Taylor vs. Hemingray

KENTUCKY LAW REPORTER AND JOURNAL

VOL. 2                      JULY, 1883.                   No. 1

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KENTUCKY COURT OF APPEALS

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TAYLOR v. HEMINGRAY.

(Filed May 15, 1883.)

Surety — Extent of liability of — The court having ordered the sale of infants' real estate, appointed the guardian special commissioner to receive the proceeds from the master commissioner and reinvest the same. The guardian gave bond, with appellant as surety, to faithfully perform his duties, etc., as such commissioner. The proceeds of sale were paid to him by the purchasers, instead of to the master commissioner, as was proper. Held — The surety is liable to the infant on the bond, if the guardian fails, to account for the money so received, notwithstanding the money was received from the purchaser instead of from the master commissioner.

Appeal from Campbell Chancery Court.

Opinion of the court by Judge Pryor.

The appellee, Ann S. Hemingray, a daughter of Henry C. Timberlake, obtained by devise from her uncle, John Tibbatts, some real estate, consisting partly of unimproved lots in the city of Newport. She being an infant when the devise was made, her father, Henry Timberlake, qualified as her statutory guardian, with the appellant, John Taylor, as his surety. The estate devised was to his daughter for life, with remainder to her children. A petition in equity was filed by her guardian for a sale of this unimproved property, and an investment of the proceeds.

On the 31st of January, 1872, a judgment was entered directing a sale of the property by the court's commissioner, that judgment providing "the guardian having executed bond which is approved, is hereby appointed a special commissioner to receive the purchase money from the master commissioner when collected, and reinvest the same in productive real estate, under the supervision of this court, to be held under the limitations and by the parties as directed by the testator in his will." The bond is an undertaking to the infant that her guardian "will faithfully perform all the duties as special commissioner, to reinvest the proceeds of sale, obey the orders of this court in relation thereto, that have been or may be made, and account for his actions herein," dated 31st of January, 1872, signed H. C. Timberlake, J. B. Taylor.

The master subsequently filed his report of sale, and on the 30th of May, 1874, this order was entered: "The purchasers are permitted to pay the purchase money before due, and the guardian is directed to reinvest the same and report to court. The purchasers, Thomas Nestward and Joseph Stone having paid the purchase money, the master is directed to convey to them the lot purchased."

Taylor, the appellant, was surety on the original bond as guardian executed by Timberlake, and on the bond executed by Timberlake as special commissioner. At the time of the sale and execution of the bond there was no remainderman in existence, but shortly after the marriage of the devisee she gave birth to a child, named Robert, who is before the court asserting his claim.

Taylor, the surety, apprehending some trouble by reason of his liability, filed his petition in equity, seeking to avoid responsibility by reason of certain irregularities in the proceedings, alleging that the money, or a part of it, had gone into the hands of the guardian, and asking a settlement of the guardian's accounts. Out of that action and the failure of the guardian, as special commissioner, to make the investment, originates the claim of the life tenant and her child.

They filed an answer and cross petition, alleging a sale of the property, and that the commissioner was directed to pay over the money to the special commissioner for reinvestment; that no investment had been made or reported with reference thereto; that the guardian, although ordered to do so, had failed to make any investment or account for the moneys. They ask for a settlement, and that he account, etc., and for all relief to which they are entitled.

The defense is that the commissioner never collected the money, but that the purchasers voluntarily paid the money to the guardian without authority, and for that reason the surety is not liable; further, that as the guardian had no right to invest until he was ordered to collect the money, or commissioner to pay it over to him, and no order of court having been made in reference thereto, no breach could have occurred and none is alleged; that the guardian is liable to the purchasers, and not to these appellees as they had no right to pay it over.

The guardian as special commissioner made no report showing the balance in his hands unaccounted for, and in June, 1879, Timberlake was, by an order of court, directed to pay the money into court on or before the next term, and if he failed steps would be taken against the sureties. He failed to pay the money, and a judgment was then entered against Taylor, as surety, requiring him to pay the money to Hemingray as special commissioner, and from that judgment he appeals.

The chancellor is trying to reach this money in the hands of Timberlake, whether as guardian or as special commissioner, that he may have the proceeds reinvested. Taylor, in his original action, is denying his liability on either bond, and is seeking to avoid the payment of the money upon mere technical grounds. In the cross petition of the beneficiaries it is alleged that bonds were executed by Taylor as the surety, and the covenant of each set forth, and the only defense the surety presents is that while the guardian was ordered to reinvest and the purchaser to pay the money before due, that he ought to have received it from the commissioner, whose duty it was to collect, and not from the purchasers.

The money, or the most of it, had been paid into court before the order directing the guardian to reinvest was made, and while there is no order in express terms requiring the purchasers or the commissioner to pay the money over to the guardian, as special commissioner, it must necessarily follow, when he was directed by au express order to invest, that he had the right to receive the money from either the purchaser or commissioner. By the original judgment, and under which the bond to reinvest was executed and approved, the guardian was appointed to receive the money from the commissioner when collected, and reinvest under the supervision of the court. He was not then ordered to reinvest, but at a subsequent term of the court the order was entered, as already recited, permitting the purchasers to pay the money for the land before the maturity of the notes, and they did pay the money into court, or the greater portion of it, and deeds were ordered to be made them by the commissioner. Whom they paid the money to does not appear, and at the same time the guardian was ordered, in this language, to make the investment: "The purchasers are permitted to pay the purchase money before deed, and the guardian is directed to reinvest the same and report to court."

The guardian received the money, whether from the commissioner or the purchaser does not appear, but failed to make the investment or to account for the money. It is immaterial whether he obtained the money from the commissioner or the purchaser, he was authorized to invest it and report to court, the order clearly implying his authority to receive the money, as he could not well invest the money when in the hands of the purchaser, yet it is maintained that because the record fails to show that the commissioner was directed to pay it to him, in express terms, the surety is released, and the cases of Hammond v. Crawford, 9 Bush, 75, and Greenwell v. The Commonwealth, 78 Ky., 328, relied on as authority to sustain the defense. Neither one of the cases control the questions involved in this case. In Hammond v. Crawford the action was brought in the name of the Commonwealth as relator for the use of Silas Hammond and for the use of the trustees of the several school districts in the county against Crawford, former school commissioner for the county of Powell, and his sureties for failing to pay over certain moneys he drew from the treasury as the common school fund due the county. There was a demurrer to the petition by the sureties, and sustained on the ground that the petition failed to show he had authority of law to withdraw the money. In the case of Green well v. The Commonwealth the sureties on a sheriff's bond were attempted to be made liable for a tax that it was alleged the sheriff had collected, but that had never been imposed by the county court. This court held if the court imposed no taxation the sheriff had no right to collect. It was a local railroad tax, and the county court authorized to make the levy. These cases in their results are exactly the reverse of the case before us. In neither was there any authority for the principal to collect or appropriate the proceeds when collected, but here the petition was filed by the guardian asking a sale of the ward's real estate and an investment of the proceeds.

He executes a bond that as special commissioner he will invest the proceeds as directed by the court, with appellant as his surety. The original judgment under which the bond was given appointed the guardian a special commissioner to receive the purchase money from the master when collected, and reinvest the same, etc. This was the order appointing, but did not authorize him to invest or collect the money, but a subsequent order permitted the purchasers to pay the money before due, and the guardian, as special commissioner, was ordered to invest it and make report. He did receive the money, as he admits, but it is maintained that the record does not show that he received it from the commissioner. The surety undertook that he would invest it, and the failure to do so was the breach. He was entitled to the money for that purpose, and gave his bond that he would invest the proceeds. He was then ordered to make the investment, and admits that he received the money for that purpose. It is, therefore, an immaterial inquiry, the order to invest having been made, whether he obtained the money from the one or the other. The money was in fact in court, and if the order had directed the guardian to withdraw it and invest it could not have been more certain and positive than the order made.

The surety was in court asking a settlement of the guardian's accounts, and insisting that all the moneys that were paid him were received by him as guardian, and not as special commissioner, and that as guardian Timberlake should be held to account, and he, as surety, released. These appellees in their cross action seek to recover on both bonds, but it is evidently an action on the bond as special commissioner. The court ascertained, through its commissioner, the amount due by reason of the collection of this purchase money, and required, by an interlocutory order, the guardian to pay the money on or before the next term of the court, and if not, that a judgment or steps should be taken to hold the surety responsible. The money was not paid and judgment rendered requiring the surety and his principal to pay the money over to Hemingray, who had married the ward, and was made commissioner to receive the money. We see no reason why such a judgment was not proper. The judgment could have been rendered in favor of the infants in no other mode, as the chancellor wanted to reinvest it. Their cross petition authorized such a judgment,, and the same is, therefore, affirmed.

J. R. Hallam and Wm. Lindsay for appellant.

M. J. Dudley for appellee.

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