Meyers v. Martinez , 172 Ala. 641 ( 1911 )

DOWDELL, C. J.

When this case was last here on appeal (to he found reported in 167 Ala. 456, 52 South. 592), the equity of the bill was sustained in so far as it sought to open up the final settlement of the guardianship in the probate court and to charge the guardian with the profits realized from the investment of her ward’s money in the stock and bonds of the Meridian Light & Railroad Company, on the allegations of a fraudulent concealment by her of the facts in the making of said settlement; but as to other items of charges sought to be made against the guardian the bill was held to be subject to the demurrer interposed. The bill also was held to be insufficient in averment, and of consequence subject to demurrer in respect to the alleged fraudulent conveyance by Elizabeth Meyers to her corespondent, Mary J. Martinez, which was sought to be canceled. Since the remandment of the cause the bill has been amended by striking out the items or claims with which the guardian was held on former appeal not to be chargeable in this proceeding, and also amended by additional averments in respect to said alleged fraudulent conveyance.

As the bill now stands since amendment, it avers that the complainants were existing creditors of the grantor at the time of the making of the conveyance assailed for fraud, and that the cash consideration of $4,000, named in the deed, was simulated; and, if that is not true, the bill avers in the alternative that the consideration paid, was grossly less than the real value of the property, and that the recited cash consideration in the deed, over and above the assumed mortgage debt by the grantee on the property conveyed, was fixed and agreed on between the grantor and grantee as a means whereby the value of the said property conveyed, over and above the recited consideration, should be removed beyond the reach of the complainants as creditors of said defendant Meyers, and that the grantee participated in said fraudulent purpose, which was to hinder, delay, or defraud the complainants in the collection of their debts. The averments of the bill as amended, when fairly and reasonably construed, we think sufficiently charge notice and that the grantee participated in the alleged fraud; and this is so as to each alternative averment, and neither was therefore subject to demurrer.

The investment by the guardian of the funds of her ward’s estate in the stock and bonds of the Meridian Light & Railroad Company, as shown by the bill, was a single transaction, and the guardian was liable to account for the profits arising from the investment. This is what the bill seeks to charge her with, and the facts concerning which the bill alleges she fraudulently concealed in making final settlements of her guardianship accounts in the probate court. In this respect the bill undoubtedly contains equity. The bill, however, does claim more. In addition to charging her with the profits arising out of the investment in the stock and bonds, it seeks to charge her with interest on the entire amount, principal sum and profits, after realizing on the sale of the bonds and stock from the date of such sale. In this respect the bill is objectionable, and open to the demurrer directed to this feature. Where the guardian without authority invests the money of his ward, the latter has the option to elect to claim the benefit of such investment, or to disregard it and charge the guardian with interest. He cannot claim both profits and interest. But when a definite election is made to claim the profits, and the guardian refuses to account for the profits, then, in such event, we apprehend the law to be that the guardian is chargeable with interest on both principal and profits from the date of such election by the ward.

For the error indicated, the decree overruling the demurrer is reversed, and one will be here rendered sustaining the ground of demurrer going to that part of the bill which seeks to charge the guardian with both profits and interest, and in other respects the decree is affirmed.

Affirmed in part, and reversed, rendered, and remanded.

Anderson. Sayre, and Somervil-le, JJ., concur.