Reeves v. Hunter
| Decision Date | 08 April 1919 |
| Docket Number | 32724 |
| Citation | 171 N.W. 567,185 Iowa 958 |
| Parties | GEORGE T. REEVES, Appellee, v. CHARLES L. HUNTER et al., Appellants |
| Court | Iowa Supreme Court |
Appeal from Wapello District Court.--SENECA CORNELL, Judge.
ACTION on a promissory note for $ 325 against the maker, Charles L Hunter, an incompetent and spendthrift, and against H. H Harrold, his guardian. The plaintiff obtained the note from Hunter while he was under guardianship, the consideration thereof being an old automobile, which was received by Hunter and soon thereafter abandoned by him at a repair shop. The defense of incompetency and guardianship was avoided by the plaintiff by pleading that he sold the automobile in regular course of business, without knowledge of the purchaser's incompetency or of the guardianship over him, and that the automobile has never been restored to the plaintiff. Evidence having been introduced in support of the allegations thus pleaded, the trial court directed a verdict for the plaintiff. The defendants appeal.
Reversed.
Thomas J. Bray, for appellants.
Jaques Tisdale & Jaques, for appellee.
In September, 1915, a guardianship was established by regular proceedings over Charles L. Hunter on the ground that he was an incompetent, and that he was squandering his property. Daugherty was appointed his permanent guardian. On July 28, 1916, while said guardianship was in full force and effect, and while Daugherty was still acting as his permanent guardian, the plaintiff obtained from Charles L. Hunter the execution of the note in question, as the consideration for a secondhand automobile. Subsequently, Daugherty resigned as guardian, and the defendant Harrold was appointed, and is made defendant herein as such guardian. Counsel for defendant, appellant, contends that the note was void in its inception, and is of no force or effect; whereas counsel for the plaintiff, appellee, contend that the contract was voidable only, and that the restoration by the maker of the consideration received is a condition precedent to its avoidance. The brief of the appellant states the question as follows:
"Boiled down, the issue is, Can a person under guardianship execute an enforceable contract?"
On the other hand, the brief of appellee states the question as follows:
"Boiled down, Can a person of apparent normal mind make an ordinary contract in the ordinary way with another person in ignorance of the fact that he was under guardianship, and avoid his obligation incurred therein without restoring the consideration received?"
The foregoing brief statements indicate clearly the range and nature of the respective arguments put forth. The specific question is one which has not heretofore confronted us, and we find abundant difficulty in it. It is well settled in this state that a contract of an incompetent, when entered into innocently by the other party, is voidable only, and not void. It is settled also that such a contract may be enforced, if fair and reasonable, and if both parties cannot be put in statu quo. Behrens v. McKenzie, 23 Iowa 333. Such rule, however, has never been applied in this state to a case where the incompetent was under actual guardianship. Neither is any case cited to us from any other jurisdiction where the rule has been applied to an incompetent under guardianship, except, possibly, where a question of necessaries is involved. It is generally true, also, that, where the contract of an incompetent with an innocent party is set aside as voidable, the innocent party is entitled to be restored to the status quo or its equivalent. It is settled in this state also that, though a person be under guardianship, he may yet be found competent to make a will. In such case, however, the fact of guardianship is presumptive proof of incompetency to make a will, and the burden is upon the proponent to overcome such presumption.
Cases from other jurisdictions are cited to us which hold that the fact of guardianship will not defeat a contract for actual necessaries furnished to the ward; nor are any cases cited to us holding otherwise on this point. In such a case, however, the vitality of the plaintiff's cause of action is not in his contract, but in the fact that he responded to the actual necessities of the ward. In such a case, the plaintiff's position before the court is just as strong without a contract as with one. The contract adds nothing to his right of recovery.
None of the foregoing propositions quite reach the case at bar. The question presented must be answered by a consideration of our statute and the necessary effect thereof.
The subject of guardianship is dealt with in Chapter 5, Title XVI, of the Code, being Sections 3192 to 3228 inclusive. The provisions of this chapter are made applicable alike to the guardianship of minors, idiots, lunatics, insane, drunkards, and spendthrifts who squander their property. Section 3223 provides:
"The provisions of this chapter, and all other laws relating to guardians for minors, and regulating or prescribing the powers, duties or liabilities of each, and of the court or judge thereof, so far as the same are applicable, shall apply to guardians and their wards appointed under the fourth preceding section of this chapter."
The "fourth preceding section" referred to in Section 3223 is Section 3219, which is as follows:
The argument for appellee is made to rest largely upon Code Section 3189, which is as follows:
"A minor is bound not only by contracts for necessaries, but also by his other contracts, unless he disaffirms them within a reasonable time after he attains his majority, and restores to the other party all money or property received by him by virtue of the contract, and remaining within his control at any time after his attaining his majority, except as otherwise provided."
The argument is that, by the terms of Section 3223, the provisions of Section 3189 are made applicable to all persons under guardianship. It is to be noted that Section 3189 is not a part of Chapter 5, Title XVI, but is a part of Chapter 4. It declares the liability of a minor for his contracts, subject only to a right of disaffirmance upon certain conditions. It does not deal at all with the question of guardianship, nor with the "powers, duties or liabilities" of guardians. The argument that would make Section 3189 apply to the idiot and the insane, and to the drunkard and spendthrift, would make Sections 3190 and 3191 apply, likewise; and this would be a strained argument. We are clear, therefore, that the argument of appellee cannot be sustained at this point, and that the liability of the insane and the spendthrift is not to be ascertained from the terms of Section 3189.
Some reliance is put by plaintiff, appellee, upon the fact that he dealt innocently, and without knowledge of the guardianship. Does this furnish him any protection against the invalidity or voidability of the contract? When the guardianship was established by the judgment of the court, such court, through the appointed guardian, took charge of the property and of the business of the ward. The property was thus, in a sense, in custodia legis. Suppose that the ward, by his contract, had traded off some of the property thus in the custody of the court of guardian, could the beneficiary of the trade take the property from the custody of the court or custodian without an approval of the trade by the court? Indeed, it appears that the ward in this case did execute a chattel mortgage, to secure this note, on ten head of cattle. Nothing is claimed herein, however, under that mortgage. Could the plaintiff have pleaded his innocence as a sufficient ground for enforcing such mortgage? The guardian was under bond to report and account to the court for the proper management of the ward's business. Was he bound to stand guard against possible encroachment upon his field of duty by the thousands of people living in Wapello County, any one of whom might, at any time, innocently enter into an unsuitable contract with his ward? Was he bound to see to it that every one of these thousands of people had actual...
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