Read v. Turner, 200 N.C. 773 (1931)

May 13, 1931 · Supreme Court of North Carolina

200 N.C. 773

MRS. GEORGE H. READ v. M. A. TURNER and MATHILDE S. TURNER, Guardian.

(Filed 13 May, 1931.)

1. Clerks of Court C 1) — Clerk of court lias no power to order guardian of lunatic to pay debt contracted prior to adjudication of lunacy.

The clerk of the Superior Court has only such powers as are conferred on him by statute, and his statutory powers to appoint a guardian for one who has been adjudged a lunatic, C. S., 2285, and the provision requiring such guardian to account to him in the administration of the estate, C. S., 2183-2188, and the power of the clerk to order the guardian to expend such sums as may be found by him necessary for the support of the lunatic and the members of his family dependent on him, does not give the clerk authority to order the guardian to pay debts of the . lunatic contracted prior to the adjudication of lunacy.

2. Courts A d — Superior Court has jurisdiction to order payment of debts of lunatic contracted before adjudication of lunacy.

The Superior Courts in their equity jurisdiction have the power to order debts contracted by a lunatic before his adjudication of lunacy to be paid out of the funds in the hands of the guardian when there are funds available after provision has been made out of the estate for the maintenance of the lunatic and the dependents of his family.

3. Insane Persons D b — Judgment creditors of insane person before adjudication are entitled'only to prorate in funds available.

Where a creditor has obtained judgment against his debtor before the latter’s adjudication as a lunatic, and seeks by action in the Superior Court against the guardian to subject moneys available for the payment of such claims to the payment of his judgment, and the guardian makes it to appear that there are other like creditors of the lunatic, and that the funds are insufficient to pay all claims: SaM, a refusal by the court of the guardian’s motion to make other like creditors of the lunatic parties to the suit, is error and the case will be remanded, the judgment creditors being entitled only to prorate in the funds available unless there are priorities by liens or mortgages.

Appeal by defendants from Harding, J., at Chambers in the city of Charlotte, N. C., on 29 November, 1930.

Error.

This is an. action begun on 26 July, 1930, in the Superior Court of Mecklenburg County, for judgment and decree, ordering and directing the defendant, Mathilde S. Turner, guardian of M. A. Turner, a lunatic, to pay to plaintiff, out of money in her hands belonging to the estate of said lunatic, the amount due on a judgment recovered by the plaintiff of the defendant, M. A. Turner, prior to his adjudication as a lunatic.

Without objection, proceedings pending in said court, one begun by petition filed by the plaintiff herein in the action in which the judgment was recovered, and the other by petition filed by the plaintiff “In the matter of M. A. Turner, Lunatic, Mathilde S. Turner, Guardian,” for the same relief as that sought herein, were consolidated with this action by order of Judge Harding, dated 29 November, 1930.

The facts alleged in the complaint in this action, and also in the petitions in said proceedings, are as follows:

1. On 21 February, 1927, in an action pending in the Superior Court of Mecklenburg County, entitled “Mrs. George H. Read v. M. A. Turner and M. E. Turner,” judgment was rendered that plaintiff in said action recover of the defendants the sum of $3,000, with interest thereon from 11 November, 1926, and the costs of said action. This judgment is now duly docketed in the office of the clerk of the Superior Court of Mecklenburg County. No part of said judgment has been paid. The full amount thereof, with interest, is now due the plaintiff.

2. On 8 March, 1927, the said M. A. Turner was duly adjudged a lunatic by the clerk of the Superior Court of Mecklenburg County, and thereafter the defendant herein, Mathilde S. Turner, was appointed by said clerk as guardian of the said M. A. Turner. The said defendant has qualified as such guardian, and is now engaged in the performance of the duties of said guardianship. The said M. A. Turner is now insane and is confined in the State Hospital for the Insane at Mor-ganton, N. C.

3. On 30 March, 1927, an order was made by the clerk of the Superior Court of Mecklenburg County, authorizing and directing the defendant, Mathilde S. Turner, guardian of M. A. Turner, to expend each month the sum of $400 for the support of the said lunatic and his family, the said sum to be paid out of the estate of the said lunatic, in the hands of his said guardian.

4. The said lunatic has a monthly income of $750, which is paid to his said guardian by an insurance company under the terms of its policy issued to him and in force at the date of his adjudication as a lunatic. After paying the sum of $400 monthly for the support of the said lunatic and his family, as she has been authorized and directed to do by the clerk of the Superior Court of Mecklenburg County, the defendant, Mathilde S. Turner, guardian, now has in hand a sum of money in excess of $6,000, belonging to tbe estate of said lunatic. It is not necessary for tbe said guardian to hold or retain tbe said sum of money for tbe support of tbe lunatic and bis family, but said sum of money is available for tbe payment of bis debts contracted prior to bis adjudication as a lunatic.

On these facts alleged in her complaint, plaintiff prays that a judgment and decree be entered in this action adjudging that she is entitled to have her judgment against M. A. Turner, lunatic, paid and discharged out of tbe money in the bands of tbe defendant, Mathilde S. Turner, guardian, ordering and directing tbe said guardian to pay to plaintiff out of said money tbe amount due on her judgment.

In her answers to tbe complaint in this action and to tbe petitions in said proceedings tbe defendant, Mathilde S. Turner, guardian of M. A. Turner, admits tbe facts to be as alleged therein, and says that she desires to disburse tbe money in her bands belonging to'the estate of said lunatic as she may be directed to do by tbe court. In addition to tbe facts alleged in tbe said complaint and petition, she shows to tbe court:

“(a) That there are docketed in tbe Superior Court of Mecklenburg County ten judgments against tbe estate of M. A. Turner, a lunatic, a list of said judgments being attached hereto.

(b) That there are no other judgments against tbe estate of M. A. Turner.

(c) That all of said judgments are for indebtedness incurred by M. A. Turner prior to tbe date on which be was adjudged a lunatic; that there are no outstanding debts against tbe estate of M. A. Turner incurred since be was adjudged a lunatic.

(d) That as your respondent is informed and advised, the judgment in this cause has no priority or preference over the other judgments which have been recovered and docketed against tbe said M. A. Turner or said guardian; that all of said judgments have equal claim as to priority on said funds, and said funds if ordered disbursed on said judgments should be disbursed pro rata among tbe several judgments which have been docketed.

(e) That as your respondent is informed and believes, there are other indebtednesses claimed against her ward, M. A. Turner, by various persons or corporations; that none of said indebtedness has been reduced to judgment and no action has been brought on any such indebtedness; that so far as your respondent is advised, all of such claims or indebtedness would now probably be barred by tbe three-year statute of limitations ; that more than three years have elapsed since the adjudication of insanity of M. A. Turner, and tbe appointment of your respondent as guardian of M. A. Turner, lunatic.

(f) That the funds in tbe bands of your respondent as guardian have been derived solely from health or disability insurance provisions in insurance policies; that it is necessary to pay the premiums on said policies in order to keep such policies in force; that loans were secured on certain insurance policies by M. A. Turner and your respondent is paying the interest on such loans; that some funds should be left in the hands of the respondent to be used for said purposes.”

Attached to defendant’s answer to the complaint in this action, and to her answers to the petitions in the proceedings which have been consolidated with this action, is a list of judgments docketed in the office of the clerk of the Superior Court of Mecklenburg County against M. A. Turner, or against Mathilde S. Turner, guardian of M. A. Turner, lunatic, aggregating in amount $66,129.72, showing the name of each judgment creditor, and the date and amount of each of said judgments.

After the order of consolidation had been made by Judge Harding, and when the action was called for hearing on the motion of plaintiff for judgment on the admissions in the pleadings, the defendant moved the court that all of the judgment creditors as shown on the list attached to her answers be made parties to this action, and be given leave to be heard before judgment was rendered. This motion was denied and defendant excepted.

It was thereupon considered, ordered and adjudged by the court that the defendant, Mathilde S. Turner, guardian, be and she was directed to pay off and discharge, out of the funds in her hands belonging to the estate of M. A. Turner, lunatic, the judgment of the plaintiff against the said M. A. Turner, in the sum of $3,000, with interest thereon from 11 November, 1926, and costs, together with the costs of this action, and of the proceedings consolidated herewith.

From this judgment defendant appealed to the Supreme Court.

Shore & Townsend for plaintiff.

Walter Glarlc for defendant.

CoNNOR, J.

If the judgment in this action from which the defendant has appealed is affirmed by this Court, the judgment for $3,000, with interest and costs, which the plaintiff recovered of M. A. Turner prior to his adjudication as a lunatic, will be paid in full out of his estate. The said estate, now in the hands of the defendant, as his guardian, and consisting of money, is not sufficient in amount for the like payment of the judgments of other creditors of the lunatic, whose debts were contracted also prior to the adjudication. The effect of the judgment in this action, therefore, is to give to plaintiff priority over other judgment creditors, who are not parties to this action and who had no opportunity to be heard before the judgment was rendered.

Power to appoint a guardian of a person wbo bas been duly adjudged a lunatic (0. S., 2285), is conferred by statute in tbis State on tbe clerk of tbe Superior Court of tbe county in wbicb sucb person resided or bad bis domicile at tbe date of bis adjudication. 0. S., 2150. Sucb guardian is required to give a bond or other security to be approved by a judge or by tbe court. 0. S., 2161. Tbe bond must be conditioned that sucb guardian shall faithfully execute tbe trust reposed in him as sucb, and obey tbe lawful orders of tbe clerk or judge touching tbe guardianship committed to him. C. S., 2162. In tbe administration of tbe estate in behalf of tbe lunatic, tbe guardian is subject to tbe orders of tbe clerk by whom be was appointed and to whom be is required by statute to account. 0. S., 2183-2188. In proper eases it is the duty of tbe clerk to make an order authorizing, and directing tbe guardian of a lunatic to expend from bis estate sucb sum or sums - as shall be found by the clerk are or may be required for tbe adequate support and maintenance of tbe lunatic and of tbe members of bis family wbo are dependent on him. Lemly v. Ellis, 146 N. C., 221, 59 S. E., 683; McLean, v. Breese, 109 N. C., 564, 13 S. E., 910; McIlhenny v. Savings Co., 108 N. C., 311, 12 S. E., 1001; Adams v. Thomas, 83 N. C., 522, and 81 N. C., 296; In re Latham, 39 N. C., 231. Ordinarily, tbe guardian and tbe sureties on bis bond are fully protected by tbe orders of tbe clerk, approved in proper cases by tbe judge, with respect to tbe administration of tbe estate of bis ward.

It bas been held by tbis Court that tbe clerk of tbe Superior Court is without power to authorize or order tbe guardian of a lunatic to pay out of tbe estate committed by tbe court to sucb guardian, debts of tbe lunatic contracted by him prior to bis adjudication. In Blake v. Respass, 77 N. C., 196, it was said by Bynum, J.: “By tbe common law, as well as by statute 17 Edward II, cb. 10, wbicb was only declaratory of tbe common law, tbe king as parens patrice took charge of tbe effects of a lunatic, and held them, first, for tbe maintenance of him and bis family, and second, for tbe benefit of bis creditors, as tbe Court of Chancery might order from time to time.” As tbe clerk of tbe Superior Court in tbis State bas only sucb powers as are conferred on him by statute, and as no power bas thus been conferred on tbe clerk to authorize or order tbe payment of tbe debts of a lunatic contracted prior to bis adjudication, it follows that tbe clerk is without sucb power.

Tbe proceedings begun by petition “In tbe matter of M. A. Turner, lunatic, Matbilde S. Turner, Guardian,” and by petition in tbe action entitled, “Mrs. George H. Read v. M. A. Turner and M. E. Turner,” in which tbe judgment for -$3,000, with interest and costs, was rendered, should have been dismissed. Tbe relief sought by tbe plaintiff on tbe facts alleged in tbe petitions in said proceedings can be bad only in a civil action instituted by tbe plaintiff against the guardian of the lunatic, in the Superior Court of Mecklenburg County. This Court by virtue of its general equity jurisdiction has power to grant the relief. Adams v. Thomas, 83 N. C., 521.

The plaintiff has no lien by virtue of her judgment for $3,000 on the assets of the estate of M. A. Turner, in the hands of his guardian. She acquired no lien by the commencement of this action. The defendant, Mathilde S. Turner, guardian of M. A. Turner, lunatic, was well advised when she presented to the court, in her answer to the complaint, the facts shown therein, to wit, that there were judgment creditors of M. A. Turner, other than the plaintiff, whose judgments were recovered upon debts contracted by the lunatic prior to his adjudication and prior to her appointment as guardian. On all the facts appearing in the pleadings, these judgment- creditors are entitled to share pro rata in the estate of the lunatic, after adequate provision has been made for the support and maintenance of the lunatic and his dependent family. There was error in the refusal of the court to make an order that these creditors be made parties to the action, before judgment was rendered. For this error the action is remanded to the Superior Court of Meck-lenburg County for further proceedings in accordance with this opinion. Before any order is made or judgment rendered in this action, the court should find that provision has been made by an order of the clerk of the Superior Court of Mecklenburg County out of his estate for the adequate support and maintenance of the lunatic and of the members of his family who are dependent on him.

We quote with approval the language of Dillard, J., in Adams v. Thomas, 81 N. C., 296, as follows:

“Property of a lunatic put into the hands of a committee is to be regarded as in custodia legis, and no creditor can reach it for a preexisting debt, except through the order of the Superior Court, and that order is never made until first a sufficiency is ascertained and set apart for his own maintenance and that of his family, if minors, and this administration of the estate is based on the idea that the sovereign owes the duty to a person thus unfortunate to devote his property primarily to his maintenance and to protect him against his existing creditors, except in subordination thereto.”

Where, however, adequate provision has been made for the support and maintenance of a lunatic and the dependent members of his family, out of his estate in the hands of his guardian, and there remains any part of said estate which is available for the payment of his creditors, such part of said estate should be disbursed by the guardian, under an order or judgment of the Superior Court, pro rata, among the creditors, where there are no priorities by virtue of liens or mortgages.

Error.