Bank of Guntersville v. United States Fidelity & Guaranty Co.

SOMERVILLE, J. [1] It is the settled law of this state that a guardian has the power to dispose of the personal estate of his ward, including the transfer of choses in action, without an order of court. This power is said to be coextensive with that of an executor or administrator. Echols v. Speake, 185 Ala. 149, 64 South. 306, Ann. Cas. 1916C, 332; Steinhart v. Gregory, 176 Ala. 368, 58 South. 266. [2, 3] He cannot lawfully use such property in security or in payment of his own debts, and any one who receives it with knowledge of such a purpose on the part of the guardian is liable to account for its value. Steinhart v. Gregory, supra. But a vendee or pledgee is not bound to inquire as to the guardian’s purpose, and is not required to see that the proceeds of the property are applied to the uses of the ward. Steinhart v. Gregory, supra; Farmers’ & Merch. Bank v. Sanford, 150 Ala. 195, 43 South. 226. Al *21 though the pledgee might be charged with knowledge of an unlawful purpose by the guardian, if the debt secured is, and appears to be, his pre-existing obligation, yet, if the pledge is for a present loan, though it be given to secure the guardian’s personal obligation, and though he omit to designate his action as that of a guardian eo nomine, the pledgee without knowledge to the contrary may assume the propriety of the transaction, and will take without liability to account as for a devastavit. Farmers’ & Merch. Bank v. Sanford, supra; McLeod v. Drummond, 14 Ves. 352, 17 Ves. 152; Field v. Schieffelin, 7 Johns. Ch. (N. Y.) 150, 11 Am. Dec. 441. [4] The bill of complaint does not charge either that the guardian’s pledge of this stock was for his own debt or use, or that the respondent bank had any knowledge of such an abuse. From the allegations of the bill it must be presumed that the transfer in pledge was with all the formalities needful to vest a perfect legal estate in the pledgee. But this is not here material, since, for the purposes of a pledge, an equitable title is passed to the pledgee by the simple delivery of the stock certificate. 10 Cyc. 637, F, and cases cited. [5] It is clear that the respondent hank acquired, so far as the hill discloses, an unimpeachable title to the stock in question, and is not liable to account for it, or its proceeds, to any one. So, also, as to the dividends, which, of course, follow the stock. [6] It may be contended that the four annual dividends, which were paid to J. G. Pittman, if paid before he became guardian, were due to all the heirs jointly, and that such a payment to him did not discharge the obligation as to the others. But it has been decided by this court, in harmony with the general current of authority, that “a debt- or may efficiently pay and discharge in whole or in part his debt by payment to one of two or more joint owners thereof.” Peck v. Lampkin, 75 South. 580; 1 22 A. & E. Ency. Daw, 524; 30 Cyc. 1183, 1184. The fact that some of the joint obligees are minors cannot alter the rule. [7,8] But, apart from that consideration, the whole theory of the bill is that all of the dividend payments went into the hands of J. G. Pittman, as guardian, and on that theory alone could complainant have been iiable to the wards as surety, or claim subrogation now by reason of their payment. If those dividends, or their money equivalent, ultimately went into the hands of the guardian, as such, then the bank could not be held accountable for their-premature payment to him. If, on the other hand, they never reached his hands as guardian, complainant could not be liable therefor as surety, and on elementary principles there can be no subrogation as to the payment of the principal’s purely personal obligation, for which the surety was not liable. It must he observed, however, that, construing the bill more strongly against the pleader, it does not even appear that any dividends were actually paid to J. G. Pittman before he was qualified as guardian to receive them for the other joint obligees. In any view, the bill is deficient, and the demurrer should have been sustained. The decree of the chancery court will be reversed, and a decree here entered sustaining the demurrer as to the second and third grounds noted. The other grounds assigned are without merit. Reversed, rendered, and remanded. ANDERSON, O. J., and MAYFIELD and [THOMAS, JJ., concur. Footnotes [1] 200 Ala. 132.