McPhillips v. McGrath

• Decision Date: 14 May 1898
• Citation: 117 Ala. 549,23 So. 721
• Parties: MCPHILLIPS ET AL. v. MCGRATH ET AL.
• Court: Alabama Supreme Court

23 So. 721

117 Ala. 549

MCPHILLIPS ET AL. v. MCGRATH ET AL.

Supreme Court of Alabama

May 14, 1898

Appeal from circuit court, Mobile county; William S. Anderson Judge.

Action by John McGrath and others against James McPhillips and another. There was a judgment for the plaintiffs, and defendants appealed. Reversed.

This was a suit against defendants, as sureties on the official bonds of Joseph Hodgson, register in chancery of Mobile county, Ala., to recover a sum of money, which was paid into the custody of said Hodgson, as such register, belonging to said minors, and which said register had failed to account for or pay over. The complaint contained two counts; the first counting upon the breach of a bond executed on December 1, 1893, and the second counting upon the breach of a bond executed on December 11, 1894. These counts alleged respectively, "that Hodgson was register of the chancery court of the Thirteenth district of the southwestern chancery division of Alabama on the 16th of April, 1888, and continuously therefrom to the time of the appointment of his successor, on 29th May, 1896; that appellants had made the two official bonds sued on, one on December 1, 1893, for $10,000, and the other on December 11, 1894, for $5,000, each conditioned for Hodgson's faithful discharge of the duties of such office of register during the time he continued therein, or discharged any of the duties thereof that the condition of each of the bonds had been broken, in this: that on the 16th of April, 1888, and continuously therefrom to the appointment of his successor, Hodgson had in his custody, as such register, $776.55 belonging to appellees, and that he had refused to pay over the same to his successor upon demand, or to appellees, or to any one for them." On 25th January, 1897, appellants filed a plea alleging that their principal, Hodgson, had unlawfully converted to his own use the money sued for before the execution and delivery of either of the bonds sued on, and that no part thereof was in his possession as such register at the time of their execution of the bonds, or at any time thereafter. Subsequently, by leave of the court, appellants filed five additional pleas to each count of the complaint substantially as follows: (1) That there had been no breach of the condition of either of the bonds sued on, as alleged in the complaint. (2) That Hodgson did not have in his possession or custody as such register any money belonging to plaintiffs at the time of the execution of each of the bonds sued on, or at any time thereafter. (3) That Hodgson's successor as register had not made demand upon him to pay over the money sued for, nor had plaintiffs or any one of them, made such demand upon him, and that he had not refused to pay the same to his successor, or to any one entitled to receive it, before suit brought. (4) "That prior to defendants' execution of the official bond in said count set forth, and while he was register of the chancery court in said count mentioned, said Hodgson did have in his possession a sum of money belonging to plaintiffs, and which was the same fund alleged in the complaint to have been in his custody as register. He held the same upon the trust and in the capacity hereinafter stated, and not otherwise. A bill of complaint had been filed in said court in the year 1886 to subject to the payment of a debt certain lands in which plaintiffs were interested, and they and their mother were made parties defendant to said suit. They had no general guardian, and were represented therein by a guardian ad litem. A sum of money was paid into court into said cause on the 31st of January, 1887, and then went into the custody of said Hodgson as such register. Said cause was then ripe for a final decree, and on the 8th of February, 1887, at a regular term of said court, the court rendered such decree apportioning the money so paid into court among the parties entitled thereto, adjudging about $700 thereof to plaintiffs and ordering the register to retain the amount so allotted to them until the further order of the court. On the 9th of February, 1887, in such regular term, said court rendered a further decree in said cause which recited that it appeared to the court that the appointment of a guardian for plaintiffs would consume a large part of said sum in the hands of the register, and that it seemed best that said sum should be appropriated to the benefit of said minors directly by the court, and ordered that the register invest so much of said fund as might be necessary for the purchase of a home for plaintiffs and their mother, provided he could find such a place as would, in his opinion, be acceptable to their said mother for a home, and would, in his opinion, be suitable for them to occupy as a residence. Said decree further directed that upon making such purchase the register should put said mother and children (the plaintiffs) into the possession of the same, and that he should take the title to himself as trustee for plaintiffs, to hold the same, as such trustee, for the use and benefit of said children, under the direction of the court, with power to sell the same, for reinvestment or other purposes, under the express direction and order of the court, and not otherwise. Said decree further ordered that, if the register should be unable to make investment of such fund in such manner as aforesaid, he should, in vacation, report the fact to the chancellor for further orders in reference to said fund. At the next regular term of said court, in June, 1887, said register reported to the court, in writing, in said cause, that the mother of said children refused to co-operate with him in selecting a piece of real property for the investment of said sum; and, as trustee, he reported that no investment could be made under said decree last above set forth, and asked that said decree should be so modified as to permit the investment to be made without the consent of the mother, or that such other investment should be ordered, with or without the consent of the mother, as the court might deem best for the interest of plaintiffs; and thereupon, at said regular term, on the 4th day of June, 1887, said court rendered a decree directing that the register should execute said former decree for investment without the concurrence or consent of the plaintiffs' mother, if she should refuse to co-operate and advise with the register as therein contemplated. Said last-mentioned decree directed that in making such purchase the register should, if practicable, purchase property of some rental value, as the mother of plaintiffs might refuse to occupy it with them as a home. On the 16th of April, 1888, at a regular term of said court, said register, as trustee of said fund, reported to it, in writing, in said cause, that the sum which he had been so ordered to invest had been originally $710.30; that he had been unable to purchase any real estate upon reasonable terms; that in the meantime he had loaned out the fund, upon ample security, and at his own risk, at 8 per cent., had realized $66.25 of interest thereon, and then had in his hands in money the whole amount of the fund, $776.55, for investment; that he had contracted for the purchase of two lots, and for the building thereon of two cottages for rent; that the titles to the land had not then been perfected, but that it was expected that the titles and improvements would be made within the next ninety days. Said report was confirmed by an order of said court made at said term, on the 18th day of April, 1888. On the 6th of December, 1888, at a regular term of said court, said register, as such trustee, reported to said court, in writing, in said cause, that at the date of his last report as such trustee he had in hand $776.55; that he had purchased two desirable lots, upon which he had contracted to have built two small houses, which contract had not then been completed; that he had paid for the lots $180; that he had paid out of said fund certain costs and expenses. itemized in his said report, and amounting to $8.50, leaving in his hands on the 5th of May, 1888, a balance of $588.05; that he had loaned out said balance for six months, realizing $23.52 of interest thereon and that at the time of making said report he had in his hands a balance of $611.57 of said fund. He attached to his said report, as a part thereof, two deeds duly executed and recorded, and which conveyed to him, as trustee for plaintiffs, two lots of land situated in the city of Mobile, in the state of Alabama. Said report was in all respects confirmed by an order of said court made at said regular term on the 7th of December, 1888. And defendants say that from and after said term last mentioned said cause was left off the docket of said court; that no further reports have been made therein, and no further orders or decrees, or other proceedings, have been rendered or had therein. And defendants say that if said Hodgson had in his custody or possession any part of said fund at the time they executed his official bond in said count mentioned, or at any time thereafter, while he held said office of register, he held the same as trustee, under the several orders, decrees, and proceedings hereinafter set forth, and that his duties in respect thereof were not within the scope of his duties as such register in chancery." (5) "And, for further plea in this behalf, defendants refer to the statements of facts alleged in their plea numbered 4, last foregoing, and make such statement a part of this plea, as if particularly set forth therein; and they say that there has been no settlement of the trust vested in said Hodgson by said orders and decrees of said chancery court, and no ascertainment of the balance, if any, due from him...