Bookhart v. Younglove

• Decision Date: 13 March 1928
• Docket Number: No. 38824.,38824.
• Citation: 207 Iowa 800,218 N.W. 533
• Parties: BOOKHART v. YOUNGLOVE ET AL.
• Court: Iowa Supreme Court

207 Iowa 800

218 N.W. 533

BOOKHART

v.YOUNGLOVE ET AL.

No. 38824.

Supreme Court of Iowa.

March 13, 1928.

Appeal from District Court, Woodbury County; Robert H. Munger, Judge.

An action by the plaintiff against B. K. Younglove, the former executor of the J. M. Bookhart estate, and New Amsterdam Casualty Company, as surety, to recover for funds of said estate unaccounted for by said executor.

At the close of all the evidence, on motion of the plaintiff, the court directed a verdict against both defendants for $14,831.54. The defendants appeal. Modified, affirmed, and remanded, with directions.Stewart & Hatfield and Jepson, Struble, Anderson & Sifford, all of Sioux City, for appellants.

J. Henry Eik and Fred H. Free, both of Sioux City, for appellee.

WAGNER, J.

J. M. Bookhart died testate January 7, 1917. B. K. Younglove was nominated as executor in his last will and testament. The will was admitted to probate, and the nomination of Younglove as executor was by the court confirmed, and on February 21, 1917, he qualified as said executor by subscribing the oath prescribed by law, and by giving bond in the required amount of $25,000 with the New Amsterdam Casualty Company as surety. Said bond was approved by the clerk of the district court of Woodbury county, and letters testamentary were issued. The will of decedent devises and bequeaths certain definite property to his widow, and directs that all the other property owned and possessed by him shall be sold and the proceeds kept in trust until the decease of his wife, when distribution shall be made, as therein stated, among his children and grandchildren.

Four annual payments were paid to the surety company as premium on the bond. On February 21, 1921, the executor filed in the clerk's office his application for order, in which he alleged, in substance, that the heirs (beneficiaries) of said deceased have reached an agreement in reference to the distribution of said estate; that his final report will be on file within the next few days; that the estate will be terminated within a short time; that the heirs (beneficiaries) representing 68/90 of said estate have signed a bond for him as personal representative of said estate; and he asked that the bond signed by said heirs (beneficiaries) be filed and that the New Amsterdam Casualty Company as bondsman be released and discharged in full. The court on the same day, without notice being served upon any one, ordered that the bond signed by the surety company be released, that said company be discharged, and, that, in lieu thereof, the bond signed by the heirs be substituted therefor. Said bond, signed by the executor and the beneficiaries aforesaid, was approved by and filed with the clerk on February 21, 1921.

At all times during the period of administration Younglove was a member of a partnership which was engaged in the banking business as a private bank, known as the Farmers' Bank of Lawton, Younglove's interest therein being approximately a one-half interest. As he obtained possession of the moneys belonging to said estate, he deposited the same in his name, as executor, in a checking account in said bank. Younglove was president and at all times in active charge of the bank's business affairs. On April 13, 1921, the bank, being unable to pay its obligations, ceased doing business and a receiver was appointed to take charge of its affairs. At the time of the closing of the bank, there was on deposit in said bank, in the name of Younglove as executor of said estate, $11,049.25, which amount as increased by interest is the amount for which judgment was rendered.

It appears that in February, 1922, one of the beneficiaries of the estate filed two separate applications, in one of which he asked for the removal of Younglove as executor, and in the other for the setting aside of the court's order for the substitution of the bond signed by the heirs (beneficiaries) and accepted in lieu of the surety company bond, and as per order of the court, the executor was served with notice of the hearing of said applications. On the 7th day of March, 1922, the former order of court, bearing date February 21, 1921, releasing the surety company and substituting the bond signed by the heirs in lieu of that signed by the surety company, was set aside and Younglove was removed as executor, and the plaintiff herein was appointed administrator with the will annexed of said estate, and he duly qualified as such officer. No notice of the hearing on application for order, which was granted on the 7th day of March, 1922, was served upon the surety company. Demand was made upon Younglove for the money for which he should account as executor, and, upon his failure and inability to pay the same, this action was instituted against him and the surety company.

The defendants joined issue with the plaintiff. At the close of the evidence, the court, upon motion of the plaintiff, directed a verdict against both defendants and rendered judgment accordingly. From this action, the defendants have appealed.

The contentions of the appellants will be noted as we proceed. We deem it advisable to set out in full the order of the court bearing date February 21, 1921. Said order is as follows:

“And now on this 21st day of February, 1921, being a regular day of the January term of the district court of Iowa, in and for Woodbury county, the application of the executor of the estate of J. M. Bookhart, deceased, as aforesaid, that the bond of the New Amsterdam Casualty Company, be released and that the bond signed by Edward W. Bookhart, F. M. Bookhart, Irene Elder, Rebecca Bookhart, Amy P. Flock, Margaret Mortensen, Phoebe Christy, and Alvin E. Witwer, all heirs at law of said decedent, be substituted therefor, the court having fully investigated the premises and being fully informed as to the facts, it is ordered that the bond signed by the New Amsterdam Casualty Company be released, and that the said company be discharged, and that in lieu thereof the bond signed by the aforesaid heirs be substituted therefor.”

It is alleged and claimed by the appellants, in substance, that the filing and approval of the new bond signed by the beneficiaries supersededthe one signed by the surety company.

[1] The object of a bond is security to those who are interested in the property settlement of the estate. The law requires the bond for their protection, and the parties interested acquire a vested interest in the bond which cannot be divested without their consent, except in the manner prescribed by law. The bond signed by the surety company was executed in pursuance of the statutory requirements and in obedience to the order of the court.

[2] In the absence of statute, the court is without authority to discharge or release a surety, except with the consent of the parties interested. 24 C. J. 1073; Commonwealth v. American Bonding Co., 245 Pa. 535, 91 A. 938;Commonwealth v. Rogers, 53 Pa. 470;Newcomer's Appeal, 43 Pa. 43;Richter v. Leiby, 101 Wis. 434, 77 N. W. 745;Rudolf v. Malone, 104 Wis. 470, 80 N. W. 743;Brehm v. United States Fidelity & Guaranty Co., 124 Wis. 339, 102 N. W. 36;Commonwealth v. Fidelity & Deposit Co. of Maryland, 224 Pa. 95, 73 A. 327, 132 Am. St. Rep. 755;Fidelity & Deposit Co. of Maryland v. Phillips, 235 Pa. 469, 84 A. 432.

[3] It is generally held by the courts that, where the Legislature has provided a statute authorizing the release of sureties, its provisions must be strictly complied with, in order that the release may be effective. Clark v. American Surety Co., 171 Ill. 235, 49 N. E. 481;Rush v. State of Indiana, 19 Ind. App. 523, 49 N. E. 839; Dupont v. Mayo, 56 Ga. 304; Richardson v. Whitworth, 103 Ga. 741, 30 S. E. 573;Pollock v. Cox, 108 Ga. 430, 34 S. E. 213; Jones v. Ritter, 56 Ala. 270; Gower v. Shelton, 16 Lea (Tenn.) 652; Hickerson v. Price, 2 Heisk. (Tenn.) 623;Johnson v. Johnson, 6 Heisk. (Tenn.) 240;Taylor v. Taylor, 66 W. Va. 238, 66 S. E. 690, 19 Ann. Cas. 414. “The courts have no power to waive compliance with the statute, but the surety, in seeking to avail himself of its benefits, must comply with its provisions. * * * The proceeding to release sureties is statutory and of a summary character, requiring no notice to the parties ultimately entitled to the fund, and the statute cannot be extended, by construction, to authorize the discharge of a surety on the application of the principal in the bond, in the absence of any provision in the statue authorizing it.” Clark v. American Surety Co., supra.

[4] The courts generally declare that, where the statute provides that the surety may apply for the release, or contemplates that the initial step for obtaining release must be taken by the surety, the proceeding asking for his discharge must be on his petition. See authorities hereinbefore cited.

[5] In so far as the present litigation is concerned, the statutory authority for release of sureties on a bond is found in sections 1283, 1284, 1285, of the Code of 1897, and sections 1177a and 1177b of the Supplement to the Code of 1913. Said sections are as follows:

“Section 1283: ‘When any surety on a bond required by law, except as otherwise provided, conceives himself in danger, and desires to be...