Neal v. Hodges, 1004.
| Decision Date | 01 October 1935 |
| Docket Number | No. 1004.,1004. |
| Citation | 13 F. Supp. 916 |
| Parties | NEAL v. HODGES. |
| Court | U.S. District Court — Northern District of Oklahoma |
Lashley & Rambo, of Tulsa, Okl., for plaintiff.
Biddison, Campbell & Biddison, of Tulsa, Okl., for defendant.
This is a suit by a former ward against a surety on his guardian's bond, for accounting and to recover for defalcation of the guardian, now deceased.
The facts are not intricate. On November 15, 1924, Charles W. Neal was appointed by the county court of Tulsa county, this state, guardian of the plaintiff, then a minor fourteen years of age. The petition for such appointment, filed three days prior by the said Charles W. Neal, recited that the latter was father of said minor; that the minor was a nonresident of the state and had estate in Tulsa county, described as a real estate bond in the sum of $5,000, maturing November 1, 1925, and covering a part of lot 3, block 81, in the city of Tulsa. By its order of appointment, the court, in the usual manner of compliance with the statutory requirements, directed that letters of guardianship issue to such guardian upon his taking oath as guardian, and executing a bond in the amount of $5,000 to the ward for the faithful discharge of his duties, with sureties to be approved by the court. Thereafter, on December 1, 1924, Charles W. Neal took oath as guardian, and presented the required bond, signed by himself as principal, and the defendant and Lee E. Frye as sureties. Whereupon, the court approved the bond and duly issued the letters of guardianship. No inventory was filed, and the records of the court show no further proceedings in this probate cause, which was numbered and styled "Probate Cause No. 5251, In the Matter of the Guardianship of Wallace Neal, a Minor." No accounting was ever made by the guardian, who died insolvent in January, 1932. The surety, Frye, also died some time prior to this suit, leaving no discoverable estate.
On the part of plaintiff, the evidence disclosed the execution of a real estate mortgage bond by J. O. Stewart and wife, and W. H. Kekilty and wife, to the Exchange Trust Company of Tulsa, under date of October 17, 1922, due November 1. 1925, in the amount of $5,000, and a first mortgage executed between the same parties to secure this bond, covering the identical property described as the property covered by the bond named in the petition of Charles W. Neal for his appointment as guardian of plaintiff. It was also shown there was no other bond or mortgage affecting said property during the times above mentioned. The Exchange Trust Company sold to Charles W. Neal, and its proper officers indorsed the bond to Neal, but no assignment of the mortgage, if any made, was placed of record. Some time thereafter, and on April 24, 1924, the trust company, acting under the direction and at the request of Neal, executed an assignment of the mortgage and the indebtedness it secured, to plaintiff. There was no indorsement on the bond itself showing assignment to the plaintiff. At its maturity the bond was paid by the obligors to the trust company, which on November 2, 1925, through Steiner, its assistant secretary, paid the proceeds thereof, in the sum of $5,200, by check of the trust company, to Charles W. Neal. Steiner testified that when the check was issued to Neal he overlooked the fact of the execution of the assignment previously made by the trust company to Wallace Neal and that this oversight was the reason that the check was made payable to the individual order of Charles W. Neal. It was shown that Neal received the proceeds of said check in money at the Exchange National Bank of Tulsa.
It is for these funds, for which Charles W. Neal made no account as guardian, plaintiff sues defendant. Plaintiff's mother, the first wife of Charles W. Neal, testified that the latter visited her at her home in Kansas City, Mo., where she was residing with plaintiff, in the summer of 1925, and after she and Charles W. Neal had been divorced, and on that occasion told her he had created a trust in favor of plaintiff and mentioned in connection therewith a mortgage or bond, and further stated he had himself appointed guardian of the trust property for plaintiff, and inquired if such guardianship was satisfactory to her. Plaintiff testified he visited with his father in Tulsa every summer, with the possible exception of the summer of 1930, until his father's death, and on these visits his father told him he had made provision for him so he would have something with which to start business when he became of age. The will of Charles W. Neal bequeathed to plaintiff, his only son, the sum of $5. Plaintiff further testified that he received nothing from the estate of his father and that neither his father nor the sureties on the bond had ever accounted to him for the proceeds of the mortgage bond.
The only witnesses on behalf of defendant were himself and an attorney who had represented him for a great many years. This attorney acted for Charles W. Neal in filing the petition upon which Neal was appointed guardian of plaintiff as aforesaid, and testified that after the same was filed, Charles W. Neal, in the presence of Steiner, assistant secretary of the trust company, told him the guardianship proceedings were had for the purpose of preventing Neal's wife, the mother of plaintiff, from collecting back payments of alimony out of this bond, and he had made this disposition of the bond in order that he might get the proceeds thereof himself. The defendant testified to knowing nothing regarding this arrangement, though that he and Charles W. Neal were good friends and so remained up to the death of the latter.
To defeat the plaintiff's suit, defendant relies on several defenses. A defect of parties is urged upon the theory that the heirs and personal representatives of both Charles W. Neal and Lee E. Frye are necessary and indispensable parties defendant. Coupled with this is also the suggestion that plaintiff should have first presented his claim for an accounting to the executor of Charles W. Neal, and had a settlement of the guardian's account by the county court of Tulsa county in the guardianship proceedings, and not having done so cannot maintain this suit. I think these positions have little merit since both Neal and Frye died prior to the commencement of the suit, and the evidence developed that the administration of the estate of Charles W. Neal revealed its insolvency, and also there was no discoverable estate left by Frye upon his death. Donnell v. Dansby, 58 Okl. 165, 159 P. 317; Asher v. Stull, 61 Okl. 320, 161 P. 808; Morey v. Christian, 69 Okl. 63, 169 P. 887; Title Guaranty & Surety Co. v. Burton, 67 Okl. 320, 170 P. 1170; Equitable Surety Co. v. Sapp, 77 Okl. 221, 187 P. 917; Southern Surety Co. v. Jones, 90 Okl. 285, 214 P. 727.
Nor is there any substantial merit to the defense of laches. There is no barring statute of limitations. True, when Charles W. Neal converted to his use the proceeds of the bond on November 2, 1925, a cause of action then accrued in favor of plaintiff. But, at that time plaintiff was under the disability of minority, and so remained until October 4, 1931. Under the provisions of section 1439, O.S.1931, plaintiff had three years from the discharge or removal of the guardian within which to assert this cause of action, and the earliest date at which this period began to run, under any conceivable construction, was the date of plaintiff's majority, and suit was instituted well within three years from such date. Moreover, when plaintiff attained majority he had the right to require of his guardian and sureties a general accounting of the management of the guardianship estate. And to such cause of action the Oklahoma Supreme Court has held that the fifth subdivision of section 101, O.S.1931, with a five-year limitation, applies, and further that the statute only begins to run at the date of the ward's majority. Southern Surety Co. v. Beal. 134 Okl. 118, 272 P. 375. Under any consideration with reference to the Oklahoma statutes of limitations, the suit was timely commenced. Putting aside the question of statutory limitation, which as above stated cannot be of aid to the defendant, are there any other circumstances in the case which would warrant a court of equity in barring plaintiff from recovery because of laches? Plaintiff testified he did not learn of the guardianship until the spring of 1933. He acted without unusual delay after that time. Besides, it is well settled that mere delay alone in bringing a suit is insufficient to constitute laches; the delay must result in some prejudice to the party asserting laches. Standard Oil Co. of Colorado v. Standard Oil Co. (C.C.A. 10) 72 F.(2d) 524. The...
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