Davis v. White , 1918 Tex. App. LEXIS 1261 ( 1918 )

Statement of Case.

HIGGINS, J.

Henry Lee Davis died testate on August 10, 1906, leaving three minor daughters, viz., Blanche, Maggie, and Irma. By his will he left his estate to these children, but appointed bis brother, W. C. Davis, executor and trustee of his estate, without bond, and directed .that no action he taken in the probate court except to probate the will and return an Inventory, appraisement, and list of claims. This will was probated, and W. O. Davis qualified as executor and trustee of the estate, and assumed control thereof. Under the terms of the will he was vested with full management and control of the estate during the minority of the girls, and given full authority to provide for their maintenance and education out of the estate. The net value of the estate was approximately $70,000. There was a life insurance policy for §2,000 payable to the girls. W. C. Davis was appointed guardian of their estates by the county court of El Paso county and qualified as such. As such guardian, he collected the amount of the policy. The only property coming into his hands as guardian was the proceeds of this policy. John M. Wyatt and T. M. Wingo were the sureties upon the guardianship bond.

Prior to the filing of the present suit on February 14, 1917, Blanche and Maggie became 21 years of age and had married. Irma is still a minor and unmarried. On June 19, 1916, a judgment was rendered in the district court of El Paso county, in favor of Blanche, Maggie, and Irma, against W. O. Davis, upon an accounting and settlement of the estate which ho, as executor and trustee, was holding for them. In that suit, Blanche and Maggie were joined by their respective husbands, and Irma sued by her guardian, the Texas Bank & Trust Company. The fund of §2,000 received by Davis as guardian was excepted from the operation of the decree and left for future adjudication. The proceeding in the county court, wherein the will was probated and W. C. Davis appointed executor and trustee, was numbered 929. The guardianship proceeding in that court was numbered 982. On July 21, 1908, in cause No. 929, upon the petition of Davis, as executor, an order was entered that cause No. 982 be merged in cause No. 929, and “that W. C. Davis, guardian, trustee, and executor, continue to manage said estate heretofore handled under cause No. 982, but that hereafter he handle the same in his capacity as executor, trustee, and guardian in this cause, without the necessity of making further reports, except as is provided in the will.” After the entry of this order, Davis made no further report in the guardianship proceeding, and has never made any final settlement with his wards in respect to the guardianship fund. No action of any kind in cause No. 982 appears to have been had, after the entry of said order, until March 27, 1916, upon which date the following proceedings were had:

(1) Davis filed an instrument stating that he wished to resign as guardian of the estate of Irma Davis, and offered to file such account of the condition of the estate of the minor and of his guardianship as might be required by law.

(2) Blanche and her husband filed a petition staling that Irma was then 15 years old, and had no guardian of her estate; her former guardian, Davis, having resigned.

(8) Waiver-of citation by Irma, and selection of the Texas Bank & Trust Company as the guardian of her estate.

(4) An order was entered upon the said petition of Blanche and her husband, appointing said bank guardian of the estate of Irma. On March 28, 1916, the bank qualified as such guardian.

On February 14, 1917, the present suit was filed in the district court of El Paso county by Blanche and Maggie, joined by their respective husbands and by the bank, as guardian of Irma, against Davis, Wyatt, and Win-go, to recover upon the guardianship bond given by Davis. Succinctly stated, the pertinent allegations of the petition were: That on March 12, 1907, Davis was appointed guardian of the estates of Blanche, Maggie, and Irma, and on March 13, 1907, the said Davis gave the bond required by law and duly qualified, and that the bond which he filed was as follows: (Here is copied verbatim the guardianship bonds, with signatures of Davis, Wyatt, and Wingo appended thereto.) That on March 22, 1907, Davis collected the §2,000 belonging to the estates of the minors, and thereafter used and appropriated the same to his own use. That at all times Davis, in his capacity as trustee and executor, had sufficient funds for the education and maintenance of his wards, and that no part of the estate of his wards was necessary for such purpose. That he had failed to loan the §2,000, as he could have done by reasonable diligence, and by reason thereof he and his sureties were liable to plaintiffs for the §2,000 collected by him, with interest. That Davis had failed to pay any part of the same to plaintiffs, and by reason of the failure of Davis to pay same, or account therefor, he, and Wyatt and Win-go as sureties on his bond, became liable and are indebted to each of the plaintiffs in the sum of §666.66, with interest, for which judgment was prayed. Judgment was rendered in favor of plaintiffs. Wyatt and Wingo appeal. Any other facts pertinent to the decision will be indicated by the opinion.

Opinion.

[1, 2] The overruling of appellant’s general demurrer is first assigned as error. Among the objections urged to the sufficiency of the petition there are two, which, as to the sureties, are regarded as good, namely: The failure to allege the execution of the bond by Wyatt and Wingo, and breach thereof by them. Notwithstanding the liberal rule applying in testing the sufficiency of a petition as against a general demurrer, the petition as against the sureties is fatally defective in these particulars. There is no allegation •that they made or in any wise executed the name, nor to show refusal upon their part to comply with the terms thereof. Copying the bond in the petition, and the allegation that Wyatt and Wingo were indebted and liable to the plaintiffs, do not show execution of the bond by them, nor breach thereof. The authorities so hold. Jennings v. Moss, 4 Tex. 452; Gray v. Osborne, 24 Tex. 157, 76 Am. Dec. 99; Sneed v. Moodie, 24 Tex. 159; Parr v. Nolen, 28 Tex. 798; Whitaker v. Record, 25 Tex. Supp. 382; Brackett v. Devine, 25 Tex. Supp. 195; Grant v. Whittlesey, 42 Tex. 320; Cotton v. Thompson, 159 S. W. 455; Merchants’, etc., v. Williams, 181 S. W. 859; Carter v. Olive, 128 S. W. 478. In Parr v. Nolen, supra, Chief Justice Moore remarked that these rulings appeared somewhat technical, but followed same. This court cannot ignore the authorities cited, and in deference thereto it is constrained to hold that the petition is insufficient as to the sureties.

[3] By the second assignment, the sufficiency of the petition is questioned as against a special exception. This exception was presented upon the theory that, in order to maintain suit in the district court upon'a guardian’s bond, it must be shown as an indispensable requisite of the district court’s jurisdiction that the probate court had required final settlement by the guardian, or that the probate court had judicially found the guardian in default, ordered him to settle, and he had failed to do so, or must otherwise show that the wards had invoked all the remedies possessed by them in the probate court. This question has been several times before the courts, and it is held that the wards may proceed by an independent suit in the district court to obtain proper relief against the guardian and his bondsmen. There is no merit in the exception. Moore v. Hanscom, 103 S. W. 668; Carpenter v. Soloman, 14 S. W. 1074; Timmins v. Bonner & Long, 58 Tex. 554; Francis v. Northcote, 6 Tex. 185; Fort v. Fitts, 66 Tex. 593, 1 S. W. 563; Key v. Key, 167 S. W. 173.

[4] Error is assigned to the admission in evidence of the proceedings of March 27 and 28, 1916, culminating in the appointment and qualification of the Texas Bank & Trust Company as guardian of Irma Davis. The bank sued as guardian, and there was no plea putting in issue its capacity so to sue. So there was no necessity for any proof on that point; hence it is unnecessary to inquire whether the evidence was properly admitted. Article 1906, subds. 2, 3, R. S.; Dolson v. De Ganahl, 70 Tex. 620, 8 S. W. 321; Kaack v. Stanton. 51 Tex. Civ. App. 495, 112 S. W. 706.

Neither is there any error presented by the ruling on evidence complained of in the fifth assignment.

[5] Various other assignments complain of the court’s charge, refusal to submit requested issues, and that the judgment against the sureties is contrary to the law and evidence. Without undertaking to discuss these assignments in detail, but in view of a retrial, we will indicate our views upon the legal questions involved as applied to the facts presented by this record. In the first place, no importance is attached to the order of July 21, 1908. By this order the probate court undertook to completely divest itself of the supervisory control over the estate in guardianship which was vested in it under the Constitution and statutory law. The effect of this order was to turn over to Davis, as executor and trustee, the management and disposition of the guardianship fund, leaving him absolutely uncontrolled by the probate court in respect thereto. We think it clear that the probate court had no authority to divest itself of its supervisory control over the estate and deprive the wards of their right to have their estate administered under its control. The order was a nullity. Wheeler v. Duke, 29 Tex. Civ. App. 20, 67 S. W. 911; Prince v. Ladd (Sup.) 15 S. W. 159.

[6] While this is' true, yet if it can be shown that Davis, in the suit in the district court or otherwise, and taking into consideration the consequences resulting from commingling of funds, as hereafter indicated, has in whole or in part accounted to his wards, for this guardianship fund, then manifestly to the extent of such accounting his sureties are’protected; and this is true, notwithstanding the decree in the accounting suit excepted the guardianship fund from its operation. Wyatt and Wingo were not parties to that suit, and neither their rights nor their liabilities are affected thereby. In this connection it is noted that Davis, as executor and trustee under the will of his brother, came into possession of an estate of the net value of over $70,000. Under the terms of the will he was given management and control thereof, and vested with authority and directed to educate and maintain the minor daughters out of this estate. He was authorized to do all this free from the control of the court. In addition to the estate mentioned, he, as executor and trustee, under a void order of the probate court, took possession of the guardianship fund. These two funds and his personal funds he commingled, and the identity of the $2,000 was lost. From the very inception of his trust under the will he disregarded the terms thereof, and by the district court has been made to account to his cestuis que trust by turning over to them a large amount of property which he had acquired in his own name with trust funds; and in the decree of the district court a personal judgment has been rendered against him in favor of the daughters for $13,643.03, which remains unpaid.

[7] Davis, as executor and trustee, had ample funds to educate and maintain the children, and his brother’s will expressly authorized and directed him to use the trust estate for that purpose. There is no pretense that the probate court ever authorized the expenditure of any of the guardianship funds for any purpose. Having ample funds as executor and trustee to educate and maintain the children, and charged under the will with the duty to use sufficient of those funds for that purpose, and having no authority from the probate court to so expend any part of the guardianship fund, it follows that neither Davis, as guardian, nor his sureties, are entitled to claim any credit for any of the guardianship fund which may have been expended in educating and maintaining the children, if, in fact, any was so expended.

For the commingling of the guardianship money by Davis with the trust estate and his personal funds there is no excuse. So far as the guardianship fund is concerned, the sureties must suffer the consequences resulting from this wrongful act. So, upon retrial, the sureties are entitled to no credit iu respect to the accounting which Davis has been compelled to make to the plaintiffs, unless they can show that Davis, in his accounting with the plaintiffs, has surrendered to them property and actually paid in money sufficient to account for the entire trust estate and guardianship fund. No issue in respect thereto should be submitted to the jury, unless competent evidence be adduced to present such issue.

Reversed and remanded.

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