Shepherd v. Newkirk

The opinion of the court was delivered by Carpenter, J.

Most of the reasons urged on the behalf of the defendant present no difficulty, and may be disposed of in few words upon the answers given by the counsel of the plaintiff. We clo not suppose that the jurisdiction of the Orphans’ Court rested upon the recording of the proceedings ill lunacy transmitted from the Court of Chancery. However this may be, the defendant, having taken upon himself the duty of guardian, having acted as guardian and accounted in that capacity, cannot, in this collateral way, deny that he was lawfully appointed. The objection therefore becomes immaterial.

The guardianship bond given by the defendant was simply by way of collateral security, and does not preclude the plaintiff from any other remedy against the defendant to which he might otherwise be entitled. This is so obvious as not to recpiire further remark.

The judgment heretofore delivered by the court in this cause, very clearly points out the nature and effect of the decree of the Orphans’ Court on final settlement, as regards the liability of the defendant and the remedy of the plaintiff. The Orphans’ Court being simply a court of account, “the decree itself”— says the opinion referred to — “ created _ no legal liability, but only ascertained the extent or measure of a previously existing liability. It was the defendant’s duty to pay over to the plaintiff all the money in his hands, when the plaintiff (in the language of the act) came to his right mind, and the commission of lunacy was superceded. The legal obligation then attached.” Again; after stating that the plaintiff had an easy remedy, and was not obliged to resort to the bond : “ The plaintiff’s remedy was to declare upon the original indebtedness, for money bad and received • and the decree of the Orphans’ Court, unless *308 modified or appealed from, would be conclusive evidence of the amount in the defendant’s hands.” Spenc. R. 346, 347.

But the chief objection urged is, that the evidence does not show a money indebtedness, such as will sustain the plaintiff’s declaration; the account settled in the Orphans’ Court, setting forth a “ balance in accountant’s hands consisting of Securities interest due, cash,” &e.: that to support an action for money had and received, money must in fact have been received by the defendant to the use of the plaintiff. It is true, that in an action for money had and received, the consideration must be money, and yet anything may form the subject matter of this action, if it have been treated as money: if received as money it may be recovered as such. So also the action may be supported if sufficient time has elapsed, and other circumstances exist to raise an inference that what has been received, has been converted into money.

The inventory filed, shows the estate to have consisted of real estate, goods and chattels, choses in action, &c. It was the duty of the guardian to collect the personalty — which we may presume that he did — and securely invest it for the purposes of income, and for the support of the lunatic. The account, upon which the balance acknowledged to be in the defendant’s hands accrues, contains no items of real estate, nor of personal property in specie. The real estate (at any rate, some real estate) appears from the account to have been converted into cash (or securities received as cash) the proceeds of sales made by the defendant. The account purports to be of personal property, and of “ the proceeds of real estate sold, &c.”

At the term of October, 1832, the Orphans’ Court of the county of Bergen, in relation to the estate of the plaintiff, ordered, that the balance remaining in the hands of the guardian, amounting to $3,010.72, consisting of bonds and mortgages, notes and interest due, should be kept out at' interest, secured by bond or mortgage, or such personal security as the guardian in his wisdom should consider safe; and if so invested, the order further declared he should not be held personally responsible in case of loss. Guardians and other trustees are required to invest upon due security (and probably nothing short of *309 landed security would bo sanctioned in this state); when, if in good faith, and with proper caution and diligence, they will not bo held responsible for unavoidable loss, by the court before which they are required to account. But the law of this State further provides for their security. They may place money at interest under the direction of the Orphans’ Court, upon security such as the court shall allow at the risk of their minors, &c., and if security so taken hona fide, shall prove insufficient, they arc not to be held responsible. Rev. Laws 779, § 11. But it is future investments upon securities to be submitted to and approved by the court, to which the statute applies, and a decree of confirmation by the court of a loan previously made, and of the security taken, has been held to be entirely unauthorized and of no avail. Gray v. Fox, Saxton 271. This order goes much further than the order made in that case. It applies to all loans, without specification, previously made by the defendant upon such security, either landed or personal, he in his discretion considered safe. Indeed, the terms of the order seem to reach all future investments on similar security, which the defendant might afterwards see fit to make. Such order, even if the statute applies to guardians of idiots and lunatics, was entirely unauthorized, and may be laid entirely out of the question in considering the. liability of the defendant in the present action. If the guardian in good faith, and with proper caution, liad taken securities of a character sanctioned by law, and such securities had become unavailing, be should have applied to the Orphans’ Court, on the settlement of his account, for allowance. In the absence of any such application, it may properly be presumed that no loss has occurred. If on the restoration of the lunatic to his right mind, when called upon to surrender his trust and to restore the funds to the plaintiff, lie fails to do so, it may properly be inferred that lie lias converted to his own use the money which had been invested for the benefit of his ward, and in such case he is undoubtedly responsible in this form of action. Having received money, or its equivalent, he is bound to account for it. If in his hands in the shape of securities such as he was authorized to receive as investments, to *310 discharge himself at the least, he should shew that they were of such character, and that he had produced and tendered them to the plaintiff. I think, therefore, the action can well be maintained under the evidence upon the common counts in the plaintiff’s declaration.

The proceedings in the Orphans’ Court of Morris were prop.erly overruled. It is evident that they could in no way have lessened or altered the liability of the defendant, the extent of which had been conclusively ascertained by the decree on final settlement.

Rule discharged.