Western Cas. & Sur. Co. v. First State Bank of Bonne Terre

• Citation: 390 S.W.2d 913
• Decision Date: 18 May 1965
• Docket Number: No. 31867,31867
• Court: Court of Appeal of Missouri (US)
• Parties: WESTERN CASUALTY & SURETY COMPANY, a Corporation, Plaintiff-Appellant, v. FIRST STATE BANK OF BONNE TERRE, a Corporation, Defendant-Respondent.

Page 913

390 S.W.2d 913

WESTERN CASUALTY & SURETY COMPANY, a Corporation, Plaintiff-Appellant, v. FIRST STATE BANK OF BONNE TERRE, a Corporation, Defendant-Respondent.

No. 31867.

St. Louis Court of Appeals, Missouri.

May 18, 1965.

Buerkle & Lowes, Albert C. Lowes, Jackson, for plaintiff-appellant.

Dearing, Richeson, Weier & Roberts, J. Richard Roberts, Hillsboro, W. Oliver Rasch, Bonne Terre, for defendant-respondent.

DOERNER, Commissioner.

Plaintiff, the surety on a guardian's bond on which it had sustained a loss of $1118.53, sought in Court I of its petition to recoup from the defendant bank, and in Count II from Edward Gibson, the principal. The court rendered a judgment against plaintiff and in favor of the bank on the first count, and in favor of plaintiff and against Gibson by default on the second. Plaintiff alone has appealed.

Since this is an appeal in an equity case and the appellant has brought up the entire record we must try the matter de novo. In so doing we take into consideration only such competent evidence as we deem admissible, and reach our own conclusions without regard to the trial court's findings. Heald v. Erganian, Mo., 377 S.W.2d 431. As the record consists in the main of a stipulation of facts and documentary evidence no question of deference arises. See McMahon v. May Department Stores Co., Mo., 374 S.W.2d 82.

It is undisputed that on or about April 3, 1962, the Probate Court of St. Francois County appointed Edward Gibson guardian of the estate of his minor son, Ellis, whose age does not appear. Gibson as guardian and plaintiff as his surety executed and filed a bond in the usual form. The only asset of the ward was the sum of $2500 which the guardian invested in a time certificate of deposit issued to him as guardian by the defendant bank, numbered 10343, dated April 10, 1962, and due one year after date with interest at the rate of four per cent. At some subsequent time, presumably in November, 1962, Ellis, the ward, appeared at the bank and asked Robert B. Smith, its assistant vice-president, for some of the funds which his father, the guardian, had deposited. Smith told Ellis that he couldn't issue 'regular funds' and that he would have to talk to the guardian. Thereafter Ellis returned to the bank with his father, and according to Smith 'they' told him that they wanted to use the funds 'For hospitalization,' but for whose hospitalization does not appear. Smith gave Gibson $200, and prepared a negotiable promissory note for $200, dated November 24, 1962, payable to the defendant bank or order on demand, with interest at 6%, which was signed 'Edward C. Gibson.' The form was that for a collateral note, and provided that Gibson assigned, pledged and delivered to the bank as collateral '* * * Our C/D #10343 for $2500.00 Due 4-10-63,' the certificate of deposit which the bank had issued to Gibson as guardian. Smith conceded on cross-examination that the payment to Gibson was a loan, and that there was no authority from the Probate Court respecting the transaction.

Stanley E. Mayberry, assistant cashier of the defendant bank, testified on its behalf that thereafter Ellis called him on the phone and said that he wanted $200 to buy clothes to go back to school. Mayberry told Ellis that the bank could not do it without the guardian of the estate being present. Later Gibson came in to the bank (perhaps with Ellis, although that is not clear) and Mayberry gave Gibson another $200 in return for which Gibson executed a promissory note for $200 payable to the bank or order, dated November 28, 1962, due on demand, with interest at 6%. The form used was the same as the note of November 10, 1962, the certificate of deposit previously issued to the guardian was likewise pledged as collateral security, and this note was also signed 'Edward C. Gibson.' Mayberry testified on direct examination that in each instance the note 'was attached and placed with the time certificate,' from which we gather that Gibson delivered the certificate of deposit to the defendant bank. Mayberry likewise agreed, on cross-examination, that 'technically' the transaction was a loan, that interest of 6% was charged, and that there was no 'written authority from any authority to deliver this sum of money.'

Mayberry also handled the third transaction in which Gibson and Ellis requested an additional $200. That sum was likewise paid to Gibson, and a third note for that amount, dated December 20, 1962, due on demand and if no demand on April 10, 1963, was executed by 'Edward Gibson.' As with the first two, the certificate of deposit issued to the guardian was pledged as collateral security.

The fourth transaction was handled by Marvin Ringer, Sr., cashier of the defendant bank. He testified on direct examination that Gibson contacted him to get an additional $500 and that he told Gibson that '* * * we couldn't advance him any money without a court order from the Probate Judge.' He stated that Gibson later returned with an order from the Probate Court, dated January 30, 1963, and that $500 was then given to the guardian and a note taken from him. Exhibit D, the fourth note, dated January 30, 1963, is similar to the preceding three except as to the amount, but in this instance the words 'Estate Ellis Edward Gibson, Minor' are printed above the signature 'Edward Gibson,' and the word 'Guardian' below. The printing obviously was done by a hand other than that of Gibson. As with the first three notes, the certificate of deposit was listed as the collateral security pledged. The order from the Probate Court referred to by Ringer, dated January 30, 1963, recites that:

'Upon the Petition of the guardian herein and the evidence therewith submitted, it is hereby ordered by the court that this guardian is authorized and directed to withdraw a sum not to exceed $500.00 from the funds of this ward on deposit with the First State Bank of Bonne Terre and that such sum be allowed and Ap-appropriated (sic) to this guardian for payment of necessary medical expenses of the ward. A certified copy of this order shall serve as authority for said bank to permit the withdrawal of said funds.'

By its terms the certificate of deposit for $2500 became due and payable to the guardian on April 10, 1963, together with interest thereon of $100. The amount then due on the four notes to the bank executed by Gibson aggregated $1100, together with interest of $18.53. On that day the bank subtracted $1118.53 from the $2600 due the guardian on the certificate and applied it to the payment of the principal and interest due on the notes.

It appears from the record that beginning on February 23, 1963, the Probate Court had repeatedly notified the guardian to file his annual settlement, and that the guardian had failed to do so and had confessed that he did not have and could not account for all of the assets of the ward's estate. By an order of April 26, 1963, which recited such facts, the Probate Court revoked Gibson's letters, removed him as guardian, and fined him $100. By the same order the court found '* * * that the unaccounted for assets of this estate consisted of $2,500.00 in cash which sum was invested in a federally chartered and insured savings and loan institution which paid earnings at the rate of 4 1/2% per annum compounded semi-annually and should have earned the sum of $113.76 while under the control of said guardian.' It further found that unnecessary court costs in the amount of $42.75 had accrued because of the guardian's failure to account, and entered judgment against Gibson as guardian and plaintiff as his surety in the amount of $2756.51. One A. C. Sullivan, Jr., was by the same order appointed successor guardian, and the judgment was ordered paid to him.

It appears that plaintiff subsequently filed in the Probate Court an application for an order to take charge of the assets belonging to the ward which were in defendant's possession. The transcript contains a copy of the order made by the Probate Court on June 7, 1963, in which the court found that plaintiff was the surety; that Gibson as guardian had deposited the ward's $2500 with defendant bank in the form of the time certificate; that though notified to do so Gibson had failed to file his annual settlement and had been removed; that the judgment for $2756.51 had been entered against Gibson and plaintiff as his surety; that Sullivan had been appointed and had qualified as guardian; that '6. There is in the possession of the First State Bank of Bonne Terre, Bonne Terre, Missouri, a bank draft in the amount of $1481.47, standing in the name of Edward Gibson, Guardian of Ellis Edward Gibson and is a proper asset of the estate of the minor.

'7. That this sum of $1481.47 is properly an asset of the estate of the minor, and should be turned over to the new guardian and the sum offset against the $2756.51 ordered by this court to be paid by the petitioner to the successor guardian, A. C. Sullivan, Jr.

'8. Petitioner stands ready, willing and able to pay the difference between $2756.51 and $1481.47 to Mr. A. C. Sullivan, Jr., as guardian of the estate of Ellis Edward Gibson.'

and the court ordered that plaintiff was authorized to take possession of the $1481.47 held by the defendant bank and turn the same over to the successor guardian; to pay the additional sum of $1275.04 of its own funds to the successor guardian; and that upon the filing of receipts from the successor guardian for said sums the plaintiff would stand discharged from all further liability. The record further shows that the plaintiff thereafter filed a petition in the Probate Court for an order discharging it on its bond, and that on June 14, 1963, the Probate Court made an order in which it found that plaintiff had paid said sums to the successor guardian and filed his receipts therefor, and ordered and adjudged that plaintiff stood discharged from any further obligations on its bond.

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