SECOND DEPARTMENT, JUNE TERM, 1903. [Vol. 85. the increase made by Commissioner Willis above referred to. This action was taken in pursuance of the provisions of section 456 of the charter of 1897. It was not essential to the validity of this action that the reasons for such reduction be filed and opportunity be given to explain, because chapter 186 of the Laws of 1898* embodying these requirements did not become a law until March 31, 1898. The provisions of section 1543 of the charter applied only to cases of removal by heads of departments and had no application to a reduction of this kind made by a deputy commissioner pursuant to provisions of the statute expressly empowering him to fix and regulate salaries with the approval of the head of the department. *Amdg. Laws of 1883, chap. 354, § 13.- [REP. DETERMINED IN THE THIRD DEPARTMENT IN THE APPELLATE DIVISION, June, 1903. CARRIE NORRIS, Respondent, v. ROBERT L. NORRIS, Appellant. Settlement of an account between a guardian and ward after the latter is of age when it is a ratification of unauthorized expenditures by the guardian. After a ward had attained her majority her guardian submitted to her a statement of his accounts, in which the guardian was credited with certain unauthorized expenditures Each item of the account was read over to the ward and she assented to its correctness. The amount appearing to be due the ward was then paid over to her and an agreement of settlement, which was not under seal, was executed between the parties. The guardian was not guilty of any fraud or of any misrepresentation or concealment of fact or law in regard to the account, and it did not appear that the ward did not understand the nature of her act when she consented to allow the guardian credit for the unauthorized expenditures. Hell, that it was competent for the ward, after attaining her majority, to ratify the unauthorized expenditures and that she had done so by executing the agreement of settlement; That, under the circumstances, it could not be said that the unauthorized expenditures were credited to the guardian by mistake; That the agreement of settlement, although not under seal, constituted an accord and satisfaction and was effectual to release the guardian from all claims of the ward on account of the unauthorized expenditures. APPEAL by the defendant, Robert L. Norris, from a judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of Washington on the 5th day of March, 1902, upon the report of a referee. The defendant had been the guardian for the plaintiff during her minority, and had in his possession certain moneys belonging to her. Upon the 26th day of March, 1900, after the plaintiff had APP. DIV.- VOL. LXXXV. 8 THIRD DEPARTMENT, JUNE TERM, 1903. [Vol. 85. become of age, a private settlement of accounts was had between them whereby the sum of $606.81 was paid to the plaintiff by the defendant and an agreement of settlement was executed between the parties hereto. Thereafter, this plaintiff, having discovered that in the settlement certain credits had been allowed to the defendant to which it was claimed he was not entitled, brought this action to set aside the settlement and for a further accounting. The complaint alleges the relations of the parties as guardian and ward, the execution of the agreement of settlement, and further alleges that the same was obtained by the defendant by fraud and false representations. These allegations are denied by the answer, and the issues formed therein were referred to a referee who has found the facts as above set forth as to the relationship of the parties and the agreement of settlement and the execution of that agreement. The referee has further found that the allegations of fraud and of false and fraudulent representations alleged in the complaint are not sustained in the evidence, and that there is a failure of proof to establish that the defendant perpetrated any fraud or made any false pretensions to deceive the plaintiff and procure such account. He finds specifically that the account as made up by the defendant was read item by item to the plaintiff and vouchers submitted to her, and that no item was disputed by the plaintiff except an item of one dollar, which was then disallowed by consent of the defendant. He further finds that the account rendered by the defendant, and as thus settled, to be correct except in two particulars. First. In that accounting the guardian obtained credit for a loan made to his father, John Norris, and the costs of a judgment thereafter entered therefor. The loan was made upon his father's personal liability without any security whatever. This the referee has held to have been an improvident investment and has charged the defendant therewith. Second. Funeral expenses and advances to John Norris, Jr., amounting to seventy-nine dollars and eighty cents, had been in the accounting credited to the defendant, and with this the referee has charged the defendant. The referee has found that these two items were erroneously credited to the defendant by mistake. As matters of law he has found that the accounting and settlement were not equivalent to an accord and satisfaction or a technical release under seal, and that the plaintiff was entitled to judgment for these two App. Div.] THIRD DEPARTMENT, JUNE TERM, 1903. items, with interest and costs. From the judgment entered upon the report of the referee defendant has appealed. Charles E. Palmer and Alexander Fenwick, for the appellant. J. B. Holmes, Clarence W. Betts and Emmet N. Akin, for the respondent. SMITH, J.: 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. Á 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 THIRD DEPARTMENT, JUNE TERM, 1903. [Vol. 85. 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. |