American Bonding Co. of Baltimore v. People ex rel. Kennedy

• Decision Date: 07 June 1909
• Parties: AMERICAN BONDING CO. OF BALTIMORE v. PEOPLE ex rel. KENNEDY.
• Court: Colorado Supreme Court

104 P. 81

46 Colo. 394

AMERICAN BONDING CO. OF BALTIMORE v. PEOPLE ex rel. KENNEDY.

Supreme Court of Colorado

June 7, 1909

Rehearing Denied Oct. 4, 1909.

Appeal from District Court, Teller County; Louis W. Cunningham Judge.

Action by the People, on the relation of June Kennedy, an infant, by G. B. Portis, her guardian, against the American Bonding Company of Baltimore. Judgment for plaintiff, and defendant appeals. Affirmed.

Pette &amp Abrahams, for appellant.

L. C Campbell and Robert Graham, for appellee.

WHITE J.

The appellant was surety on a bond given by Florence Kennedy as guardian of June Kennedy, a minor. Said Florence was duly appointed such guardian on December 20, 1900, by the county court of Teller county. January 27, 1902, she filed and had approved a report which showed in her hands December 20, 1900, $3,000 cash and 12 several items of interest subsequently collected from the firm of Kennedy & Arnold, aggregating the sum of $360. It also showed certain items paid out leaving balance due ward of $3,131.75. Said Florence resigned her guardianship, and such resignation was accepted by an order of the court, which also directed and commanded her to pay and turn over to her successor all moneys and property that had come into her possession as such guardian belonging to said minor. On the date of her resignation she presented therewith a report purporting to cover her acts and doings as such guardian from December 20, 1901, to April 20, 1902. This report, received in evidence without objection, included as 'items of receipt December 20, 1901, amount due ward as shown by report filed January 27, 1902, $3,131.75; interest on same to April 20, 1902, at 12 per cent. per annum, $125.27,' or a total of $3,257.02. Under 'Items Paid Out,' she credited herself with $25.95, and stated that at the beginning of her trust she received the sum of $3,000 for her ward; that she loaned the same to the firm of Kennedy & Arnold on December 20, 1900, taking their note therefor drawing interest at 12 per cent. per annum; that said firm was then solvent, and was owing said trust $3,231.07, but she believed had since become and was at the date of the report wholly insolvent. This report was approved by the court, and G. B. Portis appointed guardian of said minor. The gravamen of the complaint is that there came into said Florence's possession as such guardian a large sum of money, and at the time of her resignation there was due from her as such guardian the sum of $3,231.07, of which she failed to pay over the sum of $1,976.26. By an amendment to the complaint, a further breach of said bond was alleged, in that the said Florence as such guardian unlawfully loaned, without security, in one sum $3,000 of the funds belonging to her ward on the 20th day of December, 1900, to Kennedy & Arnold without an order or authority of court authorizing her to make said loan, whereby $1,976.26 of said funds were lost to said ward. The answer is, in effect, a general denial of the breaches of the bond. The evidence being submitted, the court directed the jury to return a verdict for the appellees, upon which judgment was rendered. From that judgment, this appeal is prosecuted.

Much of the argument of appellant is based upon the assumption that the only authority for a final account or settlement of a guardian's trust is found in sections 2084, 2093 Mills' Ann. St., each of which contemplates a settlement after the termination of the relationship of guardian and ward. Counsel, therefore, contend that the reports of the guardian Florence, here is evidence, having been filed in the course of administration of the ward's estate, are prima facie evidence only, and are not conclusive against the surety on her bond, but may be attacked, altered, contradicted, or explained in a collateral proceeding, and that the evidence was conclusive that the only property of the ward coming into said guardian's hands after her appointment was the Kennedy & Arnold note, which was turned over to her successor in said trust; that said Florence, while administratrix of her father's estate, whence came the estate of her said ward, dissipated such funds, and that, therefore, the judgment herein should have been for appellant. If the premises assumed be true, appellant's conclusions are perhaps correct. It is a general principle that sureties on a guardian's bond are liable only for the money or property that actually was or came into the hands of the guardian during the term covered by the bond on which they were sureties, and that penal bonds are never held to be retrospective in their operation unless plainly so intended and expressed. However, there are authorities which hold that where a guardian was also administratrix, and as such held trust funds to which the ward eventually became entitled, she will be regarded as holding the funds in the former capacity from the time any act of transfer took place, or from the time when she credited her prior trust accounts and charged herself as guardian, or from the time when her final accounts in the prior trust were settled showing a balance due to her as guardain, though in the latter cases no act of transfer ever took place. 15 A. & E. Ency. of Law (2d Ed.) 94. As to which is the true rule we need not and should not determine herein. The record as it now stands does not conclusively show facts sufficient to enable us to determine what the acts of said Florence were as...