This section is from the book "The Law Of Contracts", by William Herbert Page. Also available from Amazon: Commercial Contracts: A Practical Guide to Deals, Contracts, Agreements and Promises.
Guardians are officers of the court for the purpose of managing the estates of persons who are in law considered incapable of managing their own property. In the absence of statutory authority they have no power to bind such estates by their contracts so as to modify pre-existing liability, which may be enforced against such estate irrespective of such contract1 A guardian cannot charge the estate by carrying on business on his ward's capital and credit,2 or form a corporation on behalf of his ward out of a partnership in which the ward had an interest,3 or bind the estate by a covenant of quiet enjoyment,4 or subject the estate of the ward to a lien for labor or materials,5 or borrow money on the credit of the estate,6 even to take up debts of the estate,7 nor can he bind the ward's estate by a contract to pay attorneys' fees.8 If the statute does not authorize such contract to employ an attorney the order of the court cannot validate it.9 So money borrowed by a guardian and expended for his ward is not a consideration for a note given by the succeeding guardian.10 The contract of one not a guardian is, of course, not binding on the estate.11 So a general judgment against the guardian cannot be enforced out of the ward's property.12 An attorney who acts as guardian ad litem cannot have any greater compensation than the allowance made to him by the court having jurisdiction of the case in which such services were rendered.13 One who is employed as attorney by a guardian ad litem may have such compensation as the court before which such case is tried may allow if reasonable in amount.14 The guardian is personally liable in such contracts,15 unless he has expressly relieved himself from personal liability by the terms of the contract,16 though in a proper case he may be reimbursed out of the estate for such expense,17 and he has an equitable lien on the estate for such expenses.18 Even if the guardian designates himself in the contract "as guardian" he is personally liable.19 A guardian may, however, provide for freedom from personal liability and full effect must be given to such stipulation.20
1 Chestnut v. Tyson, 105 Ala. 149; 53 Am. St. Rep. 101; 16 So. 723; Fish v. McCarthy, 96 Cal. 484; 31 Am. St. Rep. 237; 31 Pac. 529; Morse v. Hinckley, 124 Cal. 154; 56 Pac. 896; Wright v. Byrne, 129 Cal. 614; 62 Pac. 176; Brown v. Eggleston, 53 Conn. 110; 2 Atl. 231; Baird v. Steadman, 39 Fla. 40; 21 So. 572; Nichols v. Sargent, 125 111. 309; 8 Am. St. Rep. 378; 17 N. E. 475; Sperry v. Fanning, 80 111. 371; Lewis v. Edwards, 44 Ind. 333; Lindsay v. Stevens, 5 Dana (Ky.) 104; Massachusetts General Hospital v. Fairbanks, 132 Mass. 414; Rollins v. Marsh, 128 Mass; 116; Wood v. Truax, 39 Mich. 628; Reading v. Wilson, 38 N. J. Eq. 446; Hardy v. Bank, 61 N. H. 34; Warren v. Bank, 157 N. Y. 259; 68 Am. St. Rep. 777; 43 L. R. A. 256; 51 N. E. 1036; Fessenden v.
Jones, 52 N. C. 14; 75 Am. Dec. 445; Shepard v. Hanson, 9 N. D. 249; 83 N. W. 20. Contra, Robinson, v. Hersey, 60 Me. 225; Price's Appeal, 116 Pa. St. 410; 9 Atl. 856.
2 Warren v. Bank, 157 N. Y. 259; 68 Am. St. Rep. 777; 43 L. R. A. 256; 51 N. E. 1036.
3 Weld v. Mfg. Co., 86 Wis. 549; 86 Wis. 552; 57 N. W. 378; 57 N. W. 374.
4 Chestnut v. Tyson. 105 Ala. 149; 53 Am. St. Rep. 101; 16 So. 723.
5 Fish v. McCarthy. 96 Cal. 484; 31 Am. St. Rep. 237; 31 Pac. 529.
6 Wright v. Byrne, 129 Cal. 614; 62 Pac. 176 (the ward is not personally liable therefor) ; Buie's Estate v. White, 94 Mo. App. 367; 68 S. W. 101.
7 Andrus v. Blazzard, 23 Utah 233; 54 L. R. A. 354; 63 Pac. 888 (the note was signed "John Blazzard by Joseph H. Hurd, his general guardian").
8 Morse v. Hinckley, 124 Cal. 154; 56 Pac. 896; Cole v. Superior Court, 63 Cal. 86; 49 Am. Rep. 78; Glassgow v. McKinnon, 79 Tex. 116; 14 S. W. 1050; Richardson v. Tyson, 110 Wis. 572; 84 Am. St. Rep. 937; 86 N. W. 250. (For other phases of this litigation, see Tyson v. Richardson, 103 Wis. 397; 79 X. W. 439; Tyson v. Tyson, 94 Wis. 225; 68 N. W. 1015.)
9 Glassgow v. McKinnon, 79 Tex. 116; 14 S. W. 1050; Andrus v. Blazzard, 23 Utah 233; 54 L. R. A. 354; 63 Pac. 888.
10 Wright v. Byrne, 129 Cal. 614; 62 Pac. 176.
11 Columbia, etc., Co. v. Lewis,
190 Pa. St. 558; 190 Pa. St. 577; 42 Atl. 1094; 42 Atl. 1117.
12 Baird v. Steadman, 39 Fla. 40; 21 So. 572.
13 Englebert v. Troxell, 40 Neb. 195; 42 Am. St. Rep. 665; 26 L. R. A. 177; 58 N. W. 852.
14 Richardson v. Tyson, 110 Wis. 572; 84 Am. St. Rep. 937; 86 N. W. 250.
15 Chestnut v. Tyson, 105 Ala. 149; 53 Am. St. Rep. 101; 16 So. 723; Hunt v. Maldonada, 89 Cal. 636; 27 Pac. 56; Sperry v. Fanning, 80 111. 371; Rollins v. Marsh, 128 Mass. 116; Forster v. Fuller, 6 Mass. 58; 4 Am. Dec. 87; Hardy v. Bank, 61 N. H. 34; Shepard v. Hanson, 9 N. D. 249; 83 N. W. 20; Andrus v. Blazzard, 23 Utah 233; 54 L. R. A. 354; 63 Pac. 888.
16 Morse v. Hinckley, 124 Cal. 154: 56 Pac. 896.
Conversely the interest of a guardian in a contract which he has made in his own name is a personal interest and not an interest as guardian.21 Thus he can sue in his own name on a note payable to himself, the consideration of which was property of the ward,22 can release a guarantor on a note payable to himself,23 and the ward cannot bring suit thereon.24 But in some states the ward may avoid the entire contract and hold the person who borrows money of the estate from the guardian with knowledge of the facts, as trustee.25 A guardian is not liable on a contract made by the infant even for necessaries.26
Statutory provisions may confer upon a guardian power to bind the estate by his contracts with reference thereto.27 He can contract for the location of a land certificate, the locator to be paid a part of the land,28 or can lease,29 or borrow money to discharge liens on order of the court.30 The general power of a guardian over personalty, together with the provisions found in most statutes empower a guardian to compromise claims,31 though an order of court may be necessary.32 A guardian's contract with the stockholders of an insolvent national bank in which the ward holds stock for raising funds to pay the debts of the bank with as little expense as possible,33 and his surrender of a life insurance policy,34 have been held valid. He cannot arbitrate where his interest is adverse to his ward's.35 In some cases the guardian has been allowed to bind the estate of his ward without an order of court; as where a guardian employed a doctor to save the ward's life.36
17 Curran v. Abbott, 141 Ind. 492; 50 Am. St. Rep. 337; 40 N. E. 1091; (insurance) Sims v. Billing-ton, 50 La. Ann. 968; 24 So. 637; (money) Merkel's Estate, 154 Pa. St. 285; 26 Atl. 428.
18 Curran v. Abbott, 141 Ind. 492; 60 Am. St. Rep. 337; 40 N. E. 1091.
19 Sperry v. Fanning, 80 111. 371; Forster v. Fuller, 6 Mass. 58; 4 Am. Dec. 87; Andrus v. Blazzard, 23 Utah 233; 54 L. R. A. 354; 63 Pac. 888.
20 Nichols v. Sargent, 125 111. 309; 8 Am. St. Rep. 378; 17 X. E. 475.
21 Thompson v. Duncan, 85 Ga. 542; 11 S. E. 860. Contra, that the guardian cannot sell notes payable to himself or bearer as guardian, without an order of the court. See Gillespie v. Crawford (Tex. Civ. App.), 42 S. W. 621; Strong v. Strauss, 40 O. S. 87.
22 McLean v. Dean, 66 Minn. 369; 69 X. W. 140.
23 Ditmar v. West, 7 Ind. App. 637; 35 N. E. 47.
24 Brewster v. Seeger, 173 Mass. 281; 53 N. E. 814 (citing Hippee v. Pond, 77 Ia. 235; 42 X. W. 192; Gard v. Neff, 39 O. S. 607. (Proposition of text not passed upon in this ease.) Chitwood v. Cromwell, 12 Heisk. (Tenn.) 658; Zachary v. Gregory, 32 Tex. 452).
25 Easton v. Somerville, 111 Ia. 164; 82 Am. St. Rep. 502; 82 N. W. 475.
26 Overton v. Beavers, 19 Ark. 623; 70 Am. Dec. 610; Baird v. Steadman, 39 Fla. 40; 21 So. 572; McNabb v. Clipp, 5 Ind. App. 204; 31 N. E. 858; Spring v. Woodworth, 4 All. (Mass.) 326; Pendexter v. Cole, 66 N. H. 556; 22 Atl. 560.
27 United States Mortgage Co. v. Sperry, 138 U. S. 313.
If the property has been applied to the use of the estate equity may enforce at least a reasonable compensation therefor out of the estate,37 but this relief will not be given if the property was not applied to the use of the estate.38 So attorneys employed by the guardian may receive a reasonable compensation for the benefits which have resulted to the estate from such services.39
 
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