Bourne v. Maryland Cas. Co.

• Decision Date: 30 August 1937
• Docket Number: 14527.
• Citation: 192 S.E. 605,185 S.C. 1
• Parties: BOURNE, Probate Judge, et al. v. MARYLAND CASUALTY CO. et al.
• Court: South Carolina Supreme Court

192 S.E. 605

185 S.C. 1

BOURNE, Probate Judge, et al. v. MARYLAND CASUALTY CO. et al.

No. 14527.

Supreme Court of South Carolina

August 30, 1937

Appeal from Common Pleas Circuit Court of Horry County; E. C Dennis, Judge.

Action by H. E. Bourne, as Probate Judge of Horry County, and W. M Goldfinch, as administrator de bonis non of the estate of Willie McRay, deceased, against the Maryland Casualty Company and Bernice H. Frierson, as administratrix of the estate of Benjamin T. Frierson, deceased, wherein the Peoples National Bank of Conway was made a party defendant on motion of the Maryland Casualty Company. Motion of the Peoples National Bank for a nonsuit as to it was granted, judgment for plaintiff against the other defendants on a directed verdict and the other defendants appeal.

Affirmed.

Wright & Burroughs and G. Lloyd Ford, all of Conway, for appellants.

C. B. Thomas, W. K. Suggs, and F. A. Thompson, all of Conway, for respondents.

STABLER Chief Justice.

The following facts appear: The estate of Willie McRay, a soldier who died during the World War, was administered upon by one Benjamin T. Frierson, who, as a prerequisite to his appointment, on September 15, 1933, executed an administration bond with the Maryland Casualty Company, as surety, in the sum of $10,000. On October 4, 1934, before the estate had been fully administered, Frierson died, and W. M. Goldfinch, one of the plaintiffs herein, was appointed to succeed him as administrator de bonis non. Bernice H. Frierson, the widow of Benjamin T. Frierson, became administratrix of his estate.

This action was commenced on May 28, 1935. The plaintiffs alleged that Frierson, prior to October 31, 1933, received in his official capacity $5,000 from the United States government on account of war risk insurance carried by it on the life of McRay, and deposited same to his credit, as such administrator, in Peoples National Bank of Conway, S. C.; that he thereafter procured orders from the probate judge directing payments to Sana M. Montgomery and Arthur McRay, sole distributees of the estate of Willie McRay, distributive shares totaling $4,000, and issued checks against the deposit in their favor in accordance with such orders; "that he forged, or caused to be forged, their names and endorsements to these checks, caused them to be paid by the said Peoples National Bank and charged against the estate deposit;" and that he appropriated the entire $4,000 to his own use, "and neither delivered the said checks, nor any part of the proceeds thereof, to the distributees of the said estate." It was further alleged that the administrator, by false representations, obtained from the probate judge an order directing payment of $250 "as a fee for his attorney, which said amount was paid to him for that purpose and charged against the estate deposit," but that, on information and belief, he appropriated the entire sum to his personal use, "and that the same constitutes no lawful charge against the assets of the estate." Also, that the administrator wrongfully obtained orders from the probate judge directing payment to himself, as commissions, sums totaling $228.76; "that he issued checks therefor, cashed the same, and appropriated the proceeds thereof to his own use, having had the same charged against the estate deposit; and that the said administrator was entitled to no part thereof for the reason that such payments included commissions on unlawful disbursements, and for the further reason that the said administrator failed to file any accounting as he is by law required to do." Judgment was asked for in the sum of $4,778.76.

Bernice H. Frierson, as administratrix, demurred to the complaint as not stating facts sufficient to constitute a cause of action, in that it appeared from its allegations that the suit was one for the recovery of a debt, and as such could not be maintained against her in her official capacity, as was here attempted to be done, "within a less period than one year of this defendant's intestate's death." The matter was heard by his honor, Judge Gaston, who overruled the demurrer on the ground that the action was "not strictly a suit on a debt," but was one "on a bond which is required by law, which I think should be distinguished from a debt." By leave of the court, the defendant then filed an answer to the complaint, alleging that her intestate, if he were appointed as administrator of the estate of Willie McRay, "duly and regularly accounted for all funds coming into his hands and made payment thereof in accordance with law." She also set up as a defense the ground urged as the basis of her demurrer, and asked that the complaint be dismissed as to her.

On motion of Maryland Casualty Company, his honor, Judge Dennis, ordered the Peoples National Bank be made a party defendant. The casualty company then served its answer and cross-complaint on the plaintiffs and the bank. Its first defense was a general denial; its second, a counterclaim against the plaintiffs in the sum of $38.40 for a premium alleged to be due it on the administrator's bond. By way of cross-complaint, and for a cause of action against its codefendant, Peoples National Bank, it alleged that, as a consideration for becoming surety on Frierson's bond, it was agreed between the company and Frierson that all funds coming into his hands, as administrator of the estate of Willie McRay, should be deposited in the Peoples National Bank of Conway, subject to the joint control of the company and of the administrator; that L. D. Magrath was appointed as the company's attorney in fact "for the purpose of exercising control on behalf of this defendant over the estate funds so deposited," one of his duties being to countersign all checks drawn on such funds by the administrator; that on October 24, 1933, the sum of $5,000 was deposited in the defendant bank to the account of B. T. Frierson, as administrator of the estate of Willie McRay; that Frierson thereafter drew several checks on this account in favor of various payees, which were countersigned by Magrath as attorney in fact, and which were paid by the bank; that the names of the payees were forged or fraudulently indorsed on the back of these checks by some unknown person or persons, and that, by reason of the acts of the defendant bank in paying over the funds on these forged indorsements, "in violation of its duty arising out of the contract of deposit between the parties," the defendant company had been damaged in the sum of $4,300, the total amount so withdrawn, and for which it asked judgment in its favor against the defendant bank. It also demanded judgment against the plaintiffs for the sum of $38.40, the sum alleged to be due it as an unpaid premium on the administration bond.

The Peoples National Bank interposed a demurrer to the cross-complaint, which was overruled. It then filed an answer, setting up a number of defenses. It denied, among other things, that its codefendant had been hurt by any acts on the part of the bank, and alleged that the damage done the company was due to that defendant's own negligent and careless conduct, in the several particulars set out in the answer.

The case was tried in October, 1936. At the conclusion of the testimony for the plaintiffs, the defendant casualty company made, in effect, a motion for a nonsuit on grounds hereinafter referred to. The motion was refused; and that defendant then offered testimony on its own behalf at the close of which counsel for the bank moved for a nonsuit on the ground that the checks in question were made to fictitious payees, and that the bank, under applicable law, was not liable in its payment of such checks. This motion was granted by the trial judge, who stated that he did not think that the bank, under the evidence, could be held to have been negligent in any way.

The plaintiffs, upon the completion of testimony on behalf of the defendant, Bernice H. Frierson, as administratrix, made a motion for a directed verdict. At the same time, similar motions were made by the defendants, the administratrix, and the surety company. Those of the defendants were overruled, and a verdict was directed for the plaintiffs for $4,894.80.

The appeal of the Maryland Casualty Company, which we will now consider, presents several questions for decision. It is contended, in the first place, that the trial judge committed error in refusing to grant the motion of this defendant "that as to it that part of the allegations and proof which relates to the cashing by the bank of certain checks upon their forged endorsements be withdrawn from the consideration of the jury upon the grounds that:

(1) The bond provides that B. T. Frierson, administrator of the goods, chattels, and credits of Willie McRay, deceased, shall make inventory, administer the estate as required by law, etc.-all acts done in his official capacity-whereas the proof, considered most strongly from the viewpoint of the plaintiff, is that the acts which brought loss to the estate were the forging of certain endorsements and the representation to the bank that the endorsements were genuine, acts which are purely individual and personal.

(2) Upon the deposit of funds in the bank, title thereto vested in the bank and a debtor and creditor relation was established between the estate and the bank, so that such appropriation of funds as may have occurred was not an appropriation of funds of the estate but of the bank. Not having been disbursed to proper payees, insofar as the estate is concerned, the bank is still indebted to the estate."

Judge Dennis in refusing the motion said: "Plaintiff in this case is the estate, and a man who issues a check in his official capacity as administrator, as a part of a scheme to...