Bell v. Rudolph

• Citation: 12 So. 153,70 Miss. 234
• Court: United States State Supreme Court of Mississippi
• Decision Date: 05 December 1892
• Parties: WILLIAM BELL v. DONNA M. RUDOLPH ET AL

12 So. 153

70 Miss. 234

WILLIAM BELL v. DONNA M. RUDOLPH ET AL

Supreme Court of Mississippi

December 5, 1892

FROM the chancery court of the first district of Hinds county HON. H. C. CONN, Chancellor.

This is a bill exhibited in behalf of Donna M. Rudolph and others minors, against their former guardians, and the sureties on two distinct sets of guardians' bonds, to recover a principal sum of about $ 9,000, which has been lost as the result of an unauthorized loan of their funds.

The facts, as stated by the bill, are as follows: Complainants are children and sole heirs of A. L. Banks, who died intestate in 1876, leaving an unincumbered estate, consisting of about $ 9,000 in money and a small amount of other property, mostly solvent credits. E. E. Banks, the widow became guardian of complainants, under an order of the chancery court of Scott county, where the deceased had resided, and where the administration was pending, and executed a bond as guardian in the sum of $ 11,000, with Wm Bell and N. C. Perry as sureties. Said guardian at once took possession of the estate of her said wards, and among other assets received was the sum of $ 9,000 in cash, which she deposited in the Capital State Bank, in Jackson, Hinds county, Mississippi, the bank contracting to pay her interest at the rate of eight per cent. per annum. This investment was not authorized by the court, but was made with the consent of Bell and Perry, and under an agreement between the guardian and said sureties that the money should not be withdrawn from the bank or the investment changed without their consent. Soon after this Mrs. E. E. Banks was married to W. W Ratliff, who was engaged in mercantile business. His business was unsuccessful, and he became very much embarrassed financially, and, while thus involved and insolvent, he persuaded his wife to agree to turn over to him the money on deposit in said bank, but the bank, presumably being aware of the agreement between the guardian and her sureties, refused to permit the money to be withdrawn. Thereupon Mrs. Ratliff, the guardian, agreed with Bell and Perry, her sureties, to give another bond for $ 6,000, as guardian, and secure their release pro tanto, and then withdraw that sum, leaving $ 3,000 in the bank as a protection to the sureties. The new bond was signed and tendered to the chancery clerk, and accepted subject to the approval of the court. The court, of course, refused to approve the bond thus taken, or to release Bell and Perry in any manner. But, meantime, Mrs. Ratliff, with the consent of Bell, checked out $ 6,000 from the bank, and a short time afterward withdrew the $ 3,000 without his consent, and this she loaned, without security and without authority from the court, to her husband, who used it in his mercantile business. He soon afterwards failed, and made a general assignment, and nothing has ever been realized therefrom for the wards.

As soon as Bell, the surety, heard of the withdrawal of the $ 3,000 from the bank, and of the refusal of the court to accept a new bond in lieu of the first, he made formal application to the chancery court of Scott county to be released from further liability, and an order was made releasing him from liability for future acts of the guardian as soon as a new bond should be executed and approved. Thereupon, in July, 1881, said guardian gave new bonds, which were approved, and, at the same time, her husband, W. W. Ratliff, qualified as co-guardian, and thereafter they continued to act jointly in the management of the estate of the wards.

The accounts filed by the guardians did not disclose the loan to W. W. Ratliff; but the sum appeared in the accounts as money on hand, and the guardians charged themselves with the same, and interest at the rate of ten per cent.

In 1887, said guardians filed their final accounts, and the sum due by them to each ward was ascertained and directed to be paid over to their successors. The amount due to each ward was more than $ 4,000.

Another guardian was appointed, but the money found to be due has never been paid, and both E. E. Ratliff and her husband are insolvent, and, moreover, have removed from the state.

This suit has been instituted in behalf of the wards, in the chancery court of the first district of Hinds county, where Bell resides. E. E. Ratliff and W. W. Ratliff, former guardians, have been made defendants, and also Bell and Perry, sureties on the first bond, and W. P. Ratliff and others, who are sureties on the second set of bonds.

Complainants claim that they have the right to elect which set of sureties they will proceed against; that the first bondsmen are liable for the unauthorized act of the guardian in loaning the money to her husband during the life of the first bond; and that the sureties on the second bond are liable, because W. W. Ratliff, the borrower of the money, did not become wholly insolvent and fail in business until after the second bonds were executed and approved. In order that an election between the bonds may be intelligently made, complainants pray that the sureties on both make discovery as to their solvency. Discovery was also prayed from the guardians as to all matters which might throw light on the circumstances of the loan to W. W. Ratliff and the use made of the money and assets, and of the exact status of the account at the time the second bonds were given. The bill further prays that the defendants be allowed to interplead with one another, so that a multiplicity of suits may be avoided, and that the court, by one decree, will settle the rights of all parties.

A supplemental bill was afterwards filed, but, as it does not relate to the case between Bell, the appellant, and the complainants, it is needless to set it out. All the defendants demurred to the bill, the separate demurrer of Bell assigning that there was no equity on the face of the bill; that no liability on his part is shown, and that the complainants are barred by the statute of limitations. All the demurrers were overruled, but only Bell appeals.

Decree affirmed.

Calhoon & Green, for appellant.

The ground of relief against appellant is the alleged unauthorized loan of the wards' money during the life of the first bond. It is not averred that the guardian did not charge herself with the amount. The contention is that, notwithstanding the guardian charges herself with a loan as cash, that its investment, without an order of court, is a breach of the bond.

The loan being unauthorized, the statute treats the money as still on hand, and the relation of debtor...