Nance v. Nance
| Decision Date | 09 October 1869 |
| Citation | 1 S.C. 209 |
| Parties | LAURA E. NANCE v. R. D. NANCE AND ANOTHER. MARY W. NANCE v. SAME. |
| Court | South Carolina Supreme Court |
The authorities in this State show that a guardian or other trustee. having funds to invest, may loan them to private persons, provided he takes security. Primarily it is his duty to take, as security, mortgages of unincumbered real estate of value sufficient to make the fund safe; and it is only where such real security cannot, with reasonable diligence be procured, that he may take personal security in lieu thereof. Where personal security is taken, it will devolve upon the guardian or trustee to make the necessity and propriety of such investment appear upon an accounting with his ward, or cestui que trust .
The discretion of a trustee, as to the class of securities in which he may make investments, is not unlimited; and it is only when he acts within the limits of his discretion that the rule applies which relieves him from liability for losses where he has acted in good faith, and with ordinary care and prudence.
Failure of a guardian to report a security as an investment is not conclusive evidence against him, when, upon an accounting, he sets it up as an investment.
Where upon a loan of trust funds, personal security is taken, it is not conclusive evidence of negligence that the real estate included in a mortgage taken as additional security, was encumbered at the time.
That a guardian of two wards made investments on their joint account, without distinguishing their several interests in the same, is, of itself, no reason why the investments should be disallowed.
A loan to an individual, without security, will not be sustained nor can the guardian himself become the surety.[(a)]
BEFORE JOHNSON, CH., AT NEWBERRY, SEPTEMBER, 1867.
The decree of His Honor the Chancellor is as follows:
JOHNSON, Ch.
Drayton Nance, the father of the complainants, died on the 13th day of September, 1856, leaving of force his last will and testament, of which Frederick Nance and John A. Barks-dale were appointed executors, and under authority of which they have nearly administered the whole estate. In the sixth clause of the will the testator directs his executors to have suitable settlements made upon each of his daughters of all the property which he gives to them in the will, by the Court of Equity. In requiring this he expresses the desire that such settlement shall be made as liberal as the circumstances of each will justify. The testator also appointed his brother Frederick Nance testamentary guardian of the complainants, and, in making such appointment, conferred upon him the power to discharge all the duties of a guardian appointed by any of the Courts.
By virtue of such appointment he received the whole of the complainants' estate into his possession, which consisted entirely of money and choses in action.
In 1857 he made a return of his receipts and expenditures, on account of the complainants, to the office of the Commissioner in Equity, and upon being then informed by him that the returns should be made to the office of the Ordinary, afterwards then to that office.
In June, 1863, Frederick Nance died, leaving of force his last will and testament, of which his sons, Robert Drayton Nance and John K. G. Nance, were appointed executors, who have since qualified as such, and have taken possession of his entire estate, and have permitted a large portion of the same to go into the possession of the legatees and devisees; and two of the tracts of land which belonged to his estate have been sold by the devisees, and one of them is in the possession of Edwin G. Simpson, and the other in the possession of Dr. Wm. Philips, who have been made parties to these proceedings by amended bills, for the purpose of requiring them to contribute a portion of the value of the same, if the assets retained by the executors should prove insufficient to meet the recoveries of the complainants in their case.
After the death of Frederick Nance, the pocket book, in which he kept his most important papers, was opened, and in one pocket was found a list of notes belonging to himself, and in another pocket was found a list of notes wrapped in paper, endorsed, in the handwriting of the deceased, ."
The complainants have filed their bills for the purpose of having their estate accounted for by the executors of their late guardian, and for the purpose of following his estate in the possession of E. G. Simpson and Dr. Philips, if the same should become necessary; and also for having their estate settled upon them, respectively, in accordance with the directions of their father's will. The matter in relation to the trustees and the proper terms of settlement has been referred to the Commissioner, and he has made his reports on the same, to which no exception has been filed.
The executors of Frederick Nance acknowledge their liability, as such, to account to the complainants for their estate, which went into the hands of their testator, or were retained by him; but they insist that they still hold two of the notes which he received as a part of their estates, and that their money was invested in the other notes contained in the second " list of notes," and in Greenville and Columbia Railroad scrip, & c.; and that all of which were abundantly good when the investments were made; and that if any of them are not now good, it has resulted from the casualties of war, and not from any negligence on the part of their testator or themselves; and that they are entitled to credit for the same, in any accounting that may be had, either by turning over the same to the proper parties, for the benefit of the complainants, or by collecting the same, so far as they can, and paying over the proceeds to both parties, as the complainants may prefer.
The complainants, on their part, insist that they are entitled to money decrees for the whole amount of money and assets which went into the possession of their guardian, with interest on the same; subject, however, to payments made by him for their benefit, except for the amount of the note which was given by J. M. Baxter, Esq., which they consent to receive as so much money.
Was there anything imprudent, on the part of the guardian, in retaining notes which were turned over to him as a part of the estate of his testator, for the benefit of his wards, which were good at that time?
Was the money of the complainants invested in the other notes contained in list No. 2, and in the railroad scrip? and, if so, were the investments such as should be sanctioned by this Court? These are the questions which I am called upon to decide in their case.
The notes of L. L. Young and William F. Nance, the former for two thousand five hundred dollars, and the latter for six hundred and forty-seven dollars and seventy-seven cents, both of which were included in list No. 2, were made payable to Frederick Nance, without any reference to his representative character, and were taken by him without any security whatever. The proof is, that each party was good for amount of his note when he gave it; and the notes, so far as I know, are still good. But, supposing the investments to have been made, were they properly made, and can they be allowed? I think not. This Court never orders investments to be made without security of some kind.— Spear vs. Spear , 9 Rich. Eq., 184.
The only evidence before the Court, in relation to the investments by the guardian of his wards' money in the stock of the Greenville and Columbia Railroad Company, is a certificate by the President of the road, that he, as guardian, was the proprietor of 29 shares of such stock, for each of the complainants, on the 18th day of March, 1859, and a certificate by the Auditor and Treasurer of the road, on the same day, that the guardian had paid an assessment of 20 per cent. on the stock for them, and the fact that this certificate was found amongst the notes in list No. 2. If I were fully satisfied that the stock had been purchased with the wards' money, at its proper value, which I am not, I would require further evidence to satisfy me that the investments were judicious and could be allowed. The position of the defendants, in relation to this stock, cannot be sustained.
The sealed note of Wm. P. Butler, S. Christie, J. A. Bland and F. Nance, for five thousand dollars, which was found in the list of notes No. 2, was made payable to Robert Dunlap, who was also a ward of F. Nance, or to bearer. The bearer and one of the makers of this note are the same person, and I do not think that a guardian should invest the money of his wards in notes that cannot be collected by the ordinary process of law. My opinion is, that, as an investment for the complainants, it must be rejected.
The sealed note of C. B. Griffin, S. G. Waller and Thos. Spearman, for four hundred and sixteen dollars and fifty-three cents, and the sealed note of G. M. Winn, U. W. Winn, and Wm. Mills, Jr., for seven hundred and eighty-four dollars and four cents, were found in list No. 2, and were given for purchases made at the sale of the property of Drayton Nance, by his executors, and were either retained by the guardian or were turned over to him by his co-executors as so much of the estate of his wards, and they were good at the time they were taken, and, no doubt, would have continued so, had it not been for the late war and its results, for which the guardian was in no wise responsible. The opinion of the Court is, that these notes must be received by the complainants as a part of their estate.
The sealed note of James D. Nance and Silas Johnstone, for two thousand one hundred...
To continue reading
Request your trial