Lamar v. Micou (112 U.S. 452)
E. N. Dickerson, for appellant.
S. P. Nash and Geo. C. Holt, for appellee.
This is an appeal by the executor of a guardian from a decree against him upon a bill in equity filed by the administratrix of his ward. The original bill, filed on July 1, 1875, by Ann C. Sims, a citizen of Alabama, as administratrix of Martha M. Sims, in the supreme court of the state of New York, alleged that on December 11, 1855, the defendant's testator, Gazaway B. Lamar, was duly appointed, by the surrogate of the county of Richmond, in that state, guardian of the person and estate of Martha M. Sims, an infant of six years of age, then a resident of that county, and gave bond as such, and took into his possession and control all her property, being more than $5,000; that on October 5, 1874, he died in New York, and on November 10, 1874, his will was there admitted to probate, and the defendant, a citizen of New York, was appointed his executor; and that he and his executor had neglected to render any account of his guardianship to the surrogate of Richmond county, or to any court having cognizance thereof, or to the ward or her administratrix; and prayed for an account, and for judgment for the amount found to be due.
The defendant removed the case into the circuit court of the United States for the Southern district of New York, and there filed an answer, averring that in 1855, when Lamar was appointed guardian of Martha M. Sims, he was a citizen of Georgia, and she was a citizen of Alabama, having a temporary residence in the city of New York; that in the spring of 1861 the states of Georgia and Alabama declared themselves to have seceded from the United States, and to constitute members of the so-called Confederate states of America, whereupon a state of war arose between the United States and the Confederate states, which continued to be flagrant for more than four years after; that Lamar and Martha M. Sims were in the spring of 1861 citizens and residents of the states of Georgia and Alabama, respectively, and citizens of the Confederate states, and were engaged in aiding and abetting the state of Georgia and the so-called Confederate states in their rebellion against the United States, and she continued to aid and abet until the time of her death, and he continued to aid and abet till January, 1865, that the United States, by various public acts, declared all his and her property, of any kind, to be liable to seizure and confiscation by the United States, and they both were, by the various acts of congress of the United States, outlawed and debarred of any access to any court of the United States, whereby it was impossible for Lamar to appear in the surrogate's court of Richmond county to settle and close his accounts there, and to be discharged from his liability as guardian, in consequence whereof the relation of guardian and ward, so far as it depended upon the orders of that court, ceased and determined; that, for the purpose of saving the ward's property from seizure and confiscation by the United States, Lamar, at the request of the ward and of her natural guardians, all citizens of the state of Alabama, withdrew the funds belonging to her from the city of New York, and invested them for her benefit and account in such securities as by the laws of the states of Alabama and Georgia and of the Confederate states he might lawfully do; that in 1864, upon the death of Martha M. Sims, all her property vested in her sister, Ann C. Sims, as her next of kin, and any accounting of Lamar for that property was to be made to her; that on March 15, 1867, at the written request of Ann C. Sims and of her natural guardians, Benjamin H. Micou was appointed her legal guardian by the probate court of Montgomery county, in the state of Alabama, which was at that time her residence, and Lamar thereupon accounted for the paid over all property with which he was chargeable as guardian of Martha M. Sims, to Micou as her guardian, and received from him a full release therefor; and that Ann C. Sims, when she became of age, ratified and confirmed the same. To that answer the plaintiff filed a general replication.
The case was set down for hearing in the circuit court upon the bill, answer and replication, and a statement of facts agreed by the parties, in substance as follows: On November 23, 1850, William W. Sims, a citizen of Georgia, died at Savannah, in that state, leaving a widow, who was appointed his administratrix, and two infant daughters, Martha M. Sims, born at Savannah on September 8, 1849, and Ann C. Sims, born in Florida on June 1, 1851. In 1853 the widow married the Rev. Richard M. Abercrombie, of Clifton, in the county of Richmond and state of New York. On December 11, 1855, on the petition of Mrs. Abercrombie, Gazaway B. Lamar, an uncle of Mr. Sims, and then residing at Brooklyn, in the state of New York, was appointed by the surrogate of Richmond county guardian of the person and estate of each child 'until she shall arrive at the age of fourteen years, and until another guardian shall be appointed;' and gave bond to her, with sureties, 'to faithfully in all things discharge the duty of a guardian to the said minor according to law, and render a true and just account of all moneys and other property received by him, and of the application thereof, and of his guardianship in all respects, to any court having cognizance thereof;' and he immediately received from Mrs. Abercrombie in money $5,166.89 belonging to each ward, and invested part of it, in January and April, 1856, in stock of the Bank of the Republic, at New York, and part of it, in March and July, 1857, in stock of the Bank of Commerce, at Savannah, each of which was then paying, and continued to pay until April, 1861, good dividends annually, the one of 10 and the other of 8 per cent.
In 1856, several months after Lamar's appointment as guardian, Mr. and Mrs. Abercrombie removed from Clifton, in the state of New York, to Hartford, in the state of Connecticut, and there resided till her death, in the spring of 1859. The children lived with Mr. and Mrs. Abercrombie, Lamar as guardian paying Mr. Abercrombie for their board, at Clifton and at Hartford, from the marriage until her death; and were then removed to Augusta, in the state of Georgia, and there lived with their paternal grandmother and her unmarried daughter and only living child, their aunt; Lamar as guardian continuing to pay their board. After 1856 neither of the children ever resided in the state of New York. On January 18, 1860, their aunt was married to Benjamin H. Micou, of Montgomery, in the state of Alabama, and the children and their grandmother thereafter lived with Mr. and Mrs. Micou at Montgomery, and the children were educated and supported at Mr. Micou's expense. From 1855 to 1859 Lamar resided partly in Georgia and partly in New York. In the spring of 1861 he had a temporary residence in the city of New York, and upon the breaking out of the war of the rebellion, and after removing all his own property, left New York, and passed through the lines to Savannah, and there resided, sympathizing with the rebellion, and doing what he could to accomplish its success, until January, 1865, and continued to have his residence in Savannah until 1872 or 1873, when he went to New York again, and afterwards lived there. Mr. and Mrs. Micou also sympathized with the rebellion and desired its success, and each of them, as well as Lamar, failed during the rebellion to bear true allegiance to the United States.
At the time of Lamar's appointment as guardian, 10 shares in the stock of the Mechanics' Bank of Augusta, in the state of Georgia, which had belonged to William W. Sims in his life-time, stood on the books of the bank in the name of Mrs. Abercrombie as his administratrix, of which one-third belonged to her as his widow, and one-third to each of the infants. In January, 1856, the bank refused a request of Lamar to transfer one-third of that stock to him as guardian of each infant, but afterwards paid to him as guardian, from time to time, two-thirds of the dividends during the life of Mrs. Abercrombie, and all the dividends after her death until 1865. During the period last named, he also received as guardian the dividends on some other bank stock is Savannah, which Mrs. Abercrombie owned, and to which, on her death, her husband became entitled. Certain facts, relied on as showing that he, immediately after his wife's death, made a surrender of her interest in the bank shares to Lamar, as guardian of her children, are not material to the understanding of the decision of this court, but are recapitulated in the opinion of the circuit court. 7 Fed. Rep. 180-185.
In the winter of 1861-62, Lamar, fearing that the stock in the Bank of the Republic at New York, held by him as guardian, would be confiscated by the United States, had it sold by a friend in New York; the proceeds of the sale, which were about 20 per cent. less than the par value of the stock, invested at New York in guarantied bonds of the cities of New Orleans, Memphis, and Mobile, and of the East Tennessee & Georgia Railroad Company; and those bonds deposited in a bank in Canada.
Lamar from time to time invested the property of his wards, that was within the so-called Confederate states, in whatever seemed to him to be the most secure and safe-some in Confederate states bonds, some in the bonds of the individual states which composed the confederacy, and some in bonds of cities, and of railroad corporations, and stock of banks within those states.
On the money of his wards, accruing from dividends on bank stock, and remaining in his hands, he charged himself with interest until the summer of 1862, when, with the advice and aid of Mr. Micou, he invested $7,000 of such money in bonds of the Confederate states and of the state of Alabama; and in 1863, with the like advice and aid, sold the Alabama bonds for more than he had paid for them, and invested the proceeds also in Confederate states bonds; charged his wards with the money paid, and credited them with the bonds; and placed the bonds in the hands of their grandmother, who gave him a receipt for them and held them till the end of the rebellion, when they, as well as the stock in the banks at Savannah, became worthless.
Martha M. Sims died on November 2, 1864, at the age of 15 years, unmarried and intestate, leaving her sister Ann C. Sims her next of kin. On January 12, 1867, Lamar, in answer to letters of inquiry from Mr. and Mrs. Micou, wrote to Mrs. Micou that he had saved from the wreek of the property of his niece, Ann C. Sims, surviving her sister, three bonds of the city of Memphis, indorsed by the state of Tennessee, one bond of the city of Mobile, and one bond of the East Tennessee & Georgia Railroad Company, each for $1,000, and with some coupons past due and uncollected; and suggested that by reason of his age and failing health, and of the embarrassed state of his own affairs, Mr. Micou should be appointed in Alabama guardian in his stead. Upon the receipt of this letter, Mrs. Micou wrote to Lamar, thanking him for the explicit statement of the niece's affairs, and for the care and trouble he had had with her property; and Ann C, Sims, then nearly 16 years old, signed a request, attested by her grandmother and by Mrs. Micou, that her guardianship might be transferred to Mr. Micou, and that he might be appointed her guardian. And on March 15, 1867, he was appointed guardian of her property by the probate court of the county of Montgomery and state of Alabama, according to the laws of that state, and gave bond as such. Of May 14, 1867, Lamar sent to Micou complete and correct statements of his guardianship account with each of his wards, as well as all the securities remaining in his hands as guardian of either, and a check payable to Micou as guardian of Ann C. Sims for a balance in money due her; and Micou, as such guardian, signed and sent to Lamar a schedule of and receipt for the property, describing it specifically, by which it appeared that the bonds of the cities of New Orleans and Memphis, and of the East Tennessee & Georgia Railroad Company, were issued, and the Memphis bonds, as well as the railroad bonds, were indorsed by the state of Tennessee, some years before the breaking out of the rebellion. Micou thenceforth continued to act in all respects as the only guardian of Ann C. Sims until she became of age on June 1, 1872.
No objection or complaint was ever made by either of the wards or their relatives against Lamar's transactions or investments as guardian until July 28, 1874, when Micou wrote to Lamar informing him that Ann C. Sims desired a settlement of his accounts, and that he had been advised that no credits could be allowed for the investments in Confederate states bonds, and that Lamar was responsible for the security of the investments in other bonds and bank stock. Lamar was then sick in New York, and died there on October 5, 1874, without having answered the letter. Before the case was heard in the circuit court, Ann C. Sims died, on May 7, 1878, and on June 20, 1878, Mrs. Micou was appointed, in New York, administratrix de bonis non of Martha M. Sims, and as such filed a bill of revivor in this suit. On October 3, 1878, the defendant filed a cross-bill, repeating the allegations of his answer to the original bill, and further averring that Ann C. Sims left a will which had been admitted to probate in Montgomery county, in the state of Alabama, and afterwards in the county and state of New York, by which she gave all her property to Mrs. Micou, who was her next of kin, and that Mrs. Micou was entitled to receive for her own benefit whatever might be recovered in the principal suit, and was estopped to deny the lawfulness or propriety of Lamar's acts, because whatever was done by him as guardian of Martha M. Sims in her life-time, or as guardian of the interests of Ann C. Sims as her next of kin, was authorized and approved by Mrs. Micou and her mother and husband as the natural guardians of both children. Mrs. Micou, as plaintiff in the bill of revivor, answered the cross-bill, alleging that Ann succeeded to Martha's property as her administratrix, and not as her next of kin, admitting Ann's will and the probate thereof, denying that Mrs. Micou was a natural guardian of the children, and denying that she approved or ratified Lamar's acts as guardian. A general replication was filed to that answer.
Upon a hearing on the pleadings and the agreed statement of facts, the circuit court dismissed the cross-bill, held all Lamar's investments to have been breaches of trust, and entered a decree referring the case to a master to state an account. The case was afterwards heard on exceptions to the master's report, and a final decree entered for the plaintiff for $18,705.19, including the value before 1861 of those bank stocks in Georgia of which Lamar had never had possession. The opinion delivered upon the first hearing is reported in 17 Blatchf. 378, and in 1 Fed. Rep. 14, and the opinion upon the second hearing in 7 Fed. Rep. 180. The defendant appealed to this court.
[Argument of Counsel from pages 460-463 intentionally omitted]