Rush v. State ex rel. Bixler

• Decision Date: 11 March 1898
• Citation: 49 N.E. 839,19 Ind.App. 523
• Parties: RUSH v. STATE ex rel. BIXLER.
• Court: Indiana Appellate Court

19 Ind.App. 523

49 N.E. 839

RUSH

v. STATE ex rel.BIXLER.

Appellate Court of Indiana.

March 11, 1898.

Appeal from circuit court, Whitley county; J. W. Adair, Judge.

Action by the state, on the relation of Henry Bixler, guardian, against Iredell B. Rush. Judgment for plaintiff. Defendant appeals. Affirmed.

Andrew A. Adams, for appellant. E. K. Strong, for appellee.

WILEY. J.

This was an action upon a guardian's bond, and the instrument sued upon was executed May 22, 1890. One James Arnold was the guardian; the appellant was the only surety; and the penalty of the bond, which is in the usual form, was $100. The beneficiaries of the bond were the minor heirs of one William Blaine, deceased. The complaint charges that the guardian deserted his trust, and fled from the state, was removed by the court, and that he converted to his own use the funds of the estate. The complaint further avers that the relator was appointed and duly qualified as the successor of the said Arnold. The principal in said bond was made a party defendant, but he was not served with process, and the action was dismissed as to him. The appellant answered in one paragraph, a demurrer to which was sustained, and this ruling of the court is challenged by the assignments of error. The answer admits the execution of the bond, but avers that at the time of its execution there was no estate whatever belonging to the heirs of said William Blaine, and that the purpose of the appointment of said Arnold as such guardian was to apply for a pension for said wards, and that said bond was in a nominal sum, for the sole purpose of completing such appointment, to enable said Arnold to apply for such pension; that no sum of money or any property of any character came into the hands of said guardian until his subsequently filing a new bond, and until after its approval in open court; that, after the execution and approval of the bond sued on, said Arnold made application to the government of the United States for a pension for his said wards, which was allowed; and that on account thereof he received $500, but before receiving the same, and in obedience to the laws of the United States and the regulations of the pension department, said guardian, at the April term, 1891, of said Whitley circuit court, the same having jurisdiction of said guardianship, appeared, and filed a “new bond,” in the penalty of $1,000, conditioned for the faithful discharge of his duties as such guardian, with one Thomas Arnold as surety thereon, which bond was duly approved by the judge of said court, and a record made thereof in the proper order book, as follows: “Guardianship of Minor Heirs of William Blaine, Deceased. Comes now James Arnold, guardian herein, and files new bond in the sum of one thousand dollars, in these words (here insert), and said bond is examined and approved, and said guardianship continued.” The answer further charges that said guardian continued to act under said bond, and filed a report in September, 1893, which was duly approved, and said guardianship continued till his removal by the court; that no loss whatever occurred in said guardianship prior to the filing of said new bond; and that whatever default has been made by said guardian was made after the filing and approval of said new bond.

The contention of the appellant is: First, that the filing and approval of the new bond superseded the old one; and, second, that, unless it is shown that there was some defalcation during the life of the old bond, there is no liability under it, after the approval of the new one. These two propositions may be very properly considered together, as they are each dependent upon the construction of the law, as applied to the facts averred in the answer. For an intelligent discussion of the law governing the liabilities of sureties on a guardian's bond, we should first look to the statute which primarily fixes such liability. Section 2515, Horner's Rev. St. 1897, provides that, before any person shall be appointed guardian of any minor, he shall file a statement in writing of the whole estate of such minor, and shall give bond with two or more sureties, in penalty double in amount of the personal property, etc., which bond must be approved by the clerk or court. Section 2517, Horner's Rev. St. 1897, provides how sureties may be released from further liability. It is recognized law everywhere that, for any default in his fiduciary capacity, a guardian and his sureties are liable on his bond to the extent of the loss, not exceeding the amount of the bond. The averments of the answer are confessed as true by the demurrer; and, to determine the respective rights of the parties, we must apply the provisions of the statute and the law as fixed by the adjudicated cases to them. Counsel have not cited us to any case directly in point, and the most diligent search on our part has failed to find any. The question here presented is not free from doubt, and the conclusion reached is the result of the most careful consideration and conscientious convictions, and we fully realize the importance of the principles involved. Pointedly and briefly stated, the appellant is liable, unless he was discharged from liability by the guardian giving a new bond, under the facts pleaded. If he was released, he was released by operation of law, and not by a proceeding under the statute cited. If the subsequent bond was an additional bond, it would then be cumulative, and not work a discharge or release. We have no doubt but what the court can in any case, under its supervisory power over trusts in its hands, order the trustee to execute an additional bond, if, in the judgment of the court, a former bond is insufficient to cover the estate in the hands of such trustee, under the provisions of the statute. In the case before us, however, the “new bond” was not filed by the order and direction of the court, but was a voluntary act on the part of the guardian. We have collected all the authorities at our command bearing upon the question involved, and, so far as they are pertinent, will briefly state their holdings.

In the case of State v. Barrett, 121 Ind. 92, 22 N. E. 969, one of the sureties on the bond petitioned the court, under the provisions of the statute, to be released. His petition was granted, and the administrator was ordered to, and did, file a new bond. Suit was brought on the old bond, and one of the sureties thereon answered that a co-surety had been released, and a new bond filed by order of the court. The supreme court said: “It is averred in that answer that the co-surety of Williams, upon a proper proceeding for that purpose, had been released from the bond in suit, and that the administrator had, by order of the court, filed a new bond, and that the breaches of the bond alleged in the complaint occurred after the execution of the new bond. We think that it should be held that, upon filing a new bond, the old one was at an end.” In the case from which we have just quoted it was held, further, that the sureties upon the old bond were only liable for breaches occurring before the new bond was filed and approved. In Lane v. State, 27 Ind. 108, the sureties upon the bond of an administrator applied to the court to be released, and, pending action thereon, the principal voluntarily came into court, and filed a new bond, which was duly approved. Thereupon the application of the sureties for release was dismissed, and no formal order of discharge was entered. The question arose as to whether or not the sureties could be released without a formal order of release being entered. The court said: “The proceedings would have been in better form if an order had been entered for the discharge of the sureties on the first bond from future liability, but such an order was not necessary to such discharge. The filing of the new bond in answer to the application operated as a discharge under the statute.” In State v. Mitchell, 132 Ind. 461, 32 N. E. 86, a guardian was appointed, and gave bond with two sureties. Subsequent to the appointment, a guardian of the same wards in a foreign jurisdiction sold real estate belonging to them; and the court in this jurisdiction ordered the resident guardian to give another bond before receiving the money from the foreign guardian from the sale of land. This the resident guardian did, to the approval of the court, which bond recited the fact of the sale of the land, and was conditioned for the faithful accounting of the money so received. Suit was brought on the second bond for a breach, and one of the sureties answered, setting up the fact of the giving of the two bonds by the guardian, and averred that the sureties on the first bond were solvent, and that no steps had been taken to collect the same from them. The court said: “It is manifest, we think, that the second bond was not given as subsidiary to, or as security for, the first bond, but was given as a primary security for the money to be received. The giving of the second bond did not annul the first, but was additional security, both bonds continuing, and both liable as security for the money received by the guardian; and taking, as we do, this view of the case, the question is settled by the decision of Allen v. State, 61 Ind. 268.” The court, after quoting from that case, continuing, say: “In the case at bar there is nothing whatever to indicate any intention to make the last bond subsidiary to the first bond, but, on the contrary, on the face of the bond it appears to have been given as primary security for the money to be received from the sale of the land in Pennsylvania. In this respect it is even stronger in support of the holding that it is a primary security than was the bond in the case of Allen v. State, supra; and the case at bar clearly comes within the rule laid down in that case, and which we think is the true one.” In Allen v. State, supra, Sarah J. Allen was appointed...