195 Tenn. 133 | Tenn. | 1953
delivered the opinion of the Court.
This cause involves the right to the proceeds of certain United States Government bonds and certificates of stock of the First Federal Savings and Loan Association of
Complainant R. E. Morris filed his bill against Roy Morris, administrator of the estate of Robert L. Morris, deceased, Raleigh Morris, the former guardian of Robert L. Morris, deceased, and the U. S. F. & G. Co., surety on the bond of Raleigh Morris, guardian, seeking the recovery as above set out.
It appears that Robert L. Morris was a native of Wayne County, Tennessee but about fifty years ago moved to Crittenden County, Arkansas, where he resided until 1948, when he returned to Wayne County and remained there until his death.
It appears that Robert L. Morris was successful financially and that at the time of his death was worth some thirty or forty thousand dollars in personal property and had very substantial land holdings. It further appears that in December, 1948, the said Robert L. Morris was adjudged a lunatic by the County Court of Wayne County and Raleigh Morris was duly appointed guardian of the person and estate of the incompetent.
While a resident of Crittenden County, Arkansas, said Robert L. Morris purchased twelve Series E United States bonds, issued by the United States for one thousand dollars each, payable to R. L. Morris or R. E. Morris, and after the issuance of said bonds, they were
In so far as the transaction between the guardian and the government of the United States is concerned, no question is made but it is insisted that the transaction in the sale of the bonds by the guardian was a fraud on the rights of the complainant and that the bonds were sold by the guardian for the sole purpose of destroying the rights of complainant in and to said bonds which he would have owned in his own right had the bonds as originally issued remained intact until the death of Robert L. Morris.
We are of the opinion that when Robert L. Morris was adjudged insane, this locked the wheels, so to speak, in fixing the rights of the parties. Thereafter, Robert L. Morris was no longer competent to attend to his own affairs. Under the Treasury Department regulations, if complainant R. E. Morris had predeceased Robert L. Morris, the latter would have taken the entire proceeds. So then, we are of the opinion that when Robert L. Morris became insane, nothing could be done with the bonds or the proceeds except that the guardian keep them earmarked just as they were earmarked in the first instance in the face of the bonds.
It is conceded by counsel that we have no case in this state on this point.
In Taylor v. Schlotfelt, 218 Ark. 589, 237 S. W. (2d) 889 it was held that where one co-owner had purchased United 'States Savings Bonds with intent that his co-owner should receive the proceeds at the purchaser’s death, but purchaser became incompetent, the guardian in possession of the maturing bonds could not cash them except for reinvestment of proceeds in the same manner as the original bonds, unless the proceeds were needed to support and care for the incompetent.
We think that the holding in the Arkansas case is sound and that the defendant guardian held these securities as trustee for the complainant.
*138 “A lawful act does not become unlawful merely because it may be done by agreement between two parties,- but if the purpose and result of the act is to defeat and destroy a right guaranteed by law to another, the act becomes fraudulent in its nature.” Nicholson v. Gulf, Mobile & Northern R. Co., 177 Miss. 844, 172 So. 306, 309. See also Taylor v. McCool, 183 Tenn. 1, 12, 189 S. W. (2d) 817.
We are of tlie opinion therefore that the Chancellor properly overruled the demurrer of Roy Morris, Sr., administrator. It might be stated here that the guardian turned over all of the bonds and certificates to the defendant Roy Morris, Sr., administrator of the said Robert L. Morris.
Under the demurrer of the guardian and the surety company, it is contended that all of the assets are in the hands of the administrator under bond and that, therefore, there is no further liability on the guardian and his surety. This may be true, but at this stage of the proceedings, we think the Chancellor properly overruled this demurrer on the part of the guardian and the surety.
It results therefore that all the assignments of error are overruled and the interlocutory decree of the Chancellor is affirmed.