130 Ga. 225 | Ga. | 1908
Wadsworth was appointed guardian of two minor children, and executed a bond as such, in the sum of $2,000, with the Fidelity and Deposit Company of Maryland as his sole surety. He agreed with the company, that, if it would become surety on his guardian’s bond, he would deposit his wards’ funds in some bank in the city of Macon, to be approved by the surety, and that no part of this money should be withdrawn from the bank without the joint check of the guardian and the surety, through its local representative. The guardian deposited money in a certain bank, and subsequently agreed with the surety to take an interest-bearing certificate for the amount on deposit. He and the local representative of the surety stated to the proper officers of the bank the agreement which had been made, und to carry it into effect a certificate was issued. It certified that the guardian had deposited in the bank $800, payable six months after date, to the order of the Fidelity and Deposit Company of Maryland, on return of the certificate, with interest at four per cent, for the time specified. It was delivered by the bank to the guardian in the presence of the representative of the surety, and was accepted and retained by the guardian with the understanding between himself
The facts of that case were not identical with the one now under consideration. The fiduciary there dealt with was a receiver, which made the case stronger. A receiver is the hand of the court, and no- third person, whether surety or not, can be allowed to intervene between the order of the court and the act of the receiver. If the court gives direction about the control and management of funds, the receiver must promptly perform his duty and obey that direction: He can not be required to ask the consent of any other person, or the concurrence of -such person, in drawing out funds when the court so orders. In the ease referred to it was also true that the deposit was made in the names of the sureties, and that the person who was to join in preparing the drafts for drawing the funds was a partner of one of the sureties. But a difference as to these last-mentioned facts would not have affected the decision; for there was no claim that the sureties used or intended to use the funds for their own benefit, but this was a mode of checking on the receiver, and it was not material whether a surety himself was to join in making the draft or his partner, who for-that purpose was thus constituted his agent. Allowing for thesé differences, it will be seen that the reasoning in that ease is applicable here. The authorities are not numerous.on the subject of re
In McCollister v. Bishop, 78 Minn. 228 (80 N. W. 1118), suit was brought against one Bishop, who had been the assignee of an insolvent corporation, and' the Fidelity and Deposit Company of Maryland, the defendant in the present case, as surety. It was alleged, that when Bishop applied to the Fidelity and Deposit Company to become surety on his bond, that company made it a condition precedent to doing so that he should agree that all the moneys and funds belonging to the estate in his charge which should come into his hands should be deposited with a certain named trust company, to which Bishop assented, and inserted this as one ■of the conditions of his written application to the company to become Ms surety; that at the time the surety company had full
In Wilder v. Butterfield, 50 How. Pr. 385, two of the sureties on. the bond of a municipal tax-collector, who were partners, before signing the bond agreed with the collector that the latter should deposit the taxes collected by him, from time to time, with the former, and for so doing they would allow him a certain sum as interest, and would become sureties, individually, upon his bond. The firm failed. It was held that the two partners by entering into such an agreement with the collector, which was void as against public-policy, thus aided him in committing a breach of trust, and, in putting it out of his power to execute his duties of collector, as they
Bonding and guaranty insurance as a business is of recent growth -'in this State. When the original code, which took effect January 1, 1863, was adopted, it was required that official bonds of public ■officers should not be approved unless they had at least two good . and solvent sureties and not more than five, all of whom should be ■permanent residents of the State, and two also of the county, and freeholders thereof.' The number permitted was later made ten (Acts 1863-4, p. 124), and afterwards twenty (Acts 1889, p. 45). "In 1889 guaranty or security companies incorporated under the laws of this State were allowed to become one of the sureties or the only surety on official bonds of State or county officers, as the ¡.solvency of the company might warrant (Acts 1889, p. 178), Civil Code of 1895, §§246, 247. In 1896 an act w;as passed to authorize ¡solvent guaranty companies, surety companies, fidelity insurance ■■companies, and fidelity and deposit companies to become surety upon .attachment bonds and upon the bonds of city, county, and State ■officers, providing remedies against such bonds. It provided for depositing bonds of the United States or of this State, to the amount ■of $50,000, with the State treasurer, and other matters not material here (Acts 1896, p. 58). In 1897 the amount of bonds required to be deposited by such companies with the treasurer was reduced from fifty thousand dollars to twenty-five thousand dollars (Acts 1897, p. 60). As to various other bonds besides those of ■public officers the law had provided .that the sureties.should be good -and sufficient and should be approved by,some named officer. It has generally been held that administrators, guardians, and trustees rmust furnish their own bonds without expense to the estate. But in. 1903 an act was passed “to authorize administrators, executors, trustees, receivers, and guardians, who are required by law, or, [by] the proceedings appointing such officers, to give bond, to charge costs or ■premiums paid for such bonds as costs or charges against the estates which they represent, or in the proceedings in which they are appointed, and to authorize allowances of such charges or premiums by the judges of the courts of ordinary or other officers or judges under whose jurisdiction such proceedings are pending, or by whom .such appointments are made.” In the body of the act it is limited
These companies have rapidly grown until they do a considerable part of the business of giving sureties. In some respects they have proved very useful and convenient. Instead of applying to a-, friend or an acquaintance and urging him to go on one’s bond, a-, person required to give a surety obtains one or more of these companies to sign his bond for a consideration. It becomes a matter-of business, and doubtless sometimes results in more businesslike-methods. At the same time there is no law against giving individual surety. Such companies may be safe and solvent, but the-assets of those not incorporated in the State, which are required to be held here, are limited, the present requirement being that: there must be a deposit of $25,000, in bonds. Perhaps their actual conduct in regard to assenting to the withdrawal of funds deposited by a guardian may have ordinarily been businesslike in. the past in this State. We do not decide as to this. There is no* evidence on the subject. But whether it has been so or not, in determining a general rule as to the validity and binding force of a contract of the character here involved, we must remember that all surety companies may not be equally good, and with a change-in management the same company may not always act in the same-way. The power and temptation to favor a bank in which it may have an interest, or with which it may exchange favors, is not less, where a corporation is the surety than where an individual is so. The courts can not say that a rule of public policy shall apply in favor of such companies, but not in favor of individual citizens, who may become sureties on bonds. If it should be held that a contract by which such companies should in whole or in part control or have power over funds belonging to guardians was valid and binding, the same rule would have to apply to individual sureties. Let us suppose that an individual had been the surety on the bond here involved. Under the rule sought to be established, why could he not have required the funds to be kept in a_ bank in which he was interested or where he obtained accommodations, or perhaps to which he was a debtor. If there had been a run on the bank, could the surety not have said, “I will not join in drawing out funds, lest it tend to produce a failure?” Or-
Guardians may apply to the judge of the superior court to sell ■and reinvest their wards’ estate. Civil Code of 1895, §2545 et seq. . Without any order a guardian may invest the funds of his ward in bonds or other securities issued by this State. Civil Code, "§2551. And under an order of the superior court he may invest funds held by him in lands. Civil Code, §3432. Suppose that the surety should prefer that the money in the hands of the guardian should not be reinvested, but should remain in the bank, does the law contemplate that he shall have such a veto power? If the contract set up in this case were held to be valid and bind'ing, could the guardian be punished or held liable as being in default for complying with it? If it were held to be a lawful and proper contract between the guardian and the surety to such an ■extent as to authorize a recovery by the surety for its breach, what ■effect would be claimed if the guardian violated the agreement and suit were brought on the bond? Surely it would not be claimed that such an agreement or its breach would in any way affect the right of recovery for the benefit of the wards on the bond, or that the indemnity furnished by the bond could be in any way made subject to a private contract between the principal and the surety. Let it be noted that the agreement set up here is not as tq the .guardian’s money or property, but in respect to the funds of the wards. Besides, this particular agreement does not provide for any payment- by' the guardian, even where the law authorizes or 'requires it, except upon the joint act of the surety and his principal.
As to the amount which the surety has paid to the successor of ithe original guardian the following appears from the agreed statement of facts used on the trial: The certificate of deposit, principal and interest, amounted to $801.10. The dividends paid to
If the agreement made in the present case was contrary to public policy, a breach of it would not furnish a cause of action. If the surety claimed to have been the owner of the fund, this would have been a conversion in which it took part. If it did not claim to have been the owner of the fund, but conceded it to belong to the guardian or the wards, then payment thereof to its proper custodian did not furnish a cause of action to the surety, unless the contract was a valid and enforceable one, a breach of which gaye the surety a right of action against the bank, or a right to be reimbursed out of its assets in the hands of the receiver. This we have just seen was not the case. The surety proceeded by a petition invoking the equity powers of the court. It had no standing in equity, either on the basis of having taken part in an agreement to convert the funds of the wards by placing them in its name, or on the basis of an agreement which we have held was contrary to public policy and not enforceable. In either view, the court exercising equitable jurisdiction properly denied the relief prayed.
We are aware that public policy has been called “an unruly horse,” and caution has been urged in mounting it. -We agree that care and caution should be employed. But if it be clearly ascertained, the rule of application is fixed by the law which declares that contracts against the policy of the law are not enforceable. Civil Code of 1895, §3668.
Judgment affirmed.