Maclay v. Equitable Life Assurance Society/Opinion of the Court

By the terms of the policy sued on, the amount of the insurance upon the life of Samuel H. Snowden was payable, after notice and proof of his death, to his wife, if living, and, if not living, to his children, or their guardian, for their use.

It was proved at the trial that the wife died in Mississippi; that the husband was thereupon appointed, under the laws of Mississippi, and by the chancery court of the county of Wilkinson, in that state, administrator of her estate, and guardian of the person and property of only child; and that he described himself, in his administration bond, as of the same county and state. It may be assumed, therefore, that the domicile of himself and his ward at that time was in Mississippi, and it is not suggested that he was not lawfully appointed guardian.

A guardian, unless his powers in this respect are restricted by statute, is authorized, by virtue of his office, and without any order of court, to sell his ward's personal property, and reinvest the proceeds, and to collect or compromise and release debts due to the ward, subject to the liability to be called to account in the proper court if he has acted without due regard to the ward's interest. Lamar v. Micou, 112 U.S. 452, 475, 5 Sup. Ct. 221; Field v. Schieffelin, 7 Johns. Ch. 150, 154; Ellis v. Bridge, 2 Pick. 243; Ordinary v. Dean, 44 N. J. Law, 64, 67; Pierson v. Shore, West, Ch. 711, 1 Atk. 480; Inwood v. Twyne, 2 Amb. 417, 419, 2 Eden, 148, 152.

In the case at bar the validity of the receipt by the father, as such guardian, of the surrender value of the policy, in discharge of all further claim under it, is contested by the plaintiff (appointed in Louisiana, since the father's death, tutor or guardian of the minor) upon the ground that it was a compromise or sale of a debt due the ward, unauthorized by the law of Mississippi, because the statutes of that state provide that the chancery court may empower a guardian to sell personal property of his ward, or to sell or compromise claims due to the ward, as therein directed. Rev. Code Miss. 1880, §§ 2065, 2106, 2110.

But those statutes, limiting the general power of disposition which executors and administrators, as well as guardians, had at common law, have been strictly construed by the supreme court of Mississippi. Bland v. Muncaster, 24 Miss. 62, 65. Sales of personal property by executors or administrators have been held by that court to be void, because of other provisions of the statutes, making an order of court essential to the validity of such sales, except in specified cases. See Rev. Code, §§ 2032, 2033, 2035, 2038, 2077; Hutch. Code c. 49, § 109; Cable v. Martin, 1 How. (Miss.) 558, 561; Worten v. Howard, 2 Smedes & M. 527, 529; Gelstrap v. Moore, 26 Miss. 206, 209. But the statutes relied on, so far as they relate to guardians, would seem to be permissive, and not restrictive, and only to provide a mode by which the guardian may obtain in advance a judicial approval of such a sale or compromise, and thereby, in the absence of fraud, establish that it is for the interest of the ward, instead of leaving that fact open to dispute at a future day.

However that may be, the guardian was certainly authorized to collect, for the benefit of his ward, any amount due under the policy, and had the right and the duty to elect either to keep it in force, by paying the premiums, or to surrender it in consideration of being paid at once its surrender value,-whichever appeared to be most beneficial to the ward. Cocke v. Rucks, 34 Miss. 105, 108; Martin v. Tarver, 43 Miss. 517; Berry v. Parkes, 3 Smedes & M. 625; Chapman v. Tibbits, 33 N. Y. 289. The amount received was proved to be the surrender value of the policy; and there is nothing to show, or even to raise a suspicion, that the action of the guardian was not for the best interest of the ward, upon the state of facts then existing.

Under the circumstances of this case, therefore, it was rightly held by the court below that the transaction in question was neither a compromise nor a sale of a debt, but was the collection of a debt due in the alternative at the option of the guardian, and was one which he had authority to make, under the laws of Mississippi.

The case is quite different from Hayes v. Insurance Co., 125 Ill. 626, 18 N. E. 322, cited by the plaintiff, in which, after the death of the man whose life was insured, the guardian of his children gave up the policy in consideration of a payment of about half its amount.

Judgment affirmed.