Frost v. Redford

Ellison, J.

(concurring). — The defendant’s ward was adjudged insane and defendant appointed his guardian on the fifth of July, 1888. When defendant took charge of the estate he found that the ward was indebted to various parties, among others to this plaintiff. Plaintiff obtained a judgment on his claim after the ward was adjudged insane, the defendant herein defending as guardian. There were not sufficient assets of all kinds belonging to the ward’s estate to pay all his debts in full. Defendant paid a portion of several 6ebts to other creditors but refused to pay *355any portion of plaintiff’s judgment debt notwithstanding he had notice of it. Plaintiff has brought this suit against defendant individually on the foregoing state of facts. The court below found against him and he comes here for relief.

The trial court declared the law to be that the guardian could prefer a creditor to the entire defeat of the claim of another creditor of equal dignity. The trial court further declared that the approval of the annual settlement of the guardian by the probate court wherein the disbursements to the preferred creditors were shown, protected the guardian notwithstanding the guardian made no mention of plaintiff’s claim in such settlement. The case requires the consideration of several questions in relation to the duties and liabilities of guardians of insane persons. That defendant was a trustee and that he held the ward’s estate in the nature of a fund for the benefit of the ward and his creditors I have' no doubt. Nor have I any doubt that' he would be liable for an inexcusable breach of that trust.

In all civilized countries care of the insane has been an object of much solicitude. The pity and sympathy which finds a response in the breasts of all from the first civilization has manifested itself in the promulgation of rules of law or equity devised for the protection and care of these most unfortunate of human' beings. “It seems to be agreed at this day that the King as parens patria} hath the protection of all his subjects, and that in a more peculiar manner he is to take care of those who by reason of their inability and want of understanding are incapable of taking care of themselves” — Idiots and Lunatics, Bacon’s Abridgements. The same eminent author also said that, “The first paramount rule in lunacy is to provide for the personal ease and comfort of the *356lunatic.” From the inability of the King to give attention to these unfortunates it was deputed to the chancellor, who in practice referred the case to a master to approve of a proper person to act as a committee of the person and estate of the insane person. In this country the .states have laws for the protection of the insane; and while the detail of such matters is not uniform in regulation, yet all the states, so far as my observation goes, have evidenced the same anxious care for such persons which is found to exist in other civilized communities. In Missouri the constitution places the jurisdiction over these people primarily in the probate court. That court appoints the guardian who fills the place of him who in England and many of our states is called the committee. The primary duty of the guardian (unless otherwise controlled by the statute) is to protect and maintain his unfortunate ward with the estate which may come into his hands, even to the exclusion of the claims of creditors, if this should be necessary for the ward’s maintenance. This is the effect of the observations of Bacon above quoted and it is supported by the cases of Eckstien’s Estate; 1 Parsons Equity Cases, 59, 63; In the Matter of Latham, 4 Ired. 234; 6 Ired. 406; Adams v. Thomas, 81 N. C. 296; Smith v. Pitkin, 79 N. C. 567; Ex Parte Hastings, 14 Vesey, 182. In the latter case Lord Eldon said, “I have no authority to pay the debts of the lunatic unless I see it is for the accommodation of the estate. I cannot pay his debts and leave him destitute of any provision. * * * There is no instance of paying the debts of a lunatic without reserving a sufficient maintenance for him. * * * These orders . are made for the accommodation not of the creditor but of the lunatic.” In 4 Ired. supra, the North Carolina court said that: “All the lunatic’s estate has been converted into money, and only the sum of *357$942.14, is now within reach of this court. We think that this fund must be retained by the committee, not to pay his balance or the debts of any creditors, but for the purpose of maintaining the lunatic and his wife and (tender) infant children. That the court must reserve a sufficient maintenance for the lunatic before making an order for the payment of debts or allowing to the committee sums already applied by him to that purpose is clear from the nature of the jurisdiction in lunacy, as well as from the decisions.” It is evident that the insane person must be maintained or he will perish. If not maintained by his own estate he will become a public charge. If his own estate is taken up by creditors he becomes a public charge. I take it that no creditor has the right to strip the insane of their effects beyond the point of maintenance and the probate court’s allowance for the support of the ward was proper unless the creditor’s right is conferred by statute.

In this state, the statute for the protection of insane persons provides, Revised Statutes, 1889, section 5545: “If the estate of any such insane person shall be insufficient to pay his debts, to maintain himself aud family or educate his children, his guardian may apply to the county court of the proper county by petition setting forth the particulars and praying for an appropriation from the county treasurer for the support of his ward. Sec. 5546. The petition shall be accompanied by a true and perfect account of the guardianship, an inventory of the estate and effects, and a list of the debts due from such insane person, and it shall be verified by the affidavit of the petitioner. Sec. 5547. If the county court shall be satisfied that such estate and effects are insufficient for the purposes above specified, such court may order such sum to be paid to the guardian out of the county *358treasury as to them shall appear reasonable, and cause a warrant to be issued accordingly.”

From the terms of these sections, construing them with our homestead and exemption laws, my opinion is that the guardian, in so far as his ward’s estate is concerned, can use such estate for the payment of the ward’s debts down to the exhaustion of the estate, except as it would be protected by homestead or exemption laws, if it should be of that character. The ultimate maintenance of the ward would, therefore, under this statute fall upon the county. German National Bank v. Engeln, 14 Bush. 708. So if a lunatic was the owner of a thousand acres of wild land as his entire estate, creditors could practically exhaust the whole of it and thus throw the lunatic upon the county. Under the statute cited, the reason for the rule excluding creditors as stated in the foregoing authorities does not exist, since the care and protection of the ward is plainly provided for at public .expense. The legislature has deemed it expedient to put the burden of the ward’s support upon the county rather than to disable the creditor from collecting his demand.

It follows then under this construction of the statute that if the estate was insolvent and the proper showing was made at the proper time the probate court should not have made the allowance of $1,000 for he support of the ward. But I am of the further opinion .that since the allowance was made (the probate court having jurisdiction of the matter) it is merely erroneous action and will protect the guardian in the use of that amount of the estate for that purpose.

It is next contended by the defendant guardian that he is not required by the just terms of his trust to pay to creditors pro rata, but that he may prefer them as the ward might have done when sane. I do not think such contention is sound. In my opinion it is *359contrary to the spirit of the original rule governing the care of the insane and the management of their estates as well as inconsistent with the statutory scheme which we have in this state. The guardian is a trustee. State to use v. Jones, 89 Mo. 478. And under our statute he is a trustee for the creditors. Under a statute of New York similar as respects the payment of debts he was held to be clothed with a trust for the benefit of creditors and an agency for the payment of debts and the administration of the estate. Beecher v. Van Gortland, 2 Johns. Ch. 246. He is governed by the principles of equity and cannot favor or prefer a creditor unless there be something in the nature of the debt requiring it. Equity in governingi the conduct of a trustee clothed with the trust of paying debts from a trust fund means equality. State ex rel. v. Brockman, 39 Mo. App. 131. It has therefore been held that the creditors are to be paid pro rata and not by preference, unless the nature of the debt is such as to require it, as if it be a mortgage or other lien debt made before lunacy. Wright’s Appeal, 8 Barr. 57; Eckstien’s Estate, 1 Parson’s Equity Cases, 59; Ex Parte Latham, 6 Ired. 406; and this is equally true where the debt is represented by a judgment obtained after lunacy as in the case at bar. Authorities supra.

It is true that it is held that suits may be brought against insane persons and the judgments thereon will not be void (Heard v. Sack, 81 Mo. 610) and that an execution sale to a party not advised of the insanity will pass title in the property; yet I judge these rulings to refer to that class of insane persons not under guardianship and who have not been formally adjudged to be insane. It is likewise true that the statute, sec. 5544, contemplates that there may be judgments and executions against an insane person or his guardian as such; and from this it may be suggested that it is *360allowable for a creditor to be swift by obtaining a judgment and executing property. And that since lie is thus permitted to force a preference he could be allowed a preference by the voluntary act of the guardian in preferring him. Such position is not tenable; the section of the statute referred to does not justify such course or result. There is an elaborate mode laid down by statute for the sale of the ward’s real estate under the supervision of the probate court, and this mode is exclusive. Rannels v. Gerner, 80 Mo. 474. An execütion on a judgment against a party who has been adjudged iusane before judgment cannot be utilized for the sale of the ward’s real estate.

As to personal property, while I will not say that a guardian cannot dispose of it for the purposes of the trust without an order of probate court, yet I do maintain that such personal estate is not subject to an execution at the suit of a creditor who has obtained his judgment in some independent jurisdiction. If he could it would amount to permitting a preference of creditors, and the unseemly spectacle of a race between creditors, each urged by the fear of success in the other, so forcibly deprecated in Eckstien’s Estate, supra, would inevitably follow. The result would be that the management and administration of the ward’s- estate would be taken from the hands of the guardian and out of the forum of the probate court where the constitution has placed it. It will be observed from the authorities herein before cited that where in other states the ward’s property has been disturbed or threatened by execution that the creditor has been restrained, to the end that the court and guardian designated by law might administer the estate. The right to sue the guardian which seems to be contemplated by the statute now under consideration is yet a valuable right notwithstanding the views here expressed. The cred*361itor may establish his demand by such suit. He may have the verdict of a jury thereon and thereby establish the legality of his claim over the head of the guardian. A broader statute in favor of the creditor in this respect than ours in other states has received this construction. Wright’s Appeal and Eckstien’s Estate, supra.

In this case the trial court held as stated at the outset that since defendant reported to the probate court at his annual settlement the disbursements of the estate to creditors, in which plaintiff’s name or claim did not appear, and tjiat these disbursements were approved by the probate court plaintiff could not recover. This I think was erroneous. It was a mere annual settlement and defendant made no mention therein of plaintiff’s claim, notwithstanding he had notice of it. The probate court made no adjudication thereon. There has been no final settlement and the annual exhibit of the guardian here shown to have been approved by the probate court by no means amounts to an adjudication of plaintiff’s claim; nor does it amount (as against plaintiff) to an approval of the payment of all the funds to other creditors. The case therefore stands upon the action of the guardian alone, and that action was a refusal to allow plaintiff a pro rata with the other creditors. The defendant, as we have hereinbefore stated, is a trustee for the creditors, handling a trust fund for their benefit. He has violated or abused that trust by an unequal and partial division of the fund, resulting in plaintiff’s losing all of his claim. I think that for this he is liable and liable to an action at law. There are frequent cases of close analogy to this where an action at law is sustained, though in such action a defense might be made whereby the equitable jurisdiction of the court might be invoked in order to arrive at a proper adjustment of the guardian’s accounts.

*362I ought to further remark that notwithstanding it appears to be the policy of the statute to charge the-public with the maintenance of the lunatic rather than defeat creditors, yet there may be many cases where the guardian must necessarily maintain the ward out of the estate before its condition is known.

I attach no importance to defendant’s plea of res adjudicata. It seems that plaintiff brought the suit which resulted in the judgment for his claim against the ward by name and defendant as his guardian, and that the judgment was rendered against the ward only. This was certainly not an adjudication that the plaintiff had no claim against the ward’s estate. The foregoing considerations lead me to favor a reversal of the judgment and remanding the cause.