Mitchell v. Columbia Casualty Co.

• Decision Date: 05 October 1940
• Docket Number: 8081.
• Citation: 106 P.2d 344,111 Mont. 88
• Parties: MITCHELL v. COLUMBIA CASUALTY CO.
• Court: Montana Supreme Court

106 P.2d 344

111 Mont. 88

MITCHELL v. COLUMBIA CASUALTY CO.

No. 8081.

Supreme Court of Montana

October 5, 1940

Appeal from Third District Court, Granite County; George W. Padbury Jr., Judge.

Action by Merle Mitchell, a minor, by his guardian, Christopher Degenhart, against the Columbia Casualty Company on a surety bond. From that part of a judgment in excess of the amount for which defendant offered to allow judgment to be taken against it, defendant appeals.

Affirmed.

Howard Toole and W. T. Boone, both of Missoula, for appellant.

Edwin T. Irvine, of Philipsburg, for respondent.

JOHNSON Chief Justice.

The defendant Columbia Casualty Company appeals from that part of a judgment of $1,000 in excess of $600, for which it offered to allow judgment to be taken against it.

The facts are that Harold Mitchell was appointed guardian of the person and estate of his son Merle Mitchell, and acted as such from his qualification on January 14, 1931, until suspended by court order on February 2, 1938. On July 29 1938, a final order and decree was entered removing him as guardian, sustaining objections to the fifth annual account finding that he was indebted to his ward's estate in the amount of $1,060.18, and appointing the present guardian.

In the decree the court found that from August 1, 1929, to July 1 1938, a period of 107 months, the guardian had occupied residence property of which he and his ward owned an undivided one-half interest; that the rental value of the ward's interest was $10 per month; that the guardian had not accounted for rent except the sum of $27.30 and was therefore indebted to the estate for rent in the sum of $1,042.70; that by reason of this and other items not here in question his total indebtedness to the estate was $1,060.18.

Defendant has been the surety of the defaulting guardian since February 3, 1933; prior to that date two other bonding companies had successively been sureties--the first from his qualification on January 14, 1931, to December 15, 1931, and the second from the latter date to the approval of defendant's bond. The amount of each bond was $1,000.

In his complaint the minor by his present guardian alleged all of these facts except those relative to the two prior sureties, and sought to recover from the defendant the entire amount of $1,060.18. Defendant admitted the facts pleaded and admitted that it was indebted to plaintiff in the sum of $600 and costs, for which it offered to let judgment be taken against it.

Plaintiff offered no evidence at the trial but rested his case upon the pleadings. Defendant offered in evidence only the two petitions and the two orders for the substitution of the second and third sureties in the guardianship matter.

The specifications of error are that the court erred in making the conclusion of law that the defendant was liable in the liquidation of the judgment against the former guardian for the entire sum of $1,000 and costs, and in rendering judgment accordingly.

The $600 offered by defendant is for rent at $10 per month for the five-year period from February 3, 1933, to February 2, 1938, during which the guardian was acting under the surety bond furnished by defendant. The question is whether the defendant is liable only for the rent accruing during the five-year period or whether in addition it is liable for that accruing during the period from August 1, 1929, to the qualification of the guardian on January 14, 1931, and the period from January 14, 1931, to February 3, 1933, during which others were sureties, and the period from the guardian's suspension on February 2, 1938, to July 1, 1938, when he was ordered removed. Since the condition of the bond is that the guardian "shall faithfully execute the duties of his trust" and since it was approved and ordered filed as the guardian's bond "from and after" February 3, 1933, defendant's contention is that it covers only items accruing after that date and during the continuance of the guardian's authority.

It is well settled in Montana that a surety on a guardian's or administrator's bond is concluded by the settlement of a final account of the fiduciary, even if not a party to the proceeding or actually notified of it. Botkin v. Kleinschmidt, 21 Mont. 1, 52 P. 563, 69 Am.St.Rep. 641; Kenck v. Parchen, 22 Mont. 519, 57 P. 94, 74 Am.St.Rep. 625; Baker v. Hanson, 72 Mont. 22, 231 P. 902; Swanberg v. National Surety Co., 86 Mont. 340, 283 P. 761; Oliveri v. Maroncelli, 94 Mont. 476, 22 P.2d 1054. Defendant does not question the law in that respect, but contends that it became responsible only for the guardian's defaults first accruing after the effective date of the bond.

The question is one of first impression in Montana, although the appellant relies upon some words used by this court in McCauley v. American Surety Co., 81 Mont. 161, 263 P. 90, 92, in the nature of a dictum or at least in the nature of too wide a generalization which would seem to cover this case though not the case in which it was pronounced. On the facts that case was the reverse of this, in that the controversy concerned liability under a former bond claimed to have been released, rather than under a substituted bond. The defendant contended that the default had occurred after the release of its bond. The court said: "While...