State v. American Surety Co. of New York

• Decision Date: 14 June 1915
• Docket Number: No. 11537.,11537.
• Citation: 177 S.W. 1074,191 Mo. App. 191
• Parties: STATE ex rel. WHITLOW v. AMERICAN SURETY CO. OF NEW YORK.
• Court: Missouri Court of Appeals

177 S.W. 1074

191 Mo. App. 191

STATE ex rel. WHITLOW v. AMERICAN SURETY CO. OF NEW YORK.

No. 11537.

Kansas City Court of Appeals, Missouri.

June 14, 1915.

Rehearing Denied July 2, 1915.

Appeal from Circuit Court, Cooper County; J. S. Slate, Judge.

Action by the State, at the relation and to the use of Addle L. Whitlow, against the American Surety Company of New York. Judgment for plaintiff, and defendant appeals. Affirmed.

W. G. & G. T. Pendleton, of Booneville, for appellant. W. M. Williams and John Cosgrove, both of Booneville, for respondent.

TRIMBLE, J.

This is a suit against a surety on the bond of an administrator of a partnership estate. Addle L. Whitlow, at whose relation the suit is brought, is the sole heir, devisee, and executrix of her father, Warner Whitlow, who died in Cooper county, Mo., July 28, 1904. She administered upon and fully settled said estate, and became entitled to receive all the property and assets thereof. Prior to her father's death he had secured the contract to do certain work on the "White River extension" of the Missouri Pacific Railway in Arkansas. Desiring to have Joseph W. Skinr.er to superintend this work, Whitlow and Skinner entered into an agreement whereby Skinner agreed to superintend the work and the two would divide the profits. The work was completed in 1904, and Skinner, with Whitlow's consent, took the paraphernalia known as the "grading outfit," consisting of horses, mules, wagons, pile driver, blankets, scrapers, harness, etc., to St. Louis.

On August 11, 1904, directly after Whitlow's death, Skinner on his application was appointed administrator of the partnership composed of Whitlow and Skinner, and gave bond in the sum of $2,500, with a defendant as surety thereon. On August 23, 1904, Skinner inventoried the grading outfit and filed it in the probate court September 6, 1904, stating therein that Warner Whitlow had a half interest in said property and Joseph W. Skinner owned the other half interest. This property was appraised at $1,500.

Skinner continued to use the grading outfit until February 15, 1905, when the probate court, on motion of Miss Whitlow, ordered him to sell it. He did so, and reported to the court that he had sold it for $750 to O. Guinand. On April 13, 1905, the probate court approved the sale. No other report or settlement was made until January 15, 1907. Skinner reported earnings of the teams, etc., from July, 1904, to January, 1905, at $2,870, and took credit for expense in keeping the teams and wages paid the teamsters to the amount of $2,622.87. A claim was then presented against the partnership estate by Mr. Skinner's wife which Miss Whitlow resisted, and it was finally disallowed. Thereupon, in April, 1910, Skinner filed his final settlement in the probate court of the city of St. Louis, showing a balance of something over $750 in his hands for distribution, which was ordered to be divided between Miss Whitlow and Mr. Skinner. The former appealed the case to the circuit court, and from thence to the St. Louis Court of Appeals, where it was decided that the "grading outfit" was owned entirely by Whitlow, and was not partnership property, although a partnership did exist as to the profits to be made out of the railroad contract, but that no profits were in fact made. The cause was then remanded with directions. In re Warner Whitlow, 184 Mo. App. 229, 167 S. W. 463. Pursuant to these, the probate court rendered judgment on October 16, 1914, directing Skinner, the administrator, to turn over the property, or the value thereof, to Miss Whitlow, and upon compliance therewith that said Skinner stand discharged as such administrator. No appeal was taken from this judgment; and, although it is still in full force and effect, the administrator has never complied with its terms. He became insolvent and has been, and is now, a nonresident of the state.

This suit was brought in 1910 shortly after Skinner's final settlement was filed. It was tried in 1914 before the court without a jury, and judgment was rendered for the full penalty of the bond, $2,500, to be satisfied by the payment of $1,500 the amount of damages found by the court. This suit on the bond is for the value of the property taken by Skinner, as administrator of the partnership estate, but which in fact, as afterwards found by the St. Louis Court of Appeals, belonged solely to Whitlow. The answer admitted the appointment of Skinner as administrator of the partnership estate, the execution of the bond, and that Skinner took possession of the property sued for, but set up that said property belonged to Whitlow individually, and not to the partnership firm; that the same was sold by the administrator under an order of court moved for by relatrix, and that she acquiesced in the sale, and is now estopped to dispute its validity, and is concluded as to the value of the property by the amount for which it sold. The answer further admitted that said Skinner has not delivered the property or its value to relatrix, the owner thereof, and that he is insolvent, and set up the claim that, since the property converted by Skinner did not belong to the partnership estate, defendant is not liable for any conversion thereof by the administrator.

The reply charged that Skinner claimed the property as administrator, and held it as such, and as belonging to the partnership estate; that defendant executed the bond sued on knowing these facts, and that said Skinner kept the estate open for over ten years, during which time defendant received premiums to indemnify it for the risk it assumed as bondsman of said administrator and made no effort to cause Skinner to settle said estate, and was therefore estopped to deny its liability on the bond sued on; that the Probate court finally determined that relatrix was entitled to the property taken over by the administrator, or the value thereof ; and that said judgment is now a finality. Said reply further denied that relatrix, at the time the property was sold, knew Skinner had no interest therein.

The first contention made by appellant, the surety company, is that it cannot be held liable for the misappropriation by" the administrator. of property which was not, in fact, assets of the estate, and that, since the St. Louis Court of Appeals held that the partnership estate did not own the grading outfit, the surety cannot be liable for the value thereof. Undoubtedly, the circumstances of this case show that the administrator claimed and continued to hold said property by color of his office, and that the bond given enabled him to hold and dispose of such property and maintain his claim for the years that he did. He not only obtained and held possession by color of his office, but his claim was of such a nature as only a court of last resort could finally determine. In other words, the color of office by which he held possession was plausible and apparently good; it was not a plain and unquestioned wrongful exercise of...