State Ex Rel. Harris v. Harrison , 78 N.C. 202 ( 1878 )

In 1868 the feme plaintiff, then an infant, recovered Judgment against C. B. Harrison, administrator of McKnight, her former guardian, for $5,997.23.

In 1871 said Harrison became the guardian of feme plaintiff, and sold her land for $1,471.

The two sums make $7,468, no part of which has been paid to her. And this action is brought to recover it of the defendants, sureties on Harrison's guardian bond.

The estate of McKnight was solvent; Carter B. Harrison, now bankrupt, was solvent; his administrator sureties were and are solvent; and his guardian sureties are solvent. And yet his ward, (211) the feme plaintiff, now at maturity, cannot get her estate. The administrator sureties say that they are not liable, because the administrator, Harrison, paid over the estate to the guardian, Harrison, which the guardian sureties deny; and both sets of sureties say that that is not a question for them to settle among themselves, nor is it for them to furnish the plaintiff with any information, but that it is for her to find out as best she can; and if she sue either set, and fail to make out aclear case, she must fail.

This does not sound well, to say the least.

If this is the law of administrations and guardianships, then the law has either been badly made or badly interpreted.

It would seem that the law ought to be that the administrator should be required to show precisely what came or ought to have come to his hands, and what he did with it; and that the guardian should show precisely what came or ought to have come to his hands, and what he did with it; and that all this ought to appear of record, so that the ward, who has all the while been dependent, and whose estate has paid both administrator and guardian for the discharge of these duties, should have nothing to do at her majority but to look to the record in order to ascertain her rights.

What it would seem the law ought to be, that we find it is, both by statute and the decisions of the Court.

The statute requires that a guardian shall endeavor to collect, by all lawful means, his ward's estate, on pain of being himself liable for the same if he neglect, and shall make early and frequent returns thereof on oath; and, on failure to do so, shall be put in jail until he does; and shall give bond, with sureties, conditioned that he shall faithfully execute the trust reposed in him. Bat. Rev., ch. 53.

It is difficult to see how anything could be more binding on (212) his power or on his conscience. And the same is true of his sureties. Whenever, therefore, anything has come or ought to have come to the guardian's hands, he and his sureties are liable to the ward. Why, then, are not the defendants liable in this case?

We have examined with care the elaborate report of the referee, and the exceptions thereto, and the learned brief of the defendant's counsel, and the principal defenses are twofold:

1. "That the sureties on the guardian bond are not liable, as for moneycollected and not accounted for, for money received by Harrison, administrator, and wasted by him before he made it his ward's money." And that in order to make it his ward's money, it must have been separated and set apart or otherwise appropriated by the administrator to the guardian.

2. "That the sureties on the guardian bond are not liable for the guardian's failure to collect the judgment in favor of the ward ($5,997) against the administrator, if that judgment is still collectible by theward."

In order to make the first proposition fit the case, we must strike out "as for money collected and not accounted for," because the learned counsel would not ask us to consider the proposition whether a man is liable as formoney had and received, when in fact he never received the money; and because the question is not whether the guardian sureties are liable in one form or in another, but are they liable in any form for money which Harrison received as administrator and wasted before he made it his ward's money? With this correction, both propositions are erroneous.

In opposition to the first proposition, the law is, that if the administrator had the fund and wasted it, or whether he wasted it or not, it was the duty of the guardian to collect, it being collectible. And his failure to collect was a breach of his bond, for which he and his (213) sureties are liable in damages. The amount of damages will be considered further on.

In opposition to the second proposition, the law is, that the guardian not having acted in good faith, he and his sureties are liable for the full amount of the debt to the ward, although she might collect it out of the administration bond; that she has her election to sue either set of sureties, or both, and to get judgment against both, collecting only out of one, and leaving them to adjust their equities among themselves.

1. The authorities mainly relied on by the defendants to support their first proposition — that the guardian is not liable unless the administrator separate the fund and turn it over to the guardian — are Clancy v. Dickey, 9 N.C. 497; Harrison v. Ward, 14 N.C. 417; Clancyv. Carrington, 14 N.C. 529; Winborn v. Gorrell, 38 N.C. 117.

Only the first one of these cases was upon a guardian bond, and there was a recovery against the guardian, and therefore it could not be an authority in favor of a guardian except in so far as something might be said in the opinion, by the way. But there was not even that. The case was elaborately argued by Gaston and Ruffin and there were opinions by Taylor and Henderson. The guardian before his appointment had married an executrix, who as such had possession of the slaves in controversy, and by his marriage he became executor in right of his wife, and of course her possession, was his possession, and being in possession, he was appointed guardian of the ward; and the question was, whether his possession was as executor or as guardian. Henderson, J., said, "that having the slaves in possession as executor in right of his wife, after the time allowed by law for the performance of the trusts of the will, by being appointed guardian to the child, he ipso facto became possessed of the slaves in his capacity as guardian."

There could be no stronger declaration against the defendant than that case, which is cited in his favor, if the fund in this (214) case were property.

The second case, Harrison v. Ward, was not against a guardian, but the sureties of an administrator, who sought to exonerate themselves by showing that the administrator had rendered his final account, and was then appointed guardian, and that, like as in Clancy v. Dickey, ipso fact, he was released as administrator, and became bound as guardian. Note that the question was not whether he had become bound as guardian, but whether he was ipso facto released as administrator. And it was held that he was not, the Court saying that that would have been the case if it had been property, as in Clancy v. Dickey, supra, but it was not so with money, unless separated and marked. But this Court did not say that a guardian could not be charged unless money was marked and set apart to him. The Court was trying to show how hard it is for one charged with a trust to discharge himself, and that the burden is upon him to show clearly his discharge; that he cannot discharge himself by showing that probably some one else is bound. And yet the defendant dexterously turns this to his advantage, by insisting that it ought to be as hard to tie as to unloose.Non sequitur.

The third case, Clancy v. Carrington, was decided at the same term withHarrison v. Ward, and was expressly said to be governed by it.

In Winborn v. Gorrell the wards were pursuing a third person, who had obtained from their guardian land upon which they had a lien, and the third person set up the defense that they ought to go against the sureties on the guardian bond. But the Court held that it was proper and just that they should go against the third person, who had improperly dealt with the guardian, and thereby relieve the sureties on the guardian bond. And thence it is insisted that because the wardscould go against the third person, and it was proper and just (215) that they should do so, they could not go against the sureties of the guardian. But the decision was precisely the other way. Ruffin,C. J., said: "It may be true that the wards may sue their father on his bond for the purchase money, and also might charge him and his sureties on their guardian bond; but that does not preclude them from insisting also on their real property security."

There could scarcely be a stronger case against the defendants than this; for instead of confining the wards to one remedy, or to a remedy against one, it gives three remedies against three different persons — against the land, or against the bond for the purchase money, or against the sureties on the guardian bond. The Court in that case did not leave the wards, as it is sought to leave the ward in this case, to cry like a child for a bird in the air, not knowing where to find it, or how to catch it; but, upon finding that the guardian did not have their estate in hand to deliver over to them, gave them a remedy against any one else that had it, or against his sureties, who undertook that he should have it.

Foye v. Bell, 18 N.C. 475, was also cited. In that case the sureties of a guardian becoming uneasy about his solvency obtained an order of court that he give a new bond and sureties, and the order expressly released them. And when the ward sued them, they set up the defense that they were released and that the new sureties were bound. The Court held that they were not released, they not having shown affirmatively any actual change of the effects from the old to the new fiduciaries. But the Court did not hold that the new sureties were not also bound. The contrary is to be inferred, for Ruffin, C. J., in his opinion says that "of course this opinion is not intended to affect, nor can it affect, (216) the rights of two sets of sureties as against each other, either in respect of contribution between them or of the obligation of the posterior set as substitutes to exonerate those who were prior, which rights depend on other considerations, and perhaps can be finally adjusted only in another tribunal" — equity. Nothing can be clearer from that case than that the ward had his remedy against both sets of sureties, and it was for them to settle their liabilities among themselves. And so in this case, both sets of fiduciaries are liable to the plaintiff; and then they may settle their liabilities among themselves.

Jones v. Brown, 68 N.C. 554, was also decided against the defendants. There a guardian became trustee, and was sued as guardian with his sureties, and set up the defense that the sureties were discharged, and he became liable as trustee. It was held that they were not discharged; but it was not held that the trustee was not also bound.

The only other case cited by the defendants from our own reports wasJones v. Brown, 67 N.C. 475. We fail to apprehend its bearing in this case. It decides that a trustee is a proper relator in a suit against the guardian for the trust fund.

It will thus be seen that every case cited by the defendants is either directly or by implication against them on the first point.

2. In support of their second proposition — that the defendants are not liable if the debt is still collectible by the ward — they cite a number of authorities. Those in our own Court we will discuss, and show that they do not sustain, but are against the position. Before doing so it is to be remarked that there are no facts upon which the proposition can be founded, except in part, because it appears that Harrison, administrator, sold real estate for assets more than enough to satisfy the judgment of $5,996.27, and that if he did not collect enough of the land money to pay all of the debt, yet he certainly collected very nearly enough.

And furthermore, before considering the authorities cited, it is (217) proper to concede the general rule, that a collecting agent who fails to collect is liable only for the loss sustained by his failure. And so we concede that a guardian who acts in good faith and has his ward's estate in hand, although it may consist in whole or in part of evidences of debts uncollected, is not liable "as for money had and received," nor for not having received or collected, because it is his duty to keep the money invested; and if it be well invested, he can insist upon his ward's receiving the evidences of debt as money. But that is not the rule where the investments are not well secured, or the fund not ascertained, or the debtor not known or not within reach of process, and the like cases. Nor is it the rule in any case where the guardian has been negligent, or has not acted in good faith.

The first case cited by defendant was Governor v. Matlock, 8 N.C. 425. A sheriff was sued for an escape of a debtor in execution: held, he was not liable for the debt, but for the loss resulting from the escape.

So, S. v. Skinner, 25 N.C. 564. Notes were given to a constable for collection, and when sued he tendered the notes back and they were still collectible: held liable only for the loss for not collecting, and not for the whole debt.

In S. v. Eskridge, 27 N.C. 411, notes were given to a constable for collection, and when sued he did not return the notes, but the debtors were still solvent: held liable for the whole debt. And this was because of his negligence in not collecting, and his bad faith in not returning the notes.

In McRae v. Evans, 18 N.C. 243, a sheriff was sued for not making the money on an execution. His defense was twofold: first, that he was directed by the plaintiff to hold it up, and, second, that the debt was still collectible. It was held that the first defense, if proved, was a good one, and that the second defense, if proved, relieved him from paying the debt, but left him liable for loss. And note that it was further held that the burden of proving that the debt was still collectible was on the sheriff, "and that it should be fully shown." (218)

How does that fit our case, except to show that the plaintiff is entitled to recover; because it is not "fully shown" that her debt is collectible in any other way? Brumble v. Brown, 71 N.C. 513, is to the same effect against a collecting officer.

Covington v. Leak, 65 N.C. 594, and the same case in 67 N.C. 363, are the only other cases cited by the defendants upon this second proposition, and they are conclusive against them.

In the first report of the case it appeared that the guardian had, in 1863, recovered a judgment against the administrator, who had qualified in 1857, and the administrator offered to pay the judgment, at the time it was rendered in 1863, in Confederate money, which the guardian refused to receive, and then the administrator became insolvent. After the close of the war it was sought to make the guardian liable for not collecting the judgment out of the administrator. The defense for the guardian was that he ought not to have taken payment in Confederate money during the war, and that after the war the administrator was broke. And upon that defense the court below held that the guardian was not guilty of negligence in not collecting the judgment out of the administrator. And so we would have held here, but it did not appear in the record whether there were not solvent sureties to the administration bond. If there were, then we hold that the guardian would be liable for not collecting it out of the sureties, JusticeRodman saying in his opinion: "If they were solvent, surely it was the duty of the guardian to have made good the debt." And we sent the case back to have that fact ascertained.

When the case came back again, it appeared that the administrator sureties were solvent, and were living, and that the judgment (219) debt was perfectly good and collectible by the wards. And then we held that under the circumstances of the case — the war, Confederate money, stay laws, and the condition of the country — the guardian was not guilty of negligence, and that there was no difficulty in the way of the wards collecting the judgment out of the administration sureties, Justice Rodman saying: "The highest degree of good faith is exacted of a guardian, but only ordinary diligence, and certainly not infallible judgment. In difficult circumstances, when there is no reasonable suspicion of his good faith, and when, so far as appears, he has acted honestly according to his judgment in the emergency, the law requires no more."

What does that mean, if it be not that the guardian would have been liable for not collecting the debt out of the administration sureties if he had not acted in good faith?

Did the guardian in this case act in good faith? The whole defense is based upon the idea that he did not. Were there any circumstances of war, depreciated currency, or stay laws, to excuse him? Is the judgment still unsatisfied and the sureties fully solvent and no difficulty in the way of the plaintiff's enforcing it? Who knows all this? How can it be "fully shown"? The defendants themselves show that it is not so, for they have all the right to pursue the administration sureties and the administration fund that the plaintiff has, and they have had to enter into troublesome and expensive litigation against the administration sureties, and the purchasers of the lands, to try and work up their liabilities.

In Powell v. Jones, 36 N.C. 337, a guardian had sold a bond belonging to his ward's estate, and had become insolvent, and left the State. The wards first sued the sureties of the guardian and got judgment against them for the amount of the bond. They then sued (220) the assignee of the bond, and he set up the defense that they had their remedy against the sureties of the guardian, and that they had in fact sued and recovered a judgment against them, and that they were solvent: held, that the ward "may elect to have satisfaction out of which he pleases."

So in Fox v. Alexander, 36 N.C. 340, a guardian had improperly sold a bond of his ward, and the ward sued the sureties of the guardian, and collected the money out of them, although he could have collected out of the assignee of the bond; and then the sureties collected it out of the assignee.

So in Horton v. Horton, 39 N.C. 54, the decision was to the same effect. The duty of a guardian is to gather, and neither to scatter nor allow to be scattered his ward's estate, on pain of being himself liable if he neglect.

Our conclusion is that the defendants are liable, not only for what the guardian Harrison did receive from the estate of McKnight, but for what through his neglect and bad faith he failed to receive; and this without regard to the fact that the plaintiff ward might have a remedy against the sureties of the administrator of McKnight's estate, and against the purchasers of the McKnight and Gilly Jeffreys land. And then the defendants will be substituted to the rights of the ward, and may pursue any equities which they have against others.

This view of the case substantially overrules all of the defendants' exceptions to the report, and sustains the plaintiff's second exception.

It will be referred to the clerk of this Court to reform the account stated by the referee, by adding the item embraced in the plaintiff's second exception, and report the account as reformed, and (221) then there will be a judgment here for the amount.

The clerk will be allowed $20. The plaintiff will recover costs. The judgment below is affirmed as before stated. The allowances to referee and solicitor are not considered.

PER CURIAM. Judgment accordingly. Cited: Ruffin v. Harrison, 81 N.C. 209; Luton v. Wilcox, 83 N.C. 24;Street v. Tuck, 84 N.C. 607; Culp v. Lee, 109 N.C. 678; Culp v.Stanford, 112 N.C. 668; Holden v. Strickland, 116 N.C. 192; Loftin v.Cobb, 126 N.C. 58, 61.

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