Cohn v. Winslow

• Decision Date: 18 June 1917
• Citation: 76 So. 264,115 Miss. 275
• Court: Mississippi Supreme Court
• Parties: COHN v. WINSLOW

76 So. 264

115 Miss. 275

COHN v. WINSLOW

Supreme Court of Mississippi

June 18, 1917

March 1917

Division A

APPEAL from the chancery court of Lincoln county, HON. O. B. TAYLOR Chancellor.

The matter of the guardianship of Lenora J. Winslow, a minor from an order of the chancellor holding Louis Cohn surety on the guardian's bond liable for loss of the minor's money, he appeals.

L. H Baggett was appointed by the chancery court of Lincoln county guardian of the estate of the appellee, a minor, and executed bond with appellant, Cohn, and one Becker as sureties on his guardian's bond. The guardian received two thousand, five hundred dollars of the ward's money, and reported the collection of same to the chancery court, and petitioned to be allowed to place the money in the Commercial Bank & Trust Company of Brookhaven, or in some other safe bank at the discretion of the guardian. The court granted the prayer, rendering the following decree:

"This cause this day came on for hearing on petition of L. H. Baggett, guardian, for permission to place the amount of money now in his hands as guardian, which is two thousand, five hundred dollars, with the Commercial Bank & Trust Company, or some other safe bank in the discretion of the guardian at five per cent. per annum, and the court, having heard same, doth order, adjudge, and decree that L. H. Baggett, guardian of Lenora J. Winslow is hereby permitted to place sad sum of money with the Commercial Bank & Trust Company or some other safe bank, at the discretion of the guardian, at the rate of five per cent. per annum. In granting this order the court does not relieve L. H. Baggett and his bondsmen from liability to Lenora J. Winslow for the safety of said money."

Some months later this bank failed, and afterwards, when the guardian presented his first annual account reporting the collection of a portion of the amount so deposited or loaned to said bank, and asked credit for the amount uncollected by reason of the failure of the said bank, because it had been loaned by him as guardian under specific directions of the court, the ward, through her attorney, contested the account, insisting that the sureties on the guardian's bond should be held liable for the amount of the ward's money lost by reason of the failure of the bank, because of the fact that Baggett, the guardian, was assistant cashier of the said bank, and Becker was cashier and Cohn one of the sureties, was a director in the said bank, and at the time the loan was made it was understood and so ordered by the decree of the chancery court that the sureties should not be relieved from liability to said minor for the safety of the money so loaned. On the trial it was agreed that the loan was made by the guardian as a permanent investment, and not as a temporary deposit, and that the guardian made no further effort to invest the money. Baggett and Becker were shown to be insolvent, and the court held Cohn liable for the loss of the money of the minor, and from an adverse decree he appeals.

Reversed and remanded.

Luther J. Tyler, R. H. & J. H. Thompson and Fulton, Thompson, for appellant.

It has been established in Mississippi, certainly since the decision of the case of Coffin v. Bramlett, 42 Miss. 194, that so long as a guardian keeps himself strictly within the line of duty and exercises reasonable care and diligence, he cannot be held responsible for any loss of or depreciation in the funds entrusted to him.

Under Mississippi Code 1906, section 2416, Mississippi Code 1892, section 2200 it is the duty of a guardian, having in hand money of his ward not needed for current expenditures, or not directed to be invested, to apply to the court or chancellor in vacation for directions as to the disposition he shall make of it. Upon such application the court or chancellor is required to determine whether the guardian shall lend it at interest and upon what security or how he shall dispose of it; and the statute expressly provides that if the court or chancellor designate the person to whom the loan shall be made, or the security on which it shall be made, and the loan be so made, responsibility shall not attach thereafter to the guardian. In this case Baggett, the guardian, applied to the court, under the provisions of the statute, and obtained the decree hereinbefore quoted.

We submit two propositions to the court. The determination of either of them in appellant's favor will require a reversal of the decree from which the appeal is prosecuted and will put an end to this case.

First: The decree under which the money was invested with the Commercial Bank & Trust Company expressly authorizes and empowers the guardian to so invest the money. Its words are that Baggett, the guardian "is hereby permitted to place the sum of money (meaning the twenty-five hundred dollars) with the Commercial Bank & Trust Company." It is an exact compliance with the statute, Mississippi Code, section 2416.

The appellee, however, will claim that additional words incorporated in the decree take the case out of the statute but in this we think the appellee is mistaken. It is true the decree empowered the guardian to make other deposits of the funds at his discretion. It fixed the rate of interest at which the money was to be loaned at five per cent. The concluding clause of the decree in these words: "In granting this order the court does not relieve L. H. Baggett and his bondsmen from liability to Lenora J. Winslow for the safety of said money," can have no reference to a loan made to the Commercial Bank & Trust Company. It applies only to a loan made to some other person, and the guardian was left with the discretion to loan it to some other person if he thought proper.

To construe the words quoted from the decree, as applying to a loan to the Commercial Bank would make them nullify the statute, and a construction of a decree which nullifies a statute should never be made. It is due to the good sense and legal learning of the trial court that the judge thereof should be credited with a knowledge that a decree of the court cannot change the statute and impose liability where the statute exempts from liability.

Second. Even though the decree be construed in the way in which the appellee seeks to construe it, Baggett, the guardian is not liable for the loss which resulted from the loan to the Commercial Bank & Trust Company because he is not shown to have exercised faulty discretion or to have failed to exercise reasonable care and diligence in and about...