Case ID: ohio-np-ns_27/html/0012-01.html
Source: Caselaw Access Project
Author: {"author": "King, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Common Pleas Court of Franklin County.
    Hugh Huntington, etc. v. Globe Indemnity Co.
    Decided, October 14, 1927.
    
      Frank M. Raymund and Hugh Huntington, for plaintiff.
    
      Vorys, Sater, Seymour & Pease, for defendant.
   King, J.

Josephine Howard was appointed by the Probate Court of Franklin county, as guardian of the estate of Charles E. Kinkade, a minor. On the 30th day of. January, 1922 she gave a general guardian’s bond with the defendant, Globe Indemnity Co., as surety in the sum of $3,000. On or about the 29th day of May, 1922, said Josephine Howard filed her petition in the Probate Court for the purpose of selling real estate owned by the ward. On June 2, 1922 an additional bond was filed in the Probate Court in the sum of $4,200.00. Executed by Josephine Howard as principal and the Globe Indemnity Co., as surety. This additional bond was in compliance with order of the Court, as recited in the bond.

This Bond was conditioned: That if the said Josephine Howard shall faithfully discharge all of her duties as such gúardian, as required by law, then this obligation to be void; otherwise to remain in full force.

The real estate was sold for $2,100. Sale was confirmed by the court and deed executed and delivered.

It is alleged that following said sale of real estate large sums of money were received by said Josephine Howard from the sale of real estate and otherwise while acting as the guardian of Charles E. Kinkade. That she embezzled and converted to her own use the sum of $5,722.23, and has failed and refused properly to account for and turn over said sum to her successor. That upon exceptions to her account filed by her surety the court held the sum of $5,722.23 and interest was due the ward from the guardian; that said guardian has failed to comply with conditions of bond, and failed faithfully to discharge her duties as guardian; that therefore the conditions of bond have become absolute. The action is brought to enforce the obligation of the surety.

The defendant in its first defense to second cause of action in substance alleges and claims that the bond executed on the 29th of May, 1922, being the additional bond required by court was given under authority of Section 10950, General Code, the provisions of which regulate the proceedings for sale of real estate by guardians; that the terms and conditions set forth in said statute (10950 G. C.) to-wit: “Conditioned for the faithful discharge of his duties and the payment of and accounting for all monies arising from such sale,” are conditions which the court shall read into the bond given on 29th; that therefore the liability of the surety company, on said bond is limited to a faithful discharge of her duties, and accounting only of proceeds with reference to sale of real estate; that the guardian reinvested the proceeds in other real estate and thereby fulfilled her duties. In second defense the surety claims that in any event it is liable only for the proceeds of the sale, to-wit, $2,100.00.

There seems to be no dispute about conversion of funds and the default on part of guardian. The condition of the bond usually given in the sale of real estate pursuant to G. C. 10950, is as follows, to-wit:

“Now, therefore, if the said-shall faithfully discharge his duties, as guardian as aforesaid, and shall faithfully, and according to law, pay over and account for all the moneys arising from such sale then this obligation to be void, otherwise to remain in full force.”

Under such a provision the surety’s liability is clearly limited to faithful discharge of duties and accounting with reference to the specific transaction. The terms so declare. But the terms and condition of the bond actually given are quite different. The condition of the bond executed by order of court on 29th of May, is as follows, to-wit:

“Now if said Josephine H. Howard shall faithfully discharge all of her duties, as such guardian as is required by law, this obligation to be void, otherwise to remain in full force.”

In this connection the law prescribing the duties of guardians provides:

“At the expiration of his trust fully to account for and pay over, to the proper person all the estate of the minor ip his hands.” G. G. 10933.

It is to' this end that bonds are required. There is nothing upon the face of the bond, in the recitals or elsewhere to indicate that said bond was to be limited in its application to the real estate transaction. The terms and conditions thereof are the terms and conditions of general guardian’s bond.

It would be improper to speculate upon the reasons which prompted the court to require an additional bond, with conditions such as are contained in this one. However,' interpreted in the light of later facts and circumstances, it was indeed the proper thing to' do in order to protect the interests of the ward. In fact, had the court done less it would have been derelict in its duty and obligation to the estate of the ward in failing to secure the protection necessary.

The fact that the usual bond given in real estate sales such as this would not have given full protection indicates the purpose and intent of protection beyond the specific transaction. As stated this is the clear meaning and effect of the terms and conditions of the bond voluntarily executed on the part of the surety company, unless as counsel for defendant contend, that notwithstanding the effect of the terms and conditions stipulated and agreed upon, the meaning is to be interpreted by the provisions 10950 G. C.; that is to say, although the bond given is in effect a general guardian’s bond by virtue of 10950 G. C. the liability thereon is limited to accounting faithfully for the proceeds of the sale of real estate. In this we do not concur. The conditions of the bond if construed as written afford in the instant case ample protection to the minor’s estate. That is the very purpose of the bond. The very thing the General Assembly intended by its legislation, namely to protect the ward in his estate, against careless or unscrupulous guardians. When the court in furtherance of that object requires such a bond the provisions of the statute should not be interpreted to defeat that purpose. The statute is to be interpreted as a shield for the minor’s estate — not a sword. The Maryland Casualty Co. v. McDiarmid (Sup. Ct.), O., O. S. Bar Bull., July 12, 1927.

It is true that the conditions imposed by the bond are broader than the statute. However, they were agreed to by the. surety company, and a consideration paid. To permit the defendant to avoid the obligation of such conditions by such an interpretation of General Code, 10950 as is urged would violate the terms and conditions and the very purpose of the bond as well as the object sought by the Legislature in such enactment, namely the preservation of. the ward’s estate.

Let the demurrer to first and second defenses of the second amended answer be sustained.

[Note. — Upon payment of full amount claimed, the action was dismissed.] 
      
       Note — See Kinkade’s Trusteeship, 28 Ohio App., 274; O. L. K,., May 16, 1927; 166 N. E., 611, motion to certify overruled January 11, 1927, holding — testamentary trustee transferring funds to himself as guardian, thereafter administering them as guardian, held accountable as guardian.