Court Opinion

ID: 3921390
Source: CourtListenerOpinion
Date Created: 2016-07-06 09:48:27.315235+00
Date Added: 2024-06-11T14:16:22.937988
License: Public Domain

Plaintiffs, Tate and G. B. Hutchins, minors, and the only children of G. B. Hutchins, Sr., and Eula Hutchins, by their next friend, A. A. Tate, sued defendants, G. B. Hutchins, Sr., Fidelity Union Insurance Company, and Commercial Casualty Insurance Company, on Hutchins' bond as community survivor or administrator. Plaintiffs alleged in substance: That their mother, Eula E. Hutchins, died in 1926, intestate; that the community estate of their father and mother was of the value of $32,000; that on August 6, 1928, G. B. Hutchins, Sr., qualified as community survivor and executed a bond as such for $23,000 with Fidelity Union Casualty Company as surety, which was duly approved; that said community administrator breached the conditions of said bond and did not faithfully administer the community estate as required by law; that he did not keep the account required by article 3670; that he mixed and mingled community funds and property with his separate property by depositing moneys received from the sale of community property with separate property in banks to his individual account and paid out said funds by checks drawn indiscriminately thereon for both individual and community expenses, keeping no account as to which were individual and which community, and mixed and mingled community property with his separate property so that same became indistinguishable; that he mortgaged and exchanged community property for other property, not to pay community debts, but for his own use and benefit; and for the benefit of the second community; that he collected rents and revenues from the community property without keeping account thereof and used the same for his own personal benefit and converted all the community property to his own use; that he failed and refused to pay over to the plaintiffs one-half the surplus of said community property after the payment of community debts; that he sold, mortgaged, exchanged, and converted to his own use and lost all the community estate and failed to deliver any part of the community estate, or proceeds thereof, to plaintiffs; that he mismanaged, wasted, destroyed, and converted to his own use all the community property and thereby committed a devastavit; that plaintiffs were entitled to recover one-half of the value of the community estate, after deducting the community debts, at the time Hutchins, Sr., qualified as community administrator.
Plaintiffs alleged in detail the property that came into the hands of the community administrator, its value and the way and manner in which he disposed of same; they charged the administrator did not exercise reasonable diligence and ordinary care in attempting to collect certain notes of the estate (which he failed to collect) and in his management generally of the estate.
Plaintiffs alleged that from August, 1928, to January, 1931, the administrator collected rents and revenue from the community estate amounting to $11,944, and from January 1, 1931, to October 21, 1933, $2,082.71, or a total of $14,076.61, which he converted to his own use.
The court found the following property constituted the assets of the community estate at the time of the qualification of the community administrator; that its value was as hereinafter shown; and that the debts of the community estate were as hereinafter shown:
320 acres, value ............................................... $8,000 3 lots .......................................................... 3,000 2 Herring V. L. notes ........................................... 1,200 5 Standefer V. L. notes ......................................... 1,000 Merrick notes aggregating $8700 (amt. collected) .................. 125 Hamilton note, $250 (amt. collected) ............................ 1,056 Cash in bank ...................................................... 833 (The last two items were not listed in the inventory)
Total ......................................................... $15,214 Community debts: Lien on 320 acres to secure debt to State of Texas ............... $468 Lien on 3 lots .................................................. 1,000
Total .......................................................... $1,468 Net value $13,746
The court deducted the community debts, $1,468, from the community assets of $15,214, leaving the net sum of $13,746, and rendered judgment for plaintiffs for one-half thereof, to wit, $6,873, against Hutchins, Sr., and the defendant insurance companies, with judgment for the insurance companies over against Hutchins, Sr. *Page 295 
Hutchins, Sr., in October, 1927, married his second wife, Lou Conklin. In 1930 she obtained a divorce from him and he paid her $1,000 in settlement of her property rights, and paid $109 as attorneys' fees and court costs out of the estate of the first community, in consideration of which she executed to G. B. Hutchins, Sr., a quitclaim deed to the 320 and 158-acre tracts. After the divorce was granted his second wife, Hutchins, Sr., married a widow with six children, and as a result of said marriage four children were born.
On August 14, 1928, eight days after his qualification as community survivor, Hutchins, Sr., borrowed $5,500, giving as security therefor the 320 acres of land; he borrowed $3,000, giving as security therefor community notes. He acquired 158 acres of land near Lamesa at the price of $15,800. The money acquired by the loan on the half section of land and the money borrowed from the bank, or most of it, was paid to Hubbard, the owner of the 158-acre tract, as part of the purchase price therefor. The three lots in Lamesa, property of the first community were taken in exchange by Hubbard on the 158 acres. Hubbard assumed the payment of the $1,000 debt against said lots and Hutchins assumed payments of a debt of $4,000 against the 158-acre tract. Hutchins paid the debt of $468 to the state.
In June, 1933, the holder of the debt and lien against the 158-acre tract, having obtained judgment, foreclosed the judgment lien and same was sold under execution for the debt assumed by Hutchins.
In May, 1934, the lien securing the $5,500 loan on the 320 acres was foreclosed and the land sold for the principal debt and interest. Hutchins testified that he made no "effort to get an extension of time on this debt (either) before or after suit was filed." Thus it is seen that the administrator, when he qualified, took charge of community property in August, 1928, of the value of, at least, $15,214, against which were debts aggregating $1,468. That the entire estate is gone. That the heirs have received nothing for their one-half interest in said community estate.
At the time the trade for the 158-acre tract was made, the court found there was then no necessity for the payment of the community debts; the deed to the 158-acre tract was made to G. B. Hutchins, Sr., individually, as grantee. He was then married to Lou Conklin Hutchins. The tract was occupied by them as their homestead. Improvements were made thereon and paid for with revenue evidently derived chiefly from the two farms. There was evidence to the effect that the controlling reason for making this trade, whereby the lots were exchanged and the community 320 acres mortgaged and eventually lost, the community vendor's lien notes pledged and the community lots exchanged, was to satisfy the demands of the second wife.
The court found that the foreclosure of the lien on the 320-acre tract was caused by his failure to pay an interest installment amounting to $412.50, due January 1, 1934, and that the loss was not unavoidable. With reference to the loss of the 158-acre tract, the court found the administrator defaulted in one annual payment of interest amounting to $320 due January 1, 1933, which caused it to be foreclosed and sold in September, 1933; that this loss was not unavoidable. The court further found, and the evidence, we think, supports the court's findings, that by the exercise of ordinary care and reasonable diligence Hutchins, Sr., could have secured an extension of time on said interest payments and could have saved both said tracts of land from foreclosure.
The court found that the administrator collected and converted the Standefer and Herring notes; that he collected and converted the Hamilton note prior to January 1, 1931; that he collected $1,530 interest on the Merrick notes and in 1933 traded said notes for cows of the value of $125, all of which was converted to his own use.
The court found that the administrator "sold, mortgaged and wasted the entire community estate so that nothing remained on hand at the time of filing this suit; that by mortgaging the 320 acres and using the proceeds for his own benefit in the purchase of the 158 acres and exchanging the Lamesa lots the same were thereby converted by the administrator." The court further found the allegations of the plaintiffs' amended petition with reference to keeping account as required by article 3670 to be true; that Hutchins "sold, mortgaged, and exchanged said community property for other property, not for the purpose of paying community debts, but for his own use and benefit and that he collected rents and revenues of said community property without keeping an *Page 296 
account therefor and used the same for his own personal use. That G. B. Hutchins Sr. never paid to the plaintiffs the one half of said community estate which they inherited from their mother, or any part thereof. That said defendant, G. B. Hutchins Sr. after his qualification as survivor in community as aforesaid, mismanaged, wasted, destroyed and converted to his own use all of said community property and thereby committed a devastavit of the same."
The court concluded as a matter of law that plaintiffs were not required to follow the community property; that plaintiffs were entitled to recover against the principal and sureties on the bond, or those that stood in the place of the sureties, one-half the value of the community property, less the community debts, with interest thereon at 6 per cent. from August 14, 1928, and entered judgment accordingly.
Had the 158 acres of land been retained and not lost, the heirs of the first community would not have been required to accept said land taken partly in exchange for community property and paid for, in part, by money borrowed by the administrator on real and personal property belonging to the first community; the heirs had the right to treat the transaction as a conversion and to sue the community survivor and his sureties for the value of their interest in the property converted. Hand v. Errington (Tex.Com.App.) 242 S.W. 722, 723. When the 158-acre tract was acquired by Hutchins, Sr., it was at least presumptively the community property of the second marital partnership, and the debt created was the debt of the second community. Moreman v. Roberson (Tex.Civ.App.) 76 S.W.2d 223, 225
(writ refused). Had the property been retained and Hutchins and a wife continued to reside thereon, it would have been affected by her homestead claim. Graham v. Miller, 26 Tex. Civ. App. 5, 62 S.W. 113; Hales v. Peters (Tex.Civ.App.) 162 S.W. 386; Strickler v. Kassner (Tex.Civ.App.) 64 S.W.2d 1025, 1027. The debts so contracted as an incident to acquiring the 158-acre tract were not community debts; they were not charges against the interest of the plaintiffs in the first community estate, yet thereby the remaining interest of the heirs in the community property was forever lost. 31 C.J. § 1334, p. 190, § 1351, p. 202; Brown v. Adams (Tex.Civ.App.) 55 S.W. 761; Faris v. Simpson,30 Tex. Civ. App. 103, 69 S.W. 1029; Moreman v. Roberson, supra. Although by virtue of the execution of the bond and compliance with the statute the administrator acquired the power to deal with the property as in the lifetime of his first wife, yet his actions that resulted in loss of the heirs' interest in the estate must, as to them, be done in good faith, and, we think, the fact that the act is done for the benefit of a subsequent community will not relieve the administrator of the first community and his sureties of liability when the administrator fails to deliver to the heirs their part of the community estate, or its value, and fails to account therefor. The condition of the community administrator's bond is not only that he will "faithfully administer" the estate, but also that he "will pay over one-half the surplus thereof after the payment of the debts." We see no good reason why the conditions of the bond do not condemn a principal and his sureties where the principal (community survivor) does not tender the property, or its value, to the heirs, unless it be shown that the estate was exhausted by payment of community debts, "unavoidable losses," expenses, and commissions, as provided by article 3670. There was ample evidence that the loss of the heirs' interest was not unavoidable. Moreman v. Roberson, supra. Certainly when such relationship exists it is the duty of the administrator to use ordinary care and prudence in the protection and preservation of the heirs' interest in the community estate and failing therein the administrator and the sureties on his bond are liable to the heirs for the value of their interest in the estate.
Our courts have held, in effect, that when the survivor takes charge of the community estate, same being granted to him by virtue of his bond, etc., the survivor is charged with (a) the heirs' one-half interest in the estate, plus (b) the increase and (c) profits of same, and he is credited with (1) community debts, (2) unavoidable losses, and, ordinarily, (3) necessary and reasonable expenses, and (4) a reasonable commission for the management of same. Article 3670 requires the community administrator to "* * * account to the legal heirs of the deceased for their interest in such estate, and the increase and profits of the same, after deducting therefrom all community debts, unavoidable losses, necessary and reasonable expenses, and a reasonable commission for the management of the same" *Page 297 
Leatherwood v. Arnold, 66 Tex. 414, 417, 1 S.W. 173.
There is a substantial difference between the authority of a survivor and a community administrator who has qualified as required by article 3667. Articles 3668 and 3669. The enlarged powers are granted to the community administrator upon his qualifying as such because "the bond required stands for the children's interest in the community" and the community administrator upon qualifying as such "is dismissed from the control of the court with the simple admonition to keep correct accounts." Simkins Admn. of Estates in Texas (2d Ed.) pp. 527, 528. "The bond takes the place of the property and covers such community property as is in the hands of the survivor at the time of the execution of the bond and proceeds thereof subsequently coming into the hands of the survivor." 31 C.J. § 1368, p. 212. "The bond takes the place of the property and the proceeds from any subsequent sale thereof. Where the survivor sells community property and converts the proceeds to his own use the sureties are liable to the other owners for their proportional part of the same with interest from the date of sale; and in order to relieve the sureties from liability for property to which the heirs are entitled, it must be shown the heirs received it." 14 Tex.Jur. § 783, p. 620.
"The right of the survivor in community to the absolute management of the common estate is secured by the statute, only in the event that a bond with sufficient sureties, and conditioned as the statute directs, is filed. * * *
"The sureties upon the * * * bond are, of course, liable for his waste and mismanagement of the property. * * *
"For the value of the assets invested by the survivor, at least to the amount of the bond, the sureties are liable, and to this extent they become debtors to the estate. The bond takes the place of the wasted property, and a cause of action upon it exists." Brown v. Seaman,65 Tex. 628.
"The authority and power given a community administrator are broad and conclusive. His bond and his fair dealing with the property are the protection given by the law to the minor children of the husband and his deceased wife." Brunson v. Yount-Lee Oil Co., 122 Tex. 237, 243.56 S.W.2d 1073, 1075.
"The heirs will look to the bond in lieu of the property, should it not be in the hands of the survivor when distribution is made." Ball v. Bankers Life Co. (Tex.Civ.App.) 103 S.W.2d 1111, 1114.
"The bond executed by McGraw took the place of the deceased wife's interest in the community estate." McGraw v. Merchants'  Planters' Nat. Bank (Tex.Civ.App.) 34 S.W.2d 633, 634 (writ refused).
"Having given bond under the statute (article 3667, R.S.), the father had the power to dispose of the property (article 3663, R.S.); and the only remedy available to the children was on the bond." McGraw v. Foxworth-Galbraith Lumber Co. (Tex.Civ.App.) 27 S.W.2d 554, 556 (writ dismissed).
"The bond, their only source of indemnity, must be proceeded upon in the court having jurisdiction of the amount." Huppman v. Schmidt,65 Tex. 583.
Houston Fire  Marine Ins. Co. v. Swain (Tex.Civ.App.)114 S.W. 149; Schneider v. Sellers, 98 Tex. 380, 84 S.W. 417, 420; Graham v. Miller, 26 Tex. Civ. App. 5, 62 S.W. 113; Howell v. Fidelity Lumber Co. (Tex.Com.App.) 228 S.W. 181; Coleman v. Coleman (Tex.Civ.App.)293 S.W. 695, 700; Advance-Rumely Thresher Co. v. Blevins (Tex.Civ.App.) 248 S.W. 1086; Tucker v. Imperial Oil  Development Co. (Tex.Civ.App.) 233 S.W. 339; In re Chapman's Estate (Tex.Civ.App.)213 S.W. 989; Watkins v. Hall, 57 Tex. 1; Brunson v. Yount-Lee Oil Co.,122 Tex. 237, 243, 56 S.W.2d 1073; McGraw v. Broach (Tex.Civ.App.)27 S.W.2d 250; Neaves v. Griffin (Tex.Civ.App.) 80 S.W. 420; Belt v. Cetti, 100 Tex. 92, 93 S.W. 1000; Simons v. Ware (Tex.Civ.App.)219 S.W. 858; Guy v. Metcalf, 83 Tex. 37, 18 S.W. 419; Wingo v. Rudder,103 Tex. 150, 124 S.W. 899; 18 C.J. 1031.
Article 3670 provides:
"The survivor shall keep a fair and full account and statement of all community debts and expenses paid by him, and of the disposition made of such community property; and, upon final partition of said estate, shall account to the legal heirs of the deceased for their interest in such estate, and the increase and profits of the same, after deducting therefrom all community debts, unavoidable losses, necessary and reasonable expenses, and a reasonable commission for the management of the same." *Page 298 
The court found:
"That the defendant, G. B. Hutchins Sr., did not keep a full and fair account of all community debts and expenses paid by him and of the disposition made by him of such community property and in fact, kept no account of community debts and expenses paid by him and the disposition of community property made by him; of the increase in profits of the same; of unavoidable losses and necessary and reasonable expenses; but on the contrary mixed and mingled community funds and property with his separate property by depositing moneys received from the sale of community property, rents and revenues therefrom to his individual account in the State National Bank, the Lamesa National Bank and other banks and he paid out said funds by checks thereon, drawn indiscriminately, both for his individual expenses as well as community expenses, keeping no account as to which were individual and which were community.
"That said defendant, G. B. Hutchins Sr., sold, mortgaged and exchanged said community property for other property, not for the purpose of paying community debts, but for his own use and benefit and that he collected rents and revenues of said community property without keeping an account therefor and used the same for his own personal use.
"That G. B. Hutchins Sr. never paid to the plaintiffs the one half of said community estate which they inherited from their mother or any part thereof.
"That said defendant, G. B. Hutchins Sr., after his qualification as survivor in community as aforesaid, mismanaged, wasted, destroyed and converted to his own use all of said community property and thereby committed a devastavit of the same."
The court's findings are supported by the evidence. The community administrator delivered to the heirs none of the property in which they had a one-half interest and paid them none of the proceeds thereof; he failed to keep the account required by the statute and failed to account to the heirs for any of the property or the income therefrom, or the value of either; the losses were found by the court not to be "unavoidable losses"; they were certainly not "unavoidable" as a matter of law. This was a question of fact determined against the defendants and supported by the evidence.
"Article 3601 provides that the interest of the heirs in the community estate must be accounted for with the increase and profits of the same, after deducting all community debts, unavoidable losses and necessary and reasonable expenses, and a reasonable commission for managing the same. This reduces the inquiry in the settlement of the community estate to one of fact, as the use of the words `reasonable', `necessary' and `unavoidable' must be determined by the circumstances of each particular case, and whether there has been shown in the administration the ordinary care of a prudent man." Simkins Administration of Estates in Texas (2d Ed.) 541, 542.
It is true that upon the trial the sureties presented the individual ledger sheet of Hutchins, Sr., retained by the banks with which he had accounts during the period in controversy. These ledger sheets showed the amounts and dates of deposits and withdrawals from said accounts. These did not show, nor was it shown otherwise, in most instances, from what source the deposits came, nor for what purpose the withdrawals were made. Also, such transactions as were reflected by the deed records were shown. Hutchins testified: "I have no canceled checks covering that period nor any receipts, pages of account books, other data or memorandum showing said receipts or expenditures other than such as may be contained in bank statements during that period and I am unable to identify and segregate the various items of deposit and withdrawals in said account. I did not keep any book of account thereof." Hutchins testified that "most" of the money received from the estate was deposited in banks. As to some of the withdrawals he testified they were used to pay taxes, interest, and living expenses. We are of the opinion that such general, indefinite, and incomplete statements relative to a few out of many items of receipts and disbursements did not constitute such an accounting as is contemplated by the statute. 43 A.L.R. 607, 608; Robb v. Robb (Tex.Civ.App.) 41 S.W. 92,95; Coleman v. Coleman, supra.
An attorney for plaintiffs advised Hutchins, Sr., not to come to the trial. His depositions had previously been twice taken and he had been subjected to a most thorough examination as to all receipts and disbursements and all matters relating to an accounting and was apparently unable to make anything more than the *Page 299 
general statements heretofore indicated. Appellees contend that such action on the part of plaintiffs' attorneys prevented an accounting and that plaintiffs are thereby estopped from asserting a failure to account. We do not believe that such is the necessary result. Hutchins, Sr., may be insolvent and not disturbed by a judgment against him and may be pleased with a judgment against him and his sureties in favor of his sons, but if he has violated the provisions of his bond and the law and the heirs have thereby lost their interest in the estate, such attitude on the part of the community administrator should not defeat recovery by the minor heirs who were not shown to be in collusion with him. We cannot know that if personally present he could have added anything to defendants' efforts at accounting. We do not think the action of the court in this respect was error.
In Coleman v. Coleman (Tex.Civ.App.) 293 S.W. 695, 700 (writ refused), the court said:
"The survivor kept no account as is required by art. 3670, R.S. 1925, showing a fair and full account and statement `of all community debts and expenses paid by him, and of the disposition made of such community property; and, upon final partition of said estate, shall account to the legal heirs of the deceased for their interest in such estate, and the increase and profits of the same, after deducting therefrom all community debts, unavoidable losses, necessary and reasonable expenses, and a reasonable commission for the management of the same.'
"It was shown that the property belonging to the community estate was largely used in a way to pay debts incurred somewhat largely by the survivor individually, and, having made no satisfactory report or accounting, the court was justified in treating the only community debt existing at the time the bond was given as having been extinguished and in protecting the minor children from the effect of his administration of their community funds by the judgment in favor of the children on the bond."
Said case is sufficient authority to authorize, under the facts of the instant case, a judgment against the community administrator and the sureties on his bond for the value of the heirs' interest in the estate, less the community debts, because of the failure of the community administrator to keep an account and to account to the heirs as required by article 3670.
The court charged the community administrator with the value of the heirs' interest in the community property (as it existed on the date he qualified as such and at the time it was mortgaged, exchanged, and pledged as security for the purpose of acquiring the 158 acres as a homestead satisfactory to his second wife); the court did not charge the administrator and his sureties for all "the increase and profits" from the community estate; it did deduct "all community debts"; it did not credit them with "unavoidable losses" but held there were none. It did not credit the administrator with. "a reasonable commission for the management" of the heirs' interest in the estate. This did not constitute error. Because of his failure to account, and under the facts disclosed by the record, we do not think the court was required, if authorized, to allow a commission. The administrator did not intend charging the heirs for his services. Certainly if eight days after his qualification he, in effect, disposed of the estate by mortgaging, exchanging, and pledging the property of the estate in order to acquire the 158 acres for his own benefit and that of the second community, and not for the interest of the heirs and, as a result of lack of care and prudence, lost the estate for the heirs, he is in poor position to demand compensation for such acts, and the other defendants are in no better position. See Strickler v. Kassner (Tex.Civ.App.) 64 S.W.2d 1025.
The heirs could not be charged with one-half the expenses of the second or third community, nor for the expenses incident to their board, lodging, and education. It was not proved that their services were not equal to their expenses. The heirs worked to produce crops from the farms and were not paid for it. It was primarily the duty of the father to support his children. The father made no charge and certainly under the facts of this case his sureties cannot. Linskie v. Kerr (Tex.Civ.App.)34 S.W. 765, 766; Moore v. Moore (Tex.Civ.App.) 31 S.W. 532, 534; Richardson v. Overleese, 17 Tex. Civ. App. 376, 44 S.W. 308, 310.
We think "necessary and reasonable expenses" are not shown.
The administrator's bond is conditioned "that he will faithfully administer *Page 300 
such community estate and pay over one half the surplus thereof after the payment of debts with which the whole of such property is properly chargeable" to (in this case) the heirs. Article 3667. We think a community administrator has not faithfully administered the community estate if he fails to keep an account and fails to comply with other provisions of article 3670. He is charged with the heirs' interest in the community property (one-half thereof), he is also charged with the increase and profits thereof. If it is shown that community debts, unavoidable losses, necessary and reasonable expenses, and a reasonable commission (the things with which he may be credited) are not equal to the charge against him and he fails to deliver property equal to the difference in such charge and credit, or the value thereof, to the heirs, then we think it is at least prima facie established that he has not faithfully administered the estate and a recovery is authorized against the administrator and his sureties for such difference.
To hold otherwise would be in effect to say that by virtue of his bond he is empowered to deal with the community estate as his own to sell, mortgage, pledge, lease, and speculate with it as he chooses, but regardless of his purpose, his lack of care, etc., the loss shall fall upon the heirs and not the administrator and his sureties whose bond made such acts by the community administrator possible.
The defendants (appellants here) complain of the judgment for interest at 6 per cent. from October 18, 1928, on the value of the heirs' interest in the estate. Certainly, in so far as the judgment is based upon the administrator's failure to account, there is error. The heirs could not compel an accounting until twelve months after the qualification of the survivor. Article 3681. No demand is shown prior to the bringing of this suit. We think interest on the value of the heirs' interest in the estate after deduction of community debts, to wit, $6,873, could not be charged prior to the demand evidenced by filing of this suit on the 8th day of December, 1934. 33 C.J. § 123, pp. 233, 234 and § 130, p. 236; Lipsitz v. First Nat. Bank of Gordon (Tex.Com.App.) 296 S.W. 490, 491.
The insurance company defendants are Fidelity Union Insurance Company and Commercial Casualty Insurance Company. The Fidelity Union Casualty Company signed Hutchins' bond as surety. In 1930 Fidelity Union Casualty Company and Fidelity Union Insurance Company were consolidated and Fidelity Union Insurance Company took over all of the assets of Fidelity Union Casualty Company and assumed all its liabilities and agreed "to discharge as its own all of the liabilities of Fidelity Union Casualty Company of every character whatsoever."
January 1, 1931, a contract was entered into between Fidelity Union Insurance Company, referred to in the contract as "Fidelity," and Commercial Casualty Insurance Company, therein referred to as "Commercial." For the sake of brevity we shall refer to said companies as they are referred to in said contract.
In the contract it is provided: "Commercial hereby assumes * * * all of the realnet policy liability of Fidelity on the following classes of business * * * surety."
"Commercial agrees to fulfill all of the obligations of `Fidelity' under the policies or contracts reinsured by virtue hereof, and to adjust all claims thereunder at its own expense, and to pay all claims thereunder as therein provided." It provided that it was intended that "Commercial" might act "therein in all respects as if it had issued said policies or contract" "it being the intention of this agreement that `Commercial' shall take the place of `Fidelity' as to said policies and contracts in all respects."
The contract provided, however, that "Commercial" had no liability for any loss occurring prior to January 1, 1931.
With reference to said last-mentioned clause, it is our view that the community survivor's duty to account was a continuing duty and that it would continue if not from the execution of the bond, then from the expiration of the twelve months' period thereafter, until barred by limitation, unless sooner discharged by compliance with the statutes.
The judgment of the trial court is modified so that it will bear interest from the 8th day of December, 1934, instead of August 14, 1928, and as so modified it is affirmed.