McConkey v. Cockey

McSiierry, J., delivered the opinion of the Court. Ln the month of February, eighteen hundred and seventy-three, the appellant duly bonded as the guardian of the appellee. At that time the latter was hut thirteen years of age, without father or mother, the one having died in eighteen hundred and sixty-seven and the other five years thereafter. McConkey, who was the husband of Oockey’s eldest sister, ivas appointed executor of the will of Mrs. Cockey, and in that capacity stated an account in the Orphans’ Court of Baltimore County showing the balance due to the appellee by Mrs. Cockey, the former guardian.

The subsequent settlement of her estate by McConkey placed in his hands, as guardian, nearly seven thousand dollars additional. The appellee after the death of his mother resided with the appellant, and, with the exception of brief intervals, continued to reside there until after his majority. Eo guardian accounts seem to have been stated in the Orphans’ Court until some months after the settlement made by McConkey with Cockey upon the latter attaining his majority, which occurred on the seventeenth day of October eighteen hundred and eighty. On the first day of the following month McConkey made up a statement of his accounts showing an apparent balance of ten thousand five hundred and ninety-one dollars and thirty cents due to ²⁸⁸ liis ward.

From-that balance several sums were to he deducted, leaving seven thousand seven hundred and seven dollars and ninety-seven cents as the true amount due. In settlement of that sum McConkey transferred and delivered to Cockey on said first day of November, three certificates for one hundred and fifty shares of the capital stock of the American Manufacturing Company, of the nominal value of fifteen thousand dollars ; and on the twenty-seventh of- the same month Cockey executed a release to his guardian acknowledging the receipt of the said ten thousand five hundred and ninety-one dollars and thirty cents. Cockey subsequently discovered that this stock was valueless and thereupon filed a bill in the Circuit Court of Baltimore City against the appellant, who was then and still is living in New York; charging that said release had been obtained by fraud and praying that it might be vacated and that McConkey be decreed to pay the sum of seven thousand seven hundred and seven dollars and ninety-seven cents, with interest. Mc-Conkey answered the bill and denied its material averments.

The Circuit Court passed a decree granting the relief sought. From that decree this appeal has been taken. There is no room to question or to controvert, at this day, the well settled and salutary principles which govern Courts of equity in dealing with a case like this. “They will not pérmit transactions between guardians and wards' to stand, even when they have occurred after the minority has ceased, and the relation become thereby actually ended, if the intermediate period be short, unless the circumstances demonstrate, in the highest sense of the term, the fullest deliberation on the part of the ward, and the most abundant good faith, (uberrima fides) on the part of the guardian.” 1 Story Eq.} sec. 317. ’Where the transaction ²⁸⁹ occurs within a short time after the ward attains his majority, the onus of proof is on the guardian to show every thing requisite to make the settlement valid and binding. Smith vs. Davis, 49 Md., 489 .

When, therefore, the appellee attained his majority it became the obvious duty of the appellant to turn pver to him all property belonging to the ward in the possession of the guardian, including the sum of money heretofore mentioned. His plain obligation was to pay that sum of money in cash. Instead of doing this he transferred to him, whilst the ward was still living under his roof, as a member of his family, and in just fourteen days after Cockey reached his majority, these one hundred and fifty shares of stock with emphatic assurances that the stock was an excellent investment for which he had been recently offered sixty dollars a share; that it was better than gas stock, because that had been repeatedly watered; more profitable than city stock, because that paid a low rate of interest, and safer than railroad securities because they were dangerous, and that it would pay very handsome dividends. The appellee knew nothing whatever about the stock or the company by which it had been issued.

He relied wholly and confidingly upon the representations of his guardian under whose dominion and control he had lived since childhood. McConkey had been but shortly prior to that time the manager or superintendent of the company, and, of course, knew its condition, the value of its stock and the extent of its business. The appellee was informed by his guardian that the latter had become possessed of this stock because of its having been pledged to him as collateral security for a loan made by him of the money of the appellee,—the borrower of that money having failed to pay the interest on it and the stock having been taken in consequence. Between the date of the transfer of this ²⁹⁰ stock and the date of the release, McConkey frequently repeated his representations touching the value of the investment and the large business carried on by the company in the manufacture and sale of oleomargarine.

Under these circumstances, induced by these assurances given by one who had stood towards, him, for so long a time, in the close and intimate relation of guardian, the appellee, without any investigation whatever, accepted