defence of purchaser for a valuable consideration. All that he has is an equity as between himself and the guardian, individually. That equity is clearly subordinate to that of the defendant, Isabella, both' as it regards its character .and the time of its origin. • If the legal title was in the guardian as trustee, the equity of the cestui que trust must have been preferred to any that might be created through any act of misconduct on the part of the trustee, for it was impressed upon the legal title from the moment of its creation, and could only be displaced by an equity to which the cestui que trust was, in some respect, subject. An equity claimed through the misconduct of ■the trustee could not occupy such a position.
But the case is stronger than that supposed, for the defendant Isabella had more than equity. She had the beneficial interest in the bond without any vesting of the legal title in the guardian ■so as to reduce that beneficial interest to a mere equity. As there was no legal title standing in the way of her beneficial, it was entitled to legal as well as equitable consideration, and, consequently, (he defendant Isabella has the legal as well as the best ■equitable right to the bond and was entitled to recover.
It is contended by the plaintiff that as between the estate of the deceased guardian and the ward there have been transactions that amount, in law, to the payment of the amount covered by this bond in suit. If it had appeared that these transactions, alleged to amount to payment, had taken place prior to the transfer of the bond in suit, from the deceased guardian to the plaintiff, there might be more reason to inquire whether the legal ■effect of such transactions is such as is claimed for them, for in that case it might well be said that the equity of the ward was extinguished at the time of the transfer of the bond, and that of the plaintiff would remain as the controlling equity; but the fact appears otherwise. The argument in behalf of the plaintiff must rest on one of two assumptions, either that the deceased guardian or his executor had the right to elect to take the bond and become a debtor to the ward for its amount, or that the ward Tad, in effect, made such an election through the effect of her *173appearance in the suit to marshal the assets of the estate of the deceased guardian, brought by his executor and by the decree therein. It is clear that a guardian cannot appropriate the property of his ward by making himself a debtor for the value of such property, so as to invest himself with the title of such property, either in law or in equity. If the ward is bound by transactions amounting to an assent that the guardian shall have the property and become a debtor, then such a transfer of interest may be brought about.
It is contended that under the bill to marshal the assets of the estate of J. W. Wilson, the deceased guardian, brought by Le Roy Wilson, the executor of J. W. Wilson, the account of the deceased guardian with his ward was adjusted on the principle of charging such estate with the amount of the bond assigned to plaintiff, and that the ward being a party to the suit is bound to such mode of statement. It is claimed as a deduction from this that when the transaction assumed the form of a mere indebtedness between the deceased guardian’s estate and the ward, in view of the fact that Le Roy Wilson, the present guardian, was surety for J. W. Wilson on his guardian’s bond, that the debt became ' paid by the operation of law. It will not be necessary to examine the soundness of this view, as it does not appear to rest on an adequate basis of fact. It does not appear, from what is disclosed of the accounting in the suit to marshal assets, that this particular bond was brought into the account. The duty of a guardian is to turn over to his ward, specifically, all the property of his ward in his hands and to account for all his pecuniary transactions. It is true that where he has committed waste of his ward’s estate, he is bound to account for that; but it does not appear that the accounting established any such devastavit as the basis of the accounting on the part of the deceased guardian’s estate. Such fact cannot be presumed; and as the question is one of estoppel upon a record, we are not at liberty to speculate as to what matters may have been affected by such record, but must take it at what appears by it. Under such circumstances-we cannot say, from the evidence ■ before us, that the deceased guardian’s estate has ever accounted for the value of the bond in *174■suit, and, consequently, no such effect upon the rights of the ward has been accomplished as that contended for.
The decree of the Circuit Court must be affirmed and the appeal dismissed.
Mc'Iver and McGowan, A. J/s, concurred.