Fidelity & Deposit Co. v. Fairfield , 164 Ark. 498 ( 1924 )

McCulloch, C. J.

This is an action against W. A. Anthony, who was formerly administrator of the estate of D. P. Beard, deceased, and appellant Fidelity & Deposit Company, the surety on his bond, to recover funds which came into his hands as such administrator, and which he had failed to pay over in accordance with the orders of the probate court. The action was instituted by the appellees, Fairfield, as administrator in succession of the Beard estate, and Mrs. Virgie Beard, the widow of said decedent.

Beard died in the year 1918, and, as before stated, Anthony became administrator of the estate, and appellant Fidelity & Deposit Company executed his bond as surety. Property of the estate of the aggregate value of $74,184.87 came into the hands of the administrator, according to his own settlement account filed in the probate court, of which there was $40,000 in cash collected ou an insurance policy payable to the decedent. The cash was collected by the administrator, and deposited in the Bank of Blytheville, a banking institution with which Anthony was officially connected, and which later became insolvent.

During the year 1918 the probate court made an order assigning the widow’s dower in personalty, and directed the administrator to pay over to her the sum of $13,478.09 as her dower in the funds of the estate, and also certain other items of personal property. After the Bank of Blytheville became insolvent, it was taken over by the State Banking Department, and a dividend was declared for distribution to creditors. The amount of this dividend on the deposit of Anthony, as administrator, was $8,-452.08, which was paid over to the widow, leaving a balance of $5,026.01, the balance due on her dower in the cash assets of the estate. Anthony resigned as administrator, and filed his settlement account showing. a balance of funds in his hands belonging to the estate in the sum of $19,926.66. There were no exceptions to this settlement, and the court approved it and ordered Anthony to pay the sum found to be in his hands over to his successor. Appellant A. Bi. Fairfield was appointed administrator in succession, and, as before stated, he and the widow instituted this action to recover not only the amount found due on settlement, but to recover additional sums alleged to have been wrongfully taken credit for by Anthony in his settlement account. In other words, the suit was in part to surcharge his account for alleged fraud in making excessive payments to creditors of the estate, and in taking credit for same in the settlement account. It is charged in the complaint, in general terms, that the payments were fraudulently made, but no facts or circumstances are either alleged or proved 'which constitute fraud in fact.

The court, on final hearing, found that there was due from Anthony the sum of $12,155.26 after crediting the amount of dividend paid by the bank on the sum shown in Anthony’s final settlement, and rendered a decree against him and the surety on his bond for this amount, and also for the sum of $8,417.18, which Anthony had paid, according to his settlement, to certain creditors in excess of the amount due on those claims.

The court was correct in its decree for the recovery of the balance due ($12,155.26) and in the hands of the administrator, and which the court ordered paid over to his successor. Anthony and his surety are, according to the undisputed evidence, liable for this amount, for the order of the probate court fixing the amount and ordering it paid over is conclusive upon the administrator and his surety. Fogg v. Arnold, 163 Ark. 461.

The court erred, however, in surcharging Anthony’s settlement account and in charging him and his surety with the sums paid to creditors in excess of their respective pro rata. Neither the allegations nor the proof were sufficient to show fraud or mistake'which would justify a court of equity in surcharging the account. It is undisputed that the claims of creditors were valid liabilities of the estate. There is not shown any collusion between the administrator and any of those creditors, or any actual fraud in making the payments. All that appellees allege in the complaint is that payments were made in excess of the pro rata to which each of the claimants was entitled. This is not sufficient to show fraud. McLeod v. Griffis, 45 Ark. 505. The confirmed settlement account of Anthony and the order to pay over are conclusive, not only upon the administrator and his bondsman, but upon all others interested in the estate, in the absence of ’fraud or mistake which constitutes ground for surcharging the account. Rhodes v. Driver, 108 Ark. 80.

The judgment of the probate court, like any other judgment, is conclusive unless fraud be shown in its procurement. James v. Gibson, 73 Ark. 440.

Counsel for appellant contend here that appellees had an adequate remedy at law for recovery of the amount due by Anthony and his surety under the order of the probate court, and1 that the chancery court was without jurisdiction to entertain the cause of action. There was no question raised below as to the right of appellees to sue in equity, and it is too late now to raise the question here.

There can be no dispute as to the liability of appellant for the balance of the amount ordered paid over by the probate court, and the decree for the recovery of that amount will be affirmed. The decree is. therefore modified by reducing the recovery to the sum of $12,155.26, and, as thus modified, it is affirmed.