Opinion
June Term, 1903.
Charles E. Palmer and Alexander Fenwick, for the appellant.
J.B. Holmes, Clarence W. Betts and Emmet N. Akin, for the respondent.
Appellant can hardly claim that for the two items for which he has received credit in his private settlement with his ward, he was not in law liable to the plaintiff. There is no rule of law which would justify a trustee in loaning money on personal credit, and the payment of expenses of a third party and advancements of money to him from the funds of this plaintiff is not sought to be justified by the appellant's attorney. But these expenditures from the plaintiff's funds, although unauthorized, could have been ratified by the plaintiff, and I am unable to discover any legal ground for holding that they were not so ratified in the settlement of March 26, 1900. That was a settlement made without fraud or misrepresentation, where each item was read over to the plaintiff, and it nowhere appears that she did not understand the nature of her act in consenting to the credit to the defendant for the sums so expended. I cannot agree that this settlement did not have the effect of an accord and satisfaction or of a technical release under seal, as found by the learned referee. It is clearly something more than a receipt for moneys received. Here was a liability of the defendant to the plaintiff covering many items of which the law implies a dispute. A settlement reached between the guardian and his ward after the ward has become of age and the payment of the amount found due upon such settlement was a legal accord and satisfaction and was binding and effectual to release the guardian from all further claims of his ward unless that settlement was induced by some fraud or misrepresentation on his part. In Kirby v. Taylor (6 Johns. Ch. 242) the rule is stated in the head note in these words: " It seems that a release given by a ward six months after she comes of age, to her guardian, freely and fairly, without any fraud, misrepresentation or undue means to obtain it, is valid." In Douglass v. Ferris ( 138 N.Y. 200) the opinion of O'BRIEN, J., in part reads: "It was competent for the plaintiff after he became of age to settle with his guardian, and if the settlement had been fairly and honestly and not fraudulently made, it would discharge the guardian and his sureties." It matters not that there was no seal attached to this agreement of settlement. The only effect of a seal is to create a conclusive presumption of consideration. Of this there is no need in the case at bar because the adjustment of an undetermined account and payment of the moneys found due thereupon are in themselves a consideration for the agreement of settlement executed.
The learned referee has found that for these two items credit was given in the settlement "by mistake." It is not quite clear just what is meant by this finding. There could have been no mistake of fact. The guardian himself clearly understood what had been done, and it was set forth in the account rendered, each item of which was read over by the guardian to the plaintiff. Between a guardian and ward there is a confidential relation which calls for a full disclosure by a guardian in any settlement made with the ward, and failure to make such disclosure is deemed in law a fraud which will avoid the settlement made. But the plaintiff nowhere alleges in her complaint any fraudulent concealment of fact or law. She bases her cause of action to set aside this agreement of settlement upon certain false representations claimed to have been made by the defendant with intent to deceive her, and upon which she relied. The cause of action thus alleged she has failed to prove, and the referee has found that the defendant, in making such settlement, was guilty neither of fraud nor of false representations. In the absence thereof, the agreement of settlement made and executed would seem to constitute an effective bar to further liability upon the part of the defendant. To ignore such a settlement when no fraud or deceit has been practiced would be to deny to parties the right to make a settlement between themselves. But the law recognizes that right and gives effect to such settlements until they be legally impeached. We are of opinion that the facts found by the referee do not sustain the judgment. The judgment should, therefore, be reversed.
All concurred; PARKER, P.J., in result.
Judgment reversed on law and facts, referee discharged and new trial granted, with costs to appellant to abide event.