Swartwout v. Oaks , 1868 N.Y. App. Div. LEXIS 126 ( 1868 )

By the Court, Johnson, J.

It is admitted by the counsel for the defendants that they are liable, upon the bond, for the principal of the fund which the special guardian of the plaintiff received and converted to his own use in violation of his duty and trust as such guardian. It is contended, how'ever, that they are not liable for the interest, which their principal received from the fund, although he converted it to his own use, as he did the principal, and never paid .or expended any portion of either for the use and benefit of the plaintiff. The special guardian was also general guardian of the plaintiff, and it is claimed that he must be adjudged to have received the interest in his capacity of general guardian; and that the defendants not having been sureties for him as general guardian, but as special guardian only, cannot be made liable for such interest. But upon the facts found by the referee, and about .which there is no dispute, there is no presumption that Shimer, their principal, received the interest in any other capacity than that of special guardian. The portion of the fund which he invested, he invested in violation of the order of the court, in respect to the time of payment. He made the securities, interest as well as principal, payable to himself as special guardian. . Upon one of the securities the payments of interest are indorsed by him as special guardian. And indeed the legal presumption must be that he received both principal and interest in the way, and in the character in which they were made payable, in the absence of any evidence to the contrary. By the order of the court the special guardian was required to invest the fund in securities, upon unincumbered real estate, of double the value, payable one half to each, when the plaintiff and the other infant should respectively arrive at the age of twenty-one years, with annual interest. .The order does not specify in whose name the securities shall be taken, nor does the statute. Eule 69 of this court provides that the proceeds of the sale of the infant’s real estate shall be brought “into court,” or the special guardian shall “ invest the same under the direction of the court, for the use of the infant.” I am of the opinion, therefore, that it was no violation of the order of the court or of the duty of the special guardian, to make the securities payable to himself as such special guardian. The error in this respect was as to the time at which the principal was made payable. He had no right to receive the principal at all without the order of the court, after its investment; and the rule above referred to prohibits him from receiving any more of the interest or income without the order of the court, than may be necessary for the support and maintenance of the infant. Here nothing was necessary for the support of the plaintiff. The referee finds that he lived with, and was supported by an uncle, without charge to Shimer, either as special or general guardian. The condition, therefore, on which bis right to receive the interest, or a portion thereof, without the order of the court depended, did not exist. Eule 69 relates to the special guardian, and not to a general guardian, as the defendants’ counsel supposes. As general guardian, clearly Shimer had no use for the money, as he was not called upon or required to furnish any thing for the plaintiffs’ support and maintenance. Indeed, it is clear that he received it only to use' for himself. This is to be inferred from the fact that he so used it. The interest, as well as the principal, was therefore received and converted by Shimer in clear violation of his trust, and of his obligation as special guardian, and his sureties became liable to'the plaintiff for both.

There is no force in the suggestion that the plaintiff must follow the Boyd bond and mortgage in the hands of Hurd, the assignee. It is enough for him that his special guardian sold the security and realized the money upon it to his own use, in violation of his trust and his bond. The judgment should, therefore, be affirmed.

[Monroe General Term, December 7, 1868.

E. J). Smith, Johnson and J. G. Smith, Justices.] *