Fid. & Cas. Co. of New York v. State ex rel. Anderson

• Decision Date: 30 March 1933
• Docket Number: No. 14473.,14473.
• Citation: 184 N.E. 916,98 Ind.App. 485
• Court: Indiana Appellate Court
• Parties: FIDELITY & CASUALTY CO. OF NEW YORK v. STATE ex rel. ANDERSON et al.

98 Ind.App. 485

184 N.E. 916

FIDELITY & CASUALTY CO. OF NEW YORK

v.STATE ex rel. ANDERSON et al.

No. 14473.

Appellate Court of Indiana, in Banc.

March 30, 1933.

Appeal from Probate Court, Vanderburgh County; Travis B. Williams, Judge.

Suit by the State, on the relation of Edna Howey Anderson, guardian of Esther Carroll Howey, a minor, and others, against the Fidelity & Casualty Company of New York, in which defendant filed a cross-complaint against its codefendant the Citizens' Trust & Savings Bank of Evansville. From the judgment defendant Fidelity & Casualty Company appeals and relator files a pleading designated as a cross-assignment of errors.

Reversed, with instructions.Funkhouser & Funkhouser and Ben J. Biederwolf, all of Evansville, for appellant.

McGinnis, Waller & McGinnis and Chas. M. Lafollette, all of Evansville, for appellees.

WOOD, Judge.

The parties to this action will hereafter be designated and referred to as follows: The appellant, as appellant; the appellee State of Indiana on relation of Edna Howey Anderson, guardian of Esther Carroll Howey, a minor, as the guardian; the appellee Citizens' Trust & Savings Bank, as the bank; and Joseph M. Howey, as Howey.

The guardian, as successor to Howey, as guardian brought suit against the appellant as surety on the bond of Howey, for conversion of a $1,000 United States Liberty Loan bond, the property of his ward, which it was alleged Howey unlawfully deposited with the bank as collateral security, for a personal loan which it made to Howey. Upon the motion of appellant, the bank was made a party defendant to the original complaint. Appellant filed an answer in general denial to the guardian's complaint, and also filed a cross-complaint against its codefendant the bank, in which it admitted that it was surety upon Howey's bond as guardian, but alleging that Howey deposited said bond with the bank as collateral security for a personal loan to him; that the bank had no title in or right to the possession of said bond, except as collateral security to the personal loan to Howey; that the bank had refused, and still refuses, to deliver the possession of said bond to the guardian. This cross-complaint closed with a prayer asking that an order and judgment be entered requiring the bank to surrender the possession of the bond to the guardian of Esther Carroll Howey, and account to her for all interest theretofore collected by the bank on said bond. The bank filed a demurrer to this cross-complaint which was overruled, and it filed an answer in general denial.

Upon these issues the cause was tried by the court without a jury. Judgment was rendered against appellant on the guardian's complaint, and against appellant and in favor of the bank on appellant's cross-complaint. The appellant filed a motion for a new trial for the following causes: “(1) Error in the assessment of recovery, in this, the amount is too large. (2) The decision of the court is not sustained by sufficient evidence. (3) The decision of the court is contrary to law.” This motion was overruled. Appellant appeals assigning as error the overruling of its motion for a new trial.

[1] December 7, 1931, appellee guardian filed in the office of the clerk of this court a pleading designated as a cross-assignment of errors. This pleading is not written upon, attached to, nor does it in any manner form a part of the transcript. For that reason no question is thereby presented to this court for its consideration. Dutton v. Dutton (1868) 30 Ind. 452;Merchants, etc., Bank v. Delaware School Tp. (1916) 185 Ind. 658, 114 N. E. 450; Ewbanks, Manual (2d Ed.) § 125; Burns' 1926, § 719.

The facts were stipulated between the parties to this cause. Those necessary to a consideration of this appeal are substantially as follows: September 20, 1918, by an order of the probate commissioner of the Vanderburgh circuit court, Howey was appointed guardian of the person and estate of Esther Carroll Howey, a minor. He qualified by executing a bond for the faithful discharge of his duties with the appellant as surety, and continued to act as guardian until November 7, 1928, at which time he died testate. His estate was insolvent, the total amount thereof being only $2.16. Appellant was approved as surety on the bond and continued in that capacity until Howey's death. The guardian, one of the appellees herein, was appointed as Howey's successor on November 13, 1928, by the probate court of Vanderburgh county, and she qualified to perform the duties of her trust as the law requires. December 19, 1928, the administrator with the will annexed of Howey's estate, pursuant to an order of the Vanderburgh probate court, transferred, assigned, and delivered possession of all the assets of the guardianship estate of Esther Carroll Howey, which had come into his possession and control as administrator of the Howey estate to the appellee guardian as successor to Howey, “without prejudice to the right of said guardian to bring any action at law or in equity against any person or corporation liable for any losses sustained by said guardianship estate during the time that said Joseph M. Howey was guardian of said minor, and without prejudice to the rights and *** defenses of the Citizens' Trust & Savings Bank as pledgee of one $1,000 Liberty bond now held by it as a collateral security for a loan made to said Joseph M. Howey, deceased, as shown in the report (of the administration of the Howey estate) hereinabove approved by the court, and without prejudice to the rights and *** defenses of the Fidelity & Casualty Company of New York, surety on the guardianship bond of said Joseph M. Howey, deceased, to any actions which might be brought by said guardian on said bond.” March 11, 1922, Howey filed a petition in the guardianship proceedings of his ward, in the Vanderburgh probate court, in which he alleged that he was her father; that she was four years of age and lived with her parents; that her estate consisted of United States government bonds of the par value of $4,000, and a savings deposit in the Citizens' Trust & Savings Bank in the sum of $269.40, and no real estate; that he (Howey) owned and operated a grocery and a meat market in the city of Evansville; that he had entered into a contract to purchase the real estate and building occupied by said business from one Meyer, the owner thereof, the purchase price to be $4,600, payable in yearly installments evidenced by his notes; that he had paid the first purchase-money note and interest and the sum of $350, on the second note which was due and payable; that because of depression in business in common with all other persons during the past year he was not able to pay the second note; that he desired to borrow the sum of $750 for a period of nine months, with which to pay the balance due on said note; that the bank would loan him the money to pay the note and would accept said United States government bonds as collateral security in an amount sufficient to secure such loan; that the present cash market value of the real estate was $5,500; that his business had revived and was now a good paying business; that he could pay the loan at maturity; that upon payment to Meyer of the amount of the purchase-money note (being Howey's individual note), he (Meyer) would assign it to Howey as guardian. This petition closed with a prayer that Howey be authorized to secure the loan from the bank, deposit the bonds as collateral security, and accept an assignment of his note from Meyer to himself as guardian. On the same day the court made an order authorizing the loan pursuant to the terms and conditions set out in the petition and prayer thereto. Howey's note to the bank was not paid at maturity.

February 18, 1924, Howey, as guardian, presented a second petition to the Vanderburgh probate court, in which he alleged that he had heretofore given his note for $750, bearing interest at 6 per cent., for moneys which he had theretofore used in accordance with the previous order of the court; that an extension of time for repayment by him of $750 for a period of one year from February 13, 1924, at the same rate of interest, heretofore paid and with the same securities, would be to the best interest of said trust; that within the extension of time the loan with interest would be paid; that as added security he would execute a chattel mortgage on his personal property consisting of a stock of merchandise and groceries of the estimated value of $3,000; that as the merchandise was disposed of in course of trade the net proceeds would be applied in payment of the debt. This petition closed with a prayer in harmony with the allegations thereof. On the same day the court granted this petition.

On March 13, 1922, after the order of the court entered on March 11 of that year, the bank loaned Howey personally $713.55, receiving his note as evidence due six months after date with interest at 7 per cent., and Howey deposited with the bank as collateral security one $1,000 United States Fourth Liberty Loan bond No. D00985424, which was the property of Esther Carroll Howey, and was held by Howey as her guardian. There were no subsequent orders made by the Vanderburgh probate court authorizing the renewal of said original note except the order heretofore referred to dated February 18, 1924. But as appears from the record, without any order having been made by the court authorizing such action, the note was renewed and reduced in amount by payments, from time to time until October 13, 1928, when the last note given to the bank by Howey previous to his death was executed for the principal sum of $413. This note including principal and interest was unpaid when Howey died.

It was due ninety days after date, instead of one year after date, and provided for interest at 7 per cent. instead of 6 per cent. as provided in the petition and order of February 18, 1924. In fact, so far as the record discloses,...