Jones & Cullom v. Knox

B. F. SAEFOLD, J. The purpose of the bill filed by the minor, was to obtain a settlement of his guardianship in the chancery court. The sureties of the guardian were alone made defendants on the allegation that the guardian had died insolvent and bankrupt, leaving no assets whatever. A demurrer to the bill, on the ground that a representative of the deceased guardian was a necessary party defendant, was properly overruled. Equity never requires the performance of a useless ceremony. • The appointment of an administrator would have caused some expense, while it could afford no possible advantage to the sureties.— Frowner v. Johnson, 20 Ala. 477; Vanderveer v. Alston, 16 Ala. 494. The allegation also showed the necessity of the chancery jurisdiction, because the probate court was only authorized to settle the accounts of the guardian with his representative. — Eevised Code, §§ 2324, 2326. Is the defendant Jones’ discharge in bankruptcy a protection against his liability as surety on the guardian’s bond ? It absolved him from all debts and claims provable against his .estate which existed on the 24th of February, 1868. An account filed for settlement by the guardian on the 8th of February, 1868, showed a liability existing at that date against him as great as the amount recovered by the decree. No breach of trust is alleged or proved to have been committed after the filing of Jones’ petition in [60] bankruptcy. Unless the liability of the surety is fiduciary, the discharge released him from it. In Turner v. Esselman, (.5 Ala. 690,) a discharge in bankruptcy of the surety of a guardian under the bankrupt act of 1811, was held not to protect him against a statute judgment obtained after his discharge, on the ground that the debt was not provable, and, as declared by Judge Largan, that it was a fiduciary debt. The act of 1867 is essentially different in this respect from that of 1811. The 19th section includes, among the debts and claims provable, all cases of contingent debts and contingent liabilities contracted by the bankrupt, and not therein otherwise provided for. The creditor is allowed to “ make claim therefor, and have his claim allowed, with the right to share in the dividends, if the contingency shall happen before the final dividend j or, he may at any time apply to the court to have the present value of the debt or liability ascertained and liquidated, which shall then be done in such manner as the court shall order, and he shall be allowed to prove for the amount so ascertained.” The liability of the sureties of a guardian attaches whenever the guardian receives property of his ward, and becomes a debt on, and to the extent of, the guardian’s default, with a right of action accruing in law against them on the rendition of a decree or judgment ascertaining the fact and amount of the default.— Ward & Davis v. Yonge, adm'r, January term, 1871. It is a contingent liability, within the comprehensive meaning of section 19 of the bankrupt law of 1867, capable of being fixed, or having its present value ascertained by the modes therein indicated. And it is the contract imposing the liability from which the party is relieved. The exception from discharge, under the 33d section of the law, of debts created by the fraud or embezzlement of the bankrupt, or by his defalcation as a public officer, or while acting in any fiduciary character, from its very comprehensiveness, conveys, as a reason for the exception, the idea of some moral turpitude or culpable neglect of duty. The sureties of a guardian have no control of his conduct. [61] Their obligation is entirely different from his. They undertake to pay money on his account, while he, in addition, engages to be honest and faithful and careful. It is for failure in this latter respect that the law refuses to release him from his debt. The liability of the sureties was not of a fiduciary character. The decree is reversed, and the cause remanded. To an application for re-hearing, the following response was made: SAFFOLD, J. — We think it is the contract or obligation to be liable for the default of the guardian that the discharge in bankruptcy relieves from, and not the mere liability when fixed. There is no difficulty in ascertaining the amount of the claim to be filed for allowance. It might be done by calling the guardian to a settlement. A re-hearing is denied.