Southern Surety Co. v. Tessum
| Decision Date | 29 November 1929 |
| Docket Number | No. 27384.,No. 27350.,No. 27364.,No. 27352.,27350.,27352.,27364.,27384. |
| Parties | SOUTHERN SURETY CO. v. TESSUM et al. |
| Court | Minnesota Supreme Court |
Appeal from District Court, Fillmore County; N. E. Peterson, Judge.
Action by the Southern Surety Company against Oluf Tessum and others. From an order denying their several alternative motions for amendment of trial court's decision or for a new trial, defendants appeal. Reversed and remanded.
Cobb, Hoke, Benson, Krause & Faegre, and Tracy J. Peycke, all of Minneapolis, for appellant U. S. Fidelity & Guaranty Co.
Perl W. Mabey and H. O. Chommie, both of Thief River Falls, for appellants Tessum, Aastad, Oen, Dahlen, Prichard, and Loken.
Barrows & Stewart, of St. Paul, for appellant Maryland Casualty Co. Duxbury & Duxbury, of Caledonia, and Hopp & Larson, of Preston, for defendants Daniels, Kenneberg and Christenson.
F. H. Durham and Arthur H. Lindeman, both of Minneapolis, for respondent Southern Surety Co.
Plaintiff, having paid certain judgments against it as surety for Miller Tessum, guardian of Margrethe Tessum, incompetent, brought this action to enforce contribution from defendant Oluf Tessum, coguardian with Miller, and the other defendants, also sureties for one or the other of the two guardians. The trial was without a jury, and plaintiff prevailed. In four groups, defendants appeal from an order denying their several alternative motions for amendment of the decision so as to require judgment in their favor or for a new trial. The appeal taken by defendants Daniels, Kinneberg, and Christenson as sureties for Miller Tessum has not been argued, and will not be discussed. The judgments paid by plaintiff, and which are the subject-matter of the case, are those affirmed in Lyngen v. Tessum, 169 Minn. 304, 211 N. W. 314.
The estate involved was originally that of Elling Tessum. It consisted in the main of a farm of 119 acres, of which 80 were the homestead. Elling Tessum died in 1899. Surviving him as heirs were his widow, Margrethe Tessum, four sons, Oluf, William, Miller, and Oscar, and a daughter, Mathilda Lyngen. Before any of the transactions presently involved, the widow, Margrethe, acquired by purchase the interest in the estate of the son William. She was adjudged incompetent in 1918, and Oluf and Miller became her guardians. They filed an inventory listing the farm as her property, although she had but a life interest in the homestead and only an undivided one-third of the remaining 40. In 1919 the farm was sold under license from the probate court for $27,013. The four children interested joined in the deed. They also signed a "stipulation," in which Miller and Oluf also joined as guardians of their mother. In substance, it was that the net proceeds of the land sale should be invested by the guardians; that the mother should have the income for life; and that at her death the principal should be distributed to the three sons and daughter.
In 1920, and again in 1921, Miller Tessum filed an account charging the guardians with the entire sum received on the sale of the farm. Oluf was not a party to these accounts. He lived a long distance from Fillmore county, where the farm was situated, the rest of the family lived, and all of the business was done. He seems to have had little or nothing actually to do with the management of the trust. Finally, August 8, 1925, Miller's final account was settled. It charged him with the entire proceeds of the farm and interest thereon. See In re Margrethe Tessum, 169 Minn. 310, 211 N. W. 316. Oluf's account has never been settled by the probate court. There is no order or judgment of that court charging him with any sum as guardian.
There is a finding that the two guardians, while in possession of the property of their ward, "wrongfully caused and permitted same to be dissipated so that said estate suffered a loss in excess of" $15,625.54; and "that said loss occurred before any of the defendant sureties were discharged from liability and while all of their bonds were actually or by legal construction in full force and effect." Miller Tessum used the trust fund as though it were his own, and lost the sum stated. Oluf was held liable, not because of any active participation in the embezzlement, but solely because of his negligent failure to discharge his own duties as guardian.
Successively, Oluf filed four bonds for the faithful performance by him of his duties as guardian. In like manner Miller filed five separate and successive bonds conditioned for the faithful performance by him of his duties. When the farm was sold, each filed a separate sale bond conditioned for the discharge by the guardians of their duties under the license to sell the real estate. By Gen. St. 1923, § 8911, the discharge of the sureties upon a sale bond of a guardian upon the settlement of his annual account is provided for, but there was no such discharge in this case. The default charged against both guardians by the decision below is really their failure to account for the proceeds of the land sale, and the sureties on the sale bonds are therefore liable. Because that liability is cumulative to that of the general bonds of the guardians (Frederickson v. American Surety Co., 135 Minn. 346, 160 N. W. 859), there is no need of distinguishing between the sale bonds and the general bonds. It is sufficient to consider the sureties in two groups, in the one those for Oluf and in the other those for Miller, plaintiff being one of the latter, and as such having discharged the entire liability.
1. There is a finding that March 9, 1923, Oluf resigned, and Miller "continued as sole guardian" until the death of the ward. The evidence is that March 9, 1923, the probate court made an order reciting the filing of a resignation by Oluf, and purporting to discharge him "from any and all further duties and liabilities in said matter." Neither then nor thereafter was the final or any other account of Oluf examined and allowed. Gen. St. 1923, § 8789, permits a representative to resign at any time, but provides that "such resignation shall not be effectual for any purpose until the [probate] court shall have examined and allowed his final account." So his attempted resignation and discharge can be allowed no effect upon the liability of Oluf and his sureties for any default of his as guardian. The attempted discharge is void on the record and so open to collateral attack.
2. The two appeals of Oluf Tessum and his sureties, defendants Maryland Casualty Company, Aastad, Oen, Dahlen, Prichard, and Loken, may be considered by themselves. That Oluf has never been found liable for any sum by the probate court is urged as an obstacle to any recovery against him or his sureties. It is argued that the matter involved is an accounting by a guardian, over which the probate court has exclusive original jurisdiction. Brandes v. Carpenter, 68 Minn. 388, 71 N. W. 402; Pierce v. Maetzold, 126 Minn. 445, 148 N. W. 302. Consideration of that point is not necessary in disposing of the case. There is no suggestion that Oluf took or had the benefit of anything not rightfully his. Miller, had he paid the entire sum which plaintiff as his surety paid, could not recover from Oluf or his sureties. Yet the decision below charges Oluf as coguardian for the whole loss by Miller.
We consider first whether Oluf's sureties are liable to make contribution to plaintiff, a surety for Miller alone. The question must be determined from the absolute status and obligations of the parties when the bonds were given, and not on the wholly fortuitous basis of what has transpired since. There was no liability common to the two sets of bondsmen, for the simple reason that one was bound only for the default of Miller and the other only for that of Oluf. That there might be a default of which the two were equally guilty, or for which at least the ward or her heirs might charge them jointly, does not make the obligation common to the two groups of sureties. Identity of certain results of the two undertakings or of some of their points of incidence does not unify their burden and spread it as a common one to all the sureties of both guardians. Our statute permitted the separate bonds (Gen St. 1923, § 8909). Each guardian furnished his own, his sureties assuming no responsibility for his coguardian. So there was no such common liability on the two sets of sureties as to entitle those for Miller to contribution from those for Oluf. "The right or liability to contribution does not attach to one who is not a co-surety with a surety." 32 Cyc. 277; 6 R. C. L. 1046; Young v. Shunk, 30 Minn. 503, 16 N. W. 402; National Surety Co. v. Becklund, 169 Minn. 177, 210 N. W. 882; Bankers' Surety Co. v. Wyman, 141 Iowa, 574, 120 N. W. 116; Wanack v. Michels, 215 Ill. 87, 74 N. E. 84. Contribution was denied between the sureties on the separate bonds of two executors in Hewlett v. Beede, 2 Cal. App. 561, 83 P. 1086. To hold that the sureties on the separate bond of a guardian are entitled to contribution for those on the bond of his coguardian would make the sureties for the one equally so for the other, in spite of the fact that the expressed obligation of each was to answer only for the principal named in the bond. In that way an expressed contractual intention would be thwarted, and the obligation of the sureties extended far beyond their undertaking.
3. The next question is whether plaintiff may recover from Oluf Tessum and his sureties through subrogation. The argument is that the judgment creditors paid by plaintiff, had such payment not been made, could have recovered from Oluf and his sureties, and that plaintiff should now recover as a subrogee of that right. On that theory judgment...
To continue reading
Request your trial