United States Fidelity & Guaranty Co. v. Parker

Scott, Justice. This action was commenced in the district court of Sheridan County by Clara E. Parker, defendant in error as plaintiff, against the plaintiff in error as defendant, to recover from the latter as surety upon a guardian’s bond for an alleged default of the guardian. Upon issue joined the case was tried to the court, a jury being waived, and the court found for and gave judgment in favor of Clara E. Parker and against the company for the sum of $974.50 and interest thereon at eight per cent, per annum from July 14, 1908, and costs of suit. The company brings the case here on error. An amended petition was filed to which the defendant demurred 'upon the ground that it did not state facts' sufficient to constitute a cause of action. The demurrer was overruled and such ruling is here assigned as error. It is alleged in the petition that the plaintiff in error is and was at all times mentioned therein a corporation duly organized and existing under and by virtue of the laws of the State of Maryland. That one George A. Marks upon his own application made in July, 1900, to the district court of Custer County in the State of Montana, was appointed guardian of the estates and person of Clara E. Marks, the defendant in error, who has since married and is now Clara. E. Parker, Jennie M. Marks and James R. Marks, minors, who were then residents of and had property situate in that county; that on July 7, 1900, he qualified in pursuance of the order by taking the required oath and giving the bond which was duly approved in the amount of $4800, fixed and required by the order and conditioned that he would faithfully execute his trust according to law, and on the same day letters of guardianship were issued to him and he entered upon his duties as such guardian. Thereafter the said Marks wag by the court required to give a new guardian’s bond in the same amount which was accordingly done and the bond here in suit with plaintiff in erfor as surety was executed on April 17, 1902, approved and accepted in said court on June 28, 1902, and the sureties oh — 44 — the previous bond were upon order of the court discharged from further liability. That the law of the State of Montana with reference to guardianship bonds and the appointment of guardians is now, and has been at all times herein mentioned as follows, to-wit: §7760. “Before the order appointing any person guardian under this Chapter takes effect, and before letters issue, the court or judge must require of such person a bond to the minor with sufficient sureties, to be approved by the judge, and in such sum as he shall order, conditioned that the guardian will faithfully execute the duties of his trust according to law, and the following conditions shall form a part of such bond without being expressed therein. 1. To make an inventory .of all the estate, real and personal, of his .ward, that comes to his possession or knowledge, and to return the same within such time as the court or judge may order. 2. To dispose of and manage the estate according to law and for the best interest of the ward, and faithfully to discharge his trust in relation thereto, and also in relation to the care, custody and education of the ward. 3. To render an account on oath of the property, estate and moneys of the ward in his hands and all the proceeds or interest derived therefrom, and of the management and disposition of the same, within three months after his appointment, and at such other times as the court or judge directs, and at the expiration of his trust to settle his accounts with the court or judge, or with the ward if he be of full age, or his legal representatives, and to pay over and deliver all the estate, moneys and effects remaining in his hands, or due from him on such settlement to the person who is lawfully entitled thereto. Upon filing the bond, duly approved, letters of guardianship must issue to the person appointed. In form the letters of guardianship must be substantially the same as letters of administration, and the oath of the guardian must be indorsed thereon that he will perform the duties of his office as such guardian according to law.” — 45 — §7810. “The court or judge may require a new bond to be given by a guardian whenever such court or judge deems it necessary, and may discharge the existing sureties from further liability, after due notice given .as such court or judge may direct, when it shall appear that no injury can result therefrom to those interested in the estate.” §7811. “Every bond given by a guardian must be filed and preserved in the office of the clerk of the District Court, and in case of a breach of condition thereof, may be prosecuted for the use and benefit of the ward, or of any person interested in the estate.” That the condition of an official bond urider the laws of Montana is and has been at all times herein mentioned applicable to guardians’ bonds, to-wit: §384. “The condition of an official bond must be that the principal will well, truly and faithfully perform all official duties then required of him by law, and also all such additional duties as may be imposed on- him by any law of the state, and that he will account for and pay over and deliver to the person or officer entitled to receive the same, all moneys or other property that may come into-his hands as such officer.” It is further provided: §393. “Whenever an official bond does not contain the substantial matter or conditions required by law or there are any defects in the approval or filing thereof, it is not void so as to discharge such officer and sureties; but they are equitably bound to the state or party interested and the state or such party may, by action in any court of competent jurisdiction, suggest the defect-in the bond, approval, or filing, and recover the proper and equitable demand or damages from such officer and the persons who intended to become and were included as sureties in such bond.” That on August 7, 1907, the said George A. Marks as such guardian entered into possession and assumed control of the estates of said minors which consisted of cattle and horses, title to an undivided one-third interest being in plaintiff as ward and that the value of her interest was $800; — 46 — that said property increased by the natural increase so that the value of her -interest in August, 1903, became and was $2812.37; that after June 28, 1902, and prior to August 1, 1906, the said guardian sold all the property belonging to said Clara Marks (now Parker) and converted the proceeds to his own use and failed to account for, or deliver, or pay over to her, or’ to any one entitled to receive the same any of said property or any of the proceeds derived from its sale except the sum of $430.87, nor has she ever received any part of said property or its proceeds except said sum, and that when she became twenty-one years of age in June, 1906, the said guardian did not settle his guardianship accounts with the court which appointed him, or its judge, or with her. That the said guardian died on August 1, 1906, leaving an estate in Rosebud County, Montana, of which he was a resident at the time of his death, and that such proceedings were had in the district court of that county that his widow, Edith M. Marks, was duly appointed and qualified as ad-ministratrix of his estate. That defendant in error became twenty-one years of age in June, 1906, and during that month married one James Parker. That on or about September 26, 1906, having attained her majority the preceding June, she presented her claim duly and properly verified for the sum of $2812.37, being the amount claimed by her as her share of the estate alleged to have been converted by her guardian during his lifetime, to the 'administratrix of his estate and the latter rejected the claim. Thereafter, and on February 23, 1907, she instituted suit on said claim in the district court of that county. Upon issue joined the case was tried and the court found generally upon the issue in favor of the' defendant in error and against said adminis-tratrix, “That there is due and owing from the estate of George A. Marks, deceased, the sum of $900, after allowing the said defendant all off-sets and counter claims which the said estate or the said George A. Marks, during his life time had against the said plaintiff” and judgment was rendered on July 2, 1908, in her favor for that amount, to — 47 — gether with interest from February 23, 1907. That .said judgment is in full force and effect and that no part thereof has ever been paid and that the estate of the deceased guardian is insolvent and has not the assets to pay the sanie or any portion thereof; that plaintiff in error as surety on the guardianship bond of the said George A. Marks has paid no part of said judgment although payment of the same was demanded on July 14, 1908. It is alleged that the district court of Custer Co.unty and also of Rosebud County is and was each a court of competent and general jurisdiction. The plaintiff prayed judgment for the sum of $1600, and interest thereon from August 1, 1903. It is here urged that in order to maintain the action it is necessary to allege and prove as a condition precedent that the court wherein the guardian was appointed, — that is to say the district court of Custer County, Montana — had settled the guardian’s accounts and a balance in favor of the ward found and adjudged due such ward from the guardian. As will be obsérved the guardian died in and leaving an estate in Rosebud County, Montana, and in which county letters of administration were applied for and the district court of that county duly appointed the guardian’s widow as administratrix and that she so qualified and entered upon her duties as such. The jurisdiction in probate of the district court of Rosebud County of the estate of the deceased guardian is alleged. Such jurisdiction includes the adjustment of accounts in favor of and against such estate. The disallowance of defendant in error’s claim by the adminis-tratrix was a condition precedent and gave to the former the right to commence suit thereon in that court to establish the same as a charge against the estate. The suit in the district court of that county was instituted and tried upon the issues made by the pleadings and upon these issues an accounting between the administratrix and the defendant in error arising out of the guardianship matter was necessarily involved and had. The guardian was dead and his personal representative was not required to go into the courts of Custer. — 48 — County for an accounting for she was acting as a trustee, appointed by and under the supervision of the district court of Rosebud County in the matter of the administration of her trust. That court upon the allegations of the petition being vested with and having taken jurisdiction in the case to try and determine the issues therein, which did not involve title to real estate and having made and rendered its findings and judgment settling, the account which it is alleged remains unsatisfied and in full force and effect would require the courts of this state to give such judgment full faith and credit under the provisions of Sec. 1, Art. IV of the Constitution of the United States, and the Act of Congress, May 26, 1790, Sec. 905 (U. S. Comp. Stat. (1901) p. 1901) and in the absence of an allegation of fraud or mistake which is not here relied upon, (23 Cyc. 1554, 1590, Chadron Bank v. Anderson, 6 Wyo. 518, 48 Pac. 197) to hold upon the allegations of the petition upon demurrer that plaintiff in error is concluded upon the merits as to all matters involved in that action. 18 Cyc. 1272, 21 Cyc. 238, 239; 23 Cyc. 1591; Brodrib v. Brodrib, 56 Cal. 563; Sanborn v. Perry, 86 Wis. 361, 56 N. W. 337; Osborn et al v. Lidy, 51 O. St. 90; Hicks v. Oliver, 78 Tex. 233, 14 S. W. 575; Lynch v. Rotan, 39 Ill. 14; Fidelity & Deposit Co. of Maryland v. M. Rich & Bros., 122 Ga. 506, 50 S. E. 338 Ryan v. People, 165 Ill. 143, 46 N. E. 206; Pan v. State, 71 Md. 220, 17 Atl. 1020; Rice v. Wilson, 129 Mich. 520, 89 N. W. 336; Cross v. White, 80 Minn. 413, 83 N. W. 393, 81 Am. St. Rep. 267; State v. Booth, 9 Mo. App. 583; Botkin v. Klunschmidt, 21 Mont. 1, 52 Pac. 563, 69 Am. St. Rep. 641; Eberle v. Bryant, 31 Miss. 814; Eberle v. Schilling, 65 N. Y. S. 728, 32 Misc. Rep. 193; Neil v. Com. (Penn.) 7 Atl. 74; Hornung v. Schramn, 22 Tex. Civ. App. 327, 54 S. W. 615; Fahey v. Bonlmay, 24 Tex. Civ. App. 279, 57 S. W. 300. 2. The plaintiff in error challenges the jurisdiction of the district court of Sheridan County to entertain this action. That court is vested with original jurisdiction in all causes at — 49 — law and in equity and in all cases in which original jurisdiction shall not have been by law vested exclusively in some other court. Sec. 10, Art. V of the Constitution. This provision of the Constitution has reference to the courts of this state and has no extra-territorial effect. The defendant was bound in so far as jurisdiction is concerned by the settlement of the guardianship account between plaintiff and the administratrix of the deceased guardian’s estate, by the judgment of the district court of Rosebud County, Montana. That proceeding established and fixed the amount of the devastavit of the trust estate and gave a right of action against the surety on the bond for that amount. In re Crawford, 21 Ohio Cir. Ct. 554, 11 Ohio Cir. Dec. 605; Fitzsimmons v. Johnson, 90 Tenn. 416, 17 S. W. 100; 23 Cyc. 1592. It does not appear from the pleadings that the bond was conditioned or required its enforcement in the court wherein it was given and approved, nor is any law of Montana here alleged that it could only be enforced in that court or within that jurisdiction. The action accrued upon the judgment and as against the surety could upon such judgment as a basis- be maintained within or without that state in any court of competent jurisdiction for the amount of such devastavit or conversion. Pickering v. De Rochemont, 45 N. H. 67, 78; 23 Cyc. 1592; Lewis v. Adams, 70 Cal. 403, 11 Pac. 833, 59 Am. Rep. 423; Turley v. Dryfers, 33 Ia. Ann. 885; Tait v. Lewis, 7 Rob. 206; Moore v. Smith, 116 N. E. 667, 21 S. E. 506; Brown v. Winthanley, 18 Ohio 67; Nelson v. Chesapeake &c. R. Co., 88 Va. 971, 14 S. E. 838, 15 L. R. A. 583. The defendant in error was a resident of this stat.e in which plaintiff in error was doing business at the time of the commencement of the action and the court having acquired jurisdiction of the person of the defendant and as already stated the action involved no title to land and being transitory we can see no reason why the courts of this state if the necessary parties are before it and it has jurisdiction of the subject matter, should be barred from granting relief to one of its citizens instead of com — 50 — pelling her to resort to the court of a sister state to enforce her claim. 3. It is urged that the bond b)r its terms does not comply with the laws of the state of Montana where it was given in that it runs to the wards jointly. It is contended that the liability should have been several or that a separate bond should have been given to each of the wards. If it should be conceded that the statute under which the bond was given so provides there is no statute of that state here pleaded or shown declaring such a bond void but on the contrary the provisions of the statute alleged to be and which were applicable to guardians’ bonds at the time the one in controversy was given and approved expressly declared it not to be void but enforceable, viz: §§7811, 393, Rev. Stat. Mont., 1907, supra. Our attention has not been called to any decision of the Supreme Court of that state construing this statute. But waiving the wording of the statute the bond was conditioned “that if the guardian shall faithfully execute the duties of said trust according to law, and shall well, truly and faithfully perform all official duties now required by law, and also such additional duties as may be imposed by any law of the state, and that said principal will account for and pay over and deliver to the person or officer entitled to receive the same, all moneys or other property that may come into the hands of such guardian then this obligation to be void, otherwise to remain in full force and effect.” The surety on the bond is presumed to have known the law and the duties of the guardian with relation to the trust, especially when the provisions of Sec. 7760, supra, are by law a part of the bond. The conversion of the property constituted a breach of the bond which was given for the faithful performance of the duties of and by the guardian as required by law and the law required the guardian to turn over and account to each ward upon his or her becoming of legal age the property tp which such ward was entitled. The intention of the guardian and his surety was to' secure the wards in their individual rights and the bond must be — 51 — construed so as to accomplish that purpose. In such case it was neither void nor voidable but will be upheld and enforced in accordance with the intention and purpose for which it was given. Even if it were in its terms so far a departure from the statute as to render it defective as a statutory bond it would be upheld as a common law bond independent of the statutory provision. 3rd Black. Com. at page 340; Giles v. Holsted, 61 Am. Dec. 668 (N. J.); 4 A. & E. Ency. of Daw, (2nd Ed.) p. 663; Estate of Ramsay v. People, 90 Am. St. Rep. 177, (Ill.); Murfree Official Bonds, Sec. 134; Longfellow v. McGregor, (Minn.) 57 N. W. 926; Deegan v. Deegan, 22 Nev. 185, 58 Am. St. Rep. 742; 21 Cyc. 223. The bond was executed upon a consideration by a company organized to make such bonds for profit and the company does not stand in the position of a surety for accorhmodation. 32 Cyc. 306. 4. It is here urged that each of the wards or joint obli-gees is a' necessary party to an. action on the bond. The objection on the ground of defect of parties plaintiff is not raised by either demurrer or answer as required by the provision of our Code and is therefore waived. (Comp. Stat., secs. 4381, 4383.) It may be said however that the intention of the obligor and the surety to secure each of the wards in his or her individual rights and to turn over to each the property to which he or she was entitled upon attaining majority contemplated if necessary a several action on the bond by each of the obligees. §7760, R. S. Mont. Such being clearly the intention the bond will be construed so as to preserve the rights of the obligees severally. The bond was no.t void. The right to maintain the action severally as a matter of procedure in this state is clearly authorized by §4331, Comp. Stat. Wyo., 1910, which is as follows: “The’ court may determine any controversy between parties before it when it can be done without prejudice to the rights of others, or by saving their rights; but when a determination of the controversy cannot be had without the presence of other parties, the court may order them to be brought in or — 52 — dismiss the action without prejudice.” The words of the section that “a complete determination of the controversy cannot be had without the presence of other parties” means that there are persons who are not parties and whose rights must be settled before those of the parties to the suit can be determined. Under the above section if the court could do justice as between the parties to this action without prejudicing the rights of others or by saving such rights it may proceed to do so. It is not shown how or in what manner upon the facts here alleged the plaintiff in error or the other wards could be prejudiced. The amount due her from the guardian's estate had been fixed and determined by the district court of Rosebud County, Montana, in its judgment on the accounting. We see no reason upon an allegation of the conversion of the entire trust property why she should not be permitted to maintain her action on the bond for her claim was several. The aggregate liability to the wards whether recovered jointly or severally could not exceed the penalty of $4800 fixed in the bond and interest from the demand. Trempler v. Cotton, 109 Cal. 250, 41 Pac. 1033. We are of the opinion that the petition states a cause of action and that the court of Sheridan County had jurisdiction. 5. The second defense set up in the amended answer pleaded that the defendant in error, Clara E. Parker, formerly Marks, attained her majority and became an adult in June, 1903, under sections 10 and 12 of the Civil Code of the State of Montana (now sections 3584 and 3586 of the Rev. Stat. of that state, and which are set out in full in the answer) having then reached the age of eighteen years, and that the guardianship ended as to her at that time. The former section defines minors as (1) Males under 21 years of age and (2) Females under 18 years of age, and the latter section declares all other persons as adults. The following statute of limitations is alleged to have been then and ever since in force in that state, to-wit: “No action can be maintained against the sureties on any bond given by a — 53 — 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.” Secs. 3055 and 3056, Code of Civil, Procedure, (Secs. 7812 and 7813, R. S. Mont. 1907.) It is further alleged “that the cause of action contained in the amended petition is barred by the law hereinbefore quoted.” Upon objection the court refused to permit any evidence in support of this defense. The ruling was correct. The allegation was a legal conclusion and not of an issuable fact. To avail himself of the defense the pleader should have pleaded facts which would bring his case within the provision of the statute. (13 Ency. PI. & Pr. 214.) It is not alleged nor does it appear when the action was commenced. The answer to the amended petition mentions in no way when the action was commenced, nor are any facts pleaded from which it can be gathered. The pleading was insufficient under all the authorities. Pinkham v. Pinkham, 85 N. W. 285; Scroggin v. Natural Lumber Co., 41 Neb. 195; Spanish Fork v. Hopper, 26 Pac. 294; Tunnel Co. v. Stranahan, 31 Cal. 394; Caulfield v. Sanders, 17 Cal. 571; Schrieber v. Goldsmith, 79 N. Y. Supp. 848; Satterlund v. Beal, 12 N. Dak. 122, 95 N. W. 518; Pom. Code Rem. (3rd Ed.) 713; Eno v. Diefendorf, 102 N. Y. 720, 7N. E. 798; Lincoln v. Thompson, 75 Mo. 613; 25 Cyc. 1406. The pleading can not be aided nor the proper allegation which has been omitted be supplied by going to the summons to ascertain when the action was commenced. Savings Ass’n. v. Clause, 13 Wyo. 166. In the case.before us the original petition was superseded by the amended petition, and is not brought into the record. Love v. Choclow, 91 Pac. 883 (Old.); Zengal v. Kuster, 51 Wis. 31, 7 N. W. 781; Smith v. City of Janesville, 52 Wis. 680, 9 N. W. 789'; Taylor v. Union Pacific Ry. Co., 123 Fed. 155; 25 Cyc. 1409. The answer speaks only from its date. The statute of limita — 54 — tions is new matter constituting an affirmative defense and the facts must be pleaded as such • and not as mere conclusions of law or inferences of fact. Upon this state of the answer and at the trial the defendant offered in evidence Secs. 7812 and 7813, Code of Montana, and the court sustained objection thereto whereupon the plaintiff in error asked permission to amend his second defense and in connection therewith renewed its offer to prove the aforesaid sections of the statute of Montana. The court refused permission to amend so as to show that the cause of action set forth in the amended petition did not accrue within three years prior to the commencement of the action. Exceptions were taken to all these rulings and they may be considered together. The case was tried at the regular June A. D. 1909 term of the District Court of Sheridan County on September 20 and 21 of that year, and on the last mentioned day the judgment here involved was rendered. Assuming that the motion for a new trial was filed within the time allowed by statute (Sec. 4603, Comp. Stat. 1910) it was not ruled upon until the following December 1909 term of that court when it was overruled and on application of the plaintiff in. error it was given to and including March 15, 1-910, within which to reduce its exceptions to writing and present its bill of exceptions for allowance. The bill was presented, allowed and signed on March 15, 1910, and ordered to be made a part of the record of the then regular December A. D. 1909 term. By section 4594, Comp. Stat. 1910, “An exception is an objection taken to a decision of the court upon a matter of law.” Sec. 4595 is as follows: “A party objecting to the decision must except at the time the decision is made; and time may be given to reduce the exception to writing, but not beyond the first day of the next succeeding term.” It is here conceded that the exceptions were properly taken at the time but it is contended that they nor either of them have been preserved in the record so as to entitle them to consideration here. The question thus raised is whether a motion for new trial filed at the term when the trial was had and judgment — 55 — rendered and not ruled upon until the succeeding term carries with it all exceptions taken during the trial so that time given for reducing exceptions to writing at the time the motion is ruled upon includes or may properly include the exceptions taken at the trial during the preceding term. Counsel for defendant in error cite cases from Ohio, Nebraska and Kansas upon a statute like ours sustaining their contention. But we think it unnecessary to decide this question. "As already stated the trial court correctly sustained the objection to the introduction of evidence in support of the second 'defense. The application to amend occurred during the trial and it was proposed thereby to insert an allegation of fact not embraced within the answer at the •time. Our statute provides that “The party applying to amend during.the trial shall be required to show that the amendatory facts were unknown to him prior to the application, unless in its discretion the court shall relieve him from so doing.” Comp. Stat. 1910, Sec. 4437. No such showing as thus required was made in connection with the application to amend, nor does it appear that the court relieved the party from making such showing. The defendant was therefore not entitled as of right to amend its answer as proposed upon the trial. Halleck v. Bresnahen, 3 Wyo. 73. 6. It is also urged that the sureties on the bond which was given by the deceased guardian prior to .the one in suit should have been made parties to this suit. Upon the allegations and proof the devastavit occurred subsequent to the giving and approval of the bond in suit; and the order allowing and approving the bond here sued on declared that it was so allowed and filed in lieu of the former bond and that the sureties on such bond were discharged and exonerated from further liability. It was not necessary therefore to make them parties. Further than that the objection was waived by failing to raise it by demurrer or answer. The judgment will be affirmed. Affirmed. Beard, C. J., and Potter, J., concur.