McCormick v. Shannon — 127 A.D. 745

Majority

p. 745

Mary Elizabeth McCormick and Andrew McCormick, Infants, by Raymond Ballantine, Their Guardian ad Litem, Respondents, v. William N. Shannon, Individually, Appellant, Impleaded with William F. Shannon and Michael F. Tobin, as Executors and Trustees under the Last Will and Testament Mary E. Tobin, Deceased, Defendants.

First Department,

July 8, 1908.

Headnote

Guardian and ward — purchase of wards’ property on foreclosure'— interest on advancements.

Where a guardian advanced Ms own money and purchased in his own name the real property of his wards on foreclosure, and it appears that but for such act the wards would have lost the property and realized no surplus, and the guardian is ready to convey to his wards, he should be allowed interest at the rate of four per cent on the moneys advanced by him.

A guardian so purchasing his wards’ lands and thereafter appropriating the rents to himself, should be charged with the legal rate of interest on the rents received.

Appeal by the defendant, William FT. Shannon, individually, from certain parts of an interlocutory judgment of the Supreme Court in-favor df the plaintiffs, entered in the office of the clerk of the county of Mew York on the 21st day of February, 1908, upon the decision of the court rendered after a trial at the Mew York Special Term.

Daniel F. Kiely, for the appellant.

Charles O. Maas, for the respondents.

It is conceded that the defendant, notwithstanding his fiduciary relation, acted in good faith in bidding in the real property of these plaintiffs sold at foreclosure sale, and no question is made that the money which he advanced to protect their interests should be repaid to him.

The trial court was of opinion that interest could not be allowed on these advancements. because he took title in his own name and appropriated the rents.

p. 746

Ordinarily this would be the rule, but under the peculiar circumstances of this case we think interest should have been allowed.

It is quite apparent that the plaintiffs would have lost' the property at the foreclosure sale and would have realized no surplus' had not the defendant advanced his own money and purchased the property. He made the mistake of taking the title in his own name, possibly to protect, the money he had advanced, but he now makes no claim to the property and is ready to transfer it to'his wards.

We think an allowance of interest at the rate of four per cent on the moneys advanced would be just and equitable. There is no reason why the surplus moneys on hand should not be immediately applied toward liquidation of defendant’s claim. The provision of the judgment charging appellant with the legal rate of interest on rents received by him was proper and is not appealed from. .

The interlocutory judgment should be modified by providing that defendant be allowed interest at the rate of four per cent per ■ annum on the moneys advanced by him, and by also providing that the surplus moneys be immediately applied toward liquidation of appellant’s claim, and as so modified the judgment is affirmed, with disbursements only to appellant, to be deducted from his indebtedness for rents.

Present—Ingraham, McLaughlin, Laughlin, Houghton and Scott, JJ.

judgment modified as directed in opinion. Settle order on notice.