Armon v. Craig

• Decision Date: 01 July 1927
• Docket Number: No. 37998.,37998.
• Parties: ARMON ET AL. v. CRAIG.
• Court: Iowa Supreme Court

203 Iowa 1338

214 N.W. 556

ARMON ET AL.

v.CRAIG.

No. 37998.

Supreme Court of Iowa.

July 1, 1927.

Appeal from District Court, Wayne County; Homer A. Fuller, Judge.

Action at law to recover from a surety on guardian's bond, the guardian having died without accounting. Petition was attacked by demurrer, which was sustained by the district court. Affirmed as to appellants, Samuel B. Armon, Charles A. Armon, Louisa Minier, Lorena Schroeder, and J. H. Armon. Reversed as to William Armon.F. H. Baltimore, of Corydon, and Oscar Strauss, of Des Moines, for appellants.

Evans & Garrett, of Corydon, for appellee.

KINDIG, J.

Appellants, being beneficiaries under a guardian's bond, bring this action at law to obtain judgment against appellee, as surety on said undertaking. To the petition a demurrer was filed, which, upon presentation, was sustained by the district court.

Facts admitted by those pleadings are that on the 12th day of November, 1909, one R. C. Poston, of Corydon, was, by the district court of Wayne county, duly appointed guardian for the property of Lillian Armon, Samuel B. Armon, Charles A. Armon, Louisa Armon, Lorena Armon, and William Armon, then minors. On said date the said appointee qualified by executing and delivering to the clerk of said court a bond in said proceedings with appellee, R. R. Craig, as surety thereon. Said Poston died in May, 1918, without having made any report or accounting of his actions as such guardian. An administrator was appointed for his estate on the 11th day of May in said year. No claim was filed by appellants, nor any of them, against said estate for the guardianship funds in the possession of said Poston at the time of his death.

The demurrer is based upon five principal grounds enlarged by seventeen subdivisions. In effect, however, this attack was made because: (1) Said action is barred by the general statute of limitations, and (2) no claim was filed against the estate of said guardian for said trust funds. Upon these two considerations the case is to be determined.

[1] I. Appellants at the outset contend that the statute of limitations as against them did not commence to run until there was an accounting or a settlement made by the guardian, and that because no such accounting was had or settlement made the cause pleaded is not barred. We are constrained to say the rule in this state is to the contrary. The only trust here involved is the guardianship, and its existence at all times was known to the wards. In the case of Ackerman v. Hilpert, 108 Iowa, 247, 79 N. W. 90, it is said:

“Appellant's theory is that the statute does not begin to run until the guardian is ordered to account by the probate court, and, as this has not been done, the cause of action is not barred. * * * But we do not think the ward, by delaying action to secure this accounting, can postpone the running of the statute.”

See. also, Miller v. Ash, 156 Cal. 544, 105 P. 600;Reither v. Murdock et al., 135 Cal. 197, 67 P. 784;Johnson v. Henshaw, 80 Okl. 58, 193 P. 998;Davis et al. v. White et al. (Tex. Civ. App.) 207 S. W. 679;American Surety Co. of New York v. Macon Savings Bank, 162 Ga. 143, 132 S. E. 636.

This reason for the rule seems logical, the principle is sound, and completely disposes of the assignment of error on this point.

[2][3] II. In support of the action of the district court, appellee urges that the statute of limitations against the claim commenced to run on the 12th day of November, 1909, on the theory that said petition alleges conversion of said funds took place on that date. This contention cannot be sustained. Said pleading does not pretend to say that the guardianship terminated by the purported private use of said money. The official duties of the guardian continued until the final execution of the trust. Right remained in the wards, notwithstanding this wrongful act, to have the obligations imposed duly performed. It was not necessary for appellants to acquiesce in or ratify the wrong of the guardian and make him their debtor in the ordinary sense of the word. Section 12577 of the Code of 1924 and section 3197 of the Code of 1897 provide:

“Guardians of the property of a minor shall give bond, with surety * * * conditioned for the faithful discharge of their duties as such guardians according to law, and must take an oath of the same tenor as the condition of the bond.”

Said duties of the principal, and therefore of the surety, were not relieved because of the said misappropriation. That wrong did not transform the existing trust requirements into a simple action for money had and received. At all times there continued the necessity of the guardian to account, make reports, keep the trust funds separate, and finally deliver them to the respective beneficiaries, consequently such was the burden carried by the surety. Such obligor, through the guardian's ancient conversion of the trust funds, cannot avoid this responsibility. The official relationship continued. There had been no denial or repudiation thereof. Notwithstanding the fact that there was a misappropriation at the time indicated, the duties of the trustee went on until final execution of said trust, and until such closing act the statute did not commence to run, and during all of said time the trust was active. Appellee's argument, therefore, does not support the ruling and judgment.

[4][5] III. Lillian Armon died on or about the 25th day of December, 1909. Death terminated the guardianship as to her. State Fair Association v. Terry et al., 74 Ark. 149, 85 S. W. 87;Livermore's Estate, 132 Cal. 99, 64 P. 113, 84 Am. St. Rep. 37;Whittemore v. Coleman et al., 239 Ill. 450, 88 N. E. 228;Martin v. Caldwell et al., 49 Ind. App. 1, 96 N. E. 660;Cornelison's Adm'r v. Million, 138 Ky. 416, 128 S. W. 316;Barrett v. Provincher, 39 Neb. 773, 58 N. W. 292. And the statute of limitations commenced to run from said date in favor of the guardian and his surety. The property and interests of said Lillian were inherited by the appellant J. H. Armon, an adult, and accordingly the statute of limitations as against him commenced to run from said date. Section 11007, subsec. 6. More than ten years expired after said event before the commencement of this action. Therefore, so far as the rights of the said J. H. Armon are concerned, they are barred, and the ruling and judgment of the district court as to him is correct.

[6][7] IV. Majority was reached by the following of said appellants in the years set opposite their names, respectively, to wit: Samuel B. Armon, 1910; Charles A. Armon, 1912; Louisa Armon, 1911; Lorena Armon, 1913. Attainment of majority is a termination of the guardianship for the purpose of putting into operation the statute of limitations. Heath v. Elliott, 83 Iowa, 357, 49 N. W. 984;Wycoff v. Michael, 95 Iowa, 559, 64 N. W. 608;Farrington v. Secor, 91 Iowa, 606, 60 N. W. 193;O'Brien v. Strang, 42 Iowa, 643;Ackerman v. Hilpert, 108 Iowa, 247, 79 N. W. 90;Thompson v. Thompson et al., 178 Iowa, 1289, 160 N. W. 922;Owens v. McMahan, 122 Wash. 191, 210 P. 200;Perkins v. Cheney et al., 114 Mich. 567, 72 N. W. 595, 68 Am. St. Rep. 495;Christenson v. Grandy, 46 N. D. 418, 180 N. W. 18;Globe v. Simeral, 67 Neb. 276, 93 N. W. 235;Bybee's Ex'r et al. v. Poynter, 117 Ky. 109, 77 S. W. 698;American Surety Co. of New York v. Hardwick (Tex. Civ. App.) 186 S. W. 804. The reason for this rule of law is that upon reaching such age limit the ward is entitled to demand that the guardian account and settle. That being true, an action upon the bond would be barred under said statute in ten years from the time the said right accrued against the guardian. Suit was commenced in this case on the 19th day of June, 1925. Considerably more than said time elapsed from the date each said ward became of age. Therefore, the statute clearly ran and was a bar to the action, and the district court in so holding was within the law.

[8] V. What has been said does not dispose of the case so far as it relates to appellant William Armon. He became 21 May 24, 1924. Ten years has not expired thereafter before the commencement of the action, but on the date William arrived at said age the guardian was dead. This death occurred in May, 1918. The guardianship then, so far as said ward is concerned, was terminated by said decease. Such event ends a guardianship and starts the running of the statute of limitations. Hill v. Arnold et al., 199 Mass. 109, 85 N. E. 97;Title Guaranty & Surety Co. v. Burton, 67 Okl. 320, 170 P. 1170;American Bonding Co. of Baltimore v. Logan et al. (Tex. Civ. App.) 132 S. W. 894;Hughes v. Langdon, 111 Neb. 508, 196 N. W. 915, 199 N. W. 832; 28 Corpus Juris, 1096, subsec. 114.

Said statutory period did not expire before this suit was begun. The time was seven years only. That being true, the right of this ward is not barred, and the district court was in error in...