Hodges v. Council

• Decision Date: 28 February 1882
• Citation: 86 N.C. 181
• Court: North Carolina Supreme Court
• Parties: HOLLAND HODGES and others v. JAMES COUNCIL and others, Adm'rs.

86 N.C. 181

HOLLAND HODGES and others

v.JAMES COUNCIL and others, Adm'rs.

Supreme Court of North Carolina.

February Term, 1882.

CIVIL ACTION tried at Spring Term, 1881, of WATAUGA Superior Court, before McKoy, J.

This action commenced on the 19th day of April, 1880, is prosecuted against the defendants, as administrators of Benjamin Council, guardian, for an account and settlement of the trust estate committed to the hands of the intestate, and for the recovery of the sums which may be found due to the several wards. The material facts admitted, or if controverted, found by the jury, are as follows:

Joseph C. Mast, the grandfather, from whose estate the funds were obtained, died in 1841, intestate, and thereafter during the same year the said Benjamin Council who had married a daughter, then deceased, was appointed and qualified before the proper court, as guardian to their infant children, the plaintiffs Elizabeth and Joseph, and the intestates of the other plaintiffs in the action, and as such received their distributive shares. The plaintiff Elizabeth married the plaintiff Holland in 1852, and attained her majority in 1856; the plaintiff Joseph became of full age in 1854, and of the intestates, Jacob died in 1865 at the age of 42 years, Sarah (who, while still an infant married one Ebenezer Smith, who died during the late civil war,) died herself in 1878, having reached her 53rd year, and John, neither begotten nor born in wedlock, the remaining ward, died about 1859, when 36 years old. It thus appears that Elizabeth had attained her majority, 24 years; Joseph, 26 years; Sarah, 33 years; John 35 years, and Jacob 36 years, previous to the issuing of the summons in the suit.

Upon the rendering of the verdict and at the instance of the plaintiffs' counsel, the court adjudged they were entitled to an account, and ordered a reference to ascertain and report the property and effects, and the value thereof which came, or ought to have come into the possession of the guardian by virtue of his said office and his administration of the trust fund. From this judgment the defendants appeal.

Mr. J. F. Morphew, for plaintiffs .

Mr. G. N. Folk, for defendants .

SMITH, C. J., after stating the foregoing facts.

Two defences are set up against the maintenance of the action, and exception is also taken to the order of reference consequent upon the adverse rulings:

1. The bar of the statute of limitations.

2. Payment and satisfaction, the presumption of which arises under the statute from the lapse of time since the wards became of full age.

I. There is no statutory limitation of time prescribed for bringing the action to obstruct the plaintiffs' recovery, and the first defence is untenable.

The guardian has entered into bond for the faithful discharge of his official duties in securing, managing and delivering over the trust estate to his wards, and thus added his personal covenant to perform to the obligation incurred by the acceptance of the appointment, and growing out of the legal relations subsisting between himself and them; and the law in force and governing the present case fixed no determinate period in which the remedy on the bond must be pursued against him, while it did protect the sureties after a delay of three years. Rev. Stat., ch. 65, § 7. The present suit to enforce this legal obligation against the guardian only, encounters no such legal impediment.

II. It has been repeatedly declared by this court, that the statutory presumption of payment or satisfaction on all judgments, contracts and agreements arising within ten years after the right of action accrues, (Rev. St., ch. 65, § 13,) has no application to an express trust, open and unperformed, because the relations thus formed are not adversary until they are made so by some act of the trustee, in repudiation of the trust and known to the cestui que trust; and then, as in case of a trust declared by the court, and founded in fraud or the like, the latter must assert his equity within a limited time, in analogy to the rule at law, or relief will be denied. Where this occurs, the statute is put in motion and the presumption it draws from long inaction prevails alike when the proceeding is in equity as when the action is presented at law. Edwards v. University, 1 Dev. & Bat. Eq., 325; State v. McGowen, 2 Ired. Eq., 9; Hamlin v. Mebane, 1 Jones Eq., 18; Davis v. Cotten, 2 Jones Eq., 430, and other cases. See also Godden v. Kimmell, 99 U. S., 201. “It has been invariably maintained,” is the conclusion reached by the author of the work on limitations, after a careful consideration of adjudged cases, “that if a trustee should deny the right of his cestui que trust, and assume absolute ownership of the property he holds in trust, he abandons his fiduciary character, and the cestui que trust must commence legal proceedings against him within the prescribed time;” and he adds as illustration that “after a ward comes of age the fiduciary relation of the guardian ceases, and they thereafter stand as debtor and creditor,” and the ward's...