State ex rel. Lancaster v. Jones

• Decision Date: 21 June 1886
• Citation: 89 Mo. 470
• Parties: STATE, to Use of LANCASTER, Guardian, etc., v. JONES, Adm'x, etc., and others.
• Court: Missouri Supreme Court

89 Mo. 470

STATE, to Use of LANCASTER, Guardian, etc.,

v.JONES, Adm'x, etc., and others.

Supreme Court of Missouri.

June 21, 1886.

Appeal from St. Louis court of appeals.

Action on the bond of the guardian of an insane person, assigning various breaches.

G. A. Castleman and J. A. Harrison, for the State. C. & C. E. Gibson, D. Simmons, and A. R. Taylor, for appellants, Mary Jones, Adm'x, etc., and others.

[COPYRIGHT MATERIAL OMITTED]

[COPYRIGHT MATERIAL OMITTED]

BLACK, J.

In 1871, Joseph H. Locke was found to be of unsound mind, and incapable of managing his affairs, and thereupon the probate court of St. Louis county appointed Jones guardian of his person and estate. The guardian gave bond as required by law. By order of that court Jones gave a new bond in April, 1874, with Howard and others as sureties. In 1878 the court ordered the guardian to procure and file another bond, and, for failure to comply with that order, the court revoked the former appointment, and appointed R. D. Lancaster guardian of the insane person. The deposed guardian failed to make settlement of his accounts, and Lancaster brought this suit on the second bond, assigning various breaches.

Locke, it appears, at and prior to the inquisition, had been engaged in selling cement and lime, and in manufacturing lime. The business had a reputation of considerable value. Jones, as guardian, in addition to collecting debts due to, and paying those due from, the ward, carried on the business just as it had been previously conducted by the ward. The profits thus accruing to the estate, from 1871 to 1876, amounted to $52,376.66. There were losses in 1877 of a little over $1,000. The referee by whom the cause was heard debited the late guardian with $160,634.53. This amount includes the item of profits before noted. In the annual settlement made in the probate court the guardian had allowed to him, from time to time, compensation of 5 per cent. on disbursements, amounting in all to about $18,000. On the trial plaintiff conceded to defendants credit for commissions at 5 per cent. on the amount with which the guardian was debited by the referee, amounting to about $8,000. The difference of $10,000 constitutes one of the items now in dispute.

The defendants, it will be seen, had credit by the referee for commissions on the profits. But in making those profits the late guardian bought and sold merchandise, paid laborers, and the like, large sums of money. These transactions amounted to over $200,000, and appear on the one side and the other of the accounts filed in the probate court, but do not appear in the statement of the account as made by the referee. He takes account of the profits made, but not of the volume of business transacted by which those profits were realized, and hence the difference in the result.

1. The referee and court denied any compensation on the volume of business done, on the theory that the guardian had no right, with or without an order of the probate court, to carry on the business of the ward, and that every dollar thus invested was a breach of trust. That the guardian conducted the business with ability and perfect honesty is not disputed. In determining the powers and duties of a guardian of an insane person it will not do to follow closely by analogy the law with respect to the administration of estates of deceased persons. There the general purpose of the law is to wind up the estate, pay off the debts, and turn over the remainder of the property to those entitled to the same in succession. To that end creditors must prove up their demands within a specified time, or be forever barred. In the case of insane persons the ward continues to be the owner of the property. He and his family are to be supported, his children educated, and it is not practicable to close up his business affairs. Hence the bond of the guardian is conditioned to “manage and administer his estate,” etc. Section 5805, Rev. St., provides that the probate court “may make an order for the restraint, support, and safe-keeping of such person, for the management of his estate, and for the support and maintenance of his family, and education of his children, out of the proceeds of such estate; to set apart and reserve for payment of debts, and to let, sell, or mortgage, any part of such estate, real or personal, when necessary for any of the purposes above specified.” Other sections point out more in detail when real estate may be leased, mortgaged, or sold, and the proceeding to be taken therefor. The power conferred upon the court to make an order for the “management of his estate” must be construed in the light of the other sections, and the nature of the subject-matter with which the statute deals. The insanity is often of short duration, and the law contemplates cases where such persons may even make contracts, with the consent of the guardian. Section 5816. When restored to his right mind, it is made the duty of the guardian to yield up the property to his former ward. It is rather the duty of the guardian to protect and preserve the business affairs of the ward than to wind them up. To that end the statute had invested the probate court with large discretionary powers. In the exercise of these powers the court should not, for any considerable length of time, continue a hazardous manufacturing or mercantile business; but it is within the power of the court to direct and order the continuance of the business of the ward, and in many cases it would be the plain and obvious duty of the court to make such an order. Michael v. Locke, 80 Mo. 548, so far as it conflicts with what is here said, is overruled.

It has been held that the approval of an administrator's sale of real estate need not appear by a formal entry. It is sufficient if it appears from the whole record. Grayson v. Weddle, 63 Mo. 525; Henry v. McKerlie, 78 Mo. 430. The annual settlements, and the orders of approval made thereon, in this case, were competent evidence to show, and they do show, that the business was carried on under the eye and supervision of the court, and that is sufficient, though no previous order therefor was procured, It follows from what has been said that the guardian made no breach of his trust in the matter under consideration. So far as commissions are concerned, it does not follow that he is entitled to 5 per cent. on all disbursements. The statute does not fix the amount of compensation. The rule made applicable to administrators would seem to be proper enough as to the collection and payment of debts existing at the date of the appointment, but for continuing a business, and receiving and paying out moneys in that behalf, reasonable compensation, and that only, should be allowed. Indeed, the 5 per cent. rule should only be adopted when, under the circumstances, it is reasonable for the services rendered.

2. The further claim is that these annual settlements are conclusive. The law is well settled in this state that annual settlements of administrators, and of guardians and curators of minors, are not conclusive. They are subject to review and correction at the final settlement. Picot v. O'Fallon, 35 Mo. 29; State v. Hoster, 61 Mo. 544; State v. Roeper, 82 Mo. 58; Folger v. Heidel, 60 Mo. 284; Seymour v. Seymour, 67 Mo. 303; West v. West, 75 Mo. 208. As to administrators and guardians of minors a clear distinction is made by the statute between annual and final settlements, and in final settlements notice thereof must be given. In case of insane persons the guardian “shall, once a year, or oftener, if required by the court appointing him, render to such court a just and true account of his guardianship, and make settlement with the court.” If the ward's mind be restored, “the guardian shall immediately settle his account and restore to such person all things remaining in his hands belonging to the ward.” And upon the ward's death “the guardian shall immediately settle his accounts, and deliver the estate and effects of his ward to his personal representatives.” The statute, it will be seen, does not, in terms, provide for a final settlement, nor is any notice required to be given. Still, when the ward is restored to reason, the property must be delivered to him; when he dies, to his representatives; and when the guardian is removed, to the...