23 Utah 233 | Utah | 1901
Lead Opinion
It appears that a promissory note, at the date thereof was made in the following manner and form to-wit:
“Salt Lake City, Utah, Aug. 19, 1893.
“Two years after date, we jointly and severally promise to pay Erank E. McG-urrin, or order, at McCornick and Co’s. Banking House in Salt Lake City, eleven hundred and fifty-four dollars, with interest thereon at the rate of eight per cent per annum, payable quarterly at the said bank, for value received. If the interest be not paid as stipulated the legal holder of this note may declare the principal due and proceed by law to recover both principal and interest.
“Jambs Blazzabd,
“By Edwabd B. Ceitchlow, his attorney in fact.
“Thomas Blazzabd,
“By J. L. RawliNS, his attorney in fact.
“JoiiN Blazzabd,
“By Joseph H. Hubd, his general guardian.
“Mabiam -Blazzabd Steebs.”
On the same date a mortgage on certain real estate was made and signed in the same manner as said note, to secure the-payment of the same. This note and mortgage was, after the
The second was on the note alone and sought to charge the said John Blazzard and Joseph H. Hurd, personally thereon, and the third was on the note alone and sought to charge the said Joseph H. Hurd, personally thereon as one of the several obligees thereof.
On motion of the said Joseph H. Hurd, the first and second counts were stricken out, on the ground that the ward was not bound by either the note or mortgage. Thereupon the said Joseph H. Hurd answered the third count, and among other matters alleged that “For a further and separate answer and defense defendant alleges, that on or about the nineteenth day of August, 1893, the Probate court of Salt take county, Utah Territory, duly made an order in the matter of the estate and .guardianship of John Blazzard, an incompetent person, authorizing, ordering and directing this defendmit in the name and for the act and deed of the said John Blazzard to execute said note; and to secure the payment of the same, likewise, in the name and as and for the act and deed of the said John Blazzard, to secure said mortgage upon his undivided five twenty-eighths interest of, in and to the real estate described in the mortgage; that in obedience to the said order of the said Probate court, and not otherwise, this defendant signed to the said note and to the said mortgage the name of the said John Blazzard by himself as general guardian, upon the express and distinct .understanding and agreement however, that this defendant should not thereby be or become personally obligated or bound
“•Defendants further allege that neither the said principal sum of $1154, nor any part thereof, was ever paid to or received by this defendant, or the said John Blazzard, and that the said note and mortgage were directed by the said court to be given in the manner and form aforesaid for the purpose of paying the attorney’s fees incurred by Mariam Blazzard Steers as guardian ad litem of the said John Blazzard, in the prosecution of certain litigation in behalf of herself and others.”
It appears from the evidence that previous to the execution of the said note the said James Blazzard, Thomas Blazzard, John Blazzard and Mariam Blazzard Steers were parties to five cases pending in the Third District Court of the Territory of Utah, and which were consolidated into one, in which was involved their titles to a certain estate; that in pursuance of the mandate of the Supreme Court of the Territory, the said district court awarded to each of the makers of said note, and other parties to the action certain interests in the real estate involved and ordered conveyances to be made in accordance with the decree, and that the said James Blazzard, Thomas Blazzard, John Blazzard and Mariam Blazzapd Steers, who were plaintiffs and intervenors in said actions, pay to the defendants therein, $8,500; that the defendant in the pending case, Joseph Hurd, as the general guardian of the said John Blazzard, on the same day that said note was executed, filed in the probate court of Salt Lake county, a petition setting out the foregoing
On the whole property.$7,500 00
Commissions. 200 00
Expenses of examining title .......... 100 00
On five-sevenths interest of plaintiff. .. . 2,325 88
That all the parties in interest are now ready to complete the loans and perfect the title, and the deeds can not be exchanged nor the decree against the plaintiffs and lot six satisfied, until your petitioner is authorized with power in behalf of John Blazzard.”
That on the same day said probate court made and entered the following order: “Now therefore, it is ordered, adjudged and decreed, that Joseph H. Hurd, guardian of the person and estate of John Blazzard, a person of unsound mind, be, and is hereby authorized as guardian aforesaid and for
On the same day the aforesaid note and the mortgage on said lot were executed. While the said McGurrin was named as the mortgagee and payee of the note it is admitted that the real beneficiaries were Joseph L. Rawlins, E. B. Orichlow and C. S. Yarian, the attorneys of the said James Blazzard, Thomas Blazzard, John Blazzard, and Mariam Blazzard Steers, in the eases before mentioned, and the consideration of the note and mortgage was their services as such in said cases, and that the note and mortgage were made to the said McGurrin as their trustee, and for their accommodation; that afterwards, and before the maturity of the note, the said McGurrin paid to said attorneys the full amount of said note and became the legal holder and owner thereof, and that he for a good and valuable consideration subsequently and after maturity of the note transferred the same and also the mortgage to the plaintiff.
In addition to the above facts the trial court found that at and before the time the said McGurrin purchased and became the owner of said note he understood that the said Hurd was not to be bound personally upon said note; and that the said Hurd, in obedience to said order of the probate court, and not otherwise, signed said note and mortgage with the name of John Blazzard, an incompetent- person by himself as general guardian.
It is stated in the 15th Am. and Eng. Ency. of Law, (2 Ed.), 70, that “The prevailing doctrine is that a guardian has no power to make a contract binding upon the ward or upon his estate, however proper and beneficial the contract may be; but that contracts made by him impose a personal liability upon himself, and his protection from loss lies in his right to charge the expenditures to the ward’s estate in his account.”
This text is supported by a very large number of well considered cases. Thacher v. Dinsmore, 5 Mass. 299; Forster v. Fuller, 6 Mass. 58; Rollins v. Marsh, 128 Mass. 116; Wells et al. v. Barnwell et al., 126 Mass. 366; Phelps v. Worcester, 11 N. H. 51; Hardy v. Citizens’ Nat. Bank, 61 N. H. 34-39 ; Turner v. Flagg, 6 Ind. App. 563; Fessenden v. Jones, 52 N. C. 14 (7 Jones Law) ; Hunt v. Maldonado, 89 Cal. 636 ; St. Joseph’s Acad. v. Augustini, 55 Ala. 493, 495; Kingsbury v. Powers, 131 Ill. 182.
The case of Thacher v. Dinsmore, supra, arose on the following agreed statement of facts: “The defendant, as guardian of A. L. sighed the notes declared on in the first two counts, for just debts due from the said A. L. to the plaintiffs. At the time of signing them the defendant was guardian of the said A. L., an insane person, having been duly appointed to that office. After the notes were respectively payable, and before the commencement of this action, the defendant showing to the judge of probate that the said A. L. had recovered his reason, and was of sane mind, the judge duly discharged him from said office of guardian.”
In the opinion, which was delivered by Chief Justice Parsons, it is said: “The question to be decided on the facts agreed
This case is cited and followed in the foregoing cases and in many others not mentioned.
Neither guardians, nor the courts having jurisdiction over the estates of incompetent persons, have power to bind the person or estate of such persons, unless expressly authorized to do so by law. In this state the duties and powers of guardians of incompetent persons are fixed and limited by statutory provisions, as also the duties and powers of the courts.
Section 4007 Revised Statutes, provides that in case the income of the ward’s estate is insufficient for the comfortable and suitable maintenance and support of the ward and his family, the guardian may sell, mortgage, or lease the real estate, upon obtaining an order of court therefor.
Section 4008 makes it the duty of the guardian to pay all just debts of the ward out of his personal estate and the income of his real estate if sufficient, if not, then out of his real estate, .and section 4015 provides that when a sale of the property of the ward is necessary to pay the debts and expenses of guardianship the guardian may do so upon the order of the court.
Section 4014 provides that every guardian must be allowed the amount of his reasonable expenses incurred in the execution of his trust, and he must also have such compensation for his services as the court in which his accounts are settled deems just and reasonable.
There is no provision in the statute authorizing the court to order the guardian to bind either the said John Blazzard personally, or his estate by the note or mortgage in question. It was the duty of the defendant Hurd, as guardian, to pay the just debts of his ward out of the latter’s estate in the manner prescribed by the statute, and when he chose to do so in a different way than that prescribed by statute and liquidated his ward’s debt by the execution, as guardian, of a note and mortgage, under an unauthorized and void order of the court procured at his instance, he, in the absence of any other controlling circumstance bound himself as principal, and must look for reimbursement in the settlement of his accounts, as guardian, in the court which appointed him as such.
Erom the nature of the relations of guardian and ward the defendant Hurd could not be the agent of his ward, or act in any other capacity than principal in making said note, because the foundation of an agency is the delegation by the principal of authority to the agent to act, and as the ward was an incompetent person he could not delegate any authority to his guardian to bind him personally by any contract. Nor could the court, under the provisions of the statute, authorize, either the execution of a note or mortgage by the guardian in payment of the ward’s debt.
In the case of Brown v. Eggleston, 53 Conn. 110, 119, the court said: “It has been repeatedly decided in Massachusetts that á guardian has no power to bind the ward or his estate by his contract. Thacher v. Dinsmore, 5 Mass. 299; Forster v. Fuller, 6 Id. 58; Wallis v. Bardwell, 126 Id. 366. Administrators and guardians in this respect are closely analogous to conservators. The powers and duties of a conservator are de
In the case of St. Joseph’s Academy v. Augustini, supra, the court quotes with approval the following from Sanford v. Howard, 29 Ala. 694: “The purchases of trustees, including executors, administrators, and guardians, when made in obedience to the duties of the trust impose upon them a personal liability. The seller, ‘or, we may insert, the person to whom a debt is contracted,’ must look to them for payment, and they must look to the trust estate for reimbursement. ‘This is everywhere, in this country, as well as in England, held to be the law; and appellant’s counsel admit it.’ ”
In Hardy v. The Bank, supra, the court said: “In Thacher v. Dinsmore, 5 Mass. 299, it is held that a guardian signing a note as guardian can not bind the estate of the ward. This doctrine was approved in Forster v. Fuller, 6 Mass. 58, the court there saying that although the note states that he
In Sperry v. Fanning et al., 80 Ill. 375, the court quotes with approval the following from 1 Parsons on Contracts, 136: “A guardian can not, by his own contract, bind the person or estate of his ward; but if he promise, on sufficient consideration, to pay the debt of his ward, he is personally bound by his promise, although he expressly promises as guardian. And it is a sufficient consideration, if such promise discharges the debt of the ward; and a guardian who thus discharges the debt of his ward, may lawfully indemnify himself out of the ward’s estate.”
In the case of Fessenden v. Jones, 56 N. C. 14, the court said: “The guardian is charged with the duty of controlling and managing the person and property of the ward, and judging of the expenditures which may be needful for either, and he also is informed of the condition of the ward’s resources. Hence, the contract should be made with the guardian, and hence, the guardian ought to be looked to for payment. Tc allow a departure from the above rule, would, in the first place, have the effect to encourage in the youth of the country appeals
In Hunt v. Maldonado, supra, the court said: “The action is to recover an attorney’s fee for services rendered to the guardian of a minor in pursuance of a written contract. The action is against the minor. If the guardian made a valid, contract with the attorney, he may be held liable, and if he pays it, and the probate court shall deem the expenditure reasonable, and necessary to protect the interests of the ward, it may. be allowed from the ward’s estate. But it is an expense incurred by the guardian in the performance of his duties, for which he is primarily liable.”
This language is quoted with approval in Morse v. Hinkley, 124 Cal. 158.
In the case at bar a just indebtedness of the ward to the attorneys heretofore mentioned has been paid, and it was ■ the duty of the guardian to pay the same from the estate of his ward. He performed this duty by executing the note in
Respondent’s counsel, in their brief, state that it “may be admitted that ordinarily a guardian who makes a contract as guardian, binds himself and not his ward.”
In the ease at bar Hurd acted in the capacity of guardian as the way in which he signed the note shows. The ward being civilly dead, the execution of the note was the act of the guardian, and the note his own and not the ward’s.
It is, however, claimed by counsel for respondents that notwithstanding a guardian, who makes a contract -as such, thereby binds himself and not his ward, that still the guardian may show by parol evidence, as was permitted by the court, over the objection of the plaintiff, to be done in this case, that the parties did not intend to bind the guardian personally. No parol agreement, in expressed terms was made, that the guardian should not be personally bound. The only evidence upon that subject was the statements of the guardian and C. S. Yarian and E. B. Critchlow, two of the beneficiaries.
The guardian, in answer to the question, “What occurred at the time the' note was made,” said: “My recollection is not as clear as it might be, but as I remember it the papers
In the examination, on this matter of C: S. Varian, the following occurred:
“Q. Now I will ask you in taking that note of Mr. Hurd, whether you understood that he was not to be bound personally upon it? A. I certainly did. Q. I will ask you if there was any intention on your part to bind anybody except the person and the estate of this incompetent person, by his signature to this note ? A. There was not; Hurd was an entirely independent person acting gratuitously as an act of courtesy. Q. In taking the note from Mr. Hurd signed in this way did you or did you not depend entirely upon the order of the probate court ? A. Certainly.”
In the examination of Mr. E. B. Critchlow, he stated: “Q. I will ask you whether or not in taking the note you yourself understood that Mr. Hurd was in no manner personally responsible? A. I certainly did. Q. I will ask you to state whether or not Mr. Hurd was procured to act as guardian at the request of yourself, Mr. Rawlins and Mr. Va-rian, who w'ere interested in the note. A. He was; he had absolutely no interest in the matter at all until he was asked to come into it at our request to act as guardian for the incompetent person. Q. State whether or not he was asked to act as attorney as guardian simply for your accommodation ? A.
The guardian and beneficiaries of said note were fully aware of all the facts regarding the transaction; there was no mistake respecting the language of the note, but „it was in the form and was executed in the manner intended. It is not claimed that there was any fraud or mistake of fact in the transaction. The substance of respondent’s claim is that he and the beneficiaries did not intend the note in legal effect should bind the guardian personally.
When the facts are within the knowledge of both parties to a written contract, and the language used is such as they intended, a mistake as to the legal effect of the contract or that its legal effect is different from that intended, is not-available as a defense at law, and is not ground for a reformation of the contract in a court of equity, and can not be shown by parol. Brown v. Worley, 20 How. 442; Martin v. Cole, 104 U. S. 30-38; Fawkner v. Smith Wall Paper Co., 88 Ia. 169; Bryan v. Duff, 50 Am. Rep. 889; McAninch v. Laughlin, 13 Pa. St. 371; Davis v. England, 141 Mass. 587-590; Oiler et al. v. Gard et al., 23 Ind. 212-218; Kelly v. Turner, 74
There are many other decisions in line with the foregoing cases but they are too numerous for citation.
In the case of Brown v. Worley, supra, Justice GeibR used this language: “When the operation of a contract is clearly settled by general principles of law, it is taken to bs the true sense of the contracting parties. This is not only a positive rule of the common law, but it is a general principle in the construction of contracts. Some precedents to the contrary may be found in some of our States, originating in hard cases; but they are generally overruled by the same tribunals from which they emanated, on experience of the evil consequences flowing from a relaxation of the rule.”
In the case of Renner v. Bank of Columbia, supra, the court, said: “There is no rule of law better settled, or more salutary in its application to contracts, than that which precludes the admission of parol evidence, to contradict or substantially vary the legal import of a written agreement.”
In the case of Moorman et al. v. Collier, supra, the legal effect of the terms of a contract was different from what the parties supposed they were, and parol evidence of the mistake was excluded.
In the ease of Fawkner v. Smith Wall Paper Co., 88 Ia. 169, it was held that “whatever the law implies from the language used in a written contract is as much a part of the contract as that which is expressed therein; and if the contract, viewed in the light of what the law thus implies, is clear, definite and complete, it can not be added to, varied or contradicted by extrinsic evidence.”
In the case of Farley v. Bryant, 32 Me. 483, the court said: “When it is alleged that' certain words, letters or figures
In the case of McAninch v. Laughlin, 13 Pa. St. 371, the facts were within the knowledge of both parties, and the mistake was in the judgment they formed of the legal effect of them, but the court held that such a mistake was not a ground of relief.
In the case of Oiler v. Gard, supra, this language is used: “It is not proved that the language or import of the note was not well understood, or that either was different from what was intended, by the parties when it was written and signed. The testimony of Gard fails to show' that there was anything omitted in the writings of the fifteenth of August and the nineteenth of October, 1857, which was, at the time of their execution, intended to be inserted. Gard understood the language and import of the papers, but he did n-ot understand their legal effect. This was a mistake of law, unattended by such circumstances as would entitle him to relief in equity. A mistake or ignoran.ce of the law forms no ground of relief from contracts fairly entered into, with full knowledge of the fact's, under circumstances raising no presumption of fraud, imposition, or undue advantage 'taken.”
In the case of Davis v. England, 141 Mass. 587, the note was in form, “I promise,” etc., and was signed as follows, W.
In the case just cited, in legal effect, the note was the note of W. H. England, and not that of the company. In the case at bar the legal effect of the note in question was, as hereinbefore shown, the note of the guardian.
In the case of Conner v. Clark, 12 Cal. 171, the court said: “Story on Promissory Notes, section 63, says: ‘As to trustees, guardians, executors, and administrators, and other persons, acting en autre droit, they are by law generally held personally liable on promissory notes, because they have no authority, to bind, ex directo, the persons for whom, or for whose benefit, or for whose estate they act; and, hence, to give any validity to the note, they must be deemed personally bound as makers. It is true that they may exempt themselves from personal responsibility, by using clear and explicit words to show that intention; but, in the absence of such words the law will hold them bound. Thus, if an executor or administrator should make or indorse a note in his own name, adding
As the terms of the note in question were such as the parties intended to use, and their legal effect was to bind the guardian personally, the parol evidence showing a different understanding was inadmissible, and the objection of the plaintiff -thereto should have been sustained.
The order of the prohate court being made without authority of the statute, is void, and does not therefore shield the guardian from personal liability. McCalley v. Wilburn, 77 Ala. 549 ; Whitesides v. Jennings, 19 Ala. 784, 788; Hudson v. Holmes, 23 Ala. 589; Beal v. Harmon, 38 Mo. 436-439; Woerner on Guardianship, 200, 219.
In the case of McCalley v. Wilburn, supra, the court said: “If his petition to the probate court had contained all the requisite jurisdictional allegations, and the order of the court based on the petition had been otherwise regular, it is very clear that the obligation given by the administrator would have been binding on him in his representative capacity, and he would not have been in any wise personally liable. Such is the express declaration of the statute. But this is the case only where the proceedings of the court are valid, so as to confer upon the administrator the legal authority to bind the estate by the execution of 'such note, bond, or bill.’ Code, 1816, sec. 2432. It is obvious that an administrator can not shield himself from personal liability, by refuge under an order which is absolutely void. The rule of law which governs his liability is analogous to that governing trustees and agents in general. Where he undertakes to bind the estate, and fails to do so for want of authority, he binds himself personally, and may be sued upon his contract individually. Whitesides v. Jennings, 19 Ala. 784. And in such cases, it avails him nothing, that he intended only to bind himself in his representative capacity.”
It appears that McGurrin was made payee of the note only as an accommodation to the attorneys beneficially interested. How this could accommodate them, or what induced them to resort to this indirect method was not inquired into. It does appear, however, from the face of the note that two of the beneficiaries signed the same as guardians of their respective wards, whom, it is claimed, it was intended should be bound by the note so signed.
It also appears that McGurrin had no personal interest
McGurrin being placed on the witness stand, by the defendants, 'testified, in substance, that he bought the note from Mr. Varían for a valuable consideration; that neither at or prior to- the time he purchased the same was anything said about his not looking to Hurd; that there was no understanding, expressed or implied, that he should not be liable on the note; that nothing was said about it at all; that at the time he saw he note and mortgage, and the manner in which it was signed, he took it for granted that when they signed their names in that way they had the authority; that he did not suppose Hurd was binding himself personally on the note, and understood that what he was getting was the note of John Blazzard, by Joseph H. Hurd, his guardian; that he took the note for what it was worth and expected to hold Hurd if he had no authority to make the note, and had no understanding by which Hurd was not to be liable, but supposed he had authority to sign the note.
It does not appear from the record that McGurrin had any knowledge that it was understood by the interested parties that the guardian was not to be personally bound.
The attorneys have received their fee and the debt of the ■ward has been paid, and if the guardian were not personally liable on the note the holder of the same, for value, would have no remedy, for he can neither hold the ward or guardian on implied assumpsit, nor do we know of any other available remedy. The guardian, however, has a remedy. Under the provision of the statute he has the right to credit himself in his accounts, with any sum legitimately expended or advanced in the discharge of his duties, and to have the same satisfied out of the ward’s estate.
It is alleged in the answer that the said James Blazzard, and Mariam Blazzard Steers, two of the makers of said note, by separate deeds conveyed to the plaintiff certain real estate, and that there was deducted from the consideration of said deeds a sum equal to one-half of the amount of said note, and which was retained by plaintiff, who in consideration of such retention agreed to indemnify and save harmless the said James Blazzard and Mariam Blazzard Steers against and
The evidence shows that a portion of the consideration of said deeds was so retained, but the exact amount is not shown. Whenever the plaintiff became the owner of said note, whatever amounts 'were so deducted and retained should, as to him, be regarded and treated as payments on the note, and the guardian is only liable for the balance.
It further appears from the testimony of E. B. Critch-low, before quoted, that the guardian was appointed at the request of the attorneys to whom the fee was due, and that “as to the execution of the note he was acting in (their) interest entirely;' it was for (their)' accommodation.”
In view of such action, and the other facts disclosed in the case, in connection with the lack of general authority of the guardian in the premises, the parties to the transaction, as against the holder of the note, who paid a valuable and good consideration for the same, should not have been allowed to say that they intended to bind the ward only.
It is ordered that the judgment be reversed, at respondent’s costs, with directions to the lower court to grant a new trial.
Dissenting Opinion
(dissenting). — I do not concur in the opinion of my learned associate, Mr. Justice BaseiN. While it is true that ordinarily a guardian who makes a contract as such binds himself and not his ward, yet there are exceptions to the rule that are quite as well settled as the rule itself. The guardian is held responsible where he has bought or contracted for the benefit of his ward, and the law implies an ‘ agreement on his part to pay, or where there was a written contract entered into with apt words to bind him personally. But the promise under consideration was made in the name of
While there is a conflict in tbe authorities on this subject, yet tbe general rule is as above stated.
As to tbe first proposition, Mecbem on Agency, at section 550, says: “Where the promise is made in tbe name of tbe principal and as bis contract, tbe better opinion is that the-agent can not be beld liable upon it, but only for tbe deceit or breach pf warranty, even in tbe case of a written contract, where the assumed relation of agency appears upon tbe face of it. * * * The rule sometimes asserted that whenever the agent fails to create a right of action against bis principal upon the contract, be makes himself liable thereon, can not, therefore be sustained as a general rule. Tbe agent is only liable
In a note to the latter citation many cases are reported sustaining-the principle announced.
As to the latter proposition above see 1 Am. and Eng. Ency. of Law (2 Ed.) 1127; Mitchell v. Jones, 84 Mo. 528; Cement Co. v. Jones, 8 Mo. App. 373; Humphrey v. Jones, 71 Mo. 62; Taylor v. Shelton, 50 Conn. 122; Ogden v. Raymond, 22 Conn. 379; Mechem on Agency, see. 546.
I am also of the opinion that evidence was admissible to show the knowledge of the parties that the note was intended as the obligation of the principal, and not of the agent, and that it was given and accepted as such. There is some conflict of authority on this subject, but the weight thereof sustains the doctrine stated. The subject is fully discussed in Mechem on Agency, sec. 441, where the authorities are collected, and the author therein states that the weight of authority sustains the doctrine announced. See, also, 1 Randolph on Commercial Paper, sec. 147. The case of Metcalf v. Williams, 104 U. S. 93, and Mechanic’s Bank v. Columbia Bank, 5 Wheat. 326, also sustain the same doctrine. See, also, Keene v. Davis, 21 N. J. L. 683, and second volume of Notes on U. S. Reports, page 34, and Mechem on Agency, 288.
In my opinion the judgment of the district court should be affirmed.
