Court Opinion

ID: 8260599
Source: CourtListenerOpinion
Date Created: 2022-10-16 15:53:36.418948+00
Date Added: 2024-06-11T16:43:10.318283
License: Public Domain

Bond, J.
(dissenting.) — I am unable to agree with the disposition of this case in the majority opinion of this court.
This is an-action on a curator’s bond, executed by W. H. Horner with appellant as one of the sureties thereon, for the purpose of recovering certain expenses and counsel fees incurred and paid by relator in the successful prosecution of a suit to vest title in himself in certain real estate, alleged in the petition herein to have been purchased by the curator with money of relator, and to have been conveyed to said curator in his individual name and subsequehtly incumbered for his private use and benefit.
The facts are that W. H. Horner, curator of' respondent, came into possession as such curator of certain notes due his ward which were secured by a deed of trust. Upon foreclosure of this deed of trust, said curator bid in the property and took a deed therefor in his individual name, and credited the purchase price on the notes in his hands' belonging to his ward. A few days after this purchase, to-wit, June 25, 1881, said Horner and wife conveyed by deed of trust duly recorded the said property to secure a loan of $2,500 made to him and interest notes thereon, all payable in one year. On June 7, 1882, the said Horner, then a widower, executed do relator a quitclaim deed duly recorded to said property. On July 21, 1882, the . said Horner made a seventh annual settlement, in which among other things he reported the purchase by him of the property at *500said foreclosure sale for the benefit of his ward and the subsequent conveyance thereof to said ward, not disclosing his having mortgaged it before he quitclaimed to his ward. On August 16, 1885, said ward who was a non-resident of the state reached his majority. On October 23, 1886, said curator, W. H. Horner, died without having made final settlement of his said curato rship. The public administrator took charge of his estate and on December 9, 1886, gave the statutory notice for the exhibition of claims.
Neither Charles L. Patterson relator, nor his counsel knew of the making of the deed of trust by said Horner, dated June 25, 1881, to secure his said note of $2,500 until informed of the fact sometime in April, 1887. They then learned also that said note had been transferred in due course of trade, and that the last holders were causing an advertisement of sale under-said deed to secure payment.
On September 7, 1887, suit was brought by relator Charles L. Patterson to set aside and annul the said trust deed given by said Horner as aforesaid on the property in question to secure his individual indebtedness. A decree sustaining the petition of relator was entered in the circuit court, and upon an appeal affirmed in the supreme court on February 23, 1891. Appellant was notified by relator of the institution of his suit to cancel said trust deed and vest title in himself. Appellant’s attorney cooperated with relator’s attorney in the prosecution of said suit in the circuit court. Relator paid his counsel for services and expenses in said suit the sum of $603.65. No claim nor demand was exhibited or presented against the estate of W. H. Horner by relator. Said estate, though insolvent, paid out a dividend of forty-two hundredths on debts established; total payment $11,916.40.
*501There was a judgment for relator from which an appeal was taken, whereon two errors are assigned. First. That the court erred in overruling appellant’s plea of statute of limitations. Second. In the giving of respondent’s instructions. It is clear the court committed no error in overruling appellant’s plea' that the surety on the curator’s bond was releasedlrom liability, because the claim sought to be enforced against him was not exhibited nor presented during the course of administration of the estate of the principal on the bond.
If it were admitted for argument that the present cause of action is barred as a demand against the estate of W. H. Horner, the principal in the bond, under the statute of limitations in the administration act, non constat that it is barred thereby against the surety on the bond executed by the deceased curator. This exact point was before the supreme court of Arkansas. Ashby v. Johnston, 23 Ark. 163. That was a suit by two wards against the sureties of the deceased guardian, who interposed the defense that the claim was not presented “within two years after grant of letters.” The judgment of the trial court sustaining a demurrer to this plea was affirmed in the supreme court, who stated the rule thus: “But it is well settled that where, from mere omission of the obligee to probate the claim in time, the cause of action is barred against the estate of the principal, in the hands of his executor or administrator, by the statute of non-claim, this of itself does not discharge the sureties in the bond.”
To the same effect is Chapin v. Livermore, 13 Gray, 561; Marshall v. Hudson, 9 Yerg. 63; Ordinary for use, etc., v. Smith, 55 Ga. 15.
I am, however, satisfied that the cause of action alleged in the petition in this cause did not arise until the payments sued for had been made, to-wit, the date *502of the final decree of the supreme court (February, 1891), vesting title in relator and annulling the deed of trust attacked in his suit. It was therefore not a demand against the estate of curator prior to that time. The statute of limitations only begins to run ■ on the accrual of the cause of action, and no bar attached when suit was bi’ought. Tenny’s Adm’r. v. Lasley’s Adm’r., 80 Mo. 664.
The next assignment presents a question of new impression, namely, whether counsel fees and expenses of litigation, other than taxable costs, are recoverable in the present action on the curator’s bond? I am of the opinion that they- are not elements of recovery against a surety on a curator’s bond in a suit thereon to enforce his liability under the stipulations and conditions of a bond framed (as the present,one) according to the provision of section 5299, Revised Statutes, 1889.
This action is brought on the bond of appellant as surety for the compliance of the curator with its conditions. The liability of appellant is measured by the obligations imposed by the terms of the bond. The law does not permit a surety to be held on the default of his principal beyond the precise terms of thefinstrument of suretyship. The liability of a curator is to account for and pay over all the estate of his ward which either came into his possession as curator, or would have come into his 'possession by the exercise of ordinary care and diligence. In the case at bar the curator credited certain notes of his ward in payment of the purchase money of a lot of ground conveyed to the curator in his personal capacity. He then mortgaged the lot to secure his personal debt, and then executed a quitclaim of the lot to his ward, and at his next settlement as curator reported (erroneously) to the probate court that the lot had boen purchased for *503and conveyed to his ward. The ward ascertained (1887) after the death of his curator that the lot was incumbered for the curator’s private debt. The ward was, therefore, entitled to two remedies: First. To refuse the quitclaim deed and enforce payment by the sureties of his curator of the guardianship funds invested by the curator in the purchase of the lot. Second. To accept the quitclaim deed, and to set up his title as the beneficiary of a resulting trust in the lot, by virtue of the purchase of the same with his money, against the creditors secured in the deed of trust made by Horner while he held the title individually on the ground of notice to them of relator’s equitable title. Robinson v. Robinson, 22 Iowa, 428; Phillips v. Overfield, 100 Mo. 466, 473; Pomeroy on Equity Jurisprudence, secs. 422, 587, 1049; 9 American & English Encyclopædia of Law, 148, 149; Evertson v. Evertson, 5 Paige, 644; Ferris v. Van Vechten, 73 N. Y. 113; Fogler v. Buck, 66 Me. 205. The bond which the curator gave upon the assumption of his trust obligated himself and his sureties to “the faithful discharge of his duties.” Revised Statutes, 1889, sec. 5299. Under this condition there would have been no liability on the part of the sureties for counsel fees and expenses of litigation, had the ward brought a direct action against them for the money invested by his curator in the purchase of the lot as aforesaid. That the ward declined this method of redress, and elected to establish a trust in the property bought by the misuse of his money by his curator, cannot in reason be held as enlarging the obligations, assumed by the surety in signing a curator’s bond containing the foregoing condition of liability. The scope of the condition is measured by its terms, and not by the election of remedies on the part of the obligee. The restriction of the obligations of the bond of a curator to the faithful *504discharge of his duties L the equivalent in law to a stipulation to. perform the special duties (legally) charged upon him. There is no provision in the statute imposing the pena’ty of counsel fees and non-taxable costs on sureties for the defaults and misfeasances of guardians and curators. Such a' rule has never been applied in actions on bonds of administrators nor public officers, although the conditions of such bonds are as broad, if not broader than those of guardians and curators. If the theory of respondent were sound, it would follow that under the condition in the bond sued upon respondent would have a right to demand that appellant, the surety in that bond, should employ counsel to conduct respondent’s litigation against third persons to establish a resulting trust in property bought by his curator by converting the money of respondent. No such obligation is contained in the “condition” of the bond executed by the surety, nor is the bringing of such a suit the necessary result of the breach of the curator’s bond. The direct result of the breach is to fasten liability on the curator and his sureties for the money (in this case $2,500), applied by the curator to his own use. The alternative result of that breach is to afford the ward an option to get the thing represented from anyone receiving it with notice in law that it was bought with the ward’s money. I do not think that it is logical to hold that by adopting this second course the ward could impose a liability on the surety not mentioned nor contemplated in his bond or undertaking, and not recoverable in a direct suit thereon against him as bondsman.
In the case of State to use, etc,, v. Bishop, 24 Md. 310, which was an action on the guardian’s bond, the facts showed that the ward had received from third parties certain shares of stock belonging to him which his guardian had illegally transferred, The *505court held that in the action by the ward for breach of the guardian’s bond only nominal damages could be recovered.
In Mann, Judge, etc., v. Everts, 64 Wis. 372, the supreme court reversed a judgment of the trial court, permitting a recovery for counsel fees in a suit on an administrator’s bond given for sale of the real estate, saying: “We do not think such counsel fees are covered by the obligation of the surety on this bond, therefore they should not be recovered.”
In Henry v. Davis, 123 Mass. 345, the facts were that the bond sued on contained a condition, that defendant should abide the decision of arbitrators selected to establish a boundary line between his estate and that of plaintiff, and should execute plaintiff a quitclaim deed according to the award of the arbitrators. Defendant committed breach by refusing to carry out the award of the arbitrators by giving a quitclaim deed, and brought a bill in equity to set aside the award, which after a hearing was dismissed with costs. Thereupon plaintiff sued defendant upon, said bond to recover the expenses incurred in the equity .suit to set aside the award. The court held: “The plaintiff has been awarded his costs in that suit. The theory of the law is, that the taxable costs awarded to the prevailing party in a suit furnish a full indemnity to him for all his expenses incurred in the suit. Therefore a defendant who successfully defends a suit brought against ¡ him has no right of action or claim beyond the amount of the taxable costs against the plaintiff therein. It' follows that the plaintiff in the case at bar has no claim against the defendant for the expenses he seeks to recover, which he can enforce either directly by a suit or indirectly as damages for a breach of his bond.” To the same effect are Oelrichs v. Spain (15 Wall.), 82 *506U. S. 211, 220; Sedgwick on Damages [2 Ed.]sec. 680, 692; State to use Roe v. Thomas, 19 Mo. 613, 618.
There are exceptional cases in which counsel fees may be' recovered in suits on contracts or bonds, although the general rule confines such recoveries to actions of tort. It has been held that they are embraced in injunction bonds, attachment bonds or any other contract made by a surety, broad enough in its stipulations to cover damages or loss incurred in the employment of counsel or discharge of the contract. But the distinct ground of these holdings is that the peculiar condition or stipulation of the bond or contract in question provides such general or special indemnification of damages as necessarily embraces counsel fees and non-taxable expenses.
The authorities relied upon by respondent belong to this class. In N. H. & N. Co. v. Hayden, 117 Mass. 433, the contract on which defendants were held liable for counsel fees was one that bound them to secure the plaintiff a right of way free of charge. Upon breach it was held that stipulation would cover counsel fees in securing the right of way. In Dubois v. Hermance, 56 N. Y. 673, a contract to perform all the outstanding contracts of plaintiffs was held to embrace counsel fees paid by plaintiffs in defending one of their contracts which defendants had failed to perform. In Strong v. Ins. Co., 62 Mo. 289, the doctrine is stated that a second insurer is bound by the judgment of the assured against the first insurer, there being a contract of indemnity between the two insurers binding the second insurer to pay the first insurer a certain part of the loss. It was decided in that case that there is no privity between the assured and the second insurer, the liability of the latter being wholly to the first insurer. For this reason, and because that liability would become absolute in the event of a judgment after loss against the *507first insurer, and because the second insurer had a right to control the defense to a suit against the first insurer, he was concluded by the judgment. That case is useful in defining the extent to which one not a party to the record may be concluded by the results of a litigation in which he has participated, or which he could have controlled; but it throws no light on the measure of á surety’s liability on a bond containing the conditions set forth in this record.
I fail to see that analogy between the cases (containing the clauses of full indemnity or warranty) cited in the opinion of the majority of the court and the case at bar. Each of those seems to be clearly one of the class of contracts, in which the obligatory words by express terms or necessary implication warrant the recovery had. No case has been adduced where a recovery for counsel fees was had in a suit on a guardian’s bond or any bond with similar conditions,. and the contrary has been held in the cases cited supra in this opinion. I do not think the conditions of a bond shouldbe strained against sureties; they are favorites in law, and have a right to stand upon the strict terms of their obligations when such terms are ascertained.
In the event of a suit upon an implied promise by the appellant to pay the counsel fees and expenses incurred by respondent after his election to sue for the lot rather than the money, the doctrine of Strong v. Ins. Co., 62 Mo. 289, might be relevant under the facts: herein tending to show appellant’s connection with the litigation of respondent. As to the maintenance of such action I express no opinion. Unquestionably there can be no recovery in the .present action on the special contract expressed in the bond, even if it were admitted that the evidence tended to show an implied agreement on the part of appellant to reimburse respondent for the litigation to_ establish his title to the *508lot. A party cannot sue on one cause of action and ¡recover on another. In Haynes v. Town of Trenton, 108 Mo. 123, 130, it was said: ‘‘The purpose of a petition is to advise the court and the adversary party of plaintiff's claim. This court has always given a liberal construction to pleadings under the code, but it has sternly set its face against the attempt to sue on one cause of action and recover on another. Warson v. McElroy, 33 Mo. App. 553; Eyerman v. Cemetery Ass’n, 61 Mo. 489.
For the error of the circuit court in giving the instruction authorizing a recovery in this action for counsel fees and non-taxable expenses, I think the judgment herein should be reversed and judgment-entered for nominal damages.