Taylor v. Hite

• Citation: 61 Mo. 142
• Parties: B. W. TAYLOR, Plaintiff in Error, v. J. C. HITE, Curator, etc., Defendant in Error.
• Decision Date: 31 October 1875
• Court: Missouri Supreme Court

61 Mo. 142

B. W. TAYLOR, Plaintiff in Error,

v.J. C. HITE, Curator, etc., Defendant in Error.

Supreme Court of Missouri.

October Term, 1875.

Error to Miller County Circuit Court.

Ewing & Smith, for Plaintiff in Error.

Wm. M. Lumpkin, with E. L. King, for Defendant in Error.

NAPTON, Judge, delivered the opinion of the court.

This is an appeal from the settlement of a guardian and curator. In the circuit court the matter was referred, and the report of the referees was confirmed, except in a matter about which there is no dispute.

The principal objection to the report of the referees, and to the action of the circuit court in confirming it, is based on an allowance which the curator received for a loss in the collection of a sum of money belonging to his ward, which he had loaned out on a mortgage.

The facts appear to be about these: The father of the plaintiff died in 1855, leaving a considerable estate to be divided among his children, of whom three were minors. The defendant was appointed guardian of these minors and curator of their estates. In 1858 the defendant received from the administrator $800, which he immediately loaned to one Goff, and took a mortgage upon certain lands to secure it. In 1861, when the principal and interest on the note amounted to $1,067.40, he took a second mortgage, embracing twenty acres more than the first mortgage did, to secure the new note for principal and interest.

This last mortgage the defendant foreclosed in 1863, and the land brought at auction only $475, about one-third of the principal and interest then due on the note. The purchaser was subsequently allowed by the guardian a reduction of $100 on his bid, because one forty-acres had been inserted in the advertisement, which did not belong to the estate, and thus only $375 were realized from the mortgage to secure $1,067.40 and interest for ten years at 10 per cent. a year. A tract of forty acres disconnected with the main body of the land included in the mortgage was sold at the ensuing term of the court after the principal sale, and was bought by the defendant--the guardian--for $25. This land was afterwards sold by the defendant for $100. It was inferior in quality to the land bought by Babcoke, the purchaser at the sale.

The guardian put the money accruing from this sale, as he states in his testimony, “in a bottle and buried it.” He did not lend it out, because it was difficult to lend money then, and various witnesses corroborated his opinion on this subject, that in 1863-'64 and 1865, it was difficult to loan money at interest.

There was evidence to show that the land sold to Babcoke, sold in 1865 for about $1,700.

The court refused to hold the guardian responsible for this loss upon the mortgage sale, and the propriety of this determination of the circuit court is the principal point arising in this case.

The duty of trustees in the discharge of their trusts may be considered as having been established by courts of equity with reasonable precision. Mr. Lewin, in his treatise on this subject, says, that the true rule is that a trustee is bound to exert precisely the same care and solicitude in behalf of his cestui que trust, as he would do for himself. This rule has, however, been questioned, for the reason that a man will sometimes engage in speculations, and may with propriety do so in regard to his own property, which courts of equity would not tolerate in a trustee.

But the rule, so far as this case requires its application, seems to be unexceptionable. All that the court requires, as was said in the case of Neff's appeal (57 Penn. St., 96), is common skill, common prudence and common caution. Executors, administrators and guardians are not liable beyond what they actually receive, unless in case of gross negligence. A trustee must use the same care for the safety of the trust fund, and for the interest of the cestui que trust that he uses for his own interests. He is bound to employ such diligence and such prudence in the care and management of a trust fund as in general prudent men of discretion and intelligence in such matters employ in their own like affairs.

There is plainly a difference in the duties of administrators and guardians arising out of the necessity imposed on executors or administrators to collect and settle up an estate within a time fixed by statute. There is no such necessity in the case of curators. If money is not required for the maintenance and education of the ward, it is unnecessary to collect it unless the security is considered as doubtful.

It is with reluctance that we have concluded in this case, that defendant should be held responsible fer the debt of Goff secured by mortgage. There is no evidence to impeach the honesty of the guardian's course, but we are unable to see why the land mortgaged, conceded to have been an amply sufficient security for the debt, was forced into sale in 1863, when civil war was raging, and real estate was of course at the lowest figure. Conceding, however, that the curator might have been justified in offering the land for sale in 1863, still, when the bids at the sale did not reach half the value of the land, why was not the sale stopped? Had the guardian been the mortgagee, to secure his own individual debt, would he have allowed such a sacrifice?

But what necessity was there for selling this land in 1863? It does not appear that any money was needed for the support or education of the minors....