Opinion
(December Term, 1860.)
1. A guardian is entitled to commissions on payments made for goods bought of a firm, of which he was a member; but not on charges for board while his ward lived in his family.
2. Where a guardian waited six months after the principal in a note, held by him as guardian, died insolvent before he sued the surety, who also became insolvent before suit was brought, such surety, though much indebted, being, up to one month before his failure, in good credit, and failed suddenly, the guardian having opportunity all the time of knowing the true condition of the obligors, it was Held, that by his laches he made himself responsible for the loss of the debt.
CAUSE removed from the Court of Equity of MECKLENBURG.
The defendant having been held liable to account by a previous declaration of this Court, it was referred to A. C. Williamson, Esq., Clerk and Master in Equity of MECKLENBURG, to state the account between the defendant and his wards. At this term the commissioner filed reports, setting forth, separately, the defendant's indebtedness to his wards, to which both plaintiff and defendant excepted. The plaintiff and defendant excepted. The plaintiff excepted because the commissioner allowed five per cent commissions on individual vouchers (naming them by their numbers), being accounts for goods and money furnished to complainant Amelia by the firm of H. B. L. S. Williams, of which he was a member.
2. The plaintiff excepted to the allowance of commissions on the sums mentioned in said report, charged by the defendant against his ward Amelia for her board in her guardian's family.
The defendant excepted to the commissioner's report because that he was charged with a debt, due by bond from John E. Penman and W. W. Elms to the defendant, as guardian, for principal and interest, about $1,192. The commissioner reports the testimony, which proves the facts to be, in substance, that the bond was given for the hires, for the year 1855, of slaves belonging to the defendant's wards, which bond (63) fell due on January, 1854. Penman having made a deed of trust of all his property in the latter part of 1854, died intestate in May, 1855, and at July Term of Mecklenburg County Court of that year administration was taken on his estate. In November following, suit was brought on the bond against the said administrator and the surety, returnable to January Term, 1856, of the said Court. At April Term, 1856, the pleas of fully administered were found in favor of the administrator, and a judgment was taken against Elms for the debt; an execution was issued thereon, and "nulla bona" returned by the Sheriff of Mecklenburg, Elms, in the meantime, having also failed. In November, 1854, Penman made a deed of trust of all his property for the payment of his debts. The property consisted of two houses and lots in Charlotte, and a large number of interests in gold mines of uncertain value, and at the time of his death was utterly insolvent. Elms, the surety, from January, 1854, to October, 1855, was in the possession of a large amount of property; in the latter month (October) judgments were taken against him to the amount of $167,714; of which judgments, the amount of $46,568 was taken by the Bank of Charlotte, of which the defendant was the president. Elms' credit was good until shortly before the rendition of these judgments, though it was generally known that he was very largely indebted. After these judgments, he was generally known to be insolvent. Penman, Elms, and the defendant, all three, resided in the town of Charlotte. One witness stated that in the winter of 1854, or early in the spring of 1855, he was protested as the endorser of Elms' paper, in the Bank of the State, and he refused to endorse for him any further. It appeared that each of the banks know that Elms was doing business in the other, but neither knew of the amount of his liabilities to the other.
On these facts, the commissioner thought the guardian was guilty of negligence, and so charged him with the amount of the debt.
Thompson and Fowle, for the plaintiff. (64)
Wilson, for the guardian.
Lowrie, for one of the wards, made defendant.
This cause now comes before us for further directions, upon the exceptions taken by both parties to the Master's report. The complainants except to the commissions allowed the defendant, Williams, as guardian, upon the disbursements for bills paid for his wards to mercantile firms of which he was a partner. We see no reason for this exception. The guardian was as much bound to make payment to the partnership of which he was a member, for goods purchased for his wards, as he would have been to any other partnership or person. The exception is overruled.
But the next, which is to the allowance of a commission on the sum retained by him for the board of his ward with himself is allowed. We suppose that an executor or administrator can not claim a commission on a sum retained in payment of his own debt, upon the ground that a retainer can not be considered a disbursement, within the meaning of the statute which gives commissions. So, we think a guardian can not consider that as a disbursement, with reference to commissions, which consists merely in keeping in his own pocket money due from his ward to himself.
The exception of the defendant, Williams, is that the Master has refused to credit him with the amount of a bond and the interest thereon, payable to him as guardian by John E. Penman and W. W. Elms. The bond was given for the hire of negroes during the year 1853, and became due on 1 January, 1854. It was for the sum of $1,089, with a credit of $107.50, endorsed as paid on 18 August, 1855. The defendant alleges that the bond was lost without any negligence on his part, but the Master reports to the contrary, and the exception brings the question before us for review. Upon an examination of the testimony, and applying it to the law as established in relation to the responsibility of guardians, we are led to the conclusion that the Master's report is correct. In Rev. Code, ch. 54, sec. 23, it is made the duty of the guardian (65) to lend out the surplus profits of his wards' estate upon bonds with sufficient security, but it is expressly required of him "that when the debtor or his sureties are likely to become insolvent, the guardian shall use all lawful means to enforce the payment thereof, on pain of being liable for the same." The guardian, then, was acting within the line of his duty in permitting the bond to remain uncollected when it fell due, as both the principal and his surety were then (as he had every reason to believe) entirely solvent. Such, and no more, is the effect of the decision in Goodson v. Goodson, 41 N.C. 238, to which we were referred by the defendant's counsel. But when the principal obligor failed, by making an assignment, in trust for the payment of his debts, in the latter part of the year 1854, it was the duty of the guardian to take immediate steps for the collection of the debt, or have it better secured. It will not do to tell us that it is not proved that he knew of the assignment. He lived in the same town with the principal debtor, knew that he had but little property except in gold mines, in which he was a speculator, and of the value of which nobody could tell. He ought then to have kept himself informed of the pecuniary condition of that debtor, and it was negligence in him not to have done so, for if he had, he might have saved the debt. After the insolvency of the principal, he was not justified in relying solely upon the surety for so large a sum, no matter what may have been the apparent wealth and actual credit of that surety. That such has been the construction of our statute in relation to the duty of the guardian in such cases, appears, we think, from Boyett v. Hurst, 54 N.C. 167, and Nelson v. Hall, 58 N.C. 32. In the latter case, indeed, the plaintiff, who was an executor, and who was directed by the will of his testator to keep the money invested in good bonds, was not held responsible; but it was, partly, because the sum was very small, only $50, and partly because the principal became insolvent only a few months before the failure of his surety. Here the debt was large, and the principal debtor made his assignment (66) more than twelve months, and died several months before the failure of the surety, and before the guardian made the least effort to collect the debt. In the other cases cited by the defendant's counsel, the executors or administrators were not held responsible for the loss of certain debts, but it was because they showed much more diligence in attempting to collect them than can be pretended for this defendant; see Deberry v. Ivey, 55 N.C. 370, and Davis v. Marcum, 57 N.C. 189.
The exception is overruled, and the Master's report, after being reformed in the manner made necessary by our sustaining one of the plaintiff's exceptions, will be confirmed.
PER CURIAM. Decree accordingly.