Hughes v. the People

• Decision Date: 22 January 1885
• Citation: 1885 WL 8138,111 Ill. 457
• Parties: WILLIAM E. HUGHES et al.v.THE PEOPLE, for use of T. C. Kerrick.
• Court: Illinois Supreme Court

111 Ill. 457

1885 WL 8138 (Ill.)

WILLIAM E. HUGHES et al.

v.THE PEOPLE, for use of T. C. Kerrick.

Supreme Court of Illinois.

Filed at Ottawa Jan. 22, 1885.

OPINION TEXT STARTS HERE

APPEAL from the Appellate Court for the Second District;--heard in that court on appeal from the Circuit Court of Livingston county; the Hon. FRANKLIN BLADES, Judge, presiding.

Messrs. STEVENSON & EWING, and Messrs. FIFER & PHILLIPS, for the appellants:

A guardian is a trustee, and the general principles relating to trustees are applied to him. 2 Kent's Com. 230, 231, and notes; Newman v. Reed, 50 Ala. 297.

If a trustee acts with due diligence in the discharge of his duty, he is not to be held liable for injury and loss accruing to the beneficiary. Newman v. Reed, 50 Ala. 297; Gould v. Hayes, 19 Id. 438; Henderson v. Summers, 33 Id. 438; Ivey v. Coleman, 42 Id. 409.

This is the proper rule to apply to guardians. 4 Bacon's Abr. 561.

A guardian is not liable for an error in judgment in making investments, where he acts in good faith, and is reasonably prudent under the circumstances. Lowell v. Minott, 20 Pick. 116; Covington v. Leak & Wall, 65 N. C. 594; State ex rel. v. Munson, 68 Id. 162.

One holding trust funds must put them out at interest. Newman v. Reed, 50 Ala. 297. A guardian acting in good faith is not chargeable with loss, even where he fails to exercise the highest diligence. Love v. Logan, 69 N. C. 70.

The guardian may change personal property into realty, or realty into personal property, without making himself responsible, though the change subsequently proved injurious. Bonsall's case, 1 Rawle, 266; Gelbach's appeal, 3 S. & R. 205; Boggs v. Adger, 4 Rich. Eq. 408; Lovell v. Minott, 20 Pick. 116; State ex rel. v. Munson, 68 N. C. 162.

If the guardian or trustee does an act without applying to the court, which, if asked, would have been given, being for the benefit of all concerned, it will be ratified and affirmed, or held of the same validity as if previously ordered by the court. Gay v. Lynch, 8 Gill, 404.

Previous approval is not always necessary. Janett v. Andrews, 7 Bush, 311.

The county court having refused or neglected to examine and approve of the securities, ought not to prejudice the honest and faithful conduct of the guardian.

Compound interest was at times charged by the English courts to guardians, like other trustees, but only in cases of willful and corrupt misappropriation of the trust fund.

Interest was not allowed at common law unless there was an express contract to pay interest. Madison County v. Bartlett, 1 Scam. 69; Sammes v. Clark, 13 Ill. 544; Hitt v. Allen, Id. 592.

Messrs. KERRICK, LUCAS & SPENCER, for the appellee:

The statute made it the guardian's duty to invest his ward's money in real estate security, to be approved by the county court; and this is mandatory, as a further protection to the funds of wards. Having failed to observe this duty, the guardian loaned at his peril. Not having discharged his duties faithfully, he was entitled to no compensation. Bond v. Lockwood, 33 Ill. 216. Mr. JUSTICE MULKEY delivered the opinion of the Court:

At the June term, 1874, of the county court of McLean county, William E. Hughes was appointed guardian of Ellen Murray, and entered into bond as such, with John F. Humphreys and others as his sureties. While acting as guardian, there came to his hands the sum of $8100 belonging to his ward, a considerable portion of which he appears to have loaned to different parties upon real estate security, without the approval of the county court, and the security thus taken as to some of the loans has since turned out to be insufficient, whereby a loss has occurred. In July, 1878, T. C. Kerrick succeeded Hughes as guardian, whereupon the latter turned over to him a part of the fund, and also tendered him the balance in notes and mortgages of the character just stated, but Kerrick declined to receive them, on the ground they were not available, and that the loans had been made without the authority of the county court. Hughes insisting on his right to turn over these securities in discharge of his liability as guardian, Kerrick brought an action in the McLean circuit court, against him and his sureties on his guardian's bond. The cause was subsequently removed from McLean to Livingston county, where a trial was had, resulting in a verdict in favor of plaintiff for $3337.79, which, on appeal, was affirmed by the Appellate Court for the Second District, and the cause, by further appeal, is brought to this court.

The errors of law complained of, arise on the rulings of the trial court. That court, in effect, held that the statute requiring a guardian to keep his ward's money at interest, upon good security, to be approved by the county court, is mandatory,...