Werner v. American Sur. Co. of New York

• Decision Date: 01 February 1967
• Docket Number: No. 3542,3542
• Parties: Justin WERNER, John Werner and Margaret Runnion, Appellants (Plaintiffs below), v. AMERICAN SURETY COMPANY OF NEW YORK, Appellee (Defendant below).
• Court: Wyoming Supreme Court

Page 86

423 P.2d 86

Justin WERNER, John Werner and Margaret Runnion, Appellants (Plaintiffs below), v. AMERICAN SURETY COMPANY OF NEW YORK, Appellee (Defendant below).

No. 3542.

Supreme Court of Wyoming.

Feb. 1, 1967.

Alfred G. Kaufman, Jr., Douglas, for appellants.

W. J. Wehrli, of Wehrli & Williams, Casper, for appellee.

Before PARKER, C. J., and HARNSBERGER, GRAY and McINTYRE, JJ.

Mr. Justice McINTYRE delivered the opinion of the court.

The appeal in this case questions whether devisees under a will are entitled to recover interest on the principal amount paid by a bonding company for defalcations of an executor bonded by it; whether such devisees can require the bonding company to pay attorney fees for the attorney representing the devisees; and whether lawyers for the testator's estate, who were also executors of the estate, were entitled to charge both attorney fees and executor fees.

Justin Werner, John Werner, and Margaret Runnion, devisees under the will of O. D. Ferguson, Jr., deceased, brought suit in the district court of Converse County, Wyoming, directly against American Surety Company of New York, for defalcations of R. C. Maurer, one of the executors of the Ferguson estate. R. C. Maurer and Joseph Garst, partners in the practice of law, were joint executors. They were bonded by the surety company. Both executors are now deceased. Neither of them nor their representatives were sued or made a party to the action brought against the surety company.

Judgment was obtained by the plaintiff-devisees for the principal amount of all defalcations. We are given to understand no further disputes exist with respect to the extent of the defalcations for which plaintiffs were entitled to recover. However, on appeal to our court, the devisees, as appellants, claim:

1. They were entitled to recover 7% interest on all principal sums which the bonding company has been required to make good;

2. They were entitled to recover from the bonding company a reasonable attorney's fee for their own attorney; and

3. They were entitled to be reimbursed a proportionate share for excessive fees charged by Maurer and Garst as attorneys and executors for the Ferguson estate, such attorneys having charged both the statutory fee as attorneys and the statutory fee as executors.

Interest

As to interest, the bonding company insisted in the district court and still insists to us that appellants cannot recover against the surety in the absence of having proceeded against the executors. Also, that interest is not recoverable in any event until there is a fixed and determinate amount which could have been tendered and interest thereby stopped; and that no amount was fixed as the amount owing in this instance until the district court judgment was rendered.

The obligation assumed by American Surety Company of New York, in its bond, was to the effect that if R. C. Maurer and Joseph Garst as executors 'shall faithfully execute the duties of the trust according to law, then this obligation to be void, otherwise to remain in full force and effect.' The bond, of course, was in effect during the administration of the estate. Then, several years before the present suit was initiated, a final decree of settlement and distribution was entered, providing among other things the following:

'That it is further ordered that said estate be and the same hereby is closed and that Joseph Garst and R. C. Maurer be and they are hereby discharged as coexecutors and their bondsman released from further liability.'

It should be obvious under the terms of the surety company's obligation that, before liability could be adjudged against the surety, there would have to be an adjudication that the executors had violated their duty in some respect; and the extent thereof would need to be reduced to a money judgment. Or, in lieu of this being done, it would be necessary for the executors or their representatives to be joined in the suit against the surety.

As a general rule, before an action can be maintained on an administrator's or executor's bond, there must have been an adjustment of his accounts by the probate court and a finding that a balance is due, or some other finding of a breach of conditions of the bond. Howard v. Jeffrey, Okl., 268 P.2d 897, 44 A.L.R.2d 803.

The Supreme Court of Kansas in Ward v. Krhounek, 151 Kan. 414, 99 P.2d 800, 803, dealt with a suit directly against a surety and said it had been cited to no precedent 'and would not expect to find one,' where a surety was held liable on an unliquidated delinquency of its principal. In holding plaintiff's collateral attack upon the judgment of a probate court improper, the Kansas court stated, although the probate court was one of limited jurisdiction, its judgments within the scope of its jurisdiction, unappealed and unrevoked, are as binding as those of a court of general jurisdiction.

We take the same view in Wyoming with respect to our probate courts and have said many times that a probate court is not the same as a court of civil jurisdiction; that these courts function in different capacities and each possesses different powers within its separate jurisdiction. Gaunt v. Kansas University Endowment Association of Lawrence, Kansas, Wyo., 379 P.2d 825, 827.

In Slover v. Harris, 77 Wyo. 295, 314 P.2d 953, 957, a decree admitting a will to probate was said not to be subject to collateral attack, but to stand as final if not revoked by a 'direct' proceeding or reversed on appeal. It follows therefore, in the absence of the decree of distribution in the Ferguson estate having been appealed or reversed, and in the absence of an effort being made to fix and determine the liability of the executors, the probate decree discharging the executors and...