WINBORNE and wife v. WHITE et al

Gilliam Pruden, for appellants:

The guardian, White, upon his intermarriage with his wife, became thereby personally responsible for the debt, which security was added to the conveyance of the land itself. And the land, as the sale shows, was ample security for the debt. There was no necessity for enforcing payment, and the trust fund was used by the guardian in the purchase of the property for himself, and the most of the purchase money paid thereby. His was a breach of official duty and a misapplication of the trust funds, which could be afterwards sanctioned by the ward, and the property thus acquired with her money claimed, or waiving this right, she could charge his bond with the moneys thus converted. Her equity to follow the investment and claim the property her money had been used to pay for, is thus clear and unquestionable. Lewin on Trusts Marg. p. 290. Has this right been forfeited and the election determined? So ruled the Court.

An election to be effectual must be made with a knowledge of one's rights and with an intention to elect. 1. Leading cases in equity in Streatfield v. Streatfield, p. 321; notes, p. 249. What will be conceded election? A receipt of a legacy for three years does not preclude an election made in ignorance of one's rights. Wake v. Wake, 1 Ves. Jr. 335; same for five years. Reynard v. Spence, 4 Beav. 103.

Infants may elect at majority. Married women after enquiry by the master. 1. Leading cases in equity, p. 303; McQueen v. McQueen, 2 Jones Eq. 16; 2 Story's Eq., sec. 793 and sec. 1,097. Story says (last cited section): Before any presumption of an election can arise, it is necessary to show that the party acting or acquiescing was cognizant of his rights. When this is ascertained affirmatively it may be further necessary to consider whether the party intended an election; whether the party was competent to make an election; for a feme covert an infant or a lunatic will not be bound by an election, c. West v. Sloan, 3 Jones Eq. 102; Young v. McBride, 68 N.C. 532.

Moore Gatling, contra.

I. This case bears no resemblance to that class of cases in which a trustee undertakes to buy the trust property for his own benefit as in West v. Sloan, 3 Jones Eq. 103; because the land in question had ceased to be the property of the feme plaintiff, having been sold by order of the Court of Equity, and bought by Mrs. Elizabeth B. Parker, a stranger to the proceeding and to the guardianship long prior to the guardianship of the intestate, Jonathan. The validity of her purchase is not impeached.

View our case as if a debt secured by deed in trust of land belonging to the debtor who is some third party, had come into the guardian's hands as the estate of his ward, and upon failure of the debtor to pay the interest promptly, or for other good cause, the guardian had required the trustee to make sale, and upon such sale had purchased the land openly and at a fair price, paying therefor with his own money, and in his final accounting fully satisfying his ward for her debt and all accrued interest. For such a view is warranted by the complaint alone without reference to the explanation contained in the answer, there being no allegation that the guardian paid for the land with the ward's money, or that there was collusion between the trustee, Nathan Winslow, and the guardian. Upon the principles announced in Simmons v. Hassell, 68 N.C. 213, it is plain that the plaintiff has no election.

II. The only charges brought against the guardian in the complaint are,

1st. An intention to buy the land for himself.

2d. That there was no necessity to change the investment.

If we admit the first charge, does it sustain the plaintiff's views of the case? We take it, "the intention to buy for himself" is very plainly evidenced by the fact that he did buy for himself. He intended to buy. He did buy. He had a right to buy. He stands upon higher ground than that claimed for him in the view just before presented. His wife owns the equity of redemption in the land conveyed to Winslow, and he himself is individually liable for the debt. Has not the guardian a right to have the debt paid before his wife's land is entirely consumed by the debt? and if his wife does not object to the sale and purchase by him, can the plaintiff, whose debt has been fully paid, object?

The defendants insist that the propriety of collecting the debt should be left to the sound judgment of the guardian in all cases where it is not alleged that injury has resulted to the ward from such collection. Such seems to be the rule established in Gary v. Cannon, 3 Ired. Eq. on page 69.

III. The real complaint seems to be at last, that the guardian did not permit the debt to stand on interest until it had eaten up his wife's land, and then buy in the land for his ward. There are three excellent reasons why he did not choose to adopt this cause, to-wit:

1st. While the law exacts of the guardian that he shall display both good faith and ordinary prudence in the management of his ward's estate, it does not require him to sacrifice his own interests, or those of his wife for the benefit of the ward, especially when that benefit is purely a matter of speculation.

2d. To have bought the land for his ward, instead of selling the land and having the ward's debt paid, would have been such a change of investment, such a speculation, as would have rendered him liable to his ward, in case, from any reason, the speculation had proved less valuable than the debt and interest. Whashington [Washington] v. Emeny, 4 Jones Eq.,

3d. The debt due his ward was the debt of his wife for which his marriage made him responsible. If he had deferred the collection with the debt constantly increasing, and the land in the hands of a trustee, it might have soon happened, and no doubt would have happened, that by reason of the increase of the debt, and the deterioration of the land, it would have failed to sell for enough to pay the debt, and the guardian would have been personally liable for the deficit. As it was, the security did not seem to have been very ample for the price, which is no where alleged to be less than the value, was $3,100, and the debt $2,600.

If, under such circumstances, the guardian collects a debt secured by his wife's land, and for which he is personally responsible, and accounts for every cent so collected, will the Court lightly declare that he acted in bad faith?

IV. To put the plaintiff's case in its strongest light, let us admit (for argument sake) that the guardian paid for the land only by surrendering his ward's bond, and that the plaintiff had the right to elect to take the land. Then this election must be made in reasonable time, and after "the closing of the trust," a short time will be reasonable time; for this right of election is not "an estate in equity, but a mere right," and the statute of presumption applies. Davis v. Cotton, 2 Jones Eq., 435; Haskins v. Wilson, 4 Dev. Bat., 243; Simmons v. Hassell, 68 N.C. Rep., 213.

V. But even before the closing of the trust by the judgment against the guardian and its satisfaction, the plaintiff, Anna F., had no such right of election. Ours is totally unlike any case in which such a right has been held to exist. It was not a sale by a guardian to himself. It was not a purchase of the wards property by the guardian. It is not a purchase by the guardian of property for which he paid his ward's money. But is only a purchase by him with his own money of his wife's property, which had been conveyed to a trustee to secure a debt due his ward, for which he was personally responsible, and for which he has already fully assented.

VI. There is no error in his Honor's ruling that the registration of the deed from the trustee affected the plaintiff's with notice. In Davis v. Cotton, 2 Jones Eq., 435, "possession of the property" was said to be sufficient to require inquiry. Is not possession under a registered deed equally so? The feme plaintiff attained her majority before marriage. The subsequent coverture is not a disability.