State v. United States Fidelity & Guaranty Co.

• Decision Date: 06 May 1941
• Docket Number: No. 25703.,25703.
• Citation: 150 S.W.2d 581
• Court: Missouri Court of Appeals
• Parties: STATE ex rel. GNEKOW v. UNITED STATES FIDELITY & GUARANTY CO.

150 S.W.2d 581

STATE ex rel. GNEKOW v. UNITED STATES FIDELITY & GUARANTY CO.

No. 25703.

St. Louis Court of Appeals. Missouri.

May 6, 1941.

As Modified on Denial of Rehearing May 20, 1941.

Appeal from St. Louis Circuit Court; William K. Koerner, Judge.

"Not to be reported in State Reports."

Action on administrator's bond by the State of Missouri on the relation of Cora M. Gnekow against the United States Fidelity and Guaranty Company. From the judgment, both the relator and the defendant appeal.

Affirmed.

J. M. Massengill, of Sikeston, and John P. Griffin, of St. Louis, for relator-appellant.

Carter & Small and James E. Garstang, all of St. Louis, and Blanton & Montgomery, of Sikeston, for defendant-appellant.

HUGHES, Presiding Judge.

The suit is against defendant-appellant as surety on the bond of George W. Kirk, administrator of the estate of E. L. Griffin, deceased. This is a joint appeal taken by both the relator and the defendant from a judgment of the Circuit Court of the City of St. Louis. The trial was before the court, a jury being waived.

The judgment of the court was in favor of the relator in the sum of $1,213.45, consisting of the following items: Principal sum, $935.96; interest from October 1, 1937, to January 8, 1940, the date of the judgment, $127.49; attorney's fees for vexatious refusal to pay, $150; total, $1,213.45.

Judgment was rendered for the full penalty of the administrator's bond in the sum of $6,000, to be satisfied by the payment of the total sum of $1,213.45, and costs. From this judgment both parties took separate appeals but by stipulation between the relator and the defendant below, there has been prepared and filed and made a part of the record a joint bill of exceptions and the appeals were consolidated in this court for all purposes.

In lieu of testimony upon all the issues, it was agreed between the parties that all statements of fact in the petition as well as all the allegations of fact in the second amended answer were admitted to be true, the plaintiff objecting to the relevancy, competency and materiality of the allegations in said second amended answer with reference to the expenditures made under the orders of the probate court and the defendant denying all liability for any attorneys' fees or damages as claimed in the petition for vexatious refusal to pay, in addition to the factual defenses set up in said second amended answer.

In addition to the facts considered in evidence by virtue of such stipulation, the relator below offered the testimony of her attorney, Mr. John P. Griffin, and of another attorney, Mr. A. Lowell Morris, upon the question of the services rendered by the relator's attorney, Mr. John P. Griffin, and their reasonable value, if the court should find the relator was entitled to recovery as for vexatious refusal to pay.

The pleadings are lengthy and in view of the issues submitted to us for decision it would serve no useful purpose to set them out in full, and a statement of the facts out of which this suit arose as gleaned from the pleadings will suffice. The facts are substantially as follows:

The relator and one George W. Kirk, as administrator of the estate of E. L. Griffin, deceased, the divorced husband of relator, interpleaded for the funds representing the net proceeds of a policy of insurance on the life of E. L. Griffin which the Metropolitan Life Insurance Company paid into court and thereupon received its discharge. The sum so paid into court less costs amounted to $935.96.

Upon a trial of the interpleader case in the circuit court, and on December 10, 1934, the fund was awarded to Kirk, as administrator of the estate of E. L. Griffin, deceased, from which judgment relator prosecuted her appeal to the St. Louis Court of Appeals. Said appeal was taken without the giving of an appeal bond. On December 8, 1936, the St. Louis Court of Appeals affirmed the decision of the circuit court, awarding the funds to Kirk as administrator. Gnekow v. Metropolitan Life Ins. Co., 99 S.W.2d 126. This opinion of the St. Louis Court of Appeals was quashed by the Supreme Court on certiorari on June 5, 1937. State ex rel. Gnekow v. Hostetter, 340 Mo. 1177, 105 S.W.2d 928. Thereafter, on September 14, 1937, the St. Louis Court of Appeals filed its second opinion, reversing the circuit court, and directing it to award the funds to the relator. Gnekow v. Metropolitan Life Ins. Co., 108 S.W.2d 621. Thereafter, on July 7, 1938, the circuit court, in obedience to the mandate of the St. Louis Court of Appeals, entered judgment awarding the funds in controversy to the relator. While the interpleader case was pending in the St. Louis Court of Appeals, no appeal bond having been given by the appellant, relator herein, and on March 18, 1935, the administrator Kirk applied to the circuit clerk and was paid by the circuit clerk the fund involved in the interpleader case, being the sum of $935.96. The administrator mingled these funds with other funds of the estate of E. L. Griffin, deceased, and in the course of administration paid out certain attorneys' fees and expenses of the administration of said estate, which payments were made while the appeal was pending in the interpleader case; some of these expenses were authorized by the probate court where the estate was being administered and all were incurred in the course of administration.

The condition of the administrator's bond upon which this suit is brought is as follows:

"The Condition Of The Above Bond Is, That if George W. Kirk Administrator of the Estate of E. L. Griffin deceased, shall faithfully administer said Estate, account for, pay and deliver all money and property of said estate and perform all other things touching said administration required by law or the order or decree of any Court having jurisdiction, then the above Bond to be void — otherwise to remain in full force."

After the interpleader case was finally determined in relator's favor, demand was made of the administrator and of the defendant as his surety for the full amount of $935.96 which had been paid to the administrator as hereinabove set forth, and there was tendered to the relator the sum of $697.08 which the administrator claimed to be the full amount of assets left in his hands after the payment of the above mentioned attorneys' fees and expenses of administration, which tender was renewed in defendant's answer, and which the defendant now admits is due the relator.

The case has been exhaustively briefed by defendant-appellant; however, the issues have been limited within a narrow compass by defendant's frank statement that although the defendant Surety Company has assigned several errors in this Court, these errors may be grouped under two general assignments. First, that the court erred in rendering judgment in favor of the relator and against the defendant for the full amount sued for, without crediting the administrator and his surety, the defendant, with the sums which the administrator Kirk had expended for attorneys' fees and other expenses of administration in the handling of the estate; and, second, that the court erred in the assessment against defendant of an attorney's fee as for vexatious refusal to pay. And in its printed brief and argument defendant admits liability in these words: "The administrator in this case, prior to suit, and his surety the defendant since suit in its answer, promptly tendered all the funds remaining in the estate just as soon as its liability became finally fixed." Hence in view of the position now taken by defendant it is our duty to only consider the assignments as above outlined. Emerson v. Mound City, Mo.Sup., 26 S.W.2d 766; Dodson v. Sovereign Camp, W. O. W., Mo.App., 122 S.W.2d 14.

That the administrator received from the circuit clerk the full sum of $935.96, for which it had interplead, in his representative capacity as administrator, is not questioned. Indeed the gravamen of the defense is the claim now made by defendant of the right of the administrator to administer this fund as an asset of the estate and pay attorneys' fees and expenses of administration therefrom. It would be out of conformity with all reason to say that a surety on an administrator's bond, under such facts as appear in this case could question the capacity in which the administrator acts, and as to whether property he administers on as belonging to the estate, actually belonged to someone else. State ex rel. v. Shulte, Mo.App., 90 S.W. 2d 1078, 1079. That the sureties on the bond of an administrator are responsible for all moneys and property that come into the hands of the administrator in virtue of his office, was decided by this Court many years ago, and is the law today. State to Use v. Dailey, 7 Mo.App. 548. It would be most inconsistent for this surety to say in one breath that it was never liable as surety for this fund because, as finally determined, the fund should never have been made a part of the assets of the estate, and then in the next breath say that the administrator had a right to administer the fund by paying therefrom attorneys' fees and other expenses of administration. And we do not understand that defendant does assume such an inconsistent position. To the contrary, defendant admits its liability as to the balance of $697.08 which the administrator has not expended, and ipso facto admits it would be liable for the remainder of the fund, $238.88, if its principal had not expended it. And so in the final analysis the only real question at issue is as defendant now contends whether the administrator had a right to pay attorneys' fees and other expenses of administration out of this fund pending the final culmination of the litigation as to who was the owner of that fund. The plaintiff's claim in the interpleader case was decided in the trial court against her, but the litigation did not end there, because she appealed from that judgment. She appealed without posting...