Beakley v. Cunningham

• Decision Date: 09 March 1914
• Citation: 165 S.W. 259,112 Ark. 71
• Parties: BEAKLEY v. CUNNINGHAM
• Court: Arkansas Supreme Court

165 S.W. 259

112 Ark. 71

BEAKLEY v. CUNNINGHAM

Supreme Court of Arkansas

March 9, 1914

Appeal from Lawrence Circuit Court, Eastern District; R. E. Jeffery Judge; affirmed.

STATEMENT BY THE COURT.

This is an action instituted in the circuit court by W. A Cunningham, as guardian of Sam and Jessie Moore, against J N. Beakley, a former guardian of said minors, and United States Fidelity & Guaranty Company of Baltimore, Maryland and American Bonding Company of Maryland, as sureties on the bond of Beakley, as such guardian.

The complaint alleges, in substance, the following: That at the October term, 1902, of the probate court for the Western District of Lawrence County, Arkansas, the defendant J. N. Beakley was by said court duly appointed as guardian of Sam Moore, Jessie Moore and Hurley Moore, minors. That on the 27th day of November, 1902, the said Beakley executed a bond, as such guardian, in the sum of $ 8,000, with the United States Fidelity & Guaranty Company of Baltimore, Maryland, as his surety. That on the 20th day of January, 1903, the said J. N. Beakley executed an additional bond in the sum of $ 4,000, as such guardian, with the United States Fidelity & Guaranty Company of Baltimore as his surety. That on the 7th day of November, 1903, the said Beakley executed an additional bond, as such guardian, in the sum of $ 15,000, with the American Bonding Company of Maryland as his surety. That at the April term, 1910, of said probate court, Sam Moore and Jessie Moore, having arrived at the age of fifteen years, elected to have W. A. Cunningham appointed as their guardian, instead of the said J. N. Beakley, and said Cunningham was duly appointed by the probate court as such guardian. That on January 13, 1910, said Beakley filed his account as guardian, showing a balance due Sam Moore of $ 3,548.04, and the sum of $ 3,551.70 due to Jessie Moore, and that on appeal to the circuit court, said J. N. Beakley was ordered to pay to the plaintiff said sums, together with 6 per cent interest per annum from January 13, 1910, on or before January 1, 1912. That, in pursuance of said order, said Beakley paid a part of said sums, but that there is now due and unpaid a balance of $ 1,780.88 to Sam Moore, and $ 1,781.34 to Jessie Moore, with interest on said sums from August 30, 1912. That the failure of the defendant Beakley to pay said amounts to plaintiffs constitutes a breach of each of said bonds. The prayer is that plaintiff have judgment against each of the defendants for the amount sued for.

The defendants filed an answer and motion to transfer the case to equity and set up substantially the following state of facts: They alleged that the defendant J. N. Beakley, as guardian of said minors, was in possession of certain notes belonging to said minors, and was unable to collect the same, and that he is entitled to certain credits on his accounts with said minors; that said guardian after his discharge made a settlement of his accounts with said minors in the probate court, and that his settlement was duly approved by the probate court. That the plaintiff appealed from the order of the probate court to the circuit court, and that the circuit court changed the order of the probate court in the manner set out in the plaintiff's complaint and ordered that its judgment be certified back to the probate court for further proceedings. They aver that the judgment of the circuit court was not certified back to the probate court and that, because the same was not done, there is no legal cause of action on this bond; that the last bond given by J. N. Beakley, with the American Bonding Company as his surety, took the place of the two former bonds given by him; that at the time the last mentioned bond was made, said Beakley was in possession of all the assets belonging to said estate, and for this reason the defendant United States Fidelity & Guaranty Company states that it is not liable for any waste of the assets of the estate except for that committed prior to the giving of the last bond; that to avoid a multiplicity of actions, and to make settlement between the several sureties of the defendant Beakley, the cause of action should be transferred to equity. The court overruled the motion to transfer to equity, and sustained a demurrer to the answer of the defendants and rendered judgment in favor of the plaintiff, W. A. Cunningham, as guardian of Sam and Jessie Moore, minors, against the defendants, J. N. Beakley, United States Fidelity & Guaranty Company of Baltimore, and the American Bonding Company of Maryland, in the sum of $ 3,560.22, with interest thereon at the rate of 6 per cent per annum from August 30, 1912. This judgment was rendered on April 4, 1913, and the defendants have duly prosecuted an appeal to this court.

Judgment affirmed.

H. L. Ponder and W. E. Beloate, for appellants.

1. The bond executed by the American Bonding Company took the place of the bonds executed by the United States Fidelity & Guaranty Company, and there was no liability on the latter except for such defalcation as may have occurred before the execution of the last bond, and the cause should have been transferred to equity for the ascertainment of the fact whether or not there was any such defalcation.

2. Cunningham was not a proper party. The action should have been brought in the name of the State for the use of the minors, or in the name of the minors by their next friend. 98 Ark. 553; Acts 1909, p. 956.

3. The jurisdiction of the case was in chancery, and not in the circuit court. Acts 1909, p. 556; 95 Ark. 148. Even if there had been a proper appeal from the probate court, the circuit court ordered its judgment to be certified down to be entered as the judgment of the probate court, which was never done; and this was necessary before the sureties became liable on their obligation. 63 Ark. 218; 74 Ark. 520; 33 Ark. 662.

4. As between the surety companies and the plaintiff, they are responsible according to their contract. It may be conceded that a judgment against Beakley would be res adjudicata as to the amount of assets the bonding companies would have to turn over that came to his hands, but not res adjudicata as to the kind of assets. The kind is governed solely by the contract, the kind received by the one to be charged and the kind tendered, which latter must be of, or directly traceable to, those received. The right of adjustment and exoneration are purely equitable remedies, and the cause should have been transferred. Bispham, Principles of Equity, §§ 326, 329, 331.

5. The bondsmen are not chargeable with interest since the order of probate court ascertaining the amount due, and order directing notes, etc., to be turned over to the succeeding guardian. 64 Ark. 477.

W. A. Cunningham, for appellee.

1. The answer set up a matter exclusively within the jurisdiction of the probate court in alleging an accounting between the minors and the former guardian, and asking leave to turn over certain lands and to receive certain credits upon his accounts. When that court passed upon the account finding a balance due, and the judgment of the circuit court on appeal directed the payment of the amount due to the succeeding guardian, the matter was settled, and could not be collaterally attacked except for fraud. 25 Ark. 113; 40 Ark. 222.

2. The suit was properly brought. 39 Ark. 173; 98 Ark. 661.

3. The probate court had settled the rights of the parties, no fraud or mistake was alleged nor any other ground for equitable intervention. The law court was the proper forum. 16 Cyc. 30.

4. The settlement in the probate court and the circuit court upon appeal, is res adjudicata, and can not be collaterally attacked. 25 Ark. 113; 40 Ark. 222.

OPINION

HART, J., (after stating the facts).

The bonds sued on in this case were payable to the State of Arkansas, and it is first insisted by counsel for defendants that the action should have been brought in the name of the State of Arkansas for the use of the minors. Since the adoption of the Code, the action may be prosecuted either by the State as a trustee of an express trust, as was done in the case of the State v. Buck, 63 Ark. 218, 37 S.W. 881, or by the real party in interest--that is, by the person entitled to receive the money, who, in this instance, is W. A. Cunningham as guardian of the minors as was done in the case of Turner v. Alexander, as Guardian, 41 Ark. 254.

It is next insisted that this action can not be maintained...