Frost v. Winston

• Decision Date: 31 July 1862
• Parties: JAMES E. FROST, Appellant, v. JOHN H. WINSTON, Respondent.
• Court: Missouri Supreme Court

32 Mo. 489

JAMES E. FROST, Appellant,

v.JOHN H. WINSTON, Respondent.

Supreme Court of Missouri.

July Term, 1862.

Appeal from Weston Court of Common Pleas.

Vories, Spratt, and Merryman, for appellant.

I. The eighth error of the court is the most prominent one in the case. It is in relation to the computation of interest. The defendant excepted to the report of the commissioner because the commissioner compounded the interest annually at the rate of six per cent.; and the court sustained the exception and referred the case back, with directions to compute at simple interest and not compound it. The plaintiff contended that it should be compounded annually; and the question for the court to decide is whether the interest should be compounded or not, and whether it shall be computed according to the legal rates of interest in this State, or according to the laws of North Carolina. The petition charges that defendant used the money from the time he came to the State, and he lent it, or could have lent it, at the rate of ten per cent., compounded annually. The answer admits he used it and lent part of it at ten per cent. The evidence shows that, from 1838 up to the time of giving their testimony, money was worth ten per cent., compounded annually, and could have been loaned all the time at that rate. All these witnesses managed money, and they say they had no difficulty in loaning at ten per cent., compounded annually. It may be contended that as defendant received his appointment as guardian in the State of North Carolina, he is not governed by the laws of Missouri, and is only bound by the rate of interest in that State, which is six per cent. compounded annually. It may further be argued that plaintiff cannot sue here in our courts. As to that, we refer the court to the private acts of Legislature passed in 1855, art. 5, § 5 & 6, pp. 96 & 97.

Independent of that act, our courts have jurisdiction. This doctrine is well settled in Story's Conflict of Laws. (See § 506, t. p. 417.) Story and Kent both say that it is the right of the guardian to change the domicil of the ward--that he may do so though it change the right of succession. If defendant exercised this right and removed the plaintiff to Missouri with his property-- and in so doing, as Story says, the right of succession and the laws of descent of this State govern his property--certainly he has a right to appeal to the laws and courts here to protect him in his property. This doctrine has been settled in Ohio. (See 8 Ohio, 227.) In this case the guardian was appointed in Pennsylvania, and received the ward's property and removed to the State of Ohio. The court decided the guardian was bound to account under the laws of Ohio, and the court say it is the doctrine in England. (See 1 Pars. Sel. Cas. in Eq. 411; 18 Martin, 69.)

The pleadings and evidence show that defendant received the effects as testamentary guardian. If so, a Court of Chancery has jurisdiction wherever he may go with the property.

Defendant, the moment he received the money of plaintiff, received it as the ward's money, and he brought it to Missouri. And what was his duty at common law? It was to loan it at the highest rate of interest; and the laws of Missouri compelled him to make annual settlements, and further directs the court to charge them with the interest annually. The statutes of Missouri direct and authorize the guardian to loan the money and take notes binding the obligors to pay the interest annually, and, if not paid at the end of the year, the interest to bear the same rate of interest as the principal. The court in this case only charges defendant with simple interest. If defendant had made his settlements annually, the court would have charged him with the interest in each settlement. It was his duty to have made his settlement; and by his failure the court should not relieve him from his liability by his refusal to do his duty. The defendant further states in his answer, that year after year he went into the Probate Court of Platte county and had the identical accounts proven up and allowed against plaintiff, and he pleads them by way of offset in this suit. If the Court of Probate had jurisdiction to allow the accounts of defendant's offset, it had jurisdiction to settle the estate as guardian. In Missouri, the rate of interest from 1835 to 1847 was ten per cent. (R. C. 1835, p. 333, § 2, and p. 295, § 9 & 10; R. C. 1845, p. 613, § 1 & 2--also, p. 551, § 23; 1 Johns. Chy. 620-628; Wright v. Wright, 2 McCord, 203; 4 Johns. Chy. 303; 4 Vesey, 620; 2 Kent's Com. 237; R. C. 1845, p. 551.)

There is a difference in administrators and executors, and guardians, and the distinction is drawn in Story and the Ohio case above cited.

II. The court, in referring the case back to the commissioner, directs him to allow defendant a commission of five per cent. on the whole amount. He failed to make any settlement, was derelict in duty, put himself to no trouble, and has forfeited all claim for his services, and has performed none, and therefore he is entitled to no remuneration. (2 L. Cas. in Eq., part 1, p. 344; Boyd v. Boyd, 2 Grat. 125; 2 L. Cas. in Eq., part 1, p. 337.) In the same volume, part 1, the rule in North Carolina is stated, p. 339; Maryland, the rule is also stated, p. 333. Pennsylvania, the same rule. (2 L. Cas. in Eq., part 1, p. 323.)

III. The court below set aside the first report of the referee, and referred the case back to him by the following order and with the following instructions:

“It is therefore ordered and decreed that the case be remanded to the referee, with instructions to charge the defendant with the highest rate of simple interest allowed by the statute law of North Carolina while the money remained there, and after the removal of it here to charge the highest rate of interest allowed by the laws of Missouri (simple interest), and allow the defendant five per cent. commission upon the whole amount at the time of settlement with the plaintiff, and the actual expenses incurred in reducing the property of plaintiff to possession; also the necessary expenses in taking care of the person of the defendant during his minority.”

This order is erroneous, because:

a. The defendant should have been compelled to make annual rests, and compound the interest annually. (1 Johns. Chy. 620-628.)

b. The order directed that the defendant should be allowed a commission of five per cent. not only upon the money received by him as guardian, but also on the interest on said amount up to the time of taking the account--this interest never having been paid or accounted for in any manner whatever, so as to make it of any profit to his ward. And in fact he was not even entitled to any commission, inasmuch as he had used the money as his own in common with his other moneys and property. (See cases elsewhere referred to.)

The referee, in taking the account under these instructions given by the court, adopted a method of computation which was not only in violation of all law, but was really an outrage on rights of the plaintiff; that is to say, he charged the defendant only simple interest on the amount of money actually received by him, so as to deprive the ward of any benefit from the interest accruing on his money for over twenty years. And then he allowed the defendant interest on all amounts paid for the benefit of the ward from the time that the same was paid up to the time of taking the account. To illustrate this mode of computation, it will be seen that in July, 1840, the interest then due on the money in the hands of defendant was over two thousand dollars. At this time defendant paid for the benefit of the ward sixteen dollars. The referee allowed the defendant twenty-four dollars and ninety-four cents interest on this payment, making forty dollars and ninety-four cents, for which he gave defendant credit, when the two thousand dollars' interest due plaintiff at the time...