Cook v. Ceas

Hensly and Gardiner were sureties on the bond of Ceas as guardian of the plaintiff, and the action is to recover three thousand dollars, the full penal sum named in the bond, the probate court having determined on settlement of the guardian's final account that he was indebted to his ward in excess of that amount. Ceas and Hensly, although named as defendants, were never served, and Gardiner alone defended the action. His defense was based upon two grounds: 1. That the action was commenced prematurely; and 2. That the action was barred by the special limitation prescribed for actions upon guardians' bonds by section 1805 of the Code of Civil Procedure, which reads as follows: — "No action can be maintained against the sureties on any bond given by a guardian, unless it be commenced within three years from the discharge or removal of the guardian; but if, at the time of such discharge, the person entitled to bring such action is under any legal disability to sue, the action may be commenced at any time within three years after such disability is removed." The facts upon which the first defense is founded are these: The order or decree of the probate court settling the *Page 223 account of the guardian, and determining the amount of his indebtedness to plaintiff, was entered as a final order of that court on the twenty-fourth day of January, 1901, and the action was commenced January 30, 1901, — i.e. within the sixty days allowed by law for taking an appeal from the order settling the account. The facts upon which the second defense are founded are, that the plaintiff attained her majority April 30, 1897, and the action was not commenced until more than three years thereafter, — to wit, January 30, 1901. In this connection it is claimed that by the coming of age of his ward the guardian was ipso facto removed or discharged, within the meaning of those terms as employed in section 1805 of the Code of Civil Procedure, above quoted, and consequently that the three years limited for the commencement of this action began to run from April 30, 1897, and fully elapsed April 30, 1900. Upon the facts, as here stated, the superior court sustained both defenses, holding that the action had been prematurely commenced, and at the same time that it was barred by the statute. (Code Civ. Proc., sec. 1805) Judgment was entered accordingly, and the plaintiff appeals. It is claimed that the judgment of the court is founded upon two conclusions so manifestly inconsistent that both cannot stand. So far as an affirmance of the judgment is concerned, it is immaterial whether this inconsistency exists or not, for if either conclusion is correct — if the action was commenced too soon or commenced too late — the judgment for the defendant must stand. We do not, however, concede that the two conclusions of the superior court are necessarily inconsistent, for it is a legal possibility that the commencement of an action may be premature, and at the same time too late, in view of some special statute of limitations. The general rule prescribing the time when the period of limitation begins to run against a cause of action fixes it at the date when the cause of action accrues (Code Civ. Proc., sec. 312), but this general rule is by the same section of the code expressly declared to be subject to such different rules as may be prescribed for special cases. In such special cases the date when the statute begins to run may be fixed without *Page 224 reference to the accruing of the cause of action, and if for any reason the cause of action does not mature until the statute has fully ran, a plaintiff might commence his action after it was barred and before the right of action had accrued. This apparently anomalous condition of things is clearly illustrated by the reasoning of the court in the case of Hunt v. Ward,99 Cal. 612.1 The individual liability of every stockholder of a corporation for his proportion of its debts is imposed by a provision of the constitution (art. XII, sec. 3), but by a special statute of limitations (Code Civ. Proc., sec. 359) the action against a stockholder to enforce this liability must in many cases be commenced within three years after the liability is created. It was argued in that case that to give effect to this section of the code according to its literal terms would bring about the result in many cases that an action against the stockholders would be barred before the debt fell due; as, for instance, where money was borrowed upon bond or note of the corporation maturing more than three years from date. But the court, assuming that in such case the creditor would have no action except upon the bond or note, declared that he would have practically waived the liability of the stockholders by putting himself in a position where his cause of action would not mature before the bar of the statute had interposed. They did not decide, and of course could not have decided, that in the case supposed there would be no liability on the part of the stockholders; for when the constitution says that stockholders shall be liable for their proportion of all debts of the corporation it is not competent for the legislature to say, directly or indirectly, that they shall be liable for such debts only as mature within three years. But it is not alone in cases arising under special statutes of limitation that an action may be barred before the cause of action is complete. Even in cases which fall under the general rule which sets the statute in motion when the cause of action accrues, an action may be barred before the cause of action is complete, and may be prematurely commenced after the bar of the statute has attached. If, for instance, a debt is expressly made payable twenty days after demand, the creditor is not allowed to defeat the policy of that statute *Page 225 by unreasonable delay in making demand. He cannot keep the obligation alive forever by failing to do an act within his power. And so with respect to any case where a demand and refusal of performance is essential to the cause of action an unreasonable delay in making demand will not prevent the running of the statute. (Barnes v. Glide, 117 Cal. 2.1) It was upon the doctrine of this class of cases, many more of which might here be cited, that the superior court founded the two conclusions supposed to be so irreconcilable. That they are not necessarily inconsistent I think has been sufficiently shown, but it still remains to be considered whether they, or either of them, can be sustained. As to the first defense, it is conceded by the appellant that according to the settled rule in this state an action against a guardian or his sureties for breach of his bond cannot be commenced until the amount of his indebtedness has been determined by an order of the probate court. The same rule prevails in respect to actions against the sureties upon the bonds of executors and administrators, and in each case it rests upon the ground that the probate court has been invested with exclusive jurisdiction to settle accounts of administrators, executors, and guardians, and that until the amount due to the ward or distributees has been determined by order of that court, and payment demanded, there is no default on the part of the trustee, and no cause of action against him or his sureties. Among the cases bearing upon this point, the following may be referred to: Graff v. Mesmer, 52 Cal. 636; Trumpler v. Cotton,109 Cal. 250; Reither v. Murdock, 135 Cal. 197; Allen v. Tiffany,53 Cal. 16; Chaquette v. Ortet, 60 Cal. 594; Spencer v. Houghton,68 Cal. 82. So far the rule is clear and is conceded, but the appellant does not concede the further proposition, essential to the conclusion of the superior court, that this action was premature because, notwithstanding an order had been entered by the probate court settling the guardian's account, the time for appealing from that order had not elapsed when the complaint was filed. The argument against this proposition is, in brief, that this is not an action on the judgment or order settling the guardian's account, but is an action on the bond of the sureties, in *Page 226 support of which the order of settlement is only needed as evidence, and therefore that it is no obstacle to the commencement of the action that the mere evidence of the obligation is not yet complete. This argument seems to prove too much. If the order of the probate court is only evidence in support of the action and no part of its necessary foundation, why delay the action until the probate court has acted? If that court is only taking one of the steps toward perfecting evidence to be used on the trial of the action, there would seem to be no reason for holding that its order is an essential preliminary to the commencement of the action. In truth, nothing is gained to the argument by saying that this is a suit on the bond and not on the order. A suit on a bond cannot be commenced before there is any breach of the bond. It is not the bond that constitutes the cause of action, but some breach of the bond, and if a guardian is not in default until he fails or refuses, on demand, to pay over the amount found due on settlement of his accounts, then a final order of settlement is an essential element of the cause of action against his sureties. The question, then, is reduced to this: When did the order settling the account of the guardian become a binding order? The numerous decisions of this court construing and applying section1049 of the Code of Civil Procedure have settled this question conclusively in accordance with the decision of the superior court. "An action [or proceeding] is deemed to be pending from the time of its commencement until its final determination upon appeal, or until the time for an appeal has passed." (Code Civ. Proc., sec. 1049) The settlement of a guardian's account is certainly a proceeding within the meaning of this section, and it is a proceeding in which an appeal from the probate court to this court may be taken at any time within sixty days after the entry of the order. The proceeding, then, was pending when this action was commenced, and it has been held here in a great number and great variety of cases that so long as an action or proceeding is pending in this sense the judgment or order from which an appeal has been or may be taken cannot be made the basis of any new action. (See Estate of Blythe, 99 Cal. 472; Naftzger v. Gregg,99 Cal. 83;1 Story *Page 227 v. Story etc. Co., 100 Cal. 41; Brown v. Campbell, 100 Cal. 635.1) Many more decisions of this court to the same effect might be cited, but I content myself with referring to the recent case of Feeney v. Hinckley, 134 Cal. 467,2 in which it was held that the statute of limitations does not commence running against an action upon a judgment of the superior court until the expiration of the time for appealing. The effect of these numerous decisions is not in the least impaired by the fact that in some cases, and for some purposes, an appealable judgment may be offered in evidence. It may, of course, be offered in evidence whenever the mere fact that it has been entered is material; as, for instance, in support of a plea in abatement, or to show the regularity of an execution. Nor is the force of the rule as to finality of judgments at all affected by what was said in the concurring opinion of Justice Harrison inNaftzger v. Gregg, 99 Cal. 83.3 He held, with the rest of the court, upon the proposition that the judgment in question was not a bar, but thought the ruling of the court admitting it in evidence was not necessarily erroneous, because the court, when making the ruling, could not anticipate that the party offering it would not prove that although the time for appealing had not elapsed, an appeal had nevertheless been taken and finally determined. But he went on to say that when the case was submitted without such additional evidence the court erred in holding that the judgment was a bar; thus expressly upholding the rule that an appealable judgment can never be made the foundation of a right of action or of defense to an action. The justice of this rule is apparent from the fact that an appealable judgment might be reversed after having been used to sustain an action, or to bar an action. (Story v. Story etc. Co.,100 Cal. 41.) It is a fact, though not shown by this record, that an appeal was taken from the order settling the account here in question after this action was commenced, but within the sixty days allowed for an appeal. (Guardianship of Ceas, 134 Cal. 114.) If that order had been reversed instead of affirmed, what would have been the status of this case? Clearly, it would have been necessary to dismiss it, for the effect of a reversal would have been to *Page 228 relegate the proceeding for a settlement of the account to the stage it was in before any order was made by the probate court, and it is conceded that no action on the bond can be commenced in advance of the order of settlement. This being so, it follows that this action was begun prematurely; for the rule as to finality of judgments and orders does not vary according to the success or failure of an appeal. This conclusion would sustain a judgment affirming the judgment of the superior court, but we would not be justified in disposing of the present appeal without deciding the more important question whether the action was barred three years after the plaintiff came of age; for if we did she would be compelled to commence another action and prosecute another appeal to obtain a decision upon a question clearly presented upon this record. For the purpose of determining this question we have only to ascertain the meaning of the expression "discharge or removal of any guardian," as employed in section 1805 of the Code of Civil Procedure. The provisions of that section, especially enacted for the protection of sureties on bonds of guardians, are prohibitory and peremptory in terms and effect. No action against them can be maintained unless it be commenced within three years from the"discharge or removal" of the guardian. The meaning of these words, as used in this connection, is determined by the sense in which they are employed in other sections of the same statute, in eluding the provisions regulating the practice in probate cases, which are made applicable in guardianship proceedings. (Code Civ. Proc., sec. 1808.) It will be found that the word "discharge" is used sometimes in a sense peculiar to itself and sometimes in a sense exactly equivalent to that of the word "removal." An executor or administrator may obtain an order or decree that he has fully accounted and paid over to the proper parties the entire residue of the estate after payment of debts and expenses. Such a decree is called a discharge (Code Civ. Proc., sec. 1697), and its effect is to exonerate him and the sureties on his bond. This provision of the probate act being applicable to proceedings in guardianship, it follows that a guardian may obtain a similar decree of discharge exonerating him and his sureties, and this evidently is the discharge which the court is prohibited *Page 229 from granting until one year after the ward's majority. (Civ. Code, sec. 257) A guardian may settle with his ward the day after he comes of age and obtain his release, but he cannot have a decree of court confirming the settlement and release until the ward has had a year to consider whether he will affirm or repudiate it. (Civ. Code, sec. 256) It seems very clear that the discharge contemplated by these provisions of the codes is not the discharge referred to in section 1805 of the Code of Civil Procedure, for it would be absurd to limit the time for bringing an action upon an order which determines that there is no liability — an order which renders it impossible to maintain an action. But there is another kind of discharge to which that section may be held to refer without imputing folly to the legislature. It is assumed in section 1753 of the Code of Civil Procedure that the guardian of a minor may be discharged of his office by order of court before the ward arrives at the age of majority or marries. The guardian of an insane person may be "discharged" by order of court when it appears that the guardianship is no longer necessary. (Code Civ. Proc., sec. 1802.) Guardians of either sort may be "removed" for incapacity or mismanagement, etc. (Code Civ. Proc., sec. 1801), and so for the same and other causes executors and administrators may be "removed." It will thus be seen that the words "remove" and "discharge" are used indiscriminately in the statute to designate orders of court which have the effect of simply removing guardians, executors, etc., from office without exonerating them from liability to account. To such orders section 1805 has a just and reasonable relation, and no doubt it is to them that it refers. As to the word "removal," there can be no doubt that the reference is to an order removing the guardian from office, and as discharge is sometimes used in the statute in the sense of removal, it is here to be construed in that sense on the principle of noscitur a sociis. There is still another view in which this construction appears most reasonable. There are guardians of minors and guardians of insane. The former are deprived of office by "removal," the latter bar "discharge." Section 1805 applies equally to bonds of either class, and declares in one breath that an action against the sureties of a guardian of an insane person must be commenced within three years after his *Page 230 discharge, and one against the sureties of the guardian of a minor within three years after his removal. For these reasons we conclude that an action against the sureties of a guardian is not by the terms of section 1805 barred until three years after a final order of court removing or discharging the guardian. By the terms of the statute, therefore, this action was not barred, for it does not appear, and it is not claimed, that the guardian of plaintiff ever was discharged or removed by any order of court. The respondent contends, however, that the coming of age of the plaintiff operated a discharge of the guardian, and set the statute in motion April 30, 1897. It is certainly true that when a ward arrives at the age of majority the authority of the guardian comes to an end. Section 255 of the Civil Code says that it is suspended; but it is suspended without the possibility of restoration, and in reality ended. (In re Allgier, 65 Cal. 228; Estate of Curtis, 121 Cal. 469. ) But although his authority is at an end when his ward comes of age, it cannot be said that in any ordinary or usual or statutory sense of the terms he has been removed or discharged, so that the statute does not in terms apply to such a case, and in order to bring the respondent within its protection its terms must be enlarged by construction. In other jurisdictions this seems to have been done. In the state of Montana it was held, construing a statute identical in terms with our own, that the death of the ward operated a discharge of the guardian, and set the statute in motion. (Berkin v. Marsh, 18 Mont. 152.1) In Massachusetts no action can be maintained against the sureties on a guardian's bond unless it be commenced within four years "from the time when the guardian shall be discharged." Chief Justice Shaw, in construing this statute, said: "The court are of opinion that by the term discharged in this statute is intended any mode by which the guardianship is effectually determined and brought to a close either by the removal, resignation, or death of the guardian, the marriage of a female, the arrival of a minor ward at the age of twenty-one, or otherwise." (Loring v. Alline, 9 Cush. 68.) This construction of the statute, in substance identical with our own, has been followed in other cases in Massachusetts, and reaffirmed as *Page 231 late as McKim v. Mann, 141 Mass. 507. The same construction has been placed upon similar statutes in Michigan and Wisconsin, and perhaps other states. On the other hand, the supreme court of Texas has in several cases refused to extend the operation of a similar statute beyond its literal terms, adhering firmly to the doctrine stated in Marlow v. Lacey, 68 Tex. 154, to the effect that the statute does not begin to run in favor of the sureties until the guardian has been removed or discharged by order of court in one of the cases provided for in their Code of Procedure. The weight of authority, it must be conceded, is on the side of respondent, but we are disinclined to follow the construction adopted in Massachusetts, Michigan, Wisconsin, etc., for a reason not adverted to in some of the decisions, and not allowed sufficient weight, as we think, in those cases where it has been adverted to. A statute of limitations ought not to be enlarged in its operation by judicial construction when it is so framed as to work injustice either by itself or in conjunction with other provisions of law. In this state we have one rule which prohibits an action on the bond of a guardian's surety until there is a final order settling the guardian's account, and another rule barring the action in three years after the removal or discharge of the guardian. So far as its express terms require, the rule must no doubt be enforced, even where without the fault of the ward a final settlement of the account has not been obtained within three years after the removal or discharge, but neither justice nor sound policy requires that a law capable of working so inequitably should be enlarged by construction so as to embrace a class of cases not comprehended in its terms. And this conclusion does not leave the sureties on guardians' bonds without an ample measure of protection against stale claims. They have all the advantage of the general statute of limitations, and of the doctrine of Barnes v. Glide, 117 Cal. 1,1 which will hold wards to the rule of reasonable diligence in procuring settlement of their guardians' accounts. In this case it does not appear whether or not there was unreasonable delay on the part of the plaintiff in seeking a settlement of the account. The judgment of the superior court is affirmed on the *Page 232 ground that the action was prematurely commenced, and without prejudice to another action. Lorigan, J., McFarland, J., and Henshaw, J., concurred. 1 37 Am. St. Rep. 87. 1 59 Am. St. Rep. 153. 1 37 Am. St. Rep. 23, and note. 1 38 Am. St. Rep. 314. 2 86 Am. St. Rep. 290. 3 37 Am. St. Rep. 23, and note. 1 56 Am. St. Rep. 565. 1 59 Am. St. Rep. 153.