Cooper v. United States Fidelity & Guaranty Co.

• Decision Date: 17 April 1939
• Docket Number: 33656
• Citation: 186 Miss. 116,188 So. 6
• Parties: COOPER v. UNITED STATES FIDELITY & GUARANTY CO. et al
• Court: Mississippi Supreme Court

188 So. 6

186 Miss. 116

COOPER v. UNITED STATES FIDELITY & GUARANTY CO. et al

No. 33656

Supreme Court of Mississippi, Division A

April 17, 1939

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

Suit by Mimie Cooper against the United States Fidelity & Guaranty Company and another based upon the alleged failure of an administrator to take the proper action to recover insurance money improperly paid out by the original administrator. From an adverse judgment, the plaintiff appeals. Affirmed.

Affirmed.

Leonard E. Nelson, of Vicksburg, for appellant.

Unless agreed payment and reasonableness of the actual contingent attorney's fees set out in the bill be conceded as admitted by the answer, it was error on the part of the lower court to exclude appellant's offered evidence thereof unless it be the law that such an expense or damage is not recoverable on the bond.

The trial court erred in rendering the final decree against the appellant and in favor of the appellee, that is, in not rendering a final decree in favor of appellant against the appellee. The trial court's decree says and means that appellant's bill and proof do not warrant any relief whatever for the appellant, either as specifically prayed for or under the prayer for general relief, in effect, that appellant is without any remedy whatsoever. Appellant is legally and equitably entitled to reparative relief.

National Surety Corp. v. Laughlin, 172 So. 490; Weyant v Utah Sav. & Tr. Co., 9 A.L.R. 1119.

The generally accepted rule is that a judgment or decree against an executor or administrator is conclusive against the sureties on his bond, although they were not parties to the proceedings, and cannot be collaterally questioned by them in an action on the bond, their only remedy being by way of appeal, writ of error, or application for a new trial, or by a direct proceeding in equity.

24 C J. 1079; 50 C. J. 196; 65 C. J. 1083.

As the bond covers the duty to make a just and proper final accounting as to all property received and acts done during the entire course of administration, the general rule is that the sureties are liable for assets of the estate which their principal received before as well as after the execution of the bond, in case of the principal's conversion or maladministration in respect of such assets or failure to render due account thereof.

24 C. J. 1062.

A debt due to the estate from an executor or administrator becomes assets of the estate and is covered by the administration bond.

24 C. J. 1062; Ordinary v. Connolly, 75 N. J. Eq. 521, 72 A. 363, 138 Am. St. Rep. 577.

The requirement that a surety either indemnify or reimburse the creditor or obligee against losses and expenses in proceeding against the principal is learnedly discussed in the well reasoned case of Bingham v. Mears, 27 L.R.A. 257: "There is authority for the doctrine that upon indemnifying the creditor against the expenses of the proceedings the surety may, in equity, compel him to first exhaust his remedies against the principal debtor. Brandt, Suretyship, par. 238. But in this case no offer of idemnity appears to have been made. . . . But in all such cases equity required that the creditor should be saved from delay, from expense, and from all risk . . . but even in such cases equity never interposed its aid without exacting the most ample protection of the creditor against all damages because of delay, and all expenses of other proceedings than those against the surety, and the most complete idemnity against all loss because of the creditor's right of recovery against the surety being postponed."

Even if the surety in the instant case had entitled itself to all equitable consideration by the payment of the full penalty of its bond to the appellant, the penalty of the bond being only $ 1, 500 and the debt of the principal to the appellant being $ 3, 186 and interest, still the surety would not be subrogated to the rights of the appellant against the principal, because the debt is not paid in full.

Fidelity & Deposit Co. of Md. v. Wilkinson County, 109 Miss. 879, 69 So. 865; Sec. 3733, Code of 1930; 60 C. J. 745; Magee v. Leggett, 48 Miss. 139.

D. S. Strauss, of Greenville, for appellee.

Neither the facts in the instant case, nor the law applicable thereto, support the contention that there is any liability on the appellee in the instant case.

While the bill of complaint bristles with allegations of fraud and conspiracy and cheat, there is not only an utter absence of any proof to support these allegations, but on the contrary the proof shows at the most a mere mistake on the part of the appellee's principal, in thinking she and her sisters were entitled to the money. As a matter of fact they were advised to this effect by the first administrator, who paid the money to them.

And when the mistake is discovered, without any request to proceed to recover the assets of the estate, she was instantly removed as administratrix, and the matter taken out of her hands. And now the appellant seeks to recover from the appellee, when the appellant herself placed it beyond the power of appellee's principal to recover the property subsequently recovered.

While acting as administratrix, Hillery did not occupy the relation of a guarantor or insurer of the debt due by herself to the estate.

Sec. 1648, Code of 1930; National Surety Corp. v. Laughlin, 172 So. 490.

In the case of Aetna Indemnity Co. v. State, 101 Miss. 703, at page 722, this court lays down the principle applicable herein: "Of course, it must appear in every case that the guardian was solvent and could have been made responsible during the currency of the second bond. In short, it must be shown that the wards have actually suffered loss by reason of the neglect. If it were shown that the guardian was insolvent, and that at no time during the life of the second bond could the amount have been collected, the second bond would not be liable for the neglect, because no damage was done by it."

The principle of law governing the instant case is laid down in the...