Case Name: The PRUDENTIAL INSURANCE COMPANY of America v. Melissa Conrad FRAZIER and Mellonie Conrad
Court: Arkansas Supreme Court
Jurisdiction: Arkansas
Decision Date: 1996-02-05
Citations: 323 Ark. 311
Docket Number: 94-1320
Parties: The PRUDENTIAL INSURANCE COMPANY of America v. Melissa Conrad FRAZIER and Mellonie Conrad
Judges: Dudley, Newbern, and Corbin, JJ., dissent.
Reporter: Arkansas Reports
Volume: 323
Pages: 311–319

Head Matter:
The PRUDENTIAL INSURANCE COMPANY of America v. Melissa Conrad FRAZIER and Mellonie Conrad
94-1320
914 S.W.2d 296
Supreme Court of Arkansas
Opinion delivered February 5, 1996
The Rose Law Firm, A Professional Association, by: Phillip Carroll, for appellant.
Crawford Law Firm, by: Michael Crawford, for appellees.

Opinion:
Andree Layton Roaf, Justice.
Appellant, the Prudential Insurance Company of America, appeals from a judgment in an action for accounting, in which the chancellor awarded $30,519.60 in insurance proceeds to appellees, Melissa Conrad Frazier and Mellonie Conrad. The court of appeals certified this case to us as one requiring interpretation of the Probate Code of 1949. Jurisdiction is therefore properly in this court pursuant to Ark. Sup. Ct. R. 1-2(d)(1) and (a)(3). For reversal, appellant argues that it properly paid the insurance proceeds to appellees' guardian and that, under the law of trusts, it had no further obligation to appellees as beneficiaries. We find no merit to these arguments and affirm.
Appellees were aged eight and nine when their mother died on August 27, 1983. On October 25, 1983, an order was entered by the Garland County Probate Court appointing their uncle, Jerry Reid, as guardian of their persons and estates. The order stated that "bond shall be determined." Bond was not determined and letters of guardianship were apparently never issued to Mr. Reid. On November 10, 1983, appellant paid the appellees' $30,519.60 share of their mother's life insurance proceeds to Reid as guardian of their estates. Reid and his wife adopted appellees in July 1984. After reaching the age of majority, appellees initiated this suit in 1994 by filing a petition for an accounting and for judgment, alleging that both Reid and appellant had failed and refused to account for the life insurance proceeds. After a bench trial, the chancellor found that Reid spent the proceeds for improper purposes and without court approval, that appellant and Reid were jointly and severally liable to appellees, and that Reid was liable to appellant for any payment of the judgment appellant made.
Unlike the dissenters, we have no difficulty in concluding that the chancellor had subject-matter jurisdiction over an action against an insurance company and former guardian for accounting and judgment. See Nelson v. Wood, 199 Ark. 1019, 137 S.W.2d 929 (1940) (chancellor imposed trust on property titled in guardian's name but purchased with minor's funds); Hancock v. Hancock, 197 Ark. 853, 125 S.W.2d 104 (1939) (chancery court had jurisdiction to hear custody dispute between natural mother and guardian previously appointed in probate court); Grogan v. Weatherby, 196 Ark. 705, 119 S.W.2d 557 (1938) (chancellor determined that guardian's failure to give bond rendered proceeding void and set aside partition sale of minor's land); A&P's Hole-In-One, Inc. v. Moskop, 38 Ark. App. 234, 832 S.W.2d 860 (1992) (accounting is an equitable remedy; provides a means to compel one entrusted with property of another to render account of his actions, and for recovery of any balance due).
Appellant first argues that it properly paid the insurance proceeds to Reid as appellees' guardian and was under no duty to ensure that the guardian would carry out his obligations. This argument challenges the chancellor's finding that appellant "paid insurance proceeds to Reid without court authority and without [ejnsuring the beneficiaries would be properly protected." Appellant presented no evidence at the bench trial. Appellant did, however, move for a directed verdict at the close of all the evidence arguing that it had properly paid Reid the proceeds on November 10, 1983, because Reid had been appointed guardian by court order entered October 25, 1983.
Appellees admitted into evidence, without objection, a certified copy of the entire file of the guardianship proceedings. The October 25, 1983 order appointing Reid guardian stated that "bond shall be determined." There is nothing in the guardianship proceedings indicating that bond was ever determined or issued, or that letters of guardianship were ever issued. Appellees introduced a notice from the Probate file dated October 10, 1984, directing Reid to file an inventory of appellees' assets, and Reid's response dated November 9, 1984, which listed each appellee's sole asset as $437.00 monthly social Security benefits. The chancellor found that Reid did not disclose the insurance proceeds he received as guardian from appellant almost one year earlier. The chancellor also found that, because the proceeds were not disclosed, no bond or additional accounting was required by the court in the guardianship proceedings.
On appeal, appellant argues it properly paid the proceeds to Reid as guardian pursuant to the October 25, 1983 order because, at that time, there was no requirement that a bond be issued in a guardianship proceeding and Reid had accepted the appointment as guardian. Appellees respond to this argument with case law to the effect that a guardian is not appointed until bond has been issued. See e.g., Sturdy v. Jacoway, 19 Ark. 499 (1858).
The parties' reliance on the requirement of a bond or on Reid's acceptance of appointment as the determinative issue is misplaced. The issue before us is whether appellant paid the proceeds to Reid without court authority. This issue is controlled by Ark. Stat. Ann. § 57-618 (Repl. 1971), in effect at the time the proceeds were paid, which provided that letters of guardianship, "until revoked or cancelled by the court, shall protect persons who, in good faith, act in reliance thereon." As determined by the chancellor, no bond was ever set and no letters of guardianship were ever issued. The Probate code of 1949 did not authorize appellant to pay Reid the proceeds on the strength of a court order conditionally appointing him guardian, with bond yet to be determined. We find no error in the chancellor's ruling in this regard.
Appellant's second argument for reversal is that, after paying the proceeds to the guardian, it had no further obligation to appellees under the law of trusts. We answer this argument summarily. First, the argument is premised upon the assumption that the trial court found a post-payment obligation of appellant to appellees as beneficiaries deriving from the law of trusts. The trial court made no such finding or any ruling that appellant had a continuing obligation to appellees after it paid the proceeds. Rather, the ruling was that appellant did not ensure that it properly paid the proceeds to the guardian and in fact paid the proceeds without court authority. Second, the abstract does not reveal that appellant relied on the law of trusts in the proceedings below. The record on appeal is confined to that which is abstracted. Mahan v. Hall, 320 Ark. 473, 897 S.W.2d 571 (1995). This court does not address arguments that were not raised below. Wacaser v. Insurance Comm'r, 321 Ark. 143, 900 S.W.2d 191 (1995).
We find no merit to appellant's arguments and affirm the chancellor's order.
Dudley, Newbern, and Corbin, JJ., dissent.
Glaze, J., concurs.