MORLING
J. ALBERT, C. J., and STEVENS, DE GRAFF, and WAGNER, JJ
concur.
OPINION
MORLING, J.
Defendant
Surety Company does not question the propriety of the
pleadings or of plaintiff's resort to equity, rather than
to the probate court. Defendant in answer sets up two reports
to the probate court, showing the deposit of funds in the
First National Bank of Armstrong, and alleges their approval.
The reports and orders of approval, if made,
do not appear in evidence.
Defendant Canon was appointed guardian in February, 1921, and
the bond in question was given and approved during the next
two months. He received the money in controversy that same
year, and without authority from the court, then deposited it
in the First National Bank of Armstrong.
About
February 19, 1925, Mr. Peisen, a representative of the
defendant Surety Company, told the guardian (as Peisen says
in affidavit in support of motion for new trial) that he
should invest the funds to comply with Section 12772 of the
Code of 1924. (This section provides that, where investments
of funds are to be made by guardians or others, and no mode
of investment is pointed out by statute, they may, under
order of the court, be made in Federal, state, Federal farm
loan, municipal, county, or drainage bonds, or bond and
mortgage on real estate.) Defendant guardian testifies:
"Q.
Mr. Peisen told you that the money was not safe, or in words
to that effect, in the bank, and you better have a court
order? A. Well, something along that line,--yes. Q. And you
understood at that time that the First National Bank was
unsafe, and you better protect yourself by getting the court
order,--now isn't that true? A. No, I don't really
think so, although I did not single out that bank. I thought
the First National Bank was as strong a bank as there was in
the country.
"The
Court: You had some suspicion at that time, didn't you?
A. Yes. * * * I did have some suspicion that the bank might
not be safe at the time the court order was obtained. The
purpose of getting this order was because of the fact that a
representative of the Surety Company came and warned me as to
the condition of banks. At one time, I received a letter from
the Surety Company to the effect that the money ought to be
taken out of the banks. That was before the court order was
obtained. * * * Q. You didn't make any endeavor to take
it out, even after he [Peisen] had advised you of the bad
condition of the bank? (Objected to as assuming.) A.
No."
A
letter set out in defendant's motion for
new trial, from the manager of the Surety Company to the
attorney for defendant guardian, dated October 8, 1925,
states:
"On July 31st, you very kindly advised us that
you were planning on securing a court order at your next term
of court, authorizing the deposit in the bank, and that the
account would be withdrawn in the form of a cashier's
check while this court order was being secured. Will you
kindly advise * * *."
The
answer of the attorney on this letter is:
"*
* * I do not know what to do, as Mr. Canon does not want to
acquiesce in the plan which you had suggested, as he says
that the bank in which this money is deposited is perfectly
sound and safe, and he does not want to do anything that
would cast the least reflection upon this bank * * *."
A
letter from the Surety Company's manager, dated October
27, 1925, says:
"*
* * Will you please explain to Mr. Canon that the action we
have requested him to take is the same as we ask that all
fiduciaries whom we bond to take and is not intended in any
way as a reflection on his depositary bank. It is simply an
additional protection that we feel that all fiduciaries
should have. * * *"
Defendant
guardian also says:
"Q.
You answered Mr. Johnston's last interrogatories that you
didn't make any endeavor to remove the funds after Mr.
Peisen told you banks were in an unsafe condition. Did he
tell you anything about the First National Bank of Armstrong?
A. Not singled out as a bank, but it was only generally
speaking. Q. Did you have any information from any person
that the First National Bank of Armstrong, Iowa, was in an
unsafe condition? A. No. I did not make any personal
investigation to ascertain whether or not the bank was in
good condition. I didn't talk with Mr. Robinson, bank
cashier, very recently, but he told me, not a great while
before this, that the bank was in better condition than it
had been for several years. That was a month or so after they
took over the State Bank. * * * The conversation I had with
Mr. Robinson was about six months after he took over the
State Bank. It was after I got the court order. Q. You had
been hearing rumors about this bank, had you not? A. I heard
rumors about all the banks. There were rumors to the effect
that this bank was insolvent, and not strong. I talked to Mr. Robinson about that very thing, and he said,
'They will never close this bank.' Those rumors had
been going around Armstrong for several months. Q. And they
had been going around there before you ever obtained this
order,--isn't that a fact? A. No, I don't think
so."
The
guardian says that Mr. Peisen "told me to take the money
out of the bank. Later, a letter came, in which they offered
to buy government bonds for me. Mr. Peisen did not suggest
getting a court order at that time. The first time I heard
about a court order was just prior to the time it was
obtained. Q. And you obtained the court order then in order
that you could protect yourself and the surety company, in
the event that the money remained in the bank and the bank
became insolvent,--isn't that so? A. Yes. Q. And you
talked it over with your attorney about that, didn't you?
A. Yes. * * * And you were afraid to leave this money in the
bank in the First National Bank without having a court order
to protect yourself,--isn't that right? A. Yes. * * * And
you never appeared before the court, asking for any
designation, until after the time that you knew that this
bank was not in a safe condition for the deposit of these
funds,--is that right? A. Yes. * * *"
He also
testifies that he told Mr. Peisen that "this bank is as
good as any bank in the country. * * * I said I could not buy
bonds with this money, and if I had them, I wouldn't know
where I could keep them. * * * It was after that * * * the
head man of the Des Moines, Iowa, office of the Surety
Company * * * said: 'I am coming down to Estherville to
see Mr. Bammer' [guardian's attorney] * * * in a few
days another man came to see me, * * * and wanted to get a
court order. * * *
"The
Court: Just what did he say about that, can you remember?
Just as nearly as you can, how he expressed it and what he
said? A. Well, he said that that would relieve him of
responsibility of this money, if the bank failed. * * * He
said, 'I will go back to Estherville with a blank,'
wherever Judge Davidson was, 'and bring it over here, for
you to sign.' That was an application for order; so I
walked up to the bank with him and signed the application. *
* * He took it and went away, and the next day he came back
and then he had Davidson's court order. * * *
"The Court: You told me before, sometime
before this order was made, if you didn't know that this
bank was in an uncertain condition, you had your suspicions.
That is true, is it, Mr. Canon? A. Yes.
"The
Court: As to this particular bank, now; I am not speaking
about all the banks in Iowa you talk about. I am talking
about this bank. You had your suspicions about whether this
bank, as you would say, would weather through? A. Yes.
"The
Court: * * * Did you have this suspicion before this man came
and talked to you and asked you to get this order, or did
that have something to do with the suspicion? A. No. I had it
before. I thought that, towards the last end, the bank was
gaining; I thought it had passed the worst of it. That is,
prior to Mr. Robinson's death.
"The
Court: Did you have any reason to think that, except the
statement made to you by Mr. Robinson? A. No, I don't
think so.
I thought the general conditions were getting better
throughout the country.
"The
Court: All the banks were getting better? A. Yes.
"The
Court: Is it a fact, or not, that there was common talk on
the streets of that little town of Armstrong about this First
National Bank, and whether it would pull through, and whether
it was safe or not; or was there talk that it was not safe?
Did you hear talk of that kind? A. Why, you always hear talk
of that kind.
"The
Court: Mr. Canon, don't speak in generalities. I am
asking you the question. Did you hear talk of that kind about
that bank? A. Yes. * * * As quick as the order was entered
we took the money out...
