National Surety Corporation v. Ladd

• Decision Date: 13 April 1938
• Docket Number: No. 7158.,7158.
• Citation: 115 S.W.2d 600
• Parties: NATIONAL SURETY CORPORATION v. LADD et al.
• Court: Texas Supreme Court

Page 600

115 S.W.2d 600

NATIONAL SURETY CORPORATION v. LADD et al.

No. 7158.

Supreme Court of Texas.

April 13, 1938.

Error to Court of Civil Appeals of Second Supreme Judicial District.

Proceeding in the matter of the estate of W. G. Turner, deceased, wherein the National Surety Corporation filed a petition for discharge from liability under an executors' bond, which was opposed by W. T.

Ladd and another, executors of the estate of W. G. Turner, deceased. To review a judgment of the Court of Civil Appeals, 94 S.W.2d 1204, reversing a judgment of the district court granting the petition on appeal from a judgment of the probate court by which the petition was denied, the National Surety Corporation brings error.

Judgment of the Court of Civil Appeals reversed, and judgment of the district court affirmed.

Worsham, Burford, Ryburn & Hincks and Autry Norton, all of Dallas, for plaintiff in error.

Leroy A. & Van Zandt Smith, of Fort Worth, for defendants in error.

SHARP, Justice.

W. G. Turner died testate in Tarrant county, and W. T. Ladd and B. H. Martin, named as coexecutors under Turner's will, qualified as such coexecutors, with the National Surety Company as surety on their bond in the sum of $40,000. Thereafter the National Surety Corporation, by virtue of a contract made with the National Surety Company, assumed liability as surety under the executors' bond. This occurred in 1933.

In 1934 the National Surety Corporation filed its petition in the probate court of Tarrant county to be relieved from further liability on the bond. The petition alleged that it desired to be discharged from all liability, and prayed that the executors be required to give a new bond, and that the National Surety Corporation be discharged from all liability for the further acts of such executors, or either of them. The executors urged a general demurrer to the sufficiency of the petition. The county court, sitting in probate matters, sustained the general demurrer, and the cause was appealed to the district court. The cause was tried to the court and executors' general demurrer was overruled, and the district court ordered the executors to give a new bond. The executors appealed to the Court of Civil Appeals at Fort Worth, and that court reversed the judgment of the district court and rendered judgment for the executors. In re Turner's Estate, 94 S.W.2d 1204.

A decision in this case involves the construction of article 3392 et seq., Vernon's Annotated Texas Civil Statutes. These articles of the statutes were in force when the matters here arose. In 1929, article 3393a was added. Acts 1929, 41st Leg., p. 130, c. 63, § 1. In 1935, article 3396, R.S. 1925, was amended. Acts 1935, 44th Leg., p. 654, c. 266, § 1, Vernon's Ann.Civ.St. art. 3396.

Article 3392 reads as follows: "An executor or administrator may be required to give a new bond in the following cases:

"1. When the sureties upon the bond or any one of them shall die, remove beyond the limits of the State, or become insolvent.

"2. When, in the opinion of the county judge, the sureties upon any such bond are insufficient.

"3. When, in the opinion of the county judge, any such bond is defective.

"4. When the amount of any such bond is insufficient.

"5. When the sureties or any one of them petition the court to be discharged from future liability upon such bond.

"6. When the bond and the record thereof have been lost or destroyed."

Article 3393 provides when a judge shall require a new bond, and reads as follows: "When it shall be known to him that any such bond is in any respect insufficient or that it has, together with the record thereof, been lost or destroyed, he shall without delay cause the executor or administrator to be cited to show cause why he should not give a new bond."

Article 3394 provides how any person interested in an estate may demand a new bond, and reads as follows: "Any person interested in an estate may, upon application in writing filed with the county clerk of the county where the administration is pending, alleging that the bond of the executor or administrator is insufficient or defective, or has been, together with the record thereof, lost or destroyed, cause such executor or administrator to be cited to appear and show cause why he should not give a new bond."

Article 3395 provides the method as to how sureties may be discharged from such bond, and reads as follows: "The sureties upon the bond of an executor or administrator, or any one of these, may, at any time, present a petition to the county judge praying that such executor or administrator may be required to give a new bond and that he or they may be discharged from all liability for the future acts of such executor or administrator, whereupon such executor or administrator shall be cited to appear and give a new bond."

Article 3396 describes how citations shall issue, and fixes the return date thereon.

Article 3397 reads: "Upon the return of any such citation served, the county judge shall, on the day named therein for the hearing of the matter, whether in term time or vacation, proceed to inquire into the sufficiency of the reasons for requiring a new bond, and if satisfied that a new bond should be required he shall enter an order to that effect, stating in such order the amount of such new bond, and the time within which it shall be given, which shall not be later than twenty days from the date of such order."

The Court of Civil Appeals in substance held: (1) Under the articles of the statutes a surety desiring to be relieved of future responsibility under an executor's bond must allege and prove sufficient reason for being relieved. (2) The surety company which assumed the liability under the executors' bond was held not entitled to be relieved of future responsibility under the bond, in the absence of allegation and proof of any reason for being so relieved. (3) The statute permitting a surety to be relieved of responsibility under an executor's bond, on allegation and proof of sufficient reason for being relieved, did not warrant the court in relieving the surety company which assumed, by virtue of a contract, liability under an executor's bond where the original surety made no application to be relieved from liability upon the bond. The Court of Civil Appeals further held that article 3397 dominates the other articles, and leaves it to the discretion of the trial court "to inquire into the sufficiency of the reasons for requiring a new bond, and if satisfied that a new bond should be required he shall enter an order to that effect."

The Legislature in enacting the foregoing articles of the statutes had certain objects in view, among which were the following:

(1) To require an executor or administrator to furnish a sufficient bond for the protection of an estate.

(2) To permit the county judge to require a new bond when it appears that the bond executed is in any respect insufficient, or that it and the record thereof have been lost.

(3) To authorize any person interested in an...