Moore v. Hanscom

106 S.W. 876, 101 Tex. 293, 1908 Tex. LEXIS 155

Opinions

On March 21, 1901, A.J. Compton was appointed guardian of Menard James, a person of unsound mind, and his bond fixed at the sum of $20,000 by the County Court. He gave the bond with the American Surety Company as his surety. The court approved the bond and Compton took the oath required by law, returned an inventory and received his letters of guardianship. Subsequently Compton returned another inventory into court which showed that the property of the estate was worth $38,056.83. The Probate Court of Galveston County entered the following order:

"In the matter of the estate of Menard James, non compos.

October 21, 1902.

"A.J. Compton, guardian of said estate, having filed herein a duly approved and conditioned bond in the sum of seventy-six thousand one hundred and thirteen 66-100 ($76,113.66), in lieu of the bond heretofore filed by him; it is ordered by the court that the bondsmen on his previous bond herein filed be and they are hereby discharged and relieved from all further liability herein; and the clerk will record the bond herein filed this day, in the minutes of the court."

The bond mentioned in the order above copied was executed by Compton as guardian and C.H. Moore and M. Marx as his sureties. On February 20, 1903, Compton applied to the court to reduce the bond for various reasons, none of which are embraced in the statute, and the court made this order:

"In the matter of the estate of Menard James, non compos.

March 3, 1903.

"Whereas the amount of bond required of A.J. Compton, as guardian of said estate, having been by an order of the court, duly made and entered herein on the 20th day of February, 1903, reduced to and fixed at the sum of thirty thousand dollars ($30,000), and said A.J. Compton having on this 3d day of March, 1903, presented to the judge of this court his bond as such guardian, made in pursuance of said order in said sum of $30,000, with the United States Fidelity Guaranty Company of Baltimore, Maryland, as surety, which said bond has been duly approved by said judge and filed by the clerk of this court; Now, therefore, on this the 3d day of March, 1903, it is ordered, adjudged and decreed by the court that C.H. Moore and M. Marx, the sureties on the bond of said A.J. Compton, as guardian of said estate, in the sum of $76,113.66, filed herein on the 21st day of October, 1902, be and they are hereby fully and completely discharged from all liability as such sureties henceforth."

On April 23, 1904, Compton reported cash on hand $11,718.91. Compton died and the County Court of Galveston County directed S.S. Hanscom, the then guardian of the estate of James, to institute suit against Compton's executrix and all of his sureties on the three bonds.

We condense the statement made by the Court of Civil Appeals as follows: Compton having appropriated to his own use the cash on hand, he borrowed money from his brother and from Adoue Lobit, bankers in Galveston, and, before the bond was executed, made a deposit with Adoue Lobit in the sum of $11,913.83, which was the full amount of the cash due by him to the estate. The bankers issued to Compton a certificate of deposit, as guardian, which certificate, with some gas stock and wharf stock which belonged to the estate, he deposited with C.H. Moore and M. Marx, who became sureties on his second bond. After the deposit was made the sureties held the certificate of deposit and the money remained in bank to the credit of Compton, as guardian, until the third bond was given and approved. Adoue Lobit were solvent bankers and the certificate of deposit would have been paid by them at any time. After the third bond was given Compton misappropriated the cash on hand and died without making restitution of the same.

Hanscom, in pursuance of the decree of the County Court, instituted suit in the District Court of Galveston County against Mrs. Jennie B. Compton, independent executrix, of A.J. Compton, deceased, the American Surety Company of New York, C.H. Moore and M. Marx and the United States Fidelity and Guaranty Company, the sureties upon the three several bonds. At the trial the Honorable District Judge instructed the jury to return a verdict in favor of the plaintiff against all of the defendants, which was accordingly done, and the court entered a judgment in favor of the plaintiff against the independent executrix and against each and all of the sureties, with a provision that the American Surety Company would ultimately be liable for the whole amount and that C.H. Moore and M. Marx and the Fidelity and Guaranty Company should be equally liable as between themselves. Upon appeal the Court of Civil Appeals affirmed the judgment as to the executrix and reversed it as to the other parties, rendering judgment in favor of the American Surety Company, that the plaintiff take nothing by his suit and that the said Surety Company recover all costs expended, etc.; "that as to C.H. Moore and M. Marx and the United States Fidelity and Guaranty Company the guardian have judgment for $11,839.85 with interest at the rate of 6 percent per annum from February 18, 1905, and for all costs occasioned by them in this court and the lower court."

When Compton deposited in the bank of Adoue Lobit the sum of money due to the estate of Menard James and the money was entered to the credit of A.J. Compton, guardian, the fund so deposited became the money and property of the ward's estate. (Anderson v. Walker, 93 Tex. 119; Skipwith v. Hurt, 94 Tex. 322 [94 Tex. 322].) Lobit testified that the bank would have paid the money on presentation of the certificate of deposit by Compton, or by any person holding it with Compton's endorsement on it. Adoue Lobit were notified by the fact that Compton made the deposit as guardian that the money belonged to the estate of the ward and they could not lawfully pay it to any person except by Compton's order and then only for the uses of the estate; that is, they could not have knowingly applied the money in their hands to the payment of any order made by Compton in any other character than that of guardian, nor could they have applied the money to the payment of any debt due from Compton, personally, to them or to any other person. The fact that the certificate of deposit, with the stocks mentioned, were placed in the hands of Moore Marx to be preserved for the estate so long as they were upon the bond did not affect the title of the estate to the money, but, on the contrary, evinces a purpose to preserve it for the benefit of the estate, and, in their hands as such securities, the money was in law in the possession of the estate and belonged to the estate. (Johnson v. Jones, 68 S.W. Rep., 14.) If any arrangement to the contrary had been made between Moore and Marx and Compton, it could not have affected the title of the estate, nor could it in any way have interfered with the power of the County Court, in which the estate was being administered, in the disposition of the said money. The money being in the bank under the circumstances named, the County Court had the authority to direct the disposition of it by the guardian, but the guardian had no legal authority to make any loan or investment of the money except by the direction of the County Court. (Rev. Stat., arts. 2640, 2641, 2642, 2643, 2644.) Complete restitution of the misapplied funds having been made by Compton, the bond upon which the American Surety Company of New York was surety was satisfied and the order by which the said surety was discharged from the further obligation terminated its liability for that fund. If it be true that Compton intended to get possession of the fund and again to misapply it, such evil purpose could not affect the discharged surety. There can be no question that the County Court had jurisdiction of the subject matter and of the parties when it made the adjudication by which the American Surety Company was discharged from its liability upon the bond and the Court of Civil Appeals correctly rendered judgment in favor of said American Surety Company of New York.

When the third bond was given by Compton as guardian of James, all of the money which belonged to the estate was in the hands of the bankers, Adoue Lobit, and, together with the shares of stock, was by the said bankers delivered to Compton and thereby the order of the County Court which discharged Moore and Marx from further liability upon the second bond became effective and the said Moore and Marx can not be held liable for any subsequent misapplication of the funds by Compton, unless the contention of the plaintiffs and of the Fidelity and Guaranty Company be sustained, to the effect, that the order discharging Moore and Marx was void. This is the next question to be decided.

The law applicable to collateral attacks upon judgments, like the one under consideration, is clearly and forcibly expressed by Mr. Justice Denman in the case of Templeton v. Ferguson,89 Tex. 57, in this language: "In such cases it may be considered the settled rule that, if the record of the cause in which such judgments were rendered does not negative the existence of the facts authorizing the court to make the particular order, the law conclusively presumes that such facts were established by the evidence before the court when such orders or judgments were rendered, and evidence of matters dehors the record to the contrary will not be received." (Martin v. Robinson, 67 Tex. 379 [67 Tex. 379]; Bouldin v. Miller, 87 Tex. 366.)

In Martin v. Robinson, above cited, Judge Stayton said: "The rule suggested in this respect, in some of the cases, would be the rule in a proceeding appellate in character, if the cause be tried de novo; but it seems to us that no such rule can exist when the validity of an administration granted by a decree of a court of record having general jurisdiction is sought to be attacked or held for naught in a collateral proceeding, for if it would be possible to prove facts sufficient to sustain the administration it must be presumed, on such attack, that these very facts were proved before administration was granted. We understand the rule to be, when the judgment or decree of such a court is collaterally called in question, that it must be deemed valid unless it appears that no facts could have been shown which would render it so."

Article 1949, Revised Statutes, is in this language: "An executor or administrator may be required to give a new bond in the following cases:

"1. When the sureties upon the bond or any one of them shall die, remove beyond the limits of the State, or become insolvent.

"2. When in the opinion of the county judge the sureties upon any such bond are insufficient.

"3. When in the opinion of the county judge any such bond is defective.

"4. When the amount of any such bond is insufficient.

"5. When the sureties or any of them petition the court to be discharged from future liability upon such bond.

"6. When the bond and the record thereof have been lost or destroyed."

It will be seen that a broad discretion is given to the judge of the County Court over the subject of demanding or permitting new bonds to be given by the guardian or administrator. The county judge in the case now before us was authorized to take the bond in question if any one of the conditions named in Article 1949 existed at the time. For instance, if in the opinion of the county judge the sureties upon the second bond were insufficient; or if, in his opinion, the bond was in any wise defective, or if the sureties or any one of them petitioned the county judge to be discharged from liability on the bond, the order would be sustained. The burden did not rest upon Moore and Marx to prove the existence of the facts which under the statute would sustain the order, but it rested upon the plaintiffs Hanscom and the Fidelity and Guaranty Company to prove that they did not exist by something which appears of record in the case. In Bouldin v. Miller, above cited, the question was upon the validity of an order by the Probate Court for sale of land by a guardian and it did not appear in the record that the required notice had been given and it was contended that there was not sufficient time in which notice could have been given. Mr. Justice Denman said: "The law, in the absence of proof, presumes that all jurisdictional facts existed. If notice was a jurisdictional fact, the defendant relying upon the judgment was not called upon to establish such notice, nor to show the order of sale to have been entered at such a time as to make notice possible; but the burden was upon plaintiffs to establish the fact that notice was not given. We therefore conclude that the probate proceedings, aided by the legal presumptions above discussed, were not void, but were sufficient to pass the title of plaintiffs to the purchaser at the guardian's sale."

It may have been that Moore and Marx joined with Compton the guardian in the request to the court to take a new bond, and if it be a fact that no application was made in writing, still it would have been an error of law for the court to have acted upon the application of the sureties, made orally, but would not render the order void. So far as the record shows the judge who made the order may have considered the bond defective although in fact it may have been perfectly correct in its forms and provisions, which would have been an error that would not render the order invalid. In the condition of this record the law will presume that one or more of the facts enumerated in the statute did exist in order to sustain the action of the court which had jurisdiction both of the subject matter and of the parties concerned therein.

Upon giving the third bond Moore and Marx were discharged from liability for any future misapplication of the funds by Compton, and the full restitution of the money which had been misapplied under the first bond discharged the American Surety Company of New York from liability on that bond. It therefore follows that the ultimate and sole liability in this transaction devolved upon the Fidelity and Guaranty Company of Baltimore under the third bond. It is therefore ordered that the judgment of the Court of Civil Appeals in favor of the American Surety Company of New York be and the same is hereby affirmed. It is further ordered that the judgment of the said Court of Civil Appeals as to the liability of Moore and Marx and of the United States Fidelity and Guaranty Company of Baltimore, Maryland, be and the same is hereby reversed, and this court now here proceeds to render such judgment as should have been rendered by the said courts as follows: It is ordered that the plaintiff Hanscom take nothing as against Moore and Marx, who shall go hence without day and recover of the plaintiff Hanscom, all of their costs in all of the courts; it is also ordered that judgment be here entered in favor of W.L. Hanscom, plaintiff, against the United States Fidelity and Guaranty Company of Baltimore, Maryland, as surety upon the bond of A.J. Compton, guardian, and that the said W.L. Hanscom recover all costs in all of the courts as between him and the said last named company.

ON MOTION FOR REHEARING. It does not appear from the record in this case that Mrs. Compton, the executrix, appealed from the judgment of the District Court, therefore the reversal of the judgment as to the sureties did not disturb the rights of the plaintiff as against Mrs. Compton under the District Court judgment. It appears from the record, as we have it, that Moore, Marx and the American Surety Company were all made parties to the petition in the first instance, therefore, Hanscom, the guardian, was liable to the cost accruing by reason of making them parties. The motion of W.L. Hanscom, guardian, and the United States Fidelity Guaranty Company will be overruled. The motion of the American Surety Company of New York, C.H. Moore and M. Marx will be granted insofar as to add to the judgment as follows: "And that the United States Fidelity Guaranty Company take nothing upon its cross bill against C.H. Moore, M. Marx and the American Surety Company, and that said Moore, Marx and the Surety Company go hence without day and recover of the Fidelity Guaranty Company all costs incurred in defending against the said cross bill."

Reversed and rendered.