Payne v. King

| Mo. | Oct 15, 1866

Lead Opinion

Wagner, Judge,

delivered the opinion of the court.

Several irregularities were committed upon the trial of. this case, but as they have no particular bearing upon the real question involved, and worked no injury to the party complaining, they demand no especial notice.

The principal matter in issue is the proper construction to be given to the 30th section of the “ Act concerning guardians and curators” — R. C. 1855, p. 827. That section, after providing that guardians and curators shall put the money of minors entrusted to their care at interest, declares that “the interest in such cases shall be payable annually; and, if not then paid, shall become part of the principal and bear interest as such, without the necessity of a new mortgage or security, unless the court should deem such additional security proper.”

The guardian in this case loaned out the money of the ward, and neglected to provide or specify in the note, or make any special agreement, that the interest, if not paid annually, should be compounded. The court below computed interest on interest with annual rests up to the date of the garnishment, and from that decision this appeal is taken. The statute is not intelligibly drawn, and its meaning is not entirely devoid of difficulty.

It may be contended with plausibility that it was only intended to authorize the guardian to loan the money on the terms and in the manner therein prescribed, and to fix the measure of responsibility for his failure or neglect of duty ; and that however he might incur liabilities for disregarding an imperative injunction of the law, that could in nowise affect the obligor in the bond, or the-person to whom the money was loaned ; and without an express stipulation in the contract, the interest could not become a part of the principal and bear interest. But was this the real intention of the law-makers when they passed the act ? This section was in the revision of 1835, and has been continued without change in the subsequent revisions. It was not till after this'law had long been in force that parties were allowed, by contract or stipulation, to make the interest, if not paid punctually, a part of the principal, and then bear like interest as the principal debt; and this could only be done where there was an agreement inserted in the instrument which evidenced the contract or obligation. But we find no such provision in the act under consideration: its language seems to be imperative, and declares that the interest shall be paid annually ; and if not then paid, shall become a part of the principal and bear interest as such, without the necessity of any new mortgage or security. No reference is made to any contract or agreement between the guardian and the person borrowing the money; but the terms are absolue and unqualified, and express the legal meaning and obligations which the contract of borrowing imports.

When parties make a contract or agreement on any given subject, they contract with reference to and are governed by the law on that subject. A promissory note may be given without expressing any interest on its face, yet after maturity the law will allow interest notwithstanding no stipulation for its payment was made; and hence where the law, as in this case, says that interest shall be paid annually, and, if not so paid, it shall become a part of the principal and bear interest, it must be considered that the law enters into and forms a part of the contract although no such agreement or stipulation is included in it.

But it further appears by the record, that, when the ward arrived at the age of twenty-one years, the guardian assigned to him the note which is the subject of this controversy, and lie did not proceed to collect it, but let it remain for a considerable period. The court rendered judgment for compound interest for the whole length of time. The statute was made for the benefit of minors. Infants are the peculiar favorites of the law and of the courts, and their interest will always be protected. But when they arrive at age they are fully emancipated from guardianship and control, and are able not only to protect themselves, but have full capacity to make their own contracts ; their wardship is then at an end, and laws giving them peculiar immunities during their minority are no longer applicable.

The reason of the law ceasing, the law itself ceases.— From the time the ward arrived at full age and received the note, current or simple interest only should have been calculated, without a new agreement was made between him. and the maker of the note stipulating for a different rate of interest. There was some evidence attempting to show that such was the fact, but we do not understand the judgment of the court to have been predicated upon that evidence.

The judgment will be reversed and the cause remanded for further proceedings in conformity with this opinion.

Judge Holmes concurs.

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Dissenting Opinion

Fagg, Judge,

dissenting.

I do not concur in the opinion of a majority of the court, but hold that the note sued upon was the property of the guardian until it was assigned by him to his ward after he became of age. Both upon reason and authority I think it can be shown that the words “guardian of,” &c., are to be taken as mere descriptio persones, and upon the death of the guardian the note in question would have gone to his administrators, and not to the succeeding guardian, as a part of the ward’s estate. If this view be correct, then the contract should' have been interpreted by the face of the note itself, and it was wrong to compound the interest. If the law is to be taken as a part of the contract, then all that need be 'expressed in obligations of this character is the amount of money to be paid, coupled with a recital of the fact that it belongs to the estate of a minor. The guardian in that case could recover not only compound interest, but it must be computed at the highest rate that could have been obtained, to be shown by any competent evidence of that fact. Surely this could not have been the intention of the Legislature. The policy of the general law at the time of the enactment of this statute being against contracts of this character, may give some force to the suggestion that it was intended for the benefit of the minors exclusively; but my opinion is that its real object was to enable .the guardian to make his contract for the loan of his ward’s money in such manner that if the interest was not collected at the end of the year, it might still be carried into the settlement of his accounts without injury to him. The protection of the minor is the bond of the guardian ; and if he fails to put out the money of his ward in the manner provided by law, so as that a loss in the matter of interest is sustained by his failure, then I apprehend that the remedy must be upon his bond, and not against a party with whom he has contracted in good faith. If the construction given to this statute by the court below is to prevail, my opinion is that the note cannot be affected by the fact of the minors coming of age, but the interest must continue to be computed in the same manner until the note is fully paid off.