Pedigo v. Pedigo's Committee

• Citation: 247 Ky. 403,57 S.W.2d 54
• Parties: PEDIGO v. PEDIGO'S COMMITTEE.
• Decision Date: 18 November 1932
• Court: Court of Appeals of Kentucky

57 S.W.2d 54

247 Ky. 403

PEDIGO v. PEDIGO'S COMMITTEE.

Court of Appeals of Kentucky

November 18, 1932

Rehearing Denied March 10, 1933.

Appeal from Circuit Court, Barren County.

Proceeding by J. H. Mann, Jr. as Walter T. Pedigo's committee for permission to make an investment, which was consolidated with action by Walter T. Pedigo, by J. N. Pedigo, his next friend against Walter T. Pedigo's committee, in which United States Veterans' Bureau of Administration intervened. From judgment rendered, Walter T. Pedigo, by next friend appeals.

Reversed and remanded with directions.

J. Wood Vance, of Glasgow, and George R Brown, Jr., and J. H. Payne both of Louisville, for appellant.

David A. McCandless, of Louisville, and W. L. Porter and J. R. White, both of Glasgow for appellee.

THOMAS J.

The appellant, Walter T. Pedigo, was an American soldier in the World War. He carried war risk insurance entitling him in certain contingencies to compensation and disability benefits payable in monthly installments, which in this case was $117.72, and which is under the administration of the United States Veterans' Bureau of Administration, as provided by the World War Veterans' Act of June, 1924, as since amended by the Congress of the United States (38 USCA § 421 et seq.). Under the terms of that insurance the veteran, Walter T. Pedigo, on November 6, 1919, was entitled to such monthly payments because of the happening of the conditions upon which it became due, and they were collected thereafter. On May 21, 1921, the ex-soldier was adjudged by the Barren circuit court to be permanently of unsound mind and he was committed to the Central State Hospital at Lakeland, Ky. where he has since remained.

L. C. Pedigo was at the same time appointed his committee and acted as such until November, 1924, when he voluntarily resigned, and the appellee, J. H. Mann, Jr., was appointed and qualified in his stead. The first committee settled with the court and turned over to his successor, the appellee, the funds in his hands amounting to $4,128.33, and the latter continued thereafter to collect the monthly payments under the war risk insurance policy. The monthly expense of keeping his ward in the asylum was $50 leaving $67.72 as accumulations. The administrative and guardianship features of the fund created by the original federal statute has been changed by amendments thereto and it is now administered by an agency known as "Veterans' Administration," and it will be so referred to in this opinion. At the time of his appointment as committee for Walter T. Pedigo, the appellee was cashier of the Citizens' National Bank in Glasgow, Ky. and had prior thereto purchased at a premium, 37 shares of its stock for which he owed practically three-fourths of the purchase price, and which was secured by a pledge of the stock. Upon receiving the funds of his ward from his predecessor after his appointment he immediately paid off that indebtedness with his ward's funds, but continued to hold the stock in his name.

Shortly thereafter he severed his connection with the bank, and on March 20, 1926, he purchased from one W. E. Jones a dwelling house and lot on a prominent residence street in Glasgow, and took the title thereto in his name. He paid part of the purchase price by assigning the bank stock that stood in his name to the vendor, and the balance was paid in cash from the trust funds in his hands as committee for his imbecile ward. There is and was a branch office of the Veterans' Administration in Louisville, Ky. through which the monthly payments, supra, were made. Under the federal law periodical accountings are required from a committee, trustee, or guardian for an insurance beneficiary of a like character to that of settlements required by our statute, all the latter of which appellee made from the time of his appointment until this litigation arose. His reticence to render an account to the branch office of the Veterans' Administration at Louisville, as requested by it, was the cause of considerable correspondence between it and him, and which developed the fact that he had invested the funds of his ward in the dwelling house in Glasgow, and the administration eventually learned that the deed thereto stood in his name. It then began an effort to have him, in some manner, transfer the title so as to make his ward the beneficial owner of the property and to put it beyond the power of any creditor or innocent purchaser to acquire rights detrimental to the interest of the ward.

More than a year was consumed by the administration in prosecuting that effort, and it was so engaged on May 18, 1930, on which day appellee on behalf of himself and his ward filed an ex parte petition in the Barren circuit court in which he set forth the fact of his appointment as committee, and that there was then in his hands, as constituting the trust fund belonging to his ward, the sum of $11,469.92, and he asked the permission of the court to invest a part of it in real estate in Glasgow. By an amendment, later filed pursuant to a motion made for that purpose, he designated the particular real estate in which he desired to make the investment and which was the dwelling house and lot that he had purchased from Jones in 1926, and to which he still held title in his name. In the settlements made by him in the Barren circuit court he charged himself with 4 per cent. interest and deducted the expense of maintaining his ward in the asylum, and perhaps other minor items leaving the above balance in his hands.

About the time the ex parte action was filed, or shortly thereafter, J. N. Pedigo, a relative of the incompetent soldier, as the latter's next friend, filed an action in the Barren circuit court against appellee, setting forth the facts we have outlined, and charging that he had converted the funds of his ward to his own use and had violated his trust and because of which he was liable on his bond for the full amount collected by him as of the date it was collected with 6 per cent. interest, and that the ward by his next friend elected to so charge him, and prayed for judgment against him on that basis for the full amount of principle and interest that might be due. The petition also asked the court to remove appellee as committee for the incompetent soldier and to appoint another in his stead. It was furthermore prayed therein that a lien be declared on the involved house and lot to secure whatever judgment might be rendered on the basis of the election made. The ex parte petition referred to was answered by the next friend and in it the same relief was asked as was done in the independent action filed by him. The cases were consolidated and the Veterans' Administration filed a pleading therein asking for practically the same relief on behalf of the incompetent soldier.

Various pleadings and motions made the issues, and, after proof taken, the Veterans' Administration also entered motion asking the court to remove appellee as committee and appoint another in his stead. Upon final submission, the court overruled the motions to remove appellee, which carried with it also the overruling of the motion to appoint another in his stead, and further adjudged that appellee execute a deed to himself as committee for his ward conveying the title to the involved house and lot at the price of $7,300, and for which amount he should be credited in his settlements, and from that judgment this appeal is prosecuted.

There seems to be but little if any dispute between learned counsel representing all parties to the litigation as to the law with reference to the power and authority of trustees in the management of the fund intrusted...