Brewer v. Herron

• Decision Date: 12 November 1934
• Docket Number: 31320
• Citation: 171 Miss. 435,157 So. 522
• Court: Mississippi Supreme Court
• Parties: BREWER v. HERRON et al

157 So. 522

171 Miss. 435

BREWER v. HERRON et al

No. 31320

Supreme Court of Mississippi

November 12, 1934

Division A

1. GUARDIAN AND WARD.

Statutory requirement that guardian apply to chancery court, or chancellor, for authority before investing ward's funds being mandatory, guardian is liable for any loss resulting from inadequacy of security where loan is made without an antecedent order, notwithstanding subsequent order approving annual or final account (Code 1930, sec. 1885).

2. GUARDIAN AND WARD.

Purpose of statutory requirement that guardian receive authority from chancery court or chancellor before investing wards' funds was to make it precedent duty of chancellor to supervise investment of wards' funds as security to be taken, and not to leave it to his subsequent discretion as to best way to protect wards' interests after loan had been made and funds expended (Code 1930, sec. 1885).

3. GUARDIAN AND WARD.

Bill for loss from unauthorized loan made by former guardian out of guardianship funds was not prematurely brought where exact amount of loss could be determined in pending suit by staying proceedings against former guardian until foreclosure of deed of trust securing loan could be made, or bill amended so as to authorize sale of security or foreclosure of deed of trust by court for credit of proceeds of sale on note for which loan was given (Code 1930, sec. 1885).

4. BANKS AND BANKING.

Bank held not liable for loss arising on unauthorized loan out of guardianship funds made by former guardian, who was cashier of bank, where loan was made directly out of funds of ward and bank had no connection with, nor interest in, the loan (Code 1930, sec. 1885).

HON. J L. WILLIAMS, Chancellor.

APPEAL from the chancery court of Humphreys county HON. J. L WILLIAMS, Chancellor.

Bill of complaint by Melanie Brewer, guardian, against A. P. Herron and others. From a decree dismissing the bill of complaint, the guardian appeals. Affirmed in part reversed in part and remanded.

Affirmed in part, reversed in part and remanded.

A. F. Gardner, Jr., of Greenwood, for appellant.

Whenever the guardian shall have the money of his ward not needed for current expenditures, or directed to be invested for the ward, he shall apply to the court, or chancellor in vacation, for direction as to the disposition he shall make of it; and the court or chancellor shall determine whether he shall lend it at interest, and upon what security or how he shall dispose of it.

Section 1885, Code of 1930.

Where one or two innocent persons must suffer because of the fraudulent conduct of a third person, this loss or suffering should fall upon the one who by his acts has clothed the third party with the power to commit the fraud.

Loring v. Brodie, 134 Miss. 453; First National Bank v. Leetan & Brother, 131 Miss. 324, 95 So. 445; First National Bank v. Blake, 60 F. 78.

It is a well settled law in this state that when a guardian on his own initiative invests guardianship money without first securing the approval of the court he must exercise the very highest degree of care.

Section 1885, Code of 1930; Pan-American Life Ins. Co. v. Crymes, 153 So. 803; Union Chevrolet Co. v. Arrington, 162 Miss. 816, 138 So. 593.

If a guardian assumes to loan out the money of his ward without the authority of the probate court, he does it at his own risk.

Coffin v. Bramlitt, 42 Miss. 194; Williams v. Campbell, 46 Miss. 57; In re Adams, Guardianship, 169 Miss. 20.

R. H. Nason and V. B. Montgomery, both of Belzoni, for appellees.

No error of the lower court has been distinctly assigned and hence no error can be considered here, except some plain error which the court may notice at its option.

Rule 6, Supreme Court Rules; Eaton v. Hattiesburg Auto Company, 117 So. 534, 151 Miss. 211; Nickey v. State, 147 So. 324.

The final decree of July 7, 1932, discharging A. P. Heron and his surety cannot be collaterally attacked.

Childress v. Carley, 92 Miss. 571, 46 So. 164; Murrah v. State, 51 Miss. 655; Shirley v. Fearne, 33 Miss. 654; State v. Taylor, 23 So. 34; Griffith's Mississippi Chancery Practice, secs. 621, 633, 634, 635 and 642, page 705 et seq.

Since this decree of July 7, 1932, imports absolute verity and since the record here is absolutely silent as to any mistake or fraud in procuring same, or as to the lack of jurisdiction of the court over the parties or subject matter, we submit that the lower court was correct in dismissing this attempted collateral attack. The decree of the lower court should accordingly be affirmed.

Finney v. Speed, 71 Miss. 32, 14 So. 465.

This suit was prematurely brought.

United States Fidelity & Guaranty Co. v. Jackson, 72 So. 150, 111 Miss. 752.

The loan was originally made by Herron, guardian, to Jones.

The Jones loan was made in the exercise of the highest degree of care and has been approved four times by the lower court.

28 C. J., secs. 233, 234 and 235, page 1139 et seq.

OPINION

Cook, J.

Appellant, Melanie Brewer, as guardian of her minor brothers and sisters, filed a bill of complaint in the chancery court of Humphreys county against A. P. Herron, former guardian of said minors, and the Fidelity & Deposit Company of Maryland, surety on said former guardian's bond, and the Grenada Bank, seeking to recover the amount of an unauthorized loan made by said former guardian out of the guardianship funds. At the final hearing, the court entered a decree dismissing the bill of complaint, and from this decree the guardian has appealed. The bill charged that during the time he was guardian of said minors the said A. P. Herron was also cashier of the Bank of Belzoni, a branch of the Grenada Bank; that while acting in this dual capacity he, as such guardian, without previous order of the court or the chancellor authorizing him so to do, purchased from the Grenada Bank a promissory note for three thousand seventy dollars, executed in favor of said bank by one Howard Jones, and transferred to said guardian by indorsement without recourse; that this note was secured by a deed of trust which constituted a first lien on a vacant lot in the town of Belzoni, and a second lien on approximately eighty-three acres of land, the Federal Land Bank of New Orleans holding a first lien thereon to secure the payment of an original principal sum of two thousand dollars, and that the said Howard Jones note also apparently constituted a first lien on the crops raised on said land during the year 1930, and also on certain live stock mentioned therein.

The bill further charged that the security for the note so purchased by the guardian was precarious and inadequate at the time of the purchase, which fact was well known to both the guardian and the Grenada Bank; that the purchase of said note with the money of said minors constituted a breach of duty to the minors by their guardian; and that the proceeds of the crops raised on the lands in the year 1930, and other personal property mentioned in the deed of trust, were not applied to the payment of the note. The bill further averred that the guardian filed an account of his guardianship covering the period from January 15, 1932, to June 6, 1932 and also filed a final account on June 24, 1932, both of which were approved by the...