Janes v. Fidelity & Deposit Co. of Maryland

• Decision Date: 22 November 1941
• Docket Number: 8232.
• Citation: 119 P.2d 39,112 Mont. 580
• Parties: JANES v. FIDELITY & DEPOSIT CO. OF MARYLAND.
• Court: Montana Supreme Court

119 P.2d 39

112 Mont. 580

JANES v. FIDELITY & DEPOSIT CO. OF MARYLAND.

No. 8232.

Supreme Court of Montana

November 22, 1941

Appeal from District Court, First Judicial District, Lewis and Clark County: George W. Padbury, Jr., Judge.

Action on guardian's bond by Arthur De Witt Janes against the Fidelity & Deposit Company of Maryland. From a judgment for the defendant, the plaintiff appeals.

Reversed and remanded with direction.

Paul W Smith, David R. Smith, and J. Miller Smith, all of Helena for appellant.

Weir Clift & Bennett, of Helena, for respondent.

ANGSTMAN Justice.

This is an appeal from a judgment entered in favor of the defendant after its demurrer to plaintiff's complaint was sustained and plaintiff declined to plead further; hence the only question for consideration is whether the complaint states facts sufficient to constitute a cause of action against the defendant.

Briefly summarized, the complaint alleges: That G. A. Janes was purportedly appointed guardian of the person and estate of plaintiff by a court order entered on the 12th day of March, 1926, in the district court of Roosevelt county; that on the 2nd day of February he furnished a bond as guardian with the defendant as surety, which bond was filed on the 15th day of March. The bond was conditioned as follows: "If the said Geo. A. Janes, Guardian, shall faithfully execute the duties of said trust according to law, and shall well, faithfully, and truly perform all official duties now or hereafter imposed upon him by any law of the State, and that said Principal will account for and pay over and deliver to the person, or officer, entitled to receive the same, all moneys or other property that may come into the hands of such Guardian, then this obligation to be void, otherwise to remain in full force and effect."

On September 16, 1937, the district court of Roosevelt county made an order vacating and setting aside the letters of guardianship and declaring them to be of no force and effect and void ab initio. It is alleged in the complaint that "pertaining to said guardianship and the matter herein set forth, the said G. A. Janes failed and refused to account for and pay over and deliver to plaintiff money and other property that came into his hands under said proceedings and as such guardian, and because thereof, on the 11th day of October, 1940," a judgment was obtained in the federal court in plaintiff's favor against Arlie M. Foor, as administrator of the estate of George A. Janes, deceased, in the sum of $11,907.48, with interest and costs; that the judgment is wholly unpaid; that because thereof an action has accrued to plaintiff against the defendant in the sum of $2,000 for which judgment was sought. A copy of the judgment is attached to the complaint, showing that most of the items going to make up the amount of the recovery arose during the time covered by the guardianship. The defendant in this action was not a party to the action resulting in the judgment in the federal court.

The first point raised by the defendant is that the complaint does not state facts sufficient to constitute a cause of action, in that defendant cannot be bound by the judgment to which it was not a party. The rule is settled by a long line of cases that the surety is bound by a judgment against the principal if rendered as a part of the probate proceedings. This court has so held in a number of cases. Botkin v. Kleinschmidt, 21 Mont. 1, 52 P. 563, 69 Am. St. Rep. 641; Swanberg v. National Surety Co., 86 Mont. 340, 283 P. 761; Kenck v. Parchen, 22 Mont. 519, 57 P. 94, 74 Am.St. Rep. 625; Baker v. Hanson, 72 Mont. 22, 231 P. 902; Oliveri v. Maroncelli, 94 Mont. 476, 22 P.2d 1054; Mitchell v. Columbia Casualty Co., 111 Mont. 88, 106 P.2d 344. These cases are based upon sound reason. The surety is bound by the various notices which must be given in a probate proceeding. In this case, however, we do not have a judgment or decision made in the probate proceedings, and when the judgment is rendered outside the probate proceedings, a contrary result is reached. In such case the surety must be made a party in order to be bound by the judgment. Montana has taken this position in Rodini v. Lytle, 17 Mont. 448, 43 P. 501, 502, 52 L.R.A. 165. In that case the court said: "They [the sureties] have a right to contest with the plaintiff the question of their liability, for to hold that they are concluded from this contestation by the suit against the sheriff is to hold that they undertook, for him, that they would be responsible for any judgment against him which might be rendered by accident, negligence, or error, instead of merely stipulating that they would be responsible for his official conduct. The authorities which sustain this view are numerous." See cases cited in note in 52 L.R.A. 165.

However whatever the rule may be regarding the liability of the surety for the judgment against his principal where the surety was not made a party, the question cannot be raised by general demurrer under the facts here alleged. As above noted, the complaint alleges that "G. A. Janes failed and refused to account for and pay over and deliver to plaintiff money and other property that came into his hands under said proceedings and as such guardian." The complaint then proceeds to allege, by way of recital, that a judgment was obtained in the federal court against the representative of the guardian's estate. If we eliminate the recital with reference to the federal court judgment, the complaint would still be sufficient for the recovery of some amount against the surety. If the surety is not bound by the federal court judgment, that question would arise when the judgment is offered in evidence. Some courts hold that such a judgment is prima facie evidence of the facts adjudged. Moses v. United States, 166 U.S. 571, 17 S.Ct. 682, 41 L.Ed....