61 A. 420 | N.H. | 1905
From an early date there have been statutory provisions in the province and state relating to the settlement and distribution of the estates of deceased persons. The earliest statutes followed in most respects the statute of 22 and 23 Car. II, enacted in 1670. See 1 N.H. Prov. Laws (Batch. ed.), p. 566; Prov. Laws, ed. 1771, p. 104; Laws, ed. 1815, p. 207. They required the making of an inventory of the estate, the administration of it according to law, an accounting, and a distribution of the "surplusage" or residue among the widow and heirs in certain proportions. The first provision relating to the sum at which the administrator should account for the personal estate is that of section 10 of the act of February 3, 1789 (Laws, ed. 1815, p. 210), which provided that he should account for it "as the same shall be appraised," unless the judge ordered it sold. This provision, however, was materially changed by the provision of the act of February 15, 1791, "that no administrator shall be obliged to account with the judge of probate for the appraised value of any personal estate, if such administrator shall produce the personal estate so appraised." Laws, ed. 1815, p. 216, s. 3. The administrator was required to pay the debts and legacies in specie, if such he had "as assets in his hands"; and if not, he could pay them in the personal property on hand, or expose such property to the creditor or legatee to be levied upon. Prov. Laws, ed. 1771, c. 42, s. 3; Laws, ed. 1815, p. 213, s. 24. If the residue of the personal estate after the payment of the debts, etc., consisted of property other than money, and the administrator produced it, the division among the heirs must have been of the property in kind.
Such was the state of the law at the time of the revision of the probate laws in 1822. Laws 1820, c. 87; Laws 1822, cc. 27-34. Section 4, chapter 31, Laws 1822, (Laws, ed. 1830, p. 333), provides that "the executor or administrator shall account in money *297 for the debts due the deceased by him received, or which by due diligence might have been collected and received. And he shall also be charged in money with the appraised value of the goods and chattels of the deceased," or, if they are sold under a license, with the proceeds of the sale: "Provided, nevertheless, that if there be any personal estate specifically bequeathed, or undisposed of at the request of the heirs or legatees, or preserved for their greater benefit, and not wanted for the payment of the just demands with which the estate is chargeable, the executor or administrator shall be discharged therefrom by producing the same and delivering it over to the heirs or legatees to whom it belongs." Upon the general revision of the laws in 1842, the foregoing provisions were reenacted in sections 5, 6, and 7, chapter 159, Revised Statutes, without change excepting in form. The provision relating to the reservation of personal property from sale was put in a section by itself (s. 6), and reads in part as follows: "Any property may be reserved at the sale, unless so needed [for the payment of debts], for the benefit or upon the request of the heirs or legatees, and the administrator shall be discharged by delivery thereof to the persons entitled thereto."
It will be noticed that the terms referring to property and heirs in these provisions are general. "Any personal estate" and "any property" are sufficiently broad to include choses in action as well as goods and chattels; and "heirs" includes minors as well as adults. No special provision is made for minor heirs. The protection of their interests is left to their guardians, whose duty it is to take care of their estates, real and personal, collect their dues, and protect their rights. R.S., c. 150, ss. 3, 17. Accordingly, it has been held that a decree upon the settlement of the administrator's account relating to the ancestor's estate binds the minor heir whose guardian has notice of the proceeding and is present (Simmons v. Goodell,
Thus far the statutes made no provision for making a division and transfer of the property in kind, if either of the parties was unwilling. An act was passed in 1857, by which it was provided that "whenever there shall be bonds, stocks, or other written evidences of debt in the hands of an administrator of a solvent estate, and there are minor heirs, and it shall appear to the judge of probate for the county in which the administrator received his appointment that it would be for the interest of such minor heirs that such property should not be sold by the administrator, but be transferred to the heirs, the judge of probate may order such bonds, stocks, or other written evidences of debt to be transferred to the heirs or the guardians of the heirs respectively, in their fair and just proportion; and the said guardians shall be authorized to receive and hold the same as long as they may deem it safe and prudent so to do," and they shall be held accountable for the property as for real estate. Administrators and guardians were empowered to sell stock, bonds, and securities payable at a distant day, upon license from the judge of probate; and in case of sale were accountable for the proceeds only. The act was not to be construed so as to authorize guardians to invest funds in their hands in a manner not theretofore authorized. Laws 1857, c. 1963. This last provision refers to the investment of money already in hand; it would be absurd to suppose that it was intended to prevent the exercise of freedom in the division of property under the prior sections.
The purpose of the act of 1857 evidently was to empower the judge of probate to order or decree a transfer of bonds, etc., to minor and other heirs whenever it appears to him to be for their interest, even if there be opposition. The act does not purport to take from the ward or his guardian any of the rights and powers which they possessed under the laws previously in force. Its provisions are not inconsistent with those laws. It was an addition to the earlier laws, rather than a modification of them. See Gardiner v. Thorndike,
Prior to 1866 there was no statute specifying the nature of the investments which guardians should make. By an act passed in that year, it was provided that they should invest in notes secured by mortgage of real estate at least double in value the notes, or in some incorporated savings bank in this state, or in the bonds of the United States, this state, or some town or county within the state, "and in no other way whatever; provided, however, that *300 it shall be lawful for such guardian to receive bonds, stocks, or other written evidence of debt, wherever invested, from any administrator, and to hold them with the approval of the probate court, in the same way as now provided in chapter 1963 of the Pamphlet Laws of this state." Laws 1866, c. 4250, s. 1. These provisions have been carried forward to the present time in sections 10 and 11, chapter 185, General Laws, and sections 8 and 9, chapter 178, Public Statutes, somewhat changed in form, but not in substance. See Comm'rs' Rep. G.L., c. 179, ss. 10, 11; Comm'rs' Rep. P.S., c. 177, ss. 8, 9. They pertain solely to the investment of funds, and have no application whatever to the transfer of property from the ancestor's estate to a minor, to satisfy his right as an heir or legatee. By the express terms of the statute, it is lawful for the guardian to receive stocks, etc., from the administrator, as previously to the passage of the act.
It appears from these statutory provisions that the defendant, as guardian of the plaintiff, had authority to agree in his behalf with the administrator of Mr. Stevens' estate upon a division of the residue of the personal property of that estate between the widow and the plaintiff. In doing so he was not investing his ward's funds, but was acquiring his ward's inheritance. His authority was not limited or controlled in any way by the provisions of section 11, chapter 185, General Laws. If the interests of his ward required it, he was at liberty to accept notes which were secured otherwise than as prescribed by the statute, and other stocks than those specifically mentioned therein — even notes and stocks that for the time being might be regarded as of little or no value. The South Dakota notes afford an apt illustration of the wisdom of this provision. When they came into the hands of the administrator they were overdue and regarded as of doubtful value. The administrator failed to collect them, although the estate was in the course of administration by him for more than two years. When a portion of them were transferred to the defendant they were regarded as of little value. It is highly improbable that the administrator could have realized more than a nominal sum for them, upon a sale under license from the probate court. The defendant has collected $565, and the plaintiff will realize whatever further can be obtained from them. The other notes (excepting three, amounting to $1,600) and the Gossard stock all represented investments made by Mr. Stevens, a man reputed to be a capable investor and financier. He had great confidence in them. It does not appear that the notes had become due. They were all believed to be good. The defendant was satisfied that they were secured by mortgages of real estate double in value the sums represented by them. The Gossard Investment *301
Company was engaged in the business of negotiating loans on farm, village, and city properties in the West — a business not specially hazardous if properly conducted. The stock was a good paying security, and was salable in the market at par. There is nothing tending to show that the loans or stock were of a speculative nature. The defendant did not need the money for the plaintiff's support. If these investments had been converted into money by the administrator, and the money had been paid to the defendant, it would have been his duty to reinvest it. The change would necessarily be attended with expense and loss of income, together amounting to a considerable sum. The defendant was advised by able counsel that he was authorized to receive these securities from the administrator as a part of his ward's inheritance. He acted in good faith, believing the course taken to be in all respects a prudent and safe one, and for the interest of his ward. While the fact that Mr. Stevens originally made these investments and had great confidence in them, and the fact that bank officials, trustees, and other investors were in the habit of investing in similar securities, and the advice of counsel that the defendant was authorized to take the securities from the administrator, may not be competent evidence upon the question of the defendant's authority in the premises, they were competent and weighty evidence upon the question of his good faith, care, and prudence. Kimball v. Reding,
Among the notes thus accepted by the defendant there were three, together amounting to $1,600, which the administrator had lent money upon during the administration of the estate. See Judge of Probate v. Mathes,
The plaintiff seeks further to charge the defendant with the money invested by him as guardian in notes secured by mortgages of real estate in the West, on the ground that the real estate was not double the notes in value. The defendant in every instance, excepting certain notes hereinafter considered by themselves, examined the application for the loan, considered the evidence relating to the value of the real estate mortgaged to secure it, and "honestly believed" that the value was double the note. The affiants as to values appeared to be acquainted with such property, and their certificates were accepted by the defendant without further inquiries concerning them, and given full faith and credit. The method thus adopted was the only practicable method available, and was that adopted by bank officials, trustees, and other investors in such securities. In arriving at his belief, the defendant acted as a prudent, careful, and reasonable man, considering the nature and importance of the business. The real estate mortgaged to secure the notes that were overdue and unpaid January 21, 1901, — the date to which the defendant's final account related, — was not double the notes in value, but he was not in fault for not knowing the fact. How much they fell short does not appear. The question is whether, in view of these findings of fact by the superior court, the investments were authorized by the successors of the statute of 1866, already mentioned. The present form of this statute, omitting the parts relating to the exception before mentioned, is as follows: "Every guardian of a minor shall invest in the name of his ward, or in his own name as guardian, the money and the proceeds of all real and personal property of his ward . . . in notes secured by mortgage of real estate at least double in value of the notes, in some incorporated savings bank in this state, or in the bonds or loans of this state, of some town, city, or county of this state, or of the United States, and in no other way." P.S., c. 178, s. 9. The plaintiff takes the position that an investment in a note secured by a mortgage of real estate is unauthorized by the statute, unless it *303 appears, when the question arises in a judicial proceeding, that the real estate was of the required value, however careful, intelligent, and honest the guardian may be in determining that it was so when he made the loan. The position, in short, is that unless the guardian is infallible, he is liable to have his act in making such an investment pronounced unauthorized, and this upon a finding of facts by men equally fallible with himself. Was such the intention expressed by the legislature in the statute?
The statute makes no provision for judicially determining in the first instance the value of the real estate offered for mortgage. Such value is not ordinarily a fact, certain and readily ascertainable. It depends upon a great variety of circumstances. Persons well qualified to judge oftentimes differ widely regarding it. Generally, a person who proposes to loan money upon a note secured by a mortgage of real estate must determine for himself the value of the property offered for mortgage. It is reasonable to suppose that the legislature had these facts in mind. It is to be presumed that they contemplated a plan that would be practical. In view of these considerations, it is manifest that the intention was that the guardian — the same as lenders of money generally — should satisfy himself as to the value before making the loan. The statute requires him to be convinced that the value is double the note. In forming this judgment, he must act as in all other matters entrusted to his discretion — in good faith and with reasonable care, diligence, and prudence, such as men of average prudence exercise under like circumstances. If upon an investigation of that kind he becomes satisfied that the real estate is of the required value, the statute authorizes him to make the loan, and will protect him accordingly. But if he voluntarily makes a loan, knowing that the real estate mortgaged to secure it is of less value than double the note, or if, by reason of his want of good faith or of due care, diligence, and prudence, the real estate does not meet the statutory requirement, the loan will be outside the authority of the law, and he will be responsible to his ward for the money loaned.
When Kimball v. Reding,
The guardian took certain notes secured by mortgages of real estate less in value than double the notes, in settlement of claims that he had against his agent for the agent's defaults. He knew that the real estate mortgaged was not of the required value. He made every reasonable effort to collect the claims, but failing to do so, finally accepted the notes as the only satisfaction of the claims he could obtain. The loans were in a sense involuntary. The origin of the claims, or his failure to collect them, was not due to any want of faithfulness, diligence, care, or prudence on his part. It would be a novel and unreasonable rule of law that would not allow a guardian to save for his ward all that could be saved under such circumstances. On the contrary, the law imposed the duty upon the guardian to use reasonable care and diligence to that end, and it appears that he fulfilled the duty in this instance. The transactions were not investments of money under the statute, but the settlement of desperate claims outstanding in favor of the ward. His authority in the premises was derived from section 6, chapter 178, Public Statutes — not from section 9 of that chapter. The findings of the superior court fully justify his acts with reference to these claims. Dodge v. Stickney,
The order of the superior court affirming the decree of the judge of probate should stand.
Case discharged.
YOUNG, J., did not sit: the others concurred. *305