Abshire v. Rowe

66 S.W. 394, 112 Ky. 545, 1902 Ky. LEXIS 196

Opinion

Opinion or the court by

JUDGE O’REAR —

Affirming.

One James Matney was appointed guardian for the infant appellees, Rowe, in August, 1S95, by the Pike county court, and executed bond with L. D. Marrs and seven others as sureties. Thereafter there came to the hands of the guardian a fund belonging to the infants jointly, to the amount of $1,6G6.66. On the 17th day of March, 1897, pursuant to a notice executed by said L. D. Marrs and D. B. Marrs, two of the sureties, the guardian was required to execute a new bond. The notice was for the purpose only of procuring the release of the two sureties named. This new bond was executed with appellants, Abshire and K. F. Roberson and others, as sureties. At the August term, 1898, of the Pike county court, Matney was removed as'guardian.and Samuel J. Salyer was appointed his successor, who brought this suit against all the sureties in both the bonds executed by his predecessor, Matney, alleging the insolvency of Matney and of the devastavit of his ward’s estate, alleging that he had; refused and failed to pay over the amount, or any amount, of the money so received by him for them, and had failed to make any investment of same for them.

Appellants, Abshire and Roberson, sureties on the new bond, plead that the money received by"the guardian was received before the new bond was executed or required, and that, likewise, it was squandered and converted by th'e guardian before the execution of the bond. They claim that in consequence of thpsé facts they are not bound, and they cite and rely upon Boyd v. Withers, 103 Ky., 698 (20 R., 541), (46 S. W., 36), and Jones v. Gallatin County, 78 Ky., 491, Cassily v. Cochran, 12 R., 119. The question is, what was the purpose, and what was the effect, of the new bond? It is argued for appellants that it was to answer for the faithful accounting by the guardian of the ward’s estate coming to his hands from and after its date. In Boyd v. Withers, supra, the court held that in any event the burden was upon the guardian or his surety claiming exemption, to showr where the devastavit was committed, and in the absence of such showing, a judgment against any of the sureties would be upheld. In Cassily v. Cochran, supra, it was adjudged that under the peculiar facts of that case, the conversion of the ward’s estate by the guardian occurred after the execution of the new bond, and, therefore, the sureties upon the new bond were undeniably liable. The question here presented did not arise, and was not decided, in either of the cases cited. By 'Section 1068 of the Kentucky Statutes, it is made the duty of the county judge to, at least once in each year, carefully inquire into the solvency of all the sureties upon the bond of each fiduciary, and if there is reason to believe that any bond is not amply sufficient to protect from loss those interested, he is required to give notice to such fiduciary “that a new bond, or additional surety on the old, is required, and upon .a failure of such fiduciary to give said bond or surety within a reasonable time to be fixed by the court, he shall be removed.” It is obviously the purpose of this statute to give to the county court a discretion and invest it with a duty, long exercised by that tribunal to exact rigid security for the protection- of infants whose estates are committed to guardians. A guardian is appointed subject to being removed for cause during the minority of the infant, and the bond first executed covers that period (Elbert v. Jacoby, 8 Bush, 511).

It not infrequently happens that one or m-orej or possibly all, the sureties of this bond become insolvent. They would not be interested, therefore, in directing -the attention of the county court to derelictions of the principal, but the court may require the security to be strengthened either by requiring additional surety or the execution of a new bond. In either event, it is the purpose of the court to protect the infant’s interest. If the new bond should take effect only from its date, and the conversion of the ward’s property or other wrongful act, that may thereafter be complained of, had occurred (before the execution of this new bond, the -sureties in the? old one, having become insolvent, then the execution of such new bond would probably be useless so far as ajny practical benefit is concerned. Unless such new bond is executed or additional surety furnished, it i-S the duty- of the court to then remove -the- guardian and appoint -another. Thi's termination of his office, depriving -him of its emoluments and privileges, and requiring of him an immediate settlement and transfer of the ward’s assets to the successor, would all have occurred at the time of the original complaint, except for the execution of a new bond. The re- suit of such execution is to continue the guardian in office, and to continue his rightful custody and use of his ward’s estate, and to prevent, for the time being, an action to require him to account for and pay over what had previously come to his hands. It is what the language of the statute says it is, — “an additional surety.” This statute is not new in our law. It has existed in one form or another from the earliest history of the Commonwealth. And under it this court has uniformly held that the exe- . cution of one or more additional bonds is merely cumulI ative, affording additional protection to the infant, and additional security to him that the guardian shall execute and shall have executed faithfully all the duties of his office. Hutchcraft v. Shrout’s Heirs, 1 T. B. Mon., 208, 15 A,m. Dec., 100; Frederick v. Moore, 13 B. Mon., 472; Elbert v. Jacoby, 8 Bush, 545; Withers v. Hickman, 6 B. Mon., 292; Taylor v. Taylor’s Ex’rs, Id., 559; Middleton’s Adm’r v. Hensley (21 R., (703), 52 S. W., 974); Sievers v. Havens, 5 Ky. Law Rep., 856. And such is the rule, it seems, elsewhere. Jones v. Hays, 44 Am. Dec., 78; Poole v. Cox, 49 Am. Dec., 410. These cases all hold that the obligation of all of the sureties in all the bonds is coequal and coextensive. It was held in Wilborne v. Com., 5 J. J. Marsh., 617, under the act of 179.7, then in force, that county courts had the right, in exercising their jurisdiction requiring additional sureties, to extend the order so as to release former sureties, if, in their judgment, it was thought expedient to do so, but unless, by the terms, the former surety was released, he continued bound for all the acts of the guardian. It was also held in that case that the surety of the new bond was likewise liable for all the acts of the guardian. By section 4659 of the Kentucky 'Statutes, it is provided that a surety on any official bond, or bond of a guardian, who wishes to be relieved irom future liability, and to obtain indemnity for such loss as may have been incurred, or either, may, by written notice to the principal obligor, require him to appear before the court in which the original bond was given, to execute a new bond with' other surety, or to effect a discharge of the motioner from future liability, or as indemnity for the past acts of the principal, or for both. Section 4663 of the Kentucky Statutes, makes the execution of such bond a discharge of all the sureties making the motion for release from all liability for the acts of the principal thereafter done; and, if the object be so specified, the bond shall contain a stipulation or covenant to indemnify the surety against any loss already incurred by reason of the suretyship. In this case it does not appear that there was a motion for indemnity, and therefore the sole question is the effect of the execution of the new bond, not as to the motioners Marrs, but as between the new sureties, the appellant here, and the old sureties who did not make the motion. The statute expressly restricts the release effected by the execution of this new bond to siich of the old sureties as moved for it. It must follow that the sureties on the old bond who did not move for the release were intended by the lawmaking body to be continued upon their liability. As between the motioners and those executing the new bond, the motioners would be liable only for such defalcation as had occurred before its execution; but, as between the other sureties on the old bond and the sureties of the new, they all stand alike, and upon the same footing. TYe could not conclude otherwise, and he in harmony with the earlier and persistent rulings <vf this court upon the effect of such obligations. Had the new.bond contained a covenant of indemnity to the mo tioners in tlie old one, then, as between the obligors in the old bond, making the motion, and the obligors in the new, those in the new bond would have been liable for the whole of the defalcation, whenever committed. In the absence of such covenant, applying the general doctrine above discussed, and assuming that the defalcation occurred before the execution of the new bond, then the liability of all the obligors, sureties on all the bonds, is coequal, as if they had all executed one bond originally. In Watts v. Pettit’s Heirs, 1 Bush, 155, the court had under consideration the relative liabilities of sureties on an old and a new guardian’s bond, where the new one had been executed under notice such as above provided for. íhe statute, however, in that case, was materially different in language from our present statute. The language of the statute in that case was, “If a guardian shall give a new bond when ruled to do so by the court, his former security shall not be bound for any acts of his thereafter.” 1 Acts 1855-56, p. 111, sec. 1. The court construed that language to exonerate the surety making the motion and requiring the execution of a new bond from all liability from any act of the guardian, whenever committed. Jones v. Callatin Co., 78 Ky., 491, was a controversy between sureties upon different bonds as to their respective liabilities for a defalcation of a sheriff as collector of revenue. It may well be argued that the sureties upon the sheriff’s bond undertook to covenant only against the wrongful acts of their principal within the period covered by their obligation; that is, from the time the bond was executed. Not so, however, as to a guardian’s bond. There the guardian obligates himself to the ward by executing a bond to the Commonwealth that he will account for and pay over to the ward all money that- has come or may come to his hands by virtue of his office. Such is the effect, in one sense, of his undertaking. It is1 not merely that he will not misappropriate the ward’s funds, but that, whenever legally demanded, they will be forthcoming. The covenant 'is broken when default is made upon demand of the ward upon arriving at age, or upon the demand of the guardian’s successor if the guardian is removed or otherwise vacates his office, to¡ pay over the balance remaining due the ward. In another sense the breach may be said to have occurred, though not necessarily completed, at such time as the guardian may have converted his ward’s estate. Properly, the guardian should not mingle the ward’s estate with his own. It should be employed separately, and securities and1 evidences of debt taken in his name as guardian for the benefit of the ward, though it is not infrequent that guardians do use, and without any improper motive, their ward’s money, being solvent, and feeling that they are bound by ample security to make good the same, with legal interest, as required by the statute. They, deem it is their privilege to personally use the fund. We are not prepared to say that such use would of itself constitute a breach of the bond. It was doubtless in part for this reason that the earlier decisions of this court, as well as tho§e later, have adopted and applied the rule concerning the general lia-1 bility of all the sureties upon all the bonds for all of the acts of the guardian during the duration of his ¡office, and until such sureties may be released by appropriate orders of court.

It follows from what has been said that there was but one cause of action in this case, and that it was not necessary to sue the sureties upon the respective bonds iff separate actions, but that one suit might be maintained against all of them, and in the same action.

Judgment affirmed.

Whole court sitting