In re the Judicial Settlement of the Account of Sack , 75 N.Y.S. 120 ( 1902 )

Spring, J.:

We must assume upon this appeal that the appellant received over $1,500 belonging to her ward which she still retains, and that the petitioner, until about the time of the commencement of this proceeding, did not know that her guardian had this money in her custody. During the long period elapsing since the petitioner became of age there has been no repudiation or disclaimer of the guardianship by the guardian, or of the receipt and retention of the moneys by her in that capacity. While the duty'was upon the guardian to initiate proceedings for the settlement of her account she has disregarded this duty, and if the allegations of the petition are true, has misappropriated the moneys belonging to her cestui que trust. To be sure, the respondent could have required an accounting, but the only object of resorting to the proceeding by her was to obtain from the guardian whatever belonged to the petitioner, and if the latter believed there was no money in the custody of the guardian she was not called upon to incur the expense and annoyance which such a proceeding might involve. The bare fact that nothing was done by the guardian, either to settle formally her account in the Surrogate’s Court or with the petitioner, indicated to the petitioner that the guardian had no funds in her hands.

While there is considerable conflict in the authorities as to the operation of the Statute of Limitations in favor of a guardian or executor or administrator as against the ward or beneficiaries, we believe the doctrine may be regarded as settled to the extent, at least of holding that where a ward, having reached his majority, believes that his guardian has no money belonging to him, and there has been no act of the guardian known to the ward in repudiation of the guardianship, that the Statute of Limitations is no bar to a proceeding of this kind.

In Matter of Petition of Camp (126 N. Y. 377) the infant became of age in 1872, and did not commence the proceeding to compel his guardian to account until 1888 when the latter raised the question of the Statute of Limitations. In that case, as in the present, the petitioner was ignorant of the receipt of the moneys by the guardian until within a year prior to the commencement of the proceeding, and no inventory or account had ever been filed'. The court in discussing the proposition as to the running of the Statute of Limitations, uses this language (at p. 389): “Although he may cease to be guardian upon the ward coming of age, yet so long as the property remains in his possession as. guardian and unaccounted for, he must remain liable to account. This is no hardship upon the guardian, nor can it be the means of sustaining stale claims against him as such. The moment the ward arrives of age he may cite the guardian to account, and now by the Code of Civil Procedure (§ 2849, following the provisions of the Revised Statutes, vol. 2, p. 152, § 12), the guardian may,- in any case where a petition for an accounting may be. presented by any other person, present one in his own behalf, and an accounting may then be had. Thus, either party may claim-an accounting the moment the ward attains his majority.”

In Matter of Taylor (30 App. Div. 213) letters of administration were issued in November, 1888, and the order compelling the accounting was entered in January, 1898, A judgment had been recovered against one of the next of kin and the petitioner was appointed the receiver of the property of the judgment debtor.. The Statute of Limitations was urged, and the court overruled this defense and required the administrator to account, holding that until the administratrix has legally accounted for the funds that she has received, “ or until she has publicly and officially renounced her trust,” the statute does not become operative. Matter of Grandin (61 Hun, 219); Matter of Jones (51 App. Div. 420); Matter of Beyea (10 Misc. Rep. 198); Mount v. Mount (35 id. 62), and Zebley v. Farmers’ L. & T. Co. (139 N. Y. 461) each sustain the principle that there must be a denial or disclaimer of the trust before the Statute of Limitations is set running.

• The position is a very reasonable one, for the guardian alone as a rule possesses exact information as to the condition and amount of the funds in his custody. If he has administered the trust properly he has kept the fund invested and is able to present an itemized statement concerning it. A provident and careful guardian will settle his account when his ward arrives at his majority. The guardian’s management of the trust estate should then cease. He may voluntarily settle with his ward, and upon filing the.proper •voucher a decree may be entered discharging him. The proceeding is simple and inexpensive, and if the guardian neglects to have his guardianship properly terminated, he is the delinquent. In the event of his remissness the retention of any funds by him operates to continue his trust management of the property. The relation is not that of debtor and creditor, but the guardian is the custodian of the funds of another which he voluntarily undertook to keep invested in a certain way for a fixed compensation, and all the time the property is his ward’s, disconnected from any other, and until its transfer to his cestmi que■ trust, the guardian is acting in recognition of his trusteeship.

In this ease the guardian, in her answer, does not deny that she received this fund. She alleges, as a defense, that it has been expended for the benefit of the petitioner, to whom, she averred, “ large sums ” have been paid since she became of age. The petitioner is entitled to know in what way this fund, a portion of which remained unexpended when she attained her majority, has been disbursed by her guardian.

The order should be affirmed, with ten dollars costs and the disbursements of this appeal against the appellant personally.

McLennan, Williams, Hiscook and Davy, JJ., concurred.

Order affirmed, with ten dollars costs and disbursements of this appeal against the appellant personally.