Lincoln Trust Co. v. Wolff

BLAND, P. J. — I. The referee refused to hear evidence as to whether or not the twelve-hundred-dollar note of Bryan had been actually paid or had been, by mistake, stamped and delivered to the maker. This ruling is assigned as error by appellant. It seems to us that for the purpose of the inquiry it was- immaterial whether Wolff had collected the note or not. His obligation was to either turn over the note to his successor, or the money due thereon. What he sought to do was to excuse himself from this duty by turning over to his successor a doubtful lawsuit for the recovery of what had been a valuable and available asset of his ward’s estate. Evidence that the note had not been paid would not have the least bearing on the issues nor tend to relieve Wolff from his obligation to produce the note unmutilated by any act of his, which was out of his power to do. II. The note was mutilated and its availability as an asset destroyed or greatly impaired, or else tire note was paid before the bond sued on was executed, and the question in the case is whether or not West, as a surety on the bond, is liable under the facts as found by the referee. The strong presumption [144] is that the note was paid at the time or before it was stamped “paid” and surrendered to the maker. The subsequent settlement made by Wolff in which he reported to the probate court that he had the note on hand, is presumptive evidence that he had then converted the proceeds of the note to his own use and reported the note on hand in order to cover up his delinquency, and there is no sufficient evidence in the record to overturn these presumptions. But if the other theory (of which there is very slight evidence) be adopted, i. e., that the note was not paid, but, by the mistake of Wolff or his agents, stamped paid and surrendered to Bryan, the maker, the fact yet remains that the estate of Wolff’s ward has been deprived of a valuable asset by the gross carelessness of Wolff or his agents and that all this was done prior to the execution of the bond sued on. Carrying the note in his settlements after he had parted with it, does not change the fact that he had parted with it and had nothing to show for it. On either theory of the evidence it appears to us that Wolff’s liability to the estate became fixed at the time he surrendered the note to the maker and that the conversion of this asset should date from that period. There is no other period of time indicated by the evidence from which it can be dated. Dating, then, the breach at the date of the conversion, did the breach continue after the giving of the bond sued on ? If so, West is liable. If it did not so continue, he is not liable. In the discussion of this question it will be well to keep in mind the distinction between a continuing liability and a continuing breach of the bond from which the liability arose. The former will continue until discharged by payment, by agreement or by operation of law. The latter was completed when Wolff stamped the note paid, mutilated the signature of Bryan and surrendered the note to him as paid. This breach could only be continued so as to bind the sureties on the second bond, by Wolff carrying the note forward into a final settlement of his account as guardian ; had such a settlement been made after the execution of [145] the second bond, tbe appellant would have been bound by the judgment of final settlement and estopped to go behind that judgment to show that the breach was actually committed before he became a surety, and in this sense the breach, as to him, would have been a continuing one. State to use, etc., v. Drury, 36 Mo. 281; State to use of Wolff v. Berning, 74 Mo. 87; Wolff v. Schaeffer, 4 Mo. App. 367; State ex rel. Hyslop v. Bilby, 50 Mo. App. 162. While as to the sureties on the first bond, they, not being parties to the settlement nor bound by it, the respondent, in a suit on their bond, would not be precluded by the settlement and could go behind the settlement and show that the conversion actually occurred during the life of their bond for the purpose of holding them liable. Authorities supra. The settlements made by Wolff, after the giving of the second bond in which he reported the note as on hand, were annual settlements and had not the effect of judgments to bind the appellant (Myers v. Meyers, 98 Mo. 262; North v. Priest, 81 Mo. 561; Baker et al. v. Runkle’s Exec’r, 41 Mo. 391) and did not, therefore, have the effect to carry forward or continue the breach so as to bind the appellant. The proceeding is not based on a final settlement of Wolff, but is to force him to make such a settlement and to ascertain the liability of the appellant on the facts ascertained by the settlement. The facts show beyond controversy that the breach occurred before the giving of the second bond, and as we have shown, nothing was done to continue the breach over into the life of this bond, we conclude that appellant is not liable for the twelve-hundred-dollar note or for the interest thereon (three hundred and three dollars), and we reverse the judgment and remand the cause with directions to the circuit court to enter judgment against appellant for four hundred and twelve and forty-four one-hundredths dollars (the amount found due after deducting the twelve-hundred-dollar note and [146] its interest), with interest thereon at six per cent per annum from February 4, 1901, the date of the filing of the referee’s report. Judge Goode concurs; Judge Barclay not sitting.