Andrews v. U.S.F. G. Co.

Full title: ANDREWS v. UNITED STATES FIDELITY GUARANTY CO. ET AL

Court: Supreme Court of South Carolina

Date published: Jan 27, 1930

154 S.C. 456 (S.C. 1930)

153 S.E. 745

Opinion

12819

January 27, 1930.

Before RAMAGE, J., Chester, January, 1928. Modified.

Action by Coralie Means Andrews against the United States Fidelity Guaranty Company and others. From the judgment, named defendant and others appeal.

REPORT OF R.L. DOUGLAS, SPECIAL REFEREE

The above matter was referred to me as Special Referee by an order of his Honor, Judge W.H. Townsend, of date November 12th, 1926, directing that I take the testimony offered on all issues raised by the pleadings herein, state the account and report the testimony, together with my findings and conclusions thereon only as to the amount due this plaintiff.

In accordance with this order references were held in my offices in Chester, S.C. on several different days, the first one being held on the 16th day of December, 1926, and the last one on the 30th day of April, 1927.

At these several references the attorneys were present representing their different clients and their various interests; and there was not only considerable testimony offered but there was quite a large number of exhibits offered in evidence. This testimony together with all of these exhibits are herewith submitted and filed with this suit.

By the order appointing me the Special Referee herein my principal duties were limited to the task of stating this account; that is, finding out the exact amount of money due to this plaintiff; thus leaving it to the circuit Judge to determine from the evidence and exhibits the question as to who is liable for the payment of the amount found to be due to the plaintiff.

My first duty towards stating this account was to find out the amount of money, or its equivalent in securities, that was on hand, or should have been on hand, on the 1st day of February, 1918, immediately after the death of A.G. Brice, one of the guardians of this plaintiff, and about one month after the said A.G. Brice made the fifth annual return of the guardians for the ward, Coralie Means, who is the plaintiff herein, and which is the last annual return that was ever made.

I find from the evidence and exhibits in this case that on the 20th day of January, 1913, J.H. McDaniel, then the probate Judge of Chester County, S.C. appointed S.E. McFadden and A.G. Brice as the guardians of Coralie Means, who is the plaintiff herein; and on that day the said Samuel E. McFadden and A.G. Brice signed and executed their bond to the said probate Judge of Chester County in the full and just sum of $15,000.00 with the United States Fidelity Guaranty Company as their surety.

I find that from the date of the appointment of these two guardians, to wit: on the 20th day of January, 1913, the said A.G. Brice had the principal management of the funds belonging to the ward; he seems to have made each of the five annual returns of the guardians of this ward, which were promptly made each of these five years, and regularly up to the death of the said A.G. Brice, which occurred on the 30th day of January, 1918.

It is admitted by all of the parties to this suit together with their several attorneys, that the said A.G. Brice was a man not only of very high character, honesty and integrity, but also a lawyer of great accuracy and ability. And I understand from each of these attorneys that in making up my statement I may consider the five annual returns which were made out by the said A.G. Brice as being accurate and correct; and that my principal duty in respect to these returns is to find out from them the exact amount of the estate, whether corpus or income, that was on hand on February 1st, 1918, that is, immediately after the death of said A.G. Brice, and about one month after he made their Fifth and last annual return.

I first thought that it would be a rather easy job to determine what was the amount of this estate on hand on the 1st day of February, 1918, and which passed into the hands of Samuel E. McFadden, the sole surviving guardian; however, I have found this job more difficult than I had anticipated. It has taken considerable work for me to catch on to Mr. Brice's method of stating the account, the investments, income, credits, etc.

I first wish to find the corpus of the estate that came into the hands of the guardians. From the first return of these guardians I find that they received the following amounts as corpus, to wit:

On February 23, 1913, sale of lands in Aiken County .................................. $ 7,364.77 On February 3, 1913, Amount obtained by suit for rents ............................... 200.00 On March 10, 1913, sale of lands in Chester County .................................. 1,244.57 On June 7, 1917, legacy from Miss Nora Means ................................... 990.85 On June 7, 1917, payment of judgment on J. W. Means ................................ 495.43 ________ Total ................................... $ 10,295.62 From examination of each of these annual returns I find that there was no other corpus except the above which makes a total of $10,295.62.

Now in order to establish the fact as to whether this estate has increased or decreased, from January 20, 1913, to February 1, 1918, during which time the guardian, A.G. Brice, has handled and managed this estate almost solely by himself, I have set out the income and expenses as I have gathered them from these five annual returns, as follows, to wit:

Income Exps. First Annual Return shows ....... $ $ 587.67 Second Annual Return shows ...... 939.65 492.23 Third Annual Return shows ....... 658.50 606.11 Fourth Annual Return shows ...... 667.50 643.11 Fifth Annual Return shows ....... 564.26 863.07 _______________________ Totals ........................... $ 2,829.91 $3,183.29 Now from the above, with nothing more, the expenses are greater than the income by $353.38; and at first thought it might seem that this $353.38; should be deducted from the corpus of $10,295.62, thus leaving the balance as the amount that came into the hands of S.E. McFadden, the surviving guardian.

However, I find that when the first annual return was made this money had been in the hands of the guardians about eleven months, but no income is accounted for; and there is no income reported until the second annual return is made, when the money has been in the hands of the guardians for nearly two years; and that method of reporting the income is kept up on through the fifth annual return, and so while income has been made on this corpus all of these five years, owing to this method of reporting, this income is not accounted for but for four of the years; except in the case of the $4,000.00 which was loaned to T.F. McCluney on note and mortgage, and which lands were taken in by the guardians for the debt. I find that the second annual return accounts for two years interest from McCluney, or at least full interest from him up to the date he deeded the land to the guardians. Then I find that the guardians accounted in each of the three following returns for income from these lands. But as I have said, there are only four annual incomes reported for the balance of this money, while there should be five; or at least the fifth one was earned just about the time of the death of A.G. Brice.

The first return shows that the guardians did not keep this money on hand very long unproductive, but that they very promptly invested it. This first return showing that on January 31st, 1913, $3,360.00 was loaned to Chisholm on note and mortgage. That on the 3rd day of February, 1913, $4,000.00 was loaned to McCluney on note and mortgage; and on March 10th, 1913, $1,175.00 was loaned to J.H. Marion on note and mortgage; thus showing that a total of $8,535.00 was very promptly invested.

I have said above that the five returns show that the $4,000.00 loaned to McCluney is credited with having produced five incomes; but the balance of this $8,535.00, which was promptly invested, is only credited for four annual incomes; therefore, I have calculated an additional year's interest on this other $4,535.00, which comes to $317.45. Then, of the corpus of $1,486.28, which came into the hands of the guardians on June 7th, 1917, as shown by their fifth annual return, there was invested, as is also shown by this fifth annual return, $225.00 on June 25th, 1917, to Mrs. Kee on note and mortgage, also $1,200.00 on September 1st, 1917, to J.B. Westbrook on note; so these two investments amounting to $1,425.00 should be charged with interest from the time they were invested, June and September, 1917, to February 1st, 1918, and this gives an additional interest of $44.09. This added to the $317.45, which I have just estimated should be accounted for, gives a total income of $361.54, additional to that shown in these five annual returns. And if I am correct in this it gives the income and expenses for these five years as coming to practically the same figures; in fact, it makes the income amount to $8.16 more than the expenses; thus leaving the corpus almost exactly what it was when it went into the hands of A.G. Brice five years previous to his death; that is, instead of the expenses being $353.38 more than the income, now by considering this additional income of $361.54, which I think must be included, it makes the income and expenses practically the same.

By checking this over in a little different manner I again find that the income and expenses are practically the same. That is, I find that the interest paid by J.H. Marion is $87.50 a year, and I find that the interest paid by Chisholm is $235.20 a year, making a total of $322.70, and I think each of these interest installments have been earned one more time than the returns show; that is, the fifth installment was earned a few weeks after the fifth annual return was made, and no doubt was collected. Then the interest on the money loaned to Kee and Westbrook, for the five and seven months from June and September, 1917, to February 1st, 1918, amounting to $44.09, is not accounted for in the fifth return (probably not collected, though earned), and this added to the said $322.70 makes a total of $366.79 as interest, which I think has been earned up to February 1st, 1918, and is not accounted for at that time, but according to Mr. Brice's method of reporting interest collected he would have accounted for it in January, 1919. Therefore, again, instead of the expenses being $353.38 above the income, I think this should be subtracted from this latter mentioned income of $366.79, which in that case would make the total income during these five years come to $13.41 more than the total expenses, again leaving the corpus at the end of these five years practically the same as it was when Mr. Brice took possession of it.

Again considering this matter from another viewpoint, to wit: Calculating the amount of interest that was either due or earned on these various loans from the time they were made up to February 1st, 1918, and deducting therefrom the amount of credits which the five annual returns show that methods will give us the balance of the interest that was due on February 1st, 1918. The $4,000.00 loaned to McCluney is credited in these five returns with the five annual incomes, either by the interest from the money loaned or by the income from rent of the lands. Then by calculating the total interest that was due by Peter Chisholm on the $3,360.00 loaned to him on January 31st, 1913, up to February 1st, 1918, it gives the total interest due by Chisholm

as coming to ...................................... $1,344.00 Then by adding the five payments that were made by Chisholm, as shown by these five returns, it shows a total payment made by him of ........... 1,199.80 Thus showing that there was earned on the Chisholm note and mortgage up to February 1st, 1918, as interest a remainder of .................. 144.20 Then taking the loan of J.H. Marion of $1,175.00 made to him on March 10th, 1913, at 7 per cent interest; this loan would have earned as interest up to February 1st, 1918, a total of .............. 402.12 And we find that of this interest he paid a total of 246.75 The other $15.10 that he paid was interest on past due interest. Then on February 1st, 1918, he not not only owed a balance in interest of ............ 155.37 But he also owed one year's interest on unpaid interest of ................................................ 5.75 Thus making a total of interest due by the said J. H. Marion on February 1st, 1918, of ............... 161.12 Then the fifth annual return shows that $225 was loaned to Kee on June 25th, 1917, and the interest on this up to February 1st, 1918, would be ........ 8.09 Then the loan, as also shown by the fifth return, of $1,200 made to J.B. Westbrook on September 1st, 1917, would have earned as interest up to February 1st, 1918 ................................ 35.00 By adding these four together it is clearly shown that there was due and unpaid on the 1st day of February, 1918, a total of $348.41 as interest which had been earned up to that time. This again showing that the income is practically the same as the expenses; this method of making the calculation gives the income but $4.97 less than the expenses as shown above.

In order to state in a little different manner the amount due to the ward at this time, as shown by the above method of arriving at this, I shall set out the securities that came into the hands of S.E. McFadden together with the earned, though unpaid, interest, up to the 1st day of February, 1918, in the following manner

(1) Deed to the McCluney lands of 129 3/4 acres, valued at ................................ $ 4,000.00 (2) Note and mortgage of Peter Chisholm: (a) Principal of this loan ................ 3,360.00 (b) Unpaid, but accrued, interest on this loan up to February 1st, 1918 ........... 144.20 (3) Note and mortgage of J.H. Marion: (a) Principal of this loan ................ 1,175.00 (b) Accrued interest ...................... 161.12 (4) Note and mortgage of Mrs. M.S. Kee: (a) Principal of this loan ................ 225.00 (b) Accrued interest ...................... 8.09 (5) Note of J.B. Westbrook: (a) Principal of this loan ................ 1,200.00 (b) Accrued interest at 6 per cent ........ 30.00 ________ Total .................................... $10,303.41 Therefore, I find and hold that A.G. Brice so handled and managed this estate, in his accurate and careful manner, that the expenses during these five years in which he had charge of the estate, did not exceed the income which he was able to derive from it by his cautious and wise investments. I believe that on February 1st, 1918, at the death of the guardian, A.G. Brice, that he had safely preserved and had intact the full amount of $10,295.62 which he had received when he assumed this trust.

Some authorities are given below establishing principles upon which I am following in making this report, as follows, to wit:

"The fiduciary is chargeable with interest from the beginning of the year succeeding that in which he received his appointment * * * all funds received during the current year are to be regarded as unproductive until the end thereof, and all expenditures made during the course of the year should be regarded as made before the balance is struck, and that interest is chargeable upon the annual balance so struck." Anderson v. Silcox, 82 S.C. 109, 63 S.E., 128, 131; Nicholson v. Whitlock, 57 S.C. 36, 35 S.E., 412.

While the Courts hold that the administrator or guardian is not chargeable with interest on trust funds until the beginning of the calendar year, following the receipt of these funds, still there are other cases holding that should the administrator or guardian receive funds during the early part of the calendar year, and especially if they are rather large amounts, that the said guardian should handle same as any prudent man would handle his own funds, to wit: Get same invested as soon as he could reasonably do so. However, as Mr. Brice got these trust funds very promptly invested that question does not concern us.

Another principle laid down by the Courts is that no one shall be permitted to make profit out of trust funds. The case of Nicholson v. Whitlock, 57 S.C. 36, 35 S.E., 412, 414, has this to say:

"The general rule, as laid down in all the cases in reference to the accountability of trustees, is that they shall use such diligence in the preservation and improvement of the trust fund as a prudent man would do in relation to his own affairs. * * *

"That he shall not make profit out of his trust."

Therefore, while Mr. Brice was very prompt in getting this money invested, in some cases within a very few days after he received it, still all of this income belongs to the ward, and I have made my calculation above on that theory.

In Smith v. Moore, 109 S.C. 196, 95 S.E., 351, 352, Mr. Justice Gage writing the opinion of the Court states:

"It is true that the rule is a trustee is not chargeable with interest on funds in his hands until after the end of the calendar year in which he may receive the funds. But it is fundamental that a trustee may not make a profit * * * out of trust funds. If he should, immediately upon its receipts, put out the trust money at interest, the interest so made would not belong to him, but to the trust estate. The same is true if the trustee lends the money to himself; he must pay that which he would under like circumstances collect from another borrower. If it be a common notion that trustees may, in the first year of their trust, use for themselves the trust fund, the notion is ill-founded. The trustee need not feel bound to make interest in the calendar year in which he receives the fund; but if he does make interest the accretion does not belong to him."

Having now arrived at the fact that on February 1st, 1918, the corpus of this estate was still intact, and therefore, that S.E. McFadden, the sole surviving guardian, should be charged with having received the equivalent of $10,295.62 on that date, I shall make below returns as they should have been made by him; making these up from the evidence and especially from the exhibits offered in evidence, as follows, to wit:

S.E. McFadden, Guardian, In account with Miss Coralie Means, Ward.

1918 Debit

1918

Feb. 1 — To amount of money, or its equivalent in securities, coming into the hands of the surviving guardian, S.E. McFadden .................... $ 10,295.62

Credits Dec. 31st — To interest at 7 per cent on $10,295.62, less $851.53, expenditures during the year 1918, that is, on $9,444.09 from February 1st, 1918, to January 1st, 1919 ....................... 606.00 ___________ Total of corpus and income .......................... $ 10,901.62 Jan. 3rd. — By cash paid A.W. Wise, probate Judge fees .......................................... $ 2.00 Jan. 15th — By cash paid Will Evans, one pair hose ................................................ 1.25 Jan. 26th — By cash paid E.H. Hardin Company, premium on bond ..................................... 30.00 March 4th — By cash paid A.E. Bonham, board, tuition, and clothes ................................ 114.16 March 9th — By cash paid Walter Simpson, Agent, premium on fire insurance ........................... 2.50 March 15th — By cash paid Chicora College, for tuition ............................................. 21.87 May 4th — By cash paid Sylvan Bros., six plates 12.50 May 9th — By cash paid Mrs. Powers, 2 weeks board ............................................... 12.50 June 4th — By cash paid Chicora College, for tuition ............................................. 21.88 June 8th — By cash paid A.E. Bonham for board, tution and clothes ........................... 108.42 June 14th — By cash paid A.E. Bonham, tuition and clothes ......................................... 62.08 July 8th — By cash paid Mrs. W.J. Powers for one month's board ................................... 25.00 July 12th — By cash paid Mrs. W.D. Love, board and other necessaries ......................... 33.50 Sept. 30th — By cash paid J.L. Mimnaugh Co. for clothes ......................................... 4.05 October 3rd — By cash paid R.L. Bryan, school supplies ............................................ 4.06

1919 Debit October 12th — By cash paid Mrs. W.D. Love, board and necessaries ............................... 60.00 October 14th — By cash paid Dr. T.T. Moore, professional services ............................... 2.50 November 7th — Will Evans for clothes ............ 29.40 Nov. 25th — By cash paid A.E. Bonham, board, tuition and clothes ................................. 98.15 Dec. 1st — By cash paid Dr. T.T. Moore, professional services ............................................ 7.00 Dec. 4th — By cash paid Chester Machine Lumber Company for lumber ........................... 48.90 Dec. 11th — By cash paid Mrs. Kate T. Love, Christmas spending money ............................ 10.00 Dec. 11th — By cash paid J.B. Guignard, professional services ............................................ 1.50 Dec. 11th — By cash paid Mrs. Kate T. Love, board and supplies .................................. 85.00 Dec. 12th — By cash paid Will Evans for clothes 11.50 Dec. 12th — By cash paid Mimnaugh Company for clothes ......................................... 7.65 Dec. 12th — By cash paid R.L. Bryan, school supplies ............................................ 1.20 Dec. 19th — By cash paid Chicora College, tuition in piano ............................................ 25.00 Dec. 31st — By cash paid S.E. Wylie, County Treasurer, for taxes ................................ 7.96 _____________ Total disbursements ................................. $ 851.53 Dec. 31st — Balance on hand ...................... $ 10.050.09 ____________ $ 10,901.62 Jan. 1st — To balance due ward ................... $ 10,050.09 Dec. 31st — To interest at 7 per cent on $ 10,050.09, less $706.08, the expenditures during

Credits the year 1919, that is, on $9,344.01 for the year 1919 ........................................... 654.08 _____________ Total corpus and income ............................. $ 10,704.17 Jan. 3rd — By cash paid Chicora College, tuition in piano ............................................ $ 25.00 Jan. 11th — By cash paid Mrs. W.D. Love, board ............................................... 25.00 Jan. 31st — By cash paid A.E. Bonham, tuition 20.00 Jan. 30th — By cash paid Watson Shoe Company, necessaries ......................................... 23.25 Feb. 7th — By cash paid Mrs. W.D. Love, board, tuition and clothes .......................... 50.00 Feb. 14th — By cash paid E.H. Hardin, premium on surety bond ...................................... 30.00 March 7th — By cash paid Mrs. W.D. Love, board, tuition and clothes .......................... 50.00 April 14th — By cash paid Mrs. W.D. Love, board, tuition and clothes .......................... 50.00 May 7th — By cash paid Mrs. W.D. Love, board, tuition and clothes .......................... 50.00 June 7th — By cash paid Mrs. W.D. Love, board, tuition and clothes .......................... 50.00 July 9th — By cash paid Mrs. W.D. Love, board, tuition and clothes .......................... 50.00 August 20th — By cash paid Mrs. W.D. Love, board, tuition and clothes .......................... 50.00 Sept. 11th — By cash paid Mrs. W.D. Love, board, tuition and clothes .......................... 50.00 Oct. 4th — By cash paid telegram, Mrs. Love ...... 1.38 Oct. 8th — By cash paid Mrs. W.D. Love, board, tuition and clothes .......................... 50.00 Oct. 10th — By cash paid J.L. Mimnaugh Company, clothes .................................... 9.50

1920 Debit Credits Nov. 25th — By cash paid The Outlook for clothes ............................................. 58.45 Dec. 14th — By cash paid Cora Means, Christmas money ............................................... 10.00 Dec. 6th — By cash paid Mrs. W.D. Love, board, tuition and clothes .......................... 50.00 Feb. 10th — By cash paid Walter Simpson, fire insurance premium ................................... 3.50 ____________ Total disbursements ................................ $ 706.08 Dec. 31st — Balance on hand ..................... $ 9,998.09 ____________ $ 10,704.17 Jan. 1st — To balance due ward ................... $ 9,998.09 Dec. 31st — To interest at 7 per cent on $9,998.09 less $636.00, the expenditures during the year 1920, that is, on $9,362.09 for the year 1920 ................................................ 655.35 ____________ Total of corpus and income .......................... $ 10,653.44 Jan. 10th — By cash paid Chester News for advertising sale of land ........................................ $ 18.00 Jan. 16th — By cash paid J.H. Gladden, auctioneering sale ................................................ 3.00 Jan. 17th — By cash paid Mrs. W.D. Love, Board and other expenses ............................ 100.00 Mar. 15th — By cash paid Mrs. W.D. Love, board and other expenses ............................ 50.00 April 6th — By cash paid Mrs. K.T. Love, board and other expenses ............................ 50.00 May 6th — By cash paid Mrs. W.D. Love, board and other expenses ............................ 50.00

1921 Debit Credits June 8th — By cash paid Mrs. W.D. Love, board and other expenses ............................ 50.00 July 6th — By cash paid Mrs. K.T. Love, board and other expenses ............................ 50.00 August 9th — By cash paid Mrs. W.D. Love, board and other expenses ............................ 50.00 Sept. 7th — By cash paid Mrs. W.D. Love, board and other expenses ............................ 50.00 Oct. 6th — By cash paid Mrs. W.D. Love, board and other expenses ............................ 50.00 Nov. 6th — By cash paid Mrs. W.D. Love, board and other expenses ............................ 50.00 Nov. 8th — By cash paid Mrs. W.D. Love, board and other expenses ............................ 50.00 Dec. 20th — By cash paid Miss Cora Means, Christmas money ..................................... 15.00 _____________ Total disbursements ................................. $ 636.00 Dec. 31st — Balance on hand ...................... $ 10,017.44 _____________ $ 10,653.44 Jan. 1st — To balance due ward ................... $ 10,017.44 Dec. 31st — To interest at 7 per cent on $10,017.44 less $677.75, the expenditures during the year 1921, that is, on $9,339.69 for the year 1921 ........................................... 653.77 ____________ Total of corpus and income .......................... $ 10,671.21 Jan. 7th — By cash paid Mrs. W.D. Love, board and other expenses ............................ 50.00 Feb. 7th — By cash paid Mrs. W.D. Love, board and other expenses ............................ 50.00

Debit March 7th — By cash paid Mrs. W.D. Love, board and other expenses ............................ 50.00 April 20th — By cash paid Mrs. W.D. Love, board and other expenses ............................ 50.00 May 6th — By cash paid Mrs. W.D. Love, board and other expenses ............................ 50.00 June 6th — By cash paid Mrs. W.D. Love, board and other expenses ............................ 50.00 July 7th — By cash paid Mrs. W.D. Love, board and other expenses ............................ 50.00 August 8th — By cash paid Mrs. W.D. Love, board and other expenses ............................ 50.00 Sept. 6th — By cash paid Mrs. W.D. Love, board and other expenses ............................ 50.00 Oct. 6th — By cash paid Mrs. W.D. Love, board and other expenses ............................ 50.00 Nov. 5th — By cash paid Mrs. W.D. Love, board and other expenses ............................ 50.00 Dec. 1st — By cash paid Chicora College, tuition and other expenses .................................. 42.75 Dec. 8th — By cash paid Mrs. W.D. Love, board and other expenses ............................ 50.00 Dec. 8th — By cash paid Dr. W.C. Abel, medical attention ........................................... 10.00 Dec. 17th — By cash paid Miss Cora Means, money for Christmas ................................. 10.00 Dec. 17th — By cash paid Miss Cora Means, spending money ...................................... 15.00 _____________ Total disbursements ................................... $ 677.75 Dec. 31st — Balance on hand ...................... $ 9,993.46 _____________ $ 10,671.21 Jan. 1st — To balance due ward ................... $ 9,993.46

Credits Dec. 31st — To interest at 7 per cent on $9,993.46, less $791.70, the expenditures during the year 1922, that is, on $9,201.76 for the year 1922 ................................................ $ 644.12 ______________ Total of corpus and income .......................... $ 10,637.58 Jan. 6th — By cash paid Mrs. W.D. Love, board and other expenses ............................ 50.00 Feb. 8th — By cash paid Mrs. W.D. Love, board and other expenses ............................ 50.00 Feb. 15th — By cash paid Chicora College, tuition ..................................................... 42.75 March 6th — By cash paid Mrs. W.D. Love, board and other expenses ............................ 50.00 April 13th — By cash paid Mrs. W.D. Love, board and other expenses ............................ 50.00 May 5th — By cash paid Mrs. W.D. Love, board and other expenses ............................ 50.00 May 15th — By cash paid Mrs. W.D. Love, board and other expenses ............................ 50.00 June 6th — By cash paid Mrs. W.D. Love, clothes, board and other expenses ................... 50.00 July 31st — By cash paid Mrs. W.D. Love, clothes, board and other expenses ................... 100.00 Sept. 9th — By cash paid Mrs. W.D. Love, clothes, board and other expenses ................... 50.00 October 7th — By cash paid Mrs. W.D. Love, clothes, board and other expenses ................... 50.00 Nov. 2nd — By cash paid Mrs. W.D. Love, clothes, board and other expenses ................... 50.00 Nov. 16th — By cash paid Miss Cora Means, one pair glasses ........................................ 14.00 Dec. 5th — By cash paid Mrs. W.D. Love, board and other expenses ............................ 50.00

1923 Debit Credits Dec. 12th — By cash paid Dr. C.L. Kibler, professional services ............................................ 7.50 Dec. 12th — By cash paid Chicora College, tuition and other expenses .................................. 52.45 Dec. 16th — By cash paid Miss Cora Means, Christmas money ..................................... 25.00 ______________ Total disbursements ................................. $ 791.70 Dec. 31st — Balance on hand ...................... $ 9,845.88 _____________ $ 10,637.58 Jan. 1st — To balance due ward .................. $ 9,845.88 Dec. 31st — To interest at 7 per cent on $9,845.88, less $790.20, the expenditures during the year 1923, that is, on $9,055.68 for the year 1923 ................................................ 633.90 _____________ Total corpus and income ............................. $ 10,479.78 Jan. 8th — By cash paid Mrs. W.D. Love, board and other expenses ............................ 50.00 Jan. 9th — By cash paid Chicora College, tuition 45.00 Feb. 6th — By cash paid Mrs. W.D. Love, board and other expenses ............................. 50.00 March 10th — By cash paid Dr. F.C. Gilmore, professional services ................................ 5.00 March 7th — By cash paid Mrs. W.D. Love, board and other expenses ............................. 50.00 April 4th — By cash paid Mrs. W.D. Love, board and other expenses ............................. 50.00 May 7th — By cash paid Dr. W.C. Abel, professional services ............................................. 6.00

1924 Debit May 5th — By cash paid Mrs. W.D. Love, board and other expenses ............................. 50.00 May 16th — By cash paid Chicora College for books ................................................ 3.40 July 9th — By cash paid Mrs. W.D. Love, board and other expenses .............................. 50.00 August 14th — By cash paid Mrs. W.D. Love, board and other expenses .............................. 10.00 Sept. 15th — By cash paid Mrs. W.D. Love, board and other expenses .............................. 50.00 Sept. 20th — By cash paid University of S.C. tuition fees .......................................... 15.00 Oct. 16th — By cash paid Mrs. K.T. Love, board and other expenses .............................. 100.00 Dec. 10th — By cash paid Mrs. W.D. Love, board and other expenses .............................. 65.00 Dec. 11th — By cash paid Mrs. W.D. Love for typewriter ............................................ 10.00 Dec. 11th — By cash paid Miss Mabel Pate, teacher shorthand ..................................... 65.00 Dec. 18th — By cash paid Miss Cora Means, Christmas spending money ............................. 25.00 ____________ Total disbursements ................................ $ 790.20 Dec. 31st — Balance on hand ..................... $ 9,689.58 ____________ $ 10,479.78 Jan. 1st — To balance due ward ................ $ 9,689.58 Dec. 31st — To interest at 7 per ct. on $9,689.58, less $1,054.00, the expenditures during the year 1924, that is, on $8,635.58 for the year 1924 ................................................. 604.49 ____________ Total of corpus and income .......................... $ 10,294.07

Jan. 12th — By cash paid Mrs. W.D. Love, board and other expenses ........................... $ 100.00 Feb. 14th — By cash paid for rent of typewriter 3.00 March 13th — By cash paid Mrs. W.D. Love, board and other expenses ............................ 50.00 April 6th — By cash paid Mrs. W.D. Love, board and other expenses ............................ 60.00 April 6th — By cash paid Miss Cora Means, board, tuition and rent of typewriter ............... 100.00 April 19th — By cash paid for rent of typewriter 10.00 May 5th — By cash paid Miss Cora Means, clothes and other expenses ............................ 100.00 May 10th — By cash paid Mrs. W.D. Love, board and other expenses .............................. 50.00 May 28th — By cash paid Mrs. W.D. Love, board and other expenses .............................. 50.00 June 21st — By cash paid Miss Cora Means, necessary expenses .............................................. 25.00 July 7th — By cash paid Mrs. W.D. Love, board and other expenses .................................... 50.00 August 1st — By cash paid Mrs. W.D. Love, board, clothes and other expenses ....................... 100.00 Aug. 1st — By cash paid Dr. J.A.S. Pike, dental work .................................................... 6.00 August 6th — By cash paid Mrs. W.D. Love, board and other expenses ................................ 50.00 Sept. 2nd — By cash paid Mrs. W.D. Love, board and other expenses ................................ 50.00 Oct. 2nd — By cash paid Mrs. W.D. Love, board and other expenses ...................................... 50.00 Oct. 12th — By cash paid Mrs. W.D. Love, board and other expenses ............................... 50.00 Nov. 3rd — By cash paid Mrs. K.M. Love, board and other expenses ..................................... 50.00

Dec. 4th — By cash paid Mrs. W.D. Love, board and other expenses ..................................... 50.00 Dec. 9th — By cash paid Miss Cora Means, Christmas money ........................................ 50.00 __________ Total disbursements ..................................... $ 1,054.00 Dec. 31st — Balance on hand ....................... $ 9,240.97 ___________ $ 10,294.07 In making out the foregoing seven proposed annual returns there is among the exhibits evidence of each of the payments, which are allowed as credits, either by a receipt for the money or a cancelled check for same; thus leaving on hand on January 1st, 1925, a total of $9,240.07 in the possession of S.E. McFadden, the surviving Guardian.

However, from Exhibit "C," which is a proposed return made out by Mary G. Sledge, the administratrix, and James McLarnon, public accountant, there is shown five items making a total of $175.46, for which they had found no receipts nor cancelled checks to cover same, but they did find on the stubs of an old check book of S.E. McFadden that these five items were paid.

Upon checking this matter over further along with the public accountant, James McLarnon, we have found that the check stub No. 324, of date February 27th, 1918, to A.E. Bonham, for $136.03, has already been accounted for by two receipts, one of date March 4, 1918, by A.E. Bonham, for board, tuition and clothes for $114.16, and the other receipt given at the same time but by Chicora College for $21.87. The stub of S.E. McFadden's check book sets out these same items, making the total of them this $136.03; and as this $136.03 had been allowed in the credits of 1918, it should not be now allowed. However, the four other credits mentioned in Exhibit "C," amounting to $39.43, which appear on the stub check book seem to be proper credits. Two of these are to Walter Simpson, each for $5.50 to cover insurance; one is to the Central Drug Company for $3.40, and the other one to A.G. Brice as a special attorney fee of $25.00. The stub check book states that these payments were made in behalf of this ward; so I conclude that the guardian should be allowed these four additional credits, amounting to $39.43. And I also conclude that I should calculate 7 per cent. interest on these from the time they were paid up to January 1st, 1925; this interest comes to $19.32, making a total credit of $58.75. This deducted from the above $9,240.07 leaves a balance of $9,181.32 on hand January 1st, 1925.

I find that S.E. McFadden, the guardian, paid to E.H. Hardin Company, Agents, of the U.S.F. G. Company, $30.00 on January 26th, 1918, as the premium on the bond for that calendar year; and then again on February 14th, 1919, he paid another $30.00 as the premium on the surety bond for the year 1919; but I find that this annual premium of $30.00 was not paid thereafter, and it should have been paid on January of the years 1920, 1921, 1922, 1923 and 1924, for these calendar years. These five annual premiums make a total of $150.00 In addition to allowing this credit of $150.00 the legal interest should be counted on these premiums from the time they should have been paid up to January 1st, 1925, and the interest on these several premiums comes to $31.50, this making a total of $181.50, which should also be credited. After deducting this $181.50 from the $9,181.32, it leaves a balance of $8,999.82, which I find as being the amount which the guardian had on hand, or should have had on hand, on the 1st day of January, 1925. And, of course, she is entitled to 7 per cent. interest on this $8,999.82 from January 1st, 1925, until paid.

I, therefore, find that there is now due and owing to the plaintiff on account of the trust fund which came into the hands of her guardian, the amount of $8,999.82, with interest thereon at 7 per cent. per annum, from January 1st, 1925, until paid.

In making up this statement, I have not allowed any commissions for the surviving guardian, on either receipts or disbursements, for the reason that he never made any returns at all; he did not file in the Probate Judge's office a single annual return, nor did he ever make any final account or return.

Code 1922, Volume 3, Section 5544, states that where guardians fail to make annual accounting of their acts and doings their commissions shall be forfeited.

In calculating the amount of interest which this guardian should be charged with having received, I have for each of these years first subtracted the total amount of disbursements from the amount which the guardian had on hands at the beginning of that calendar year, and calculated 7 per cent. interest on the balance. This method of calculating interest due by the guardian is in accordance with the following decisions: Anderson v. Silcox, 82 S.C. 109, 63 S.E., 128.

At page 117 of 82 S.C. 63 S.E., 131, of this case the Court says:

"That all funds received during the current year are to be regarded as unproductive until the end thereof, and all expenditures made during the course of the year should be regarded as made before the balance is struck, and that interest is chargeable upon the annual balance so struck."

Tucker v. Richards, 58 S.C. 22, 36 S.E., 3. This case stating at page 29 of 58 S.C. 36 S.E., 3, 5, that a trustee is not necessarily chargeable with interest on the full amount that he has on hand the first day of January, for the amount which is necessary to pay the running expenses of that year are presumed to be unproductive, and as they were presumed to be held out during the year to meet these necessary expenses, they must be deducted from the annual balance and the interest calculated on the remainder.

Tompkins v. Tompkins, 18 S.C. 1, Syllabus 13. "In stating an executor's accounts, the payments made in each current year should be deducted before striking a balance to bear interest for the year in which said payments were made."

Pettus v. Clawson, 4 Rich. Eq., 92, quoting Fourth Syllabus. "In charging an administrator with interest, not only should all funds received in the current year be regarded as unproductive until the close of it, but all expenditures in the course of the year should be regarded as made before the balance is struck, to bear interest."

While we have found that the value of this estate when it came into the hands of S.E. McFadden, the sole surviving guardian, was $10,295.62, and that on January 1st, 1925, between four and five months after his ward became of age, and after he had handled the estate for seven years, this estate was but $8,999.82, that is, it had been reduced in the sum of $1,295.80; still I am satisfied that all of these expenditures should be approved; so far as I can see from the accounts and receipts these expenditures were necessary and proper. The ward was reaching the age when her necessary expenses would naturally increase, she approaching her majority during these years, and becoming of age on the 6th day of August, 1924; and for several years before that she seems to have been either in boarding school or college, and also had other expenses such as charges for instruction in music, stenography and use of the typewriter; and while some of these board bills and tuition seem a little high, I have no doubt but that they were just as reasonable as they could have been had, and I think all of these expenditures were reasonable and proper. In addition to these expenditures and the ones for clothes there was a little money used for Christmas spending money and a vacation trip in the summer, all of which seem to be very reasonable in amount; and I am satisfied that if application had been made to the Court in advance for permission to make these expenditures the Court would have granted the order permitting same; and as all of these expenditures seem to be proper and reasonable in amount I am satisfied that the Court would now approve of them. Anderson v. Silcox, 82 S.C. 109, 63 S.E., 128.

Under the order appointing me the Special Referee herein in it is clear that I am not to pass on the titles to any property concerned in this suit, however, as some of the attorneys have raised the question as to whether the titles to the 129 3/4 acres of land, which was conveyed on the 26th day of January, 1920, to W. Dupre Anderson and J. Weldon Anderson, in equal shares by Samuel E. McFadden, as the surviving guardian of Coralie Means, really passed into these two grantees, or whether the titles to said land is really in the ward, Coralie Means, now the plaintiff herein; and, therefore, I was asked by one of the attorneys to state this account in the alternative, that is, to state how much money is due this plaintiff in case the Court should hold that the titles to these lands are in the plaintiff.

From the first annual return of A.G. Brice and S.E. McFadden, as guardians of Coralie Means, I find that they loaned, on February 3rd, 1913, $4,000.00 to T.F. McCluney on note and mortgage. Then from their second annual return, which is dated January 18th, 1915, they reported that they received $320.00 from T.F. McCluney for the interest on this loan to him for the year ending February 3rd, 1914 (showing that they received 8 per cent. on the loan). This return states that they also received from said T.F. McCluney, as interest on his note and mortgage from February 3rd, 1914, to November 30th, 1914, $264.00 (receiving again 8 per cent. interest on this loan). This return also states that on November 30th, 1914, said T.F. McCluney settled this note and mortgage obligation by deeding these lands to the guardians at the consideration of $4,000.00, the amount of the loan to him.

Then the guardians' third annual return states that they received as income from these McCluney lands $240.00 for the year 1915; thus showing that this investment brought in an income of 6 per cent. Then their fourth annual return again states that they received $240.00 as income from the McCluney lands for the year 1916; this investment again realizing an income of 6 per cent. Then their fifth and last return states that they received as income from the McCluney lands for the year 1917, a total of $304.26; thus they received a little more than 7 1/2 per cent. on the investment for the year 1917.

If the legal title to these lands did remain in the said S.E. McFadden, regardless of the fact that he deeded them to the two Anderson brothers in January, 1920, then he is liable for 7 per cent. on the cost value of these lands, which clearly is $4,000.00. And as the annual returns show that while A.G. Brice managed these lands he received 6 per cent. on the investment for two of the years and a little over 7 1/2 per cent. the other year, then S.E. McFadden should be charged with having received the legal rate of 7 per cent.; he never making any report as to whether he received less or more than that rate; and so if the legal titles to these lands did remain in S.E. McFadden, he should be charged with having received 7 per cent. income from them, from the death of A.G. Brice, to wit: January 30th, 1918, up to January 1st, 1925; and S.E. McFadden would be accountable to his ward for the income on this investment of $4,000.00 for that period of time. And if he were making settlement with his ward on January 1st, 1925, and turning over to her this tract of land as a part of the settlement, he would have to turn it over to her at the value of $4,000.00; and instead of his owing to her on January 1st, 1925, $8,999.82, he would owe to her just $4,000.00 less than that; that is, he would be liable to her for $4,999.82; together with the titles to this tract of land, and with 7 per cent. interest on the $4,999.82 from that date until paid.

From the evidence of J. Weldon Anderson, himself, and from the exhibits offered in evidence by his attorneys, Glenn Macaulay, I find that on the 26th day of January, 1920, Samuel E. McFadden, as surviving guardian of Coralie Means deeded the McCluney lands, aggregating 129 3/4 acres, to W. Dupre Anderson and J. Weldon Anderson in equal shares, for the consideration of $4,690.07. These are the identical lands upon which A.G. Brice and S.E. McFadden had loaned $4,000.00 of the money of their ward, Coralie Means, to T.F. McCluney, on February 3rd, 1913; and the said lands which they stated in their second annual return was deeded to them, as such guardians, by the said T.F. McCluney, for this $4,000.00.

I further find that the said W. Dupre Anderson, on the 6th day of September, 1921, conveyed his undivided one-half interest in these McCluney lands to his brother, J. Weldon Anderson, for the consideration of $2,000.00; thus showing that the said J. Weldon Anderson paid $4,345.03 for this tract of 129 3/4 acres of land. Then the said J. Weldon Anderson states in his testimony at page 23, that he spent between $400.00 and $500.00 in building and repairing barn and two tenant houses, and that he also spent some money in making other improvements thereon; this party having therefore invested about $5,000.00 of his money on the place, believing that he was and is holding a good title to these lands.

Before completing and signing this report I have submitted the foregoing to each of the attorneys representing their various clients herein, with the request that they might make any suggestions as to any matters that they thought I had either overlooked, or as to any errors that had been made in respect to stating the account, calculations or otherwise, so that corrections in respect to same might be made before the report was finally completed.

The attorneys for the United States Fidelity and Guaranty Company, and also the attorneys for Sallie M. Brice, executrix of the estate of A.G. Brice, deceased, have called my attention to a number of items or things in this account and the statement thereof in arriving at a balance due to the plaintiff herein which they think should be stated in a different manner and thus arrive at a different amount now due the plaintiff, as follows:

1. At page 3 of this report where I have listed the items making up the corpus of this estate, I have included the $200.00 which the first annual return of the guardian's report that they received by a suit for rents due the ward. These attorneys stated that as this $200.00 was received as rents due on lands in Aiken County, which had been rented by someone other than these guardians, before the lands were sold, that this $200.00 should be treated as income and not as corpus. As these two guardians had nothing to do with the renting of the Aiken County lands, they not being the guardians of the ward at the time the lands were rented, these rents being due before these guardians were appointed as such by the Probate Court, and these rents coming into their hands on February 3rd, 1913, that is less than two weeks after the proceeds of the sale of the land came into their hands, I am satisfied that this $200.00 should be considered as corpus in the hands of these guardians and not as income.

2. These attorneys take the position that the 2 1/2 per cent. commission due to the guardians on the corpus received by them, and also the costs and fees paid to the Probate Judge of Chester County when they were appointed the guardians, also the premium on their surety bond, should be deducted from the corpus of the estate. I think this would be a correct statement if the guardians had not been able to invest the balance of the corpus so as to make any more out of it as income than was necessary to pay the current expenses of the ward; but as these guardians were able, and did invest the balance of this corpus in such securities as realized to them not only enough to pay the necessary expenses of the ward, but also to cover these commissions properly retained by them, and also the cost of the probate fees and surety bond; and so I think it proper to consider these commissions and other expenses as being paid out of the income from the investments. Therefore, as I have already found and calculated that the amount of securities together with the earned and unpaid interest on same amounted to $10,295.62 on February 1st, 1918, when these came into the hands of S.E. McFadden, I cannot see that it makes any difference as to whether this is considered as corpus only or whether it is the corpus with interest added to it. From the foregoing findings it is clear to me that there came into the hands of S.E. McFadden on February 1st, 1918, the equivalent of $10,295.62, whether corpus or interest.

In making my calculations for each of the years that this money was in the hands of the guardian, S.E. McFadden, I have charged him with interest only for the amount that was in his hands less the expenses for that year; and these expenses were more than $600.00 each of the years; now just suppose that of the $10,295.62 which came into the hands of S.E. McFadden on February 1st, 1918, $600.00 of this had been income and the balance corpus, it would have been his duty to first use the $600.00 income which he had on hand to meet the necessary expenses, and then the interest at the end of each year would have been calculated on exactly the same amount; and consequently on January 1st, 1925, exactly the same amount would have been due by S.E. McFadden as I have above found to be due by him.

3. The second annual return states that there was received on January 5th, 1914, as interest from T.F. McCluney on note and mortgage $320.00 for the year ending February 3rd, 1914; it also shows that on that same day, January 5th, 1914, there was received as interest on note and mortgage from Chisholm, $268.80, which was the full 8 per cent. interest on his loan up to January 31st, 1914. When the first annual return was made out, on January 9th, 1914, it does not report either of these two payments of interest, amounting to $599.80, although they had been paid four days before the first annual return was made out. This seems to be on account of the fact that the guardians were making their returns to cover through the calendar years ending with December 31st. At any rate we see that the guardians had on hand at the very beginning of this second year $588.80 received as interest, and received further payments of interest during that second year, showing a total income for that year of $939.65. Yet, their expenses for that year did not total but $492.23. One of the attorneys states that the expenses during this second year amounted to $799.26, and that as that amount is greater than the $588.80, the interest received by the guardians on January 5th, by the amount of $57.20, that the guardians should be credited with a further interest on $57.20; but I cannot agree with that position; the total expenses for that year were only $492.23 instead of the $799.26 as might be indicated at first sight of this second annual report; but upon further examination this second return shows that of this credit of $799.26 there was paid over to the bank for borrowed money or to the guardians for balance due them a total of $306.93, and these items are to be deducted from the total credits before finding the actual expenses for that year. I did not charge the guardians with the $304.33 shown in their first return as either borrowed money or balance due the guardians, so, of course, it should not now be credited to them as an expense for the ward; these items in both the debit and credit account go out as balancing each other, and so the guardians received and had on hand that year $447.42 more than they ex. pended.

4. These attorneys also state that in making up the account for 1918, I should have allowed a credit of $30.56 "as the amount due guardian" as Mary G. Sledge allowed in her proposed return, which is Exhibit "C." However, I find from the fifth annual return that the guardians charged themselves with this same $30.56 as being a balance due them. I take this to mean that when the guardians credited themselves in this fifth annual return with having received $98.57 as commissions, that they did not have on hand quite enough money to pay themselves all of these commissions, but lacked $30.56 of enough money to do so; and while this $30.56 is included in the credit of $98.57, though not all of it paid at that time, it should not be put down as a credit a second time; and for that reason I did not put it in the credits in making up the 1918 statement. Just as I did not charge it to the guardians as they have it charged in their fifth return, and so I should not give them credit for it again.

I am also told that I am in error in not allowing commissions to S.E. McFadden, the surviving guardian, and especially in respect to the corpus. The plain words of the statute are that where the guardian fails to make his annual return he is not entitled to commissions, and consequently I have not allowed any commissions on either income or the corpus to be paid out. It is an admitted fact that after these funds and securities came into the hands of S.E. McFadden, the sole surviving guardian, he never made a single annual return, he never made any final report or other account of his actings and doings; and the ward has not only been deprived of the benefit of having an annual return filed with the Probate Court and thereby being able to keep in touch with, or have some information, in regard to the amount of her property, and the way in which it was being handled and invested; nor as to the total amount that was being spent on herself, and the amounts used for other costs or expenses. Nor was she able when she became twenty-one years of age of obtaining a settlement with her guardian; although she requested and demanded a settlement when she became of age she never got it, but on the other hand had to employ an attorney to bring suit to obtain this money for her; and so I hold that she is not now liable for any commissions.

All of which is respectfully submitted.

CHARGE

Mr. Foreman, and Gentlemen of the jury: —

This is an action by Coralie Means. She alleges that A. G. Brice and Samuel E. McFadden were her guardians, and that the guardianship bond was signed by the United States Fidelity Guaranty Co., and this action is brought by Coralie Means; and she afterwards married Andrews. This is an action by her against the United States Fidelity Guaranty Co. and Mary Sledge as administratrix, with the will annexed, of the estate of Samuel E. McFadden, deceased. You will have the complaint in the room with you, and any matter that you want to know about the complaint, you can read it over; but it is an action on behalf of this plaintiff, who alleges that this United States Fidelity Bonding Co. signed the bond as guardian; and she claims that there was a certain amount due her on this guardianship bond. Now, you needn't bother yourself about that; that is not one of the issues before you; that is a matter for the Court to decide afterwards.

Now, the United States Fidelity Guaranty Co. comes in Court — where is Mr. Hemphill? I don't suppose he is really interested in these issues. He hasn't joined in the argument, or anything. You and Mr. Gaston and Mr. Caldwell are the only attorneys that are really actively interested in these issues before the jury, as I understand. This is an action, I want you gentlemen to catch, that this is a suit brought by Mr. Marion on behalf of the plaintiff against the United States Fidelity Guaranty Co., and against the administratrix of Samuel E. McFadden, deceased. Now the United States Fidelity Guaranty Co. comes into Court, and so far as these issues here are concerned, here is their contention. If I am not correct, Mr. Glenn, you correct me: "That Mrs. Sallie M. Brice was appointed by A.G. Brice as executrix of his last will — are still in force and effect and binding upon the personal representative of A.G. Brice, deceased."

Now, that is the contention of the defendant United States Fidelity Guaranty Co., that Brice's estate is liable to the company. I believe, Mr. Glenn, that is your contention?

Mr. Glenn: Yes, sir.

Court: That they are liable before they can come on you all?

Mr. Glenn: Yes, sir.

Court: Now, Mrs. Brice, the executrix of A.G. Brice, comes into Court, and here is her contention as set out as far as you are concerned: "That A.G. Brice and S.E. McFadden, guardians of Coralie Means * * * and cannot recover against this defendant."

Now, here are the questions that the Court is going to submit to you in this case. Now, you will write your answer, "Yes" or "No," right after the question marked. I suppose this paper will be substantial enough to write it on.

Now, I believe, Mr. Gaston, I will just state to you gentlemen frankly, that what I charge the jury here is in reference to the issues here on this case, and when I go to file my decree, I may or may not be bound by them so far as this jury is concerned, but when I go to formulate my decree, I may or may not modify them, but as far as the jury is concerned, what I say — I believe, Mr. Gaston, you are relying on laches, negligence and estoppel, and, as a matter of fact —

Mr. Gaston: As a matter of fact, and the other would be questions of law, on written instruments and errors —

Court: I know what you allege, but those are the terms you are depending on here. I am not saying this will bind you in my decree. Now, I am going to tell you gentlemen, as far as you are concerned, unless you find laches, estoppel and waiver, negligence, one or more of them, you write "No" after each question here. I want to sharply define the findings of this fact — as far as the law is concerned, I will try to dig that out myself, the legal position here — unless you find there has been laches or negligence, estoppel or waiver on behalf — as I shall explain it here, you write "No" after each question. And that puts the issues of these matters clearly up to you gentlemen, and that is why, the main reason I wanted the verdict of the jury on this particular case.

Mr. Gaston: Mr. Glenn assumed the burden of proof, and had the opening and reply.

Court: That is right.

Mr. Gaston: I suppose that would be proper, to instruct the jury along that line, too — he has had his day, opening and reply.

Court: I will let the jury find the facts here without — I am going to charge these requests. As I say, I want it distinctly understood, in any future event of the case, that I am laying down the law here for this jury; and you are to take the law from me, because if I should happen to be wrong, why I can modify that, myself, afterwards; or the Supreme Court as far as that is concerned.

I charge you these requests in connection with my general charge — and I am not charging you on the facts of the case; that is a matter left with you. If you gather that I have any opinion about the case, one way or the other, why dismiss that as far as you are concerned.

Defendant United States Fidelity Guaranty Co.'s requests to charge:

"1. I charge you that the death of A.G. Brice of itself did not discharge his liability on the bond in this case."

"2. I charge you that it is the duty of the Probate Court to require a guardian to file annual returns, and should the secondary surety not require a principal to file returns, this is not a waiver of the liability of a co-principal or of the primary surety."

"3. I charge you that a secondary surety could not release a principal or a primary surety on a bond without the knowledge, authority and consent of the Probate Court."

"4. I charge you further that while the death of A.G. Brice terminated his active duties as joint guardian of this ward, that his liability on the bond did not cease until relieved by proper legal discharge."

Now, Mr. Glenn, I am striking out the words, "of this kind."

"5. I charge you, in the fifth request to charge, 'I charge you that the liability on a bond by a joint principal as such or as surety for his joint principal would not be discharged by the statute until twenty years from date of any default, or from the majority of the ward.'"

"6. I charge you that it was the primary duty of the Probate Court to require S.E. McFadden, the surviving guardian, to make annual returns, and it was no more the duty of the United States Fidelity and Guaranty Company, as secondary surety, than it was the duty of Mrs. Sallie M. Brice, executrix, as personal representative of A.G. Brice, joint guardian, to require returns of the surviving guardian."

"7. I charge you that Mrs. Sallie M. Brice, as executrix of A.G. Brice, is as fully bound by the terms of the application for the bond, and as fully bound by the terms of the bond itself as was the testate, A.G. Brice."

"8. I charge you that the obligation of Sallie M. Brice, as executrix of A.G. Brice, on the bond upon her qualifying as executrix, was the same as that of A.G. Brice at the time of his decease."

"9. I charge you that Sallie M. Brice, executrix of A.G. Brice, as a matter of law, could only obtain a legal discharge from liability on this guardian bond in the same way that the testate, A.G. Brice, would be discharged."

"10. I charge you that when a bond is once given to the Probate Court that there can be no legal change of the status of any party to that bond without the consent, knowledge and authority of the Probate Court in which it is given."

"11. I charge you that any attempt by one joint principal, or his representatives, to release the other joint principal on a bond without due process of law would as a matter of law release the surety of the two joint principals."

Now, gentlemen, as to joint guardians — I am reading from 28 Corpus Juris, page 1281, Sec. 476. — "Liabilities. Joint guardians are jointly responsible for their joint acts; and each is separately answerable only for his separate acts and defaults, and not for the acts and defaults of his co-guardians, unless he expressly or impliedly joins therein. A guardian remains liable for assets which were once in his hands, but, which he has voluntarily turned over to his co-guardian, especially where he afterwards unites with his co-guardian in settling a joint account."

I charge you this further request to charge. "I charge you that the surviving guardian has the full power to manage the estate of his ward, until his power is revoked, he has not only the power, but it is his duty to take into his possession all the personal estate of his ward, and all parties are bound to recognize his power and authority, and are protected in dealing with such guardian."

Now, I am going to charge you on laches, estoppel, negligence, and waiver, gentlemen, those are some issues. I am reading from Bouvier's Law Dictionary, 1914 edition.

Now, laches is the "unreasonable delay; neglect to do a thing or to seek to enforce a right at a proper time."

"The neglect to do what in law should have been done, for an unreasonable and unexplained length of time and under circumstances permitting diligence."

"Unlike a limitation, it is not a mere matter of time, but principally a question of the iniquity of permitting the claim to be enforced; an iniquity founded upon some change in the condition or relation of the property of the parties. It has been said to involve the idea of negligence; the neglect or failure to do what ought to have been done under the circumstances to protect the rights of the parties to whom it is imputed, or involving injury to the opposite party through such neglect to assert rights within a reasonable time."

"In general, laches is neglect to do what should have been done for an unreasonable or unexplained length of time under circumstances permitting diligence; mere lapse of time before bringing suit without change of circumstances will not constitute laches. Not only must there have been unnecessary delay, but it must appear that, by reason of the delay, some change has occurred in the condition or relations of the property, which would make it inequitable to enforce the claim." In other words, the idea involves the idea of change of circumstances; in other words, it is not a mere lapse of time, but such a culpable delay to do something, that circumstances have changed so that the party has been injured by the change of circumstances and delay."

I am going to charge you on negligence. Negligence is "the omission to do something which a reasonable man, guided by those considerations which ordinarily regulate the conduct of human affairs, would do, or the doing something which a prudent and reasonable man would not do. The standard is not that of a particular man, but the average prudent man."

"The failure to observe, for the protection of the interests of another person, that degree of care, precaution and vigilance which the circumstances justly demand, whereby such other person suffers injury."

"The absence of care according to circumstances."

I am going to charge you on estoppel.

"Estoppel. The preclusion of a person from asserting a fact, by previous conduct inconsistent therewith, on his own part or the part of those under whom he claims, or by an adjudication, upon his rights which he cannot be allowed to call in question."

"A preclusion, in law, which prevents a man from alleging or denying a fact, in consequence of his own previous act, allegation, or denial of a contrary tenor."

"Where a fact has been admitted or asserted for the purpose of influencing the conduct or deriving a benefit from another so that it cannot be denied without a breach of good faith, the law enforces the rule of good morals as a rule of policy, and precludes the party from repudiating his representations or denying the truth of his admissions."

"Where there is an attempt to apply the doctrine of estoppel, one essential in such a case is that the party in whose favor it is invoked must himself act in good faith."

"It is said that the following elements must be present in order to constitute an estoppel by conduct: 1. There must have been a representation or concealment of material facts. 2. The representation must have been made with knowledge of the facts. 3. The party to whom it was made must have been ignorant of the truth of the matter. 4. It must have been made with the intention that the other party would act upon it. 5. The other party must have been induced to act upon it. The rule of equitable estoppel is that where one by his acts, declarations, or silence, where it is his duty to speak, has induced another, in reliance upon such acts, declarations, or silence, to enter into a transaction, or was in, to the prejudice of the person misled, impeach the transaction."

"He who by his language or conduct leads another to do what he would not otherwise have done shall not subject such person to loss or injury by disappointing the expectations upon which he acted."

Now, I could give illustrations of estoppel — gentlemen, if I held a man out as my agent, held Mr. Glenn out there as my agent, to do a certain thing, and you act on it, why I couldn't afterwards be heard to deny that; in other words, I have said he is my agent and I am bound by it; good morals and the law wouldn't allow me to repudiate what I have said. A familiar illustration is this; Suppose my wife owns a tract of land and I make you a deed to it and she renounces dower on that deed, and she afterwards comes along and sets up claim to that land. The Court will say, "No, you can't do that because you have renounced dower on that deed as the wife of the grantor Ramage, and you will not be allowed to come in and claim the land; you only claimed a dower right in it, and having renounced your own, and having joined by testifying something else as the truth, the status of the facts, now you will not be allowed to come in here and claim the land."

Now, I charge you on waiver.

"Waiver. Relinquishment or refusal to accept of a right."

"The intentional relinquishment of a known right."

"The intentional relinquishment of a known right with both knowledge of its existence and an intention to relinquish it."

That is a good definition. Waiver is the intentional relinquishment or abandonment of a known right with both knowledge of its existence with intention to relinquish. In other words, if I have a right to do something, I say, "No, I am not going to do that"; in other words, if I had a horse out there on the big road and you come along and I say, "Well, I am abandoning this horse here; I don't need it any longer; it is in poor condition," I abandon the horse and tell you so, and you take the horse home and feed it and get it in good shape, and I come back and claim it, the law says, "No, you have abandoned that horse." In other words, in the idea of waiver, there must be a knowledge of a right; I must know I had a right and I must intend to abandon it, because a man's intention cannot only be ascertained by what he says, but what he does. Sometimes a fellow, what he does, speaks louder than what he says. Some man said once, "What you do talks so loud I can't hear what you say." That is the idea of waiver, not only knowing the thing and having full knowledge, but with that knowledge, intending to abandon it. It is required of every one to take care of his right at the proper time, and neglect to do so will be in effect a waiver.

Come up here, Mr. Foreman. You write "Yes" or "No" in there after each question. That is all you have to do. There are four questions here (reading questions).

Now, Mr. Glenn, in order that there may be no misunderstanding — Mr. Glenn says all those questions ought to be answered "No"; Mr. Gaston and Mr. Caldwell say they ought to be answered "Yes." I didn't mean to say you must be guided by what these gentlemen say; I just want no confusion; I have had juries to go in and mistake the thing. Mrs. Brice's contention is, those questions ought to be answered "Yes"; the United States Fidelity and Guaranty Company contend they ought to be answered "No." Here is the complaint, gentlemen. I think I have covered these matters. Write your name as Foreman. There is the answer of the United States Fidelity and Guaranty Company; there is the answer of Mrs. Brice.

EXCEPTIONS BY THE DEFENDANT UNITED STATES FIDELITY AND GUARANTY COMPANY EXCEPTIONS AS TO REFEREE'S REPORT

1. That his Honor erred in affirming the finding of the Referee, whereby the Referee failed to find and determine the exact amount of money or securities on hand on February 1, 1918, immediately after the death of A.G. Brice; the error being that it was the duty of the Referee to determine the corpus of the estate by the amount of the estate received by the guardians beginning with the first receipt on January 23, 1913, and to render an account for the entire period during the joint control of both Brice and McFadden as well as for the separate control of McFadden, surviving guardian.

2. That his Honor erred in affirming the finding of the Referee, whereby the Referee held that the following entry was corpus: "February 3, 1913, amount obtained by suit for rents, $200.00"; the error being that since this was income from land formerly belonging to the ward that it was income to the guardians and not corpus.

3. That his Honor erred in affirming the finding of the Referee, whereby the Referee found the income of the estate to be $2,829.91 from January 20, 1913, to February 1, 1918, and that the expenses of the estate were $3,183.29; the error being that these are not the correct amounts of either income or expenses, but that the same is correctly shown in Exhibit A, attached to these exceptions.

4. That his Honor erred in affirming the finding of the Referee, whereby the Referee held "I have said before that the five returns show that the $4,000.00 loaned McCluney is credited with having produced five incomes; but the balance of this $8,535.00, which was promptly invested, is only credited with four annual incomes; therefore, I have calculated an additional year's interest on this other $4,535.00 which comes to $317.45"; the error being that under the law the guardians were not chargeable with unearned interest of $317.45. The guardians are not chargeable with interest until the expiration of the year during which the funds are received by them for investment. Charging them with the fictitious year's interest of $317.45 is contrary to law and is altogether unwarranted by the facts of this case.

5. That his Honor erred in affirming the finding of the Referee, whereby the Referee held, "So these two investments amounting to $1,425.00 should be charged with interest from the time they were invested, June or September, 1917, to February 1, 1918, and this gives an additional interest of $49.00. This added to the $317.45 which I have just estimated should be accounted for gives a total income of $316.54 additional to that shown in these five returns"; the error being that the Referee has charged the guardians with the fictitious income of $361.54 and likewise with additional interest of $44.00 unearned and for the period during which the guardians under the law were not required to invest the ward's funds. He has thus charged them in paragraph five of this report with income of $361.54 which was never received and the corpus of the estate should be credited with this amount.

6. That his Honor erred in affirming the finding of the Referee, where the Referee held, "By checking this over in a little different manner I again find that the income and expenses are practically the same. That is, I find that the interest paid by J.H. Marion is $87.50 a year; and I find that the interest paid by Chisholm is $235.20 a year, making a total of $322.70, and I think each of these interest installments have been earned one more time than the returns show; that is, the fifth installment was earned a few weeks after the fifth annual return was made, and no doubt was collected. Then the interest on the money loaned to Kee and Westbrook, for the five and seven months from June and September, 1917, to February 1st, 1918, amounting to $44.09, is not accounted for in the fifth return (probably not collected, though earned), and this added to the said $322.70 makes a total of $366.79 as interest which I think has been earned up to February 1st, 1918, and is not accounted for at that time, but according to Mr. Brice's method of reporting interest collected he would have accounted for it in January, 1919"; the error being that the additional interest of $366.79 was never earned and that the guardians were not legally chargeable with this fictitious interest of $366.79. That all interest earned has been properly accounted for and that the Referee has no right to charge the guardians with any additional or fictitious interest not actually earned nor collected.

7. That his Honor erred in affirming the finding of the Referee, whereby the Referee calculated the corpus by the five-year-period method, that is, of lumping the income for five years and offsetting the same with the expense for a like period; the error being that the legal and correct way to account for the income and expenses is by the annual period method; that is, to report the corpus at the beginning of the annual period, add the income, deduct all proper expenses and expenditures; and surplus, if any, to be added to the corpus; and deficits, if any, to be subtracted from the corpus. The guardians to regard all expenditures made during the year as made before the balance is struck.

8. That his Honor erred in affirming the finding of the Referee, whereby the Referee held that the amount that A. G. Brice had "safely preserved" or had intact to be $10,295.62; the error being that on February 1, 1918, the corpus of the estate was a sum far less than $10,295.62 and not more than the amount shown in Exhibit A, of Exceptions attached hereto, $9,712.33.

9. That his Honor erred in affirming the finding of the Referee, whereby the Referee failed to follow the rule of law as stated by the Referee on page 9 of the Report, the rule stated by him being:

"The fiduciary is chargeable with interest from the beginning of the year succeeding that in which he received his appointment * * * all funds received during the current year are to be regarded as unproductive until the end thereof, and all expenditures made during the course of the year should be regarded as made before the balance is struck, and that interest is chargeable upon the annual balance so struck." Anderson v. Silcox, 82 S.C. 109, 63 S.E., 128, 131; Nicholson v. Whitlock, 57 S.C. 36, 35 S.E., 412; the error being that in making his calculation the Referee failed to follow the rule set forth by him.

10. That his Honor erred in affirming the finding of the Referee, whereby the Referee stated the account to be as reported by him on page 17 of his Report, that the corpus on February 1, 1918, was $10,295.62 and that the corpus on December 31, 1924, to be $9,240.07; the error being that the Referee should have stated the account from January 20, 1913, when the first fund came into the hands of Brice and McFadden as guardians; that even for the period of time the account is stated, that the Referee failed to allow all proper credits; and that no greater amount was due the ward on December 31, 1924, than is shown by the statement on account, Exhibit A, of Exceptions hereto attached, $7,895.13 (Exhibit A of Exceptions is printed after last Exception, No. 61).

11. That his Honor erred in affirming the finding of the Referee, whereby the Referee failed to allow the surviving guardian any commissions; the error being that where the ward suffers no loss of income that the guardian's account when made good by his co-guardian or by the surety, should be credited with annual commissions.

12. That his Honor erred in affirming the finding of the Referee, whereby the Referee did not allow commissions to the guardians' account for disbursing the corpus of this estate; the error being that the guardian's fund is chargeable with commissions for disbursing the corpus when the ward suffers no loss; there is abundance of evidence that both Mrs. Brice, the representative of A.G. Brice, and that the United States Fidelity and Guaranty Company are both abundantly solvent.

13. That his Honor erred in affirming the finding of the Referee, whereby the Referee held that S.E. McFadden never made any final report or any other account of his acts and doings; the error being that his personal representative in due season filed a complete, full and final return for S.E. McFadden, as surviving guardian of Coralie Means. (See Exhibit C.)

14. That his Honor erred in adopting the Report of the Referee as to the calculation of the amount due; the error being that his Honor should have adopted the correct Return and the correct amount due as shown by the calculation of this defendant attached as Exhibit "A," of Exceptions to the tenth exception of this defendant to the Referee's Report and hereto attached; and that it was an abuse of his Honor's discretion to affirm a report " in toto" in which there were so many palpable and clearly established errors on the part of the Referee.

15. That his Honor erred in adopting the Report of the Referee as a whole by decrees which evidenced no review of it when his Honor's attention had been called to and directed to the following outstanding errors of law and errors of fact in the Report:

A. In that his Honor did not review the Report for the years 1913-1917 in which the Report shows that the guardians failed to credit themselves with interest on the expenditures made during each year before striking a balance. The amounts for which the guardians were entitled to credit of such interest being as follows:

1914 interest at 7 per cent, $42.73 on $611.19, excess of expenses for 1914 over cash on hand January 1, 1914.

1915 interest at 7 per cent, $34.59 on $494.17, being excess of expenses for 1915 over cash on hand January 1, 1915.

1916 interest at 7 per cent, $39.77, on $571.46, excess of expenses for 1916 over cash on hand January 1, 1916.

1917 interest at 7 per cent, $49.07, on $700.97, being excess of expenses for 1917 over cash on hand January 1, 1917; the error being that as a matter of well known and long established law in South Carolina a guardian is entitled to interest credits for the excess of the expenses of his ward during the year over cash on hand at the beginning of the year, and before a balance was struck.

B. His Honor erred in failing to review the returns during the five-year period of joint control when a summary and concise statement of the Brice returns show that the expenses were $3,511.62; the income $3,121.58; expenses exceeding the income by $390.04, and yet with the gross principal received by the guardians being $10,295.62, the Referee held that the guardian had "preserved intact" this entire amount of $10,295.62 which was the exact amount of corpus received by the joint guardians, no corpus being received after the death of Brice; the error being that such an open and outstanding error could have been detected and should have been corrected by a review by the trial Court of the joint guardians' accounts; and it was an abuse of discretion not to review the Referee's Report to a sufficient extent to correct such a palpable mistake.

C. That the gross principal received, to wit: $10,295.62, was reduced not only by $390.04 excess of expenses over income, but was also reduced by additional sums to the corpus, such as bond premiums for the first year, the original probate fee for the first year and the 2 1/2 per cent commissions due the guardians for receiving the principal for the ward's account. that it was a clear abuse of discretion for the trial Court to overlook such large and substantial amounts fundamentally deductible from the corpus account. These items were not allowed by the Referee, nor by his Honor.

16. That his Honor erred in affirming the statement of the Referee in disallowing the following credits:

1918 December 31st — By cash paid Chester County taxes on McCluney land for 1918 .............. $ 25.43 1919 December 31st — By cash paid Chester County taxes on McCluney land for 1919 .............. $ 26.55 The error further being that the undisputed testimony was that McFadden, surviving joint guardian, paid the 1918 taxes.

The error further being that the undisputed testimony of Miss Sledge, administratrix (2nd reference, Par. 5), was that the guardian account had never been credited with the 1919 taxes, $26.55 on McCluney lands.

17. That his Honor erred in affirming the finding of the Referee whereby the Referee credited the guardian account with five premiums on one hundred fifty and no/100 ($150.00) dollars in a lump sum; the error being that the annual premium should have been shown in the annual account for each calendar year, and the guardian account so credited.

EXCEPTIONS AS TO TESTIMONY

18. That his Honor erred in admitting in evidence over objection of this defendant Exhibit "B," receipt of McFadden, surviving guardian, to Mrs. Brice, executrix, for certain securities; the error being that the receipt was an instrument solely between McFadden and Brice, and of which neither this defendant nor the probate Court had any notice until after McFadden's death, and which was not recorded in the probate Court until an instrument in regular order recorded October 30, 1926, the record being made after the institution of this suit.

19. That his Honor erred in admitting in evidence so much of Exhibit R-1 as constituted a letter from Mrs. Brice to McFadden of date September 29th, 1919; the error being that such part of the letter was a communication between the representative of one joint guardian to the other joint guardian, of which neither the surety nor the probate Court had any notice; as to waiver or estoppel it referred to a future act and was irrelevant and therefore incompetent.

20. That his Honor erred in admitting Exhibit R-2; the error being that this was a letter from a joint guardian to the surety and was a privileged communication. A mere statement by the surviving guardian could not bind the surety; a statement of intention to do a future act could not amount to a waiver or an estoppel.

21. That his Honor erred in admitting Exhibit R-3; the error being that this was a letter from the surety to the surviving joint guardian, as principal, and of which the adverse party, Brice, had no knowledge; and there is no testimony that she ever acted upon anything contained in the letter. The acts called for are in the future and were never completed, and therefore could be no basis of waiver or estoppel.

22. That his Honor erred in admitting Exhibit S-1; the error being that this was a letter between the surety and the surviving joint guardian, and that its contents were never communicated to the representative of the Brice estate, and that she never acted upon any statement in the letter. The acts called for were of necessity in the future and were never performed and could not be the basis of either waiver or estoppel.

23. That his Honor erred in admitting Exhibit S-2; the error being that this was communication between the surviving joint guardian and the surety. That its contents were never made known to Mrs. Brice, as executrix, and that she never acted upon any statement in the Exhibit. The acts referred to were " in futuro" and no basis of waiver or estoppel.

24. That his Honor erred in admitting Exhibit T-1; the error being that this was a communication between the surety and the surviving joint guardian, as principal, which was privileged, and that there is no evidence that Mrs. Brice knew of its contents or even acted upon its contents. The acts contemplated were " in futuro" and no basis of waiver or estoppel.

25. That his Honor erred in admitting Exhibit T-2; the error being that this was communication between the surviving joint guardian, one of the principals, and the surety. That the same was privileged. That there was no testimony that Mrs. Brice ever knew its contents or ever acted upon it.

26. That his Honor erred in admitting Exhibits U-1, U-2, U-3; the error being that these three Exhibits are communications between the surviving joint guardian, McFadden, or his stenographer on his behalf, with the surety. That the same are privileged, that there is no testimony that Mrs. Brice ever knew the contents of either Exhibit or ever acted upon the contents; that the Exhibits have reference to the future acts, which acts could not be the basis of either waiver or estoppel.

27. That his Honor erred in admitting in evidence letter from McFadden to Mrs. Brice of date September 9, 1919, Exhibit "BB"; the error being it was a communication from one joint guardian to the representative of the deceased joint guardian, of which the defendant, United States Fidelity and Guaranty Company, had no knowledge of its contents, and was not a party to the letter; also being objectionable by reason of being a self-serving declaration on the part of the joint guardian or their representatives.

EXCEPTIONS AS TO JURY TRIAL

28. That his Honor erred in granting the motion of Sallie M. Brice, executrix, to transfer this case from Calendar Two to Calendar One for trial by a jury "of all issues of fact raised by the pleadings herein except such issues of fact as may be involved in the statings of the guardianship of account"; the error being that the Order of Reference signed by Judge Townsend in open court fixed the method of trial. This order directed the Referee to take the testimony offered on all issues raised by the pleadings, to state the account and to report the testimony together with his findings and conclusions thereon as to the amount due the plaintiff to this Court with all convenient speed.

29. That his Honor erred in framing and in submitting four special issues to a jury for a decision after the method of trial had been fixed by a previous order of reference, in which references held pursuant thereto, all attorneys participated without objection: all attorneys not only cross examining witnesses of adverse parties, but also offering testimony in support of their client's contentions, with a view of a hearing by the Court, one or more of the parties to this action testifying; the error being that all parties so participating thereby waived their rights to a jury trial on any issue.

30. That his Honor erred in framing and submitting the four special issues to a jury after an order of reference was taken in open court with the attorneys present who later moved for a jury trial, these attorneys recommending certain referees; these attorneys at the time of this order likewise agreeing to a trial before the trial Judge out of the circuit, after the completion of the references. These attorneys furthermore agreed, after the references were completed, to a hearing in Columbia, S.C. by the presiding Judge, who signed the Order of Reference herein; the error being that such participation in the reference and such agreement and action to have a trial by the Court in two places without the circuit was a waiver of right to a jury trial on the four issues later submitted to the jury.

31. That his Honor erred in framing and submitting four issues to the jury after an order of reference was signed in open court, and references had pursuant thereto, upon all issues raised by the pleadings, and trial by the Court without the circuit agreed upon by such moving attorneys; the error being that it was an error to submit the four issues to a jury when the Order of Reference was never appealed from.

32. That his Honor erred in framing and submitting four issues to a jury upon trial, after testimony was taken by the Referee upon all issues in the case pursuant to order of reference had in open court and after two tentative trials were arranged to be had upon the testimony so taken and after motion to transfer from Calendar Two to Calendar One was not noted until eight months after the completion of the testimony; the error being that the motion to transfer from Calendar Two to Calendar One came too late, and was waived by not being noted prior to the participation in the references and prior to the completing of the testimony upon all issues as noted by the Referee.

33. That his Honor erred in framing and submitting four issues to a jury, when the record shows that at the conclusion of the last reference it was noted: "There being no further testimony reference is closed," in which references testimony on all issues was submitted by all parties without objection; the error being that the record shows that the testimony had been completed and the testimony closed by references participated in by all parties pursuant to Order of Reference not appealed from by the parties later moving for the transfer of the case on the Calendar.

34. That his Honor erred in framing and submitting four special issues to a jury when a jury trial had been waived by the moving parties, in that all parties participated in the references previously ordered when no motion for a transfer of the case on the Calendar was made until after the testimony had been noted as completed after four references; and especially when the only party not present in open court when the Order of Reference was had and on the two occasions when the agreements were made for a hearing of the case by the Court without a jury in Spartanburg, and later in Columbia without the circuit, were the attorneys for the administratrix, Sledge, whose estate is hopelessly insolvent, and possessing only nominal assets; the error being that the only party not bound by participating in the agreement for trial without the circuit on both occasions is a party whose interest is practically nominal, being an estate whose assets will pay at best only a small dividend on proven claims.

35. That his Honor erred in not hearing the testimony as taken and reported by the Referee and not deciding all issues as the Court without the aid of a jury; the error being that the method for trial had been fixed by the previous procedure in the case and that the Court was thereby bound to hear and decide the case without submitting any issue to a jury.

THE CHARGE

36. That his Honor erred in charging the jury as follows: "Now, I believe, Mr. Gaston, I will just state to you gentlemen frankly, that what I charge the jury here is in reference to the issues here on this case, and when I go to file my decree, I may or may not be bound by them so far as this jury is concerned, but when I go to formulate my decree, I may or may not modify them, but so far as the jury is concerned, what I say — !" the error being that the Court's statement was prejudicial to this defendant by minimizing to the jury the effect of its finding and verdict.

37. That his Honor erred in the Court's charge to the jury in holding that the burden of proof was upon this defendant; the error being that the burden of proof insofar as the four affirmative defenses alleged by Mrs. Brice was upon the defendant Brice, and not upon this defendant. It was upon these affirmative defenses, and upon these defenses alone, alleged by Brice estate that the issues were framed for the jury; and on each issue the burden was upon the defendant Brice; and his Honor so failed to hold or to charge the jury.

38. That his Honor charged the jury the law as to laches, negligence, waiver and estoppel, but erred in charging the jury on these points; the error was that he gave the Brice estate the benefit of any act in the case constituting laches, waiver or estoppel. He should have charged that the surety should have the benefit of any such act on the part of the Brice estate such as the failure of the Executrix to apply for a discharge as executrix or for relief by the probate Court on the guardian bond. Both parties are entitled to the results of any acts of waiver or estoppel on the part of the other in the case.

39. That his Honor erred in charging the jury as to the law of waiver and estoppel; the error being as to waiver the evidence relied on was in letters which referred to acts " in futuro." An act " in futuro" cannot constitute a waiver or an estoppel. There was a complete failure of proof as to the bonding company making any statement or representation to Mrs. Brice or to any one which was communicated to Mrs. Brice and upon which she acted to her injury or otherwise. The evidence shows Mrs. Brice to be equally acquainted with all facts as the bonding company.

AS TO VERDICT

40. That his Honor erred in submitting to the jury the first issue as framed: "Whether or not Mr. A.G. Brice's estate has been fully discharged on the bond?" the error being that there was no dispute as to the facts, all of which are founded upon documentary evidence. It was the duty of the Court to construe these instruments and decide the issue.

41. That his Honor erred in submitting to the jury the second issue as framed: "Whether or not the United States Fidelity and Guaranty Company waived all claims against A. G. Brice's estate?"; the error being that there was no dispute as to the facts, all of which were founded upon documentary evidence. It was the duty of the Court to construe these instruments and decide the issue.

42. That his Honor erred in submitting to a jury issue number three: "Whether or not there has been negligence and laches on the part of the United States Fidelity and Guaranty Company?"; the error being that all the evidence is documentary and for the Court to interpret and to decide the issue from the documentary evidence.

43. That his Honor erred in submitting the fourth issue framed to a jury: "If there has been negligence and laches on the part of the United States Fidelity and Guaranty Company; is this company barred or estopped from setting up any claim against the estate of A.G. Brice?"; the error being that the question is solely a conclusion of law for the Court.

44. That his Honor erred in not granting the motion of the defendant, United States Fidelity and Guaranty Company, for a directed verdict on all of these issues, and in not holding that the Brice estate is primarily liable upon the bond and the United States Fidelity and Guaranty Company secondarily liable; the error being that the testimony showed the clear preponderance of the evidence that the Brice estate had never been legally released either by process of law or by waiver or estoppel under the evidence in the case.

45. That his Honor erred in refusing this defendant's motion to set aside the special findings, of the jury:

(a) In that the special verdict as found was contrary to the overwhelming weight of the testimony; the jury holding the Brice estate was released by waiver or by laches of this defendant when, as a matter of law, the Brice estate could be released only by process of law.

(b) And when there was insufficient evidence of estoppel, in that there was no proof of Mrs. Brice ever acting to her injury on any statement made by the bonding company.

(c) And in that there was no evidence of negligence on the part of the bonding company, it being the duty of the Probate Court to require the returns.

(d) It was no more the duty of the bonding company as surety than of the Brice estate as joint principal to require returns.

(e) That it was not guilty of laches in that as soon as there was any evidence of liability on the bond the bonding company notified Mrs. Brice, executrix of the Brice estate, that it would look to the Brice estate to make good any liability.

46. That his Honor erred in confirming the verdict of the jury in that the verdict was contrary to the law applicable to the case and contrary to the overwhelming weight of the evidence, the verdict being based upon incompetent and insufficient evidence, and upon incorrect statements of the law.

47. That his Honor erred in refusing to set aside the special findings of the jury in that the special findings were contrary to the following charge: "I charge you that while the death of A.G. Brice terminated his active duties as joint guardian of his ward, that his liability on the bond did not cease until relieved by proper legal discharge"; the error being that there was absolutely no evidence of the Brice estate ever being discharged by any legal discharge or any attempt to relieve it of liability by a proper and sufficient legal discharge.

48. That his Honor erred in refusing to set aside the verdict of the jury as being contrary to the following paragraph of his charge: "I charge you that when a bond is once given to the Probate Court that there can be no legal change in the status of any party to that bond without the consent, knowledge and authority of the Probate Court in which it is given"; the error being that there was absolutely no evidence of any consent, knowledge or authority on the part of the Probate Court as to any release given to or attempted for the Brice estate upon the bond.

EXCEPTIONS TO DECREE

49. That his Honor erred in failing to hold that the McFadden estate and Brice estate were primarily liable on the bond, and the defendant, Surety Company, secondarily liable; the error being that under the law and that under the testimony in this case, that the McFadden estate is first liable by reason of the devastavit committed by McFadden; that the Brice estate is next liable by reason of the fact that Brice signed the joint guardian bond with McFadden, thus becoming liable, not only as joint maker on the bond, but also thereby as primary surety for the joint obligor, McFadden, upon this joint bond; that the United States Fidelity and Guaranty Company, as surety, is then liable, being merely a secondary surety upon the bond and not one of the joint principals.

50. That his Honor erred in failing to hold the Brice estate primarily liable upon the bond for the devastavit of McFadden, and the United States Fidelity and Guaranty Company, as surety, only secondarily liable upon the guardian bond by reason of the legal contract of indemnity signed by and agreed to by A.G. Brice in his application for the said bond; the said indemnity agreement being as follows:

"To indemnify and save the said company harmless from any and all loss, costs, charges, suits, damages, counsel fees and expenses of whatever kind or nature, which said company shall or may, for any cause, at any time, sustain or incur, or be put to, for or by reason or in consequence of said company having executed said bond"; the error being that the trial Court should have held that in view of the terms of this indemnity contract that the Brice estate was bound primarily to make good any loss of any kind or nature sustained at any time under the bond issued pursuant to this provision of the Brice application.

51. That his Honor erred in failing to hold that the Brice estate was primarily liable upon the bond for the devastavit of McFadden and that the United States Fidelity and Guaranty Company, as surety, was only secondarily liable, by reason of the implied contract of indemnity existing between the principal and surety upon this bond; the error being that in all contracts of suretyship entered into by principals and sureties that there is always in law an implied contract of indemnity whereby the principal is always bound to save the surety harmless and to indemnify the surety from any loss sustained by the surety under the said bond.

52. That his Honor erred in failing to hold that if the plaintiff was entitled to judgment against the defendant, United States Fidelity and Guaranty Company, that the United States Fidelity and Guaranty Company was entitled to a judgment in its favor against Sallie M. Brice, executrix, in the same amount as the sum awarded the plaintiff against this defendant; the error being that A.G. Brice in his application by the following provision expressly agreed to save this surety harmless in every way upon the said bond; the provision being:

"To indemnify and save the said company harmless from any and all loss, costs, charges, suits, damages, counsel fees and expenses of whatever kind or nature, which said company shall or may, for any cause, at any time, sustain or incur, or be put to, for or by reason or in consequence of said company having executed said bond."

53. That his Honor erred in failing to hold that if the plaintiff was entitled to judgment under any circumstances against the defendant, United States Fidelity and Guaranty Company, as surety, then in such event, the surety, United States Fidelity and Guaranty Company, was at the same time entitled to judgment for like amount against the defendant, Sallie M. Brice, executrix, by reason of the implied contract of the principal obligor to always indemnify his surety; the error being that in all contracts of suretyship entered into that there is always in law an implied contract of indemnity whereby the principal is always bound to save the surety harmless and to indemnify the surety from any loss sustained by the surety on the bond. The law and practice in this State are that such final judgment can and should be given in an action to which the beneficiary, principal and sureties are all parties.

54. That his Honor erred in failing to hold the Brice estate liable on the bond irrespective of what time the devastavit occurred; the error being that when two parties sign a bond as joint principals that each are liable as joint principals and each are liable as primary sureties for the other, irrespective of whatever time the devastavit of either joint guardian occurred.

55. That his Honor further erred in holding "That the estate of A.G. Brice be and the same is hereby declared discharged from all liability unless the plaintiff should fail to collect out of the United States Fidelity Guaranty Company, and in that case plaintiff is hereby permitted to bring an action against the estate of A.G. Brice if she should be so advised, but so far as any other party to this action, any further action against the estate of the said A.G. Brice is hereby barred." The error being:

(a) That there is no competent or sufficient evidence in the case to sustain the discharge of the Brice estate from primary liability on the joint guardian bond.

(b) The error further being: that there is no competent or sufficient evidence in the case to sustain the finding that the surety, United States Fidelity Guaranty Company, has become primarily liable and that the joint principal, the Brice estate, has become secondarily liable.

(c) The error further being that the plaintiff may, in the action now pending, obtain any judgment she is entitled to against the Brice estate, for under the pleadings any party entitled to relief in the within action, is entitled in this proceeding to judgment against any other party hereto of whatever nature the relief might be.

56. That his Honor erred in holding: "That the plaintiff is entitled primarily to be paid out of the McFadden estate, but as that estate is admittedly insolvent, United States Fidelity Guaranty Company will have to pay the bond": the error being:

(a) That there are some assets available in the McFadden estate to pay part of the bond.

(b) The error further being that if United States Fidelity Guaranty Company is liable at all, it is only liable as secondary surety upon said bond.

57. That his Honor erred in holding: "That Brice estate is released so far as United States Fidelity Guaranty Company is concerned."

(a) The error being that there is no evidence of any instrument by which the United States Fidelity Guaranty Company released the Brice estate.

(b) The error further being, that the Brice estate could only be released by authority of the Probate Court and there is no evidence of release by such authority in this case.

(c) The error further being that there is no sufficient and competent evidence of any waiver from the United States Fidelity Guaranty Company to the Brice estate of the estate's primary liability on the bond. The only alleged waiver is in letters which are privileged communications between the United States Fidelity Guaranty Company and the deceased surviving joint guardian, which letters are incompetent testimony and constitute no legal and binding contract of waiver. They do not refer to existing facts, but only refer to acts in the future, which acts were never performed.

(d) The error further being that the United States Fidelity Guaranty Company is not estopped from asserting its rights as surety to require the payment on the bond by the Brice estate, a joint principal. The Brice estate is liable primarily both as joint maker on the bond and as surety for the surviving guardian under the terms of the bond and of the application. The acts relied upon as an estoppel by the Brice estate are sought to be established by insufficient and incompetent testimony. The letters offered are privileged communications between the surety and the deceased surviving joint guardian; the letters were never communicated to the Brice estate, and, therefore, of necessity any statement in the letters was never acted upon by the Brice estate. There is not a scintilla of evidence that any false representation was ever made to Mrs. Brice, nor that the contents of a single letter was ever made known to her.

(e) The error further being as to this holding that the failure of United States Fidelity Guaranty Company to require any returns is such negligence or laches as to bar this defendant's rights against the Brice estate, in that it is the primary duty of the Probate Court to require annual returns under the Statute law of South Carolina, and it is certainly more the duty of a representative of a deceased joint guardian to require an annual return than it is of the surety of the two joint guardians.

(f) The error further being that if there is any actual laches or negligence in the case, it is the delivery by Mrs. Brice of all the securities to McFadden as surviving joint guardian without notice to or consent of the Court or of this surety; that such delivery without consent or notice as alleged was a waiver of Mrs. Brice's rights to require greater diligence on the part of the Court, or of this surety than that exercised by her. Her negligence in this regard does not bind the secondary surety.

58. That his Honor erred in holding: "That Anderson takes one-half of the land conveyed to the Andersons by McFadden; that when the United States Fidelity Guaranty Company pays the bond, the said company will be subrogated to the one-half of the land that Brice could have conveyed; that in case the plaintiff fails to get her money out of the United States Fidelity Guaranty Company then she can go on to the one-half of the McCluney lands and then on to the Brice estate for while the Brice estate is discharged so far as the United States Fidelity Guaranty Company is concerned, yet as a last resort, the said Brice estate will be liable to the plaintiff; this is the case as I see it and the plaintiff cannot enter up judgment as against the Brice estate and I hold it liable on the bond till she first exhausted the United States Fidelity Guaranty Company and the one-half interest in the land of which J. Weldon Anderson holds the other half," the error being:

(a) That Anderson took no part of the land by the unauthorized deed of McFadden in behalf of a ward.

(b) The error further being that Brice had no authority to convey a one-half of the land.

(c) The error further being that the United States Fidelity Guaranty Company is liable on the bond only as secondary surety.

(d) The error further being that under the law and facts the Brice estate is not discharged insofar as the United States Fidelity Guaranty Company is concerned.

(e) The error further being that the plaintiff should enter judgment against both the Brice estate and the United States Fidelity Guaranty Company, but that on said judgment said Brice estate should have been first held liable.

59. That his Honor erred in failing to hold that the ward must accept the McCluney lands as $4,000.00 of her estate, and that the estate of A.G. Brice is primarily liable for the balance of $3,895.73 due her, or for whatever amount in money is due the said ward; the error being that the title to the McCluney land is in the ward and she must accept it at the face of the loan made McCluney by her former joint deceased guardians; the loan is shown by undisputed evidence as being a reasonable loan and made in good faith. The balance in cash due the plaintiff is the amount stated, $3,895.73, according to a legal and proper accounting under the rules of law in this State.

RELEASE OF PRINCIPAL RELEASES THE SURETY

60. That his Honor erred in failing to hold that if under the evidence the Brice estate would be released either by contract, by Court authority, by waiver, by laches, or by estoppel, then that the United States Fidelity Guaranty Company, secondary surety of the two joint principals, is also released, the error being that whenever the principal on the bond is released, whether by operation of law; contract, estoppel or otherwise, then that the surety is forthwith released.

61. That his Honor erred in holding that there were facts in the case as found by the jury or found by his Honor to warrant him in holding that the Brice estate has been released from the position of primary obligor upon that bond to that of secondary obligor; the error being that if there were any facts in the case warranting the change of liability of the original joint obligor; the error being that if there were any facts in the case warranting the change of liability of the original joint obligor from primary to secondary, then the surety of such a primary obligor was released and forever discharged; and there is no rule of law to justify substituting the secondary surety to the liability of the original primary obligor and primary surety.

GLENN GLENN, Attorneys for the Defendant, United States Fidelity Guaranty Company.

EXCEPTIONS OF THE DEFENDANT, J. WELDON ANDERSON

It is respectfully submitted that his Honor, Judge C.J. Ramage, erred in his decree, filed March 16, 1928, in the following particulars:

1. That his Honor erred in holding that the defendant, J. Weldon Anderson, has under the law and facts of this case an undivided one-half interest only in the McCluney lands, the error being that he should have held that this defendant has good fee-simple title to the entire estate in these lands.

2. That his Honor erred in not holding that under the law and facts of this case this defendant has a fee-simple title to the entire estate in the McCluney lands when the undisputed evidence shows that he and his brother, under whom he claims paid a full and fair price for these lands and acted in good faith with McFadden, the surviving trustee of an active trust, who conveyed these lands to them.

3. That his Honor erred in holding that this defendant has an undivided one-half interest only in the McCluney lands, the error being that he should have held that this defendant, Anderson, has, under the facts of this case, an equitable title which prevails against all parties to this action.

4. That his Honor erred in holding that any of the parties to this suit have any interest in the McCluney land at all, other than the plaintiff and this defendant, the error being that under the facts of this case the plaintiff only could question Anderson's title and that she, having elected to bring suit on the bond, does not seek to recover possession of the McCluney lands.

5. That his Honor erred, in that, having correctly held that McFadden and Brice, as trustees of an active trust held the legal estate in the McCluney lands under the terms of the deed from McCluney, he then held that upon the death of Mr. Brice, McFadden had the legal estate in an undivided one-half interest in these lands, the error being that he should have held that McFadden, as surviving trustee, took the legal estate in the entirety.

6. That his Honor erred in holding that the cases of Reynolds v. Reynolds, 61 S.C. 243, 39 S.E., 391; Martin v. Price, 2 Rich. Eq., 412, and McMeekin v. Brummet, 2 Hill, Eq., 638, governed the case at bar, the error being that all of these cases deal with the devolution of the legal estate upon the death of a single trustee of active trusts or the last survivor of successive trustees, whereas, in the case at bar, Mr. McFadden, one of the trustees, survived Mr. Brice as active trustee and under the law took the entire legal estate in the McCluney lands.

7. That his Honor erred in holding as follows:

"So in my opinion as a result of the above cases and the general law on the subject: The Andersons only got the one-half of the land and the other half, the Brice half, is still in the estate, and when the United States Fidelity and Guaranty Company pays the amount of the judgment to the plaintiff, it will be subrogated to the one-half of the tract of land as a tenant in common with Anderson or rather will have the right to take over this land. And the said United States Fidelity Guaranty Company, one of the defendants, is hereby given full power to take such steps then as may be necessary to realize on the said one-half. The Court will protect Anderson in the one-half that could be conveyed by McFadden, but not in the one-half that Brice had, as trustee, and while the right of subrogation will not exist till the money has been paid, yet when the money is paid, the said United States Fidelity Guaranty Company will then be subrogated to the one-half that is covered by the Brice trust." The error being that the United States Fidelity Guaranty Company has no rights of subrogation against the defendant, Anderson, as the United States Fidelity Guaranty Company is estopped by its laches and negligence from any rights by way of subrogation.

8. The error in so holding further being that the undisputed evidence shows that the Andersons dealt in good faith with Mr. McFadden, the principal, and the surety has no right to follow this land when the Andersons were no party to, and had no knowledge of any bad faith on the part of McFadden, the principal.

9. His Honor erred in holding as follows:

"The Court will protect Anderson in the one-half that could be conveyed by McFadden, but not in the one-half that Brice had as trustee, and while the right of subrogation will not exist till the money has been paid, yet when the money is paid, the said United States Fidelity Guaranty Company will then be subrogated to the one-half that is covered by the Brice trust"; the error being that there can be no subrogation against the Andersons, who dealt with Mr. McFadden, the principal, in good faith and as neither he, the principal, nor his estate have any rights as against the Andersons, the United States Fidelity Guaranty Company, the surety, can have none.

10. It is respectfully submitted that his Honor erred in his decree dated April 14th, 1928, in not granting the motion of this defendant, Anderson, as follows: "For an order appointing an appropriate successor to A.G. Brice deceased, as trustee for the undivided one-half (1/2) interest in which, under the law of this case, Brice held the legal estate as active trustee, and that the order so appointing a fit and appropriate successor to Brice, as Trustee, shall further direct such trustee to convey to J. Weldon Anderson the undivided one-half (1/2) interest, which according to the decree filed by his Honor, Judge C.J. Ramage, is still in the Brice estate as successor to A.G. Brice. That in this connection it is respectfully suggested that either J.E. Cornwell, Clerk of Court for Chester County, or R.B. Caldwell, legal adviser and attorney for Mrs. Sallie M. Brice, would be a proper trustee to be so appointed by the Court"; the error being that if the legal estate to a one-half is still in the Brice estate or in "statu quo," Anderson is entitled to have the legal estate conveyed to him under order of Court.

11. It is also respectfully submitted that his Honor erred in his decree dated April 14th, 1928, in not granting the motion of this defendant, Anderson, which was duly noticed and presented as follows: "That failing in any of these motions the undersigned will move before Judge C.J. Ramage at the time and place above mentioned for an order directing the plaintiff herein, Coralie Means Andrews, who is now of age, upon being compensated by the bonding company or other surety for the loss which she has sustained, to execute a quitclaim deed to J. Weldon Anderson conveying to him all the right, title and interest of any nature and kind whatsoever, which she may have had or now has in the McCluney lands"; the error being that upon plaintiff who has elected to bring suit on the bond, being compensated for her loss she, the only other party interested in this land, should under the order of the Court, surrender all claim of any kind to the land.

Respectfully submitted,

GLENN MACAULAY, Attorneys for J. Weldon Anderson.

Messrs. Glenn Glenn, for appellant, cite: As to appeal from finding of Master's report: 38 S.C. 158; 142 S.C. 477. Rights of guardian: 82 S.C. 109; 57 S.C. 36. Entitled to commission: 7 C.J., 1235; 83 S.C. 157; Rich Eq. Cas., 5; 4 Rich. Eq., 392; Strob. Eq., 31. Proper for account to be stated to allow all legal credits: 57 S.C. 42; 4 Rich. Eq., 95; 18 S.C. 1; Riley Eq., 38; 82 S.C. 109. Finding of fact by Circuit Court subject to appeal where against preponderance of evidence: 51 S.E., 363; 55 S.C. 198. Duty of Circuit Judge to give his independent judgment upon facts of case and consider seriously the exceptions of Referee's report: 28 S.C. 81; 58 S.C. 284; 35 S.C. 198; 6 S.C. 209; 12 S.C. 154. As to jury trial: 24 Cyc., 157; 65 S.C. 455; 42 S.C. 436; 16 R.C.L., 218; 58 S.C. 448; 65 S.C. 455; 21 S.C. 371; 10 S.E., 828; 5 S.E., 721; 2 S.E., 339; 23 S.E., 427; 48 S.C. 619; 112 U.S. 614; 145 U.S. 132; 30 L.R.A. (N.S.), 85. No estoppel as to future events: 16 Cyc., 752, 741; 38 S.E., 616. Construction of documents or writings in evidence is question of law: 38 Cyc., 1522. Liability of guardians: 42 Ala., 218; 5 Humphries (Tenn.), 453; 4 DeS., 21; 15 Mo., 662; 62 Ala., 269; 2 Conn., 536; 15 N.E., 864; 106 Mass. 187; 39 Miss., 791; 18 Ala., 458; 10 Rich. Eq., 247. Express and implied contract of principal to indemnify surety: 23 Ark. 530; Brandt. Surty., 145, 221; 178 Fed., 209; 18 F.2d 430; 236 U.S. 549. Release of principal releases surety: 109 S.C. 196; 91 Atl., 938; 207 N.W., 532; 178 Pac., 3; 21 R.C.L., 1061; 70 S.W. 993; 35 N.E., 870; 4 S.C. 85. Sale of ward's realty by guardian without authority from the Court is void: 28 C.J., 113; 57 So., 789; 228 S.W., 590; 104 Pac., 648; 9 Rich. Eq., 325; 11 S.C. 561. As to title of realty conveyed without proper authority: 22 Cyc., 557; 8 So., 274; 61 Miss., 187; 39 Cyc., 548; 38 S.C. 440.

Messrs. McDonald Macauley, also for appellants, cite: Cases distinguished: 61 S.C. 243; 2 Rich. Eq., 412; 2 Hill Ch., 638; 61 S.C. 250. Joint trustees: 1 Perry on Trusts (5th), 499, 500; 48 S.C. 529; 105 S.C. 49; 26 R.C.L., 1339. Right to convey realty: 13 C.J., 859; 25 S.E., 232; 117 S.C. 429. Subrogation: 1 Hill Eq., 102; 70 S.C. 220; 37 Cyc., 390. Ward's rights: 9 A. E. Enc. L.2d 150; 9 N.H. 15; 33 Ark. 490; 51 Mo., 680; 58 Miss., 186; 64 Ala., 74; 13 Rich. Eq., 306; 7 Johns Ch., 150; Rich. Eq. Cas., 172; Speers Eq., 37; 2 Bail, 15; 4 S.C. 310; 66 S.C. 171; 32 S.C. 480; 3 DeS. Eq., 12; 11 Rich. Eq., 135.

Messrs. R.B. Caldwell, and Gaston, Hamilton Gaston, for respondents, cite: Trial of issues: 109 S.C. 208. Liability of trustees: 12 R.C.L., 1173; 21 Cyc., 272. Estoppel: 178 Fed., 209. Surety must exercise vigilance for own protection: 117 S.C. 424. Liability depends on facts of each case: 109 S.C. 207; 93 S.C. 300; 112 S.C. 167; 126 S.C. 433; 116 S.C. 179. Liability of joint trustees: 10 Rich., 247; 117 S.C. 195. Surety company liable as a commercial surety — waiver — estoppel: 104 S.C. 167; 103 S.C. 55; 104 S.C. 196; 117 S.C. 21; Id., 195. Joint guardians: 21 Cyc., 51; 24 C.J., 1197; 24 C.J., 1197; 24 C.J., 1190; 143 S.C. 156; 24 C.J., 1198, 1281; 15 A. E. Enc. L.2d 119; 33 Pa. St., 466; 7 Ind. 154; 11 N.J. Eq., 458; 187 Pa., 247; 9 S.C. Eq., 54; 21 Cyc., 273; 24 C.J., 1197, 1198; 5 Pick. (Mass.), 96; 21 Cyc., 233; 18 Ala., 458; 38 Conn., 309; 10 Ky. L.R., 814; 28 C.J., 1299; 116 S.C. 117; 117 S.C. 195.

Messrs. J.H. Marion, and J.J. Earle, for respondents, cite: Right to attack referee's adjudication: 109 S.C. 196. Commission of trustees: Secs. 583, 584, 617-620, Code Proc., 83 S.C. 157; 10 S.C. 208; 11 S.C. 139; 42 S.C. 58; 28 C.J., 1235; 2 McC. Eq., 43; Sec. 5552, Code; 28 C.J., 1168. Liability of surety: 32 Cyc., 306; 21 R.C.L., 1160, 1161; 57 S.C. 466; 104 S.C. 67; 27 L.R.A., 237; 21 R.C.L., 1127. Guardian and ward: 9 Rich. Eq., 311; 12 R.C.L., 1127; 1 Rich. Eq., 351-360; 4 Rich., 5; 28 C.J., 1128; 11 S.C. 551; 9 Rich. Eq., 311; 3 Rich. Eq., 156; 141 S.E., 267; 79 S.C. 346; 28 C.J., 1131; 28 C. J., 1281; Rich. Eq., 172; 11 S.C. 552; 4 Rich. Eq., 60; 13 Rich. Eq., 269; 20 S.C. 412.

January 27, 1930. The opinion of the Court was delivered by

MR. JUSTICE CARTER.

This action was commenced in the Court of Common Pleas for Chester County, June 2, 1926. As a statement of the history of the case, the admitted facts, a synopsis of the pleadings, a brief statement of the findings and conclusion of the circuit Judge, the Court adopts the agreed statement of counsel contained in the Transcript of Record, as follows:

"This is an action upon a guardian's bond. The plaintiff is the ward of the guardians who executed the bond. The bond is in the sum of fifteen thousand ($15,000.00) dollars, is in due form, and was duly executed and filed, on January 29th, 1913, in the office of the probate Judge of Chester County, by Samuel E. McFadden, A.G. Brice and the United States Fidelity and Guaranty Company. The condition of the bond is in the usual form, to the effect that if the said Samuel E. McFadden and A.G. Brice shall faithfully execute their trust, as guardians of the person and estate of Coralie Means during her minority, and deliver and pay over to her when she shall come of age the estate due her, then the obligation to be void; else to remain in full force. Upon the execution of said bond Samuel E. McFadden and A.G. Brice were duly issued letters of guardianship jointly and entered upon the discharge of the duties of their trust as guardians of the estate of said Coralie Means, a minor then of the age of ten years. From January, 1913, to January, 1918, the guardians filed in the office of the probate Judge five (5) annual returns, showing their receipts and disbursements as such guardians during the years 1913 to 1917, inclusive. On January 30, 1918, A.G. Brice, one of the guardians, died. Thereafter on September 11, 1918, the executrix of the will of A.G. Brice, deceased, turned over to Samuel E. McFadden, the surviving guardian, all of the securities constituting the estate of the minor, Coralie Means, which had been in the hands of her decedent, A.G. Brice, at the time of his death, and took McFadden's receipt in writing therefor, without formal court procedure or formal notice to the bonding company. After the death of A.G. Brice no annual returns were filed in the office of the probate Judge by Samuel E. McFadden, surviving guardian. On August 6, 1924, Coralie Means became of full age. She thereupon made demand upon her guardian, Samuel E. McFadden, for an accounting and settlement. No accounting and settlement were made by her said guardian. On January 6, 1925, the said Samuel E. McFadden died, without having accounted and without having paid over to his ward any part of the corpus of her estate, except the corpus was reduced by encroachment from ten thousand two hundred ninety-five and 62/100 ($10,295.62) dollars to nine thousand and eight hundred twenty-nine and 29/100 ($9,829.29) dollars, the maximum amount claimed in the complaint. McFadden's estate was hopelessly insolvent. His personal representative found among his effects no moneys or securities belonging to or applicable to the payment of the amount due the ward on account of the corpus of her estate. From the books and papers of the deceased guardian, Samuel E. McFadden, his personal representative, in response to demand made, furnished to the plaintiff statements, made up in the form of annual returns, showing, or attempting to show, the amount of the corpus of the ward's estate in the hands of the said guardian on January 1, 1925, to be the sum of eight thousand five hundred and nine and one/100 ($8,509.01) dollars.

"On June 2, 1926, the ward, Coralie Means, commenced this action against the United States Fidelity and Guaranty Company, one of the makers of and obligors upon her guardian's bond, and Mary G. Sledge, as administratrix D.B. N. and C.T.A., of the estate of Samuel E. McFadden, one of her deceased guardians. In her complaint she alleges, in substance, the facts which are hereinabove set out, and further alleges, in substance, that the corpus of her estate which had come into the hands of her deceased guardian, Samuel E. McFadden, after the death of his co-guardian, A.G. Brice, amounted in value to the sum of at least nine thousand eight hundred and twenty-nine and 45/100 ($9,829.45) dollars, and that the condition of the bond filed by her guardian for the protection of her estate had been breached by the failure of her said guardian, Samuel E. McFadden, to defend and protect her estate, to render true and correct annual accounts to the probate Judge, and to account for and deliver and pay over to her when she came of age the value or amount of the corpus of her estate, with accrued interest, to her damage in the sum of $9,829.45, with interest thereon from January 1, 1925.

"The defendant, United States Fidelity Guaranty Company, interposed a demurrer to the complaint based upon the grounds:

"(1) That the personal representative of A.G. Brice, deceased, was a necessary party.

"(2) And that it appeared upon the face of the complaint that the guardians' account had not been adjusted and that no specific sum had been decreed by the probate Court to be paid over by the plaintiff. This demurrer was overruled, but on July 30, 1926, on motion of the defendant, United States Fidelity Guaranty Company, an order was made requiring that Mrs. Sallie M. Brice, executrix of A.G. Brice, be made a party-defendant. The order making Mrs. Brice, as executrix, a party was made without notice to her. Pursuant to this order, the summons and complaint were served upon Mrs. Sallie M. Brice, as executrix of A.G. Brice, deceased, as a party defendant.

"Each of the parties-defendant answered in due time. The defendant, United States Fidelity Guaranty Company, as surety, contended in its answer that it was liable only as secondary surety upon the bond. That Mrs. Sallie M. Brice, as executrix of A.G. Brice, was primarily liable by reason of A.G. Brice being joint-maker on the bond, and thereby liable as joint-principal and primary surety. Also that the Brice estate was primarily liable by reason of contract of indemnity contained in the original application for the bond.

"The answer of the defendant, Sallie M. Brice, as executrix of the estate of A.G. Brice, deceased, denied the allegations of the complaint and of the answer of the U.S. Fidelity Guaranty Company and set up as a defense thereto: (1) That A.G. Brice and S.E. McFadden, as guardians, had faithfully and fully performed their duties and made annual returns each year, which were approved by the probate Court, and that there was no default during the life of A.G. Brice. (2) That on the death of A.G. Brice, his duties and liabilities terminated, and that S.E. McFadden became, by law, entitled to the sole control and possession of the assets in her hands, which were turned over to him by her, and that S.E. McFadden took sole control and possession thereof and executed his receipt to her for the assets in her hands and that the estate of A.G. Brice was entitled to a discharge as a matter of law and fact by reason of the settlement in full and payment of the assets to the surviving guardian. (3) That the United States Fidelity Guaranty Company knew, or should have known, of the death of A. G. Brice, and thereafter continued its liability on the bond of S.E. McFadden, as sole surviving guardian, and waived any and all claims or demands against the estate of A.G. Brice; and continued to act as surety for S.E. McFadden as sole surviving guardian, and to collect and demand premiums on his bond, and neglected to require annual returns from S.E. McFadden, and thereby by its negligence became liable for the defaults of S.E. McFadden. (4) That the application of A.G. Brice to the United States Fidelity Guaranty Company was the personal, separate and distinct undertaking on his part for his own fidelity under the bond as surety; A.G. Brice's estate is not liable under the said application, which is without consideration and did not bind him as surety for S.E. McFadden and his defaults, and is barred. (5) And that the United States Fidelity Guaranty Company is estopped by reason of its laches, neglect and failure, after the death of A.G. Brice, to require S.E. McFadden to make annual returns and account; and that she was not liable in any way whatsoever.

"The answer of Mary G. Sledge, as administratrix, C.T. A.D.B.N. of the estate of Samuel E. McFadden, deceased, admitted certain of the allegations of the complaint, but alleged in substance that she had no knowledge or information sufficient to form a belief as to the true status of the account between plaintiff and her decedent, Samuel E. McFadden, deceased, and that she denied liability of her said decedent's estate to the plaintiff and demanded strict proof thereof.

"Plaintiff's attorneys then docketed the case on calendar two. On call of the case in open court on November 12th, 1926, Hon. W.H. Townsend, Judge presiding, ordered that the case be referred to R.L. Douglas, as special referee, "To take the testimony offered on all issues raised by the pleadings, to state the account and to report the testimony, together with the findings and conclusions thereon only as to the amount due the plaintiff, to this Court with all convenient speed.' At the time of the making of this order, there were present in the Court all of the attorneys of record, except Messrs. Hemphill Hemphill. From this order of reference, there was no appeal by any party to this suit.

"At the time it was agreed that references should be held immediately and that Judge Townsend should mark the case heard and hear the same in the next two weeks after leaving Chester. The hearing was to be had upon the testimony which was to be taken and to be reported by the special referee. Two references were held in December, 1926, and two in April, 1927, and the report not filed until May 20th, 1927. Although Judge Townsend marked the case heard he never actually heard the case as originally contemplated that he should.

"After the first two references, and on motion of the defendant, United States Fidelity Guaranty Company, J. Weldon Anderson was made a party-defendant, Mr. Anderson having purchased lands acquired by the joint guardians as mortgagees from the mortgagor. The deed from McFadden, as surviving guardian to Anderson was without any authority of Court.

"This case came for trial before special Judge C.J. Ramage, on January 16th, 1928. All issues in the case were before the Court at this trial, including the appeal from the referee's report.

"Over the objection of certain defendants, the Judge submitted four questions to a jury. The jury decided these four questions in favor of the Brice Estate and against the bonding company as to liability on the guardian's bond. On March 16th, 1928, after motion to set aside the verdict of the jury, Judge Ramage filed a decree affirming the report of the referee as to the amount due the plaintiff in the sum of eighty-nine hundred ninety-nine and 82/100 ($8,999.82) dollars. Decree further held the bonding company primarily liable on the bond and the Brice estate secondarily liable, and that upon payment of the amount due the plaintiff, the payer was subrogated to a one-half interest in the McCluney lands; that the one-half interest in the McCluney lands held by Brice as guardian had never been conveyed to Anderson but was in 'statu quo.' And that the party paying the bond would be subrogated to this half interest. There were three motions to amend the decree, but the final holding of the trial Judge is as above stated. The final supplemental decree was filed April 14th, 1928."

Following the motion of Messrs. Glenn Glenn, attorneys for the defendant United States Fidelity Guaranty Company, to set aside the verdict of the jury, his Honor, Judge Ramage, filed the following decree, dated March 15, 1928:

"This case was marked 'Heard' in open court and the same was taken by me under advisement.

"I have been very much concerned and have devoted much study and reading to the issues involved in this case.

"I am satisfied in the main with the report of R.L. Douglas, special referee, and I adopt his report as a part of my decree herein, except as herein modified. It is a splendid thing to have all the issues passed on by a good lawyer and this practice ought to be more prevalent. I adopt the report but in case anything therein should conflict with the special provisions of this decree, then, of course, the decree must prevail.

"I also refuse to set aside the findings and verdict of the jury herein. I sustain the verdict of the jury and make it a part of this decree so far as United States Fidelity Guaranty Company is concerned.

"It is ordered that plaintiff have judgment and that the same be entered up in the Clerk's office for the sum of eight thousand nine hundred and ninety-nine dollars and eighty-two cents, together with interest on the said amount from January 1, 1925, at seven per cent per annum against Mary G. Sledge, administratrix of the estate of S.E. McFadden, and against the United States Fidelity Guaranty Company.

"It is further ordered that the estate of A.G. Brice be and the same is hereby declared discharged from all liability, unless the plaintiff should fail to collect out of the United States Fidelity Guaranty Company and in that case, plaintiff is hereby permitted to bring an action against the estate of A.G. Brice if she should be so advised, but so far as any other party to this action, any further action against the estate of the said A.G. Brice is hereby barred.

"Perhaps I ought to stop right here and let all further proceedings in the case be settled by some other Judge.

"That really would have been the proper method: let plaintiff get or fail to get her relief and then let all other matters and things be settled by subsequent proceedings.

"But under the pleadings in the case and inasmuch as it is understood that I am to pass on all issues raised, I shall proceed to dispose of the case as best I can.

"I refuse to allow McFadden's estate to be paid anything in this case and disallow any claim of any kind set up by the said estate; any other course would be taking money from innocent parties who must suffer already too severely by his conduct. I hold that the McCluney mortgage was and is discharged under the ruling of the Supreme Court in the case of Werber v. Cain, 71 S.C. 346, 51 S.E., 123, and other cases on the same subject.

"I hold that McCluney is discharged by the conveyance of the land to Brice and McFadden, guardians.

"The main question in the case from the standpoint of the law is: What part of the land did McFadden convey to Andersons; none or all or one-half?

"I have read many cases on this question and am frank to say that the question is one over which much darkness and confusion hover.

"It is useless to say that a guardian cannot convey away the real estate, the legal title to which is in the ward. That is elementary. By 'belonging' to the ward in the sense of the ward's having the legal title, is what is meant here.

"It is also clear that when property is willed to a trustee with power to sell, then the trustee can convey the legal title to the property. But in all these cases, the whole thing depends on the terms, language, and conditions set out in the instrument creating the trust relationship and most of the cases confine their decision to the actual terms of the paper writing before the Court in the particular case.

"It is also well settled that what is called the 'Statute of Uses' will execute or pass over to the cestui que trust the entire property in the land, unless there be some actual duty or active duty to be performed by the trustee. There is no need for citation of authority for any of these matters.

"As in most other cases, the trouble is not so much to find out what the law is, as to properly apply the law to the facts.

"It seems to me that the reasoning of McIver, J., in State v. Evans, 33 S.C. 184, 11 S.E., 697, 698, is determinative of the present case. The conveyance in that case was to C.P. Leslie, Land Commissioner, and it was held that these words did not vest the legal title in the State as it was the manifest object to let the legal title stay in the commissioner so that he might the more easily re-sell the land in small lots. It seems that this was the object of Brice and McFadden in this case. The word Guardian would indicate on its face that there was an active duty to be performed on the part of the guardian at least during the minority of the ward and I think and hold that the word itself imports an active trust that would not become a passive trust till the guardian had made a full settlement with the ward. That appears to be the case here and I so hold.

"Now, another difficult question arises. Did McFadden as surviving guardian have the right to convey the whole fee?

"The cases holding this are those dealing with powers; that the power of sale on the principle of joint tenancy goes to the survivor and that statutes like ours providing for the severing of a joint tenancy, do not apply to a trust relationship, but that the survivor takes the full power to convey the fee by reason of the doctrine of survivorship under the common law relating to joint tenants.

"But here we have not a power but a legal estate. This distinction is of the first importance here.

"We have not only an estate but one that passed to the legal heirs of A.G. Brice under the common law.

"'The death of a trustee named in a deed creating a trust does not destroy the trust, but the oldest son of the trustee becomes his successor, in law, unless the Court names and appoints another trustee.' Reynolds v. Reynolds, 61 S.C. 243, 39 S.E., 391.

"Chancellor Johnston in Martin v. Price, 2 Rich. Eq., 412, demonstrates this matter very clearly and shows that the trust goes to the heir at common law.

"I fail to see how the legal estate that was in Brice could go to his heir at common law and also vest in McFadden at the same time.

"As to the right of survivorship: Chancellor Harper in McMeekin v. Brummet, 2 Hill, Eq., 638, says:

"'Any interest, of any sort, in which there may be a joint tenancy, shall be severed by the death of one joint tenant, and the share of the deceased go to his legal representative.'

"So in my opinion as a result of the above cases and the general law on the subject, the Andersons only got the one-half of the land, and the other half, the Brice half, is still in the estate and when the United States Fidelity Guaranty Company pays the amount of the judgment to the plaintiff, it will be subrogated to the one-half of the tract of land as a tenant in common with Anderson or rather will have the right to take over this land. And the said United States Fidelity Guaranty Company, one of the defendants, is hereby given full power to take such steps then as may be necessary to realize on the said one-half. The Court will protect Anderson in the one-half that could be conveyed by McFadden but not in the one-half that Brice had as trustee and while the right of subrogation will not exist till the money has been paid, yet when the money is paid, the said United States Fidelity Guaranty Company will then be subrogated to the one-half that is covered by the Brice trust.

"If there be any significance to the words 'as Trustees' it cuts both ways for the word as is omitted in the premises of the deed but is used in the habendum.

"Recurring to the Evans case above cited, the language was as follows: 'Unto the said Charles P. Leslie, land commissioner, his successor or successors, their heirs and assigns forever. * * * (to have and to hold lands) to the proper use and behoof of the said party of the second part, his heirs and assigns forever, and the warranty is to the said party of the second part, his heirs and assigns.' The State cannot maintain an action for the recovery of this land, because the deed does not convey to her the legal title.

"The case says: 'It would seem that the Legislature never intended that the title to lands purchased by the land commissioner should be taken to the State, but rather to the land commissioner so that re-sale could be readily made by him.'

"Carrigan v. Drake, 36 S.C. page 354, 15 S.E., 339, is in point also. (One of the best discussions of powers is in 4 Kent Com. (1873) ed. by Justice Holmes at star page 326.) Even if this were simply a power and not an estate as I construe it, it would not survive under the authority of Kent.

"So my conclusions are as follows: Plaintiff is entitled primarily to be paid out of the McFadden estate, but as than estate is admittedly insolvent, the United States Fidelity Guaranty Company will have to pay the bond; that Brice estate is released so far as the United States Fidelity Guaranty Company is concerned; that Anderson takes one-half of the land conveyed to the Andersons by McFadden; that when the United States Fidelity Guaranty Company pays the bond, the said company will be subrogated to the one-half of the land that Brice could have conveyed; that in case the plaintiff fails to get her money out of the United States Fidelity Guaranty Company, then she can go on to the one-half of the McCluney lands and then on the Brice estate, for while the Brice estate is discharged so far as the United States Fidelity Guaranty Company is concerned, that and yet, as a last resort, the said Brice estate will be liable to the plaintiff; this is the case as I see it, and the plaintiff cannot enter up judgment as against the Brice estate and hold it liable on the bond till she has first exhausted the one-half interest in the land of which J. Weldon Anderson holds the other half. Miss Mary G. Sledge, administratrix, has shown that the estate of McFadden is insolvent.

"All positions and exceptions in the record contrary to this decree are overruled.

"Any party to this action may apply at the foot of this decree are overruled.

"Any party to this action may apply at the foot of this decree for such other or further orders as may be necessary to carry out the terms of this decree.

"By paying the bond, I, of course, mean so much of the bond as is covered by the judgment herein ordered to be entered up.

"I hold that plaintiff could take the one-half of the McCluney land, but she elects to proceed against United States Fidelity and Guaranty Company, and that this company, when it pays up the judgment, will be subrogated to her right and may move to have a trustee appointed or take any other steps it may be advised to take possession or dispose of that half, and that Anderson already has legal title to the other half.

"C.J. RAMAGE, "Special Presiding Judge.

"March 15, 1928."

After the filing of this decree, motions were made to amend the same by Messrs. Glenn Glenn, attorneys for the defendant United States Fidelity Guaranty Company, by Messrs. Glenn Macauley, attorneys for the defendant, J. Weldon Anderson, and by Messrs. R.B. Caldwell, and Gaston, Hamilton Gaston, attorneys for the defendant, Sallie M. Brice, executrix of the will of A.G. Brice, upon grounds which need not here be stated. Thereafter his Honor, Judge Ramage, issued the following order, correcting and amending his decree dated March 15, 1928:

"Whereas, it appears that the decree dated March 15th, 1928, heretofore filed by me in the above-entitled cause, contains a typographical error in the statement of the amount for which judgment was allowed and ordered in favor of the plaintiff against the defendants, Mary G. Sledge, as administratrix, etc., of the estate of Samuel E. McFadden, deceased, and the United States Fidelity Guaranty Company, in that the principal of said amount is therein stated to be nine thousand nine hundred ninety-nine and 82/100 ($9,999.82) dollars, when it should be eight thousand nine hundred ninety-nine and 82/100 ($8,999.82) dollars, that is, the amount found to be due by the special referee, R.L. Douglas, Esq., whose report in that particular was expressly confirmed and adopted by this Court in the said decree; now, on motion of R.B. Caldwell and Gaston, Hamilton Gaston, attorneys for defendant, Sallie M. Brice, executrix, etc., made pursuant to the provision of the said decree permitting any party to apply at the foot of said decree for such other or further orders as might be necessary to carry out the terms thereof, and duly noticed for hearing before me, it is, after hearing and with the consent of J.H. Marion, attorney for the plaintiff —

"Ordered, that the first word, viz., 'Nine' (9) of the principal amount as stated in the said decree for which judgment is allowed and ordered in favor of the plaintiff herein be changed and corrected to real 'Eight' (8) instead of nine, so that the provision of said decree in which said typographical error appears, as thus amended and corrected, shall read as follows: 'It is ordered that plaintiff have judgment and that the same be entered up in the Clerk's office for the sum of eight thousand and nine hundred and ninety-nine dollars and eighty-two cents together with interest on the said amount from January 1, 1925, at seven per cent per annum against Mary G. Sledge, administratrix of the estate of S.E. McFadden and against the United States Fidelity and Guaranty Company.'

"It is further ordered that the Clerk of this Court be, and is hereby authorized and directed to alter and correct the decree filed in accordance with the foregoing order.

"It is further ordered, for the purpose of carrying out the terms of the said decree providing that the plaintiff have judgment and that same be entered in the Clerk's office, that the accrued costs of the action be taxed against the defendants, Mary G. Sledge, as administratrix, etc., of the estate of S.E. McFadden, deceased, and against the United States Fidelity Guaranty Company, including a reasonable fee for the services of R.L. Douglas, as special referee. But in the event the amount of said referee's fee cannot be agreed upon or fixed by consent of counsel for the parties hereto, it is ordered that all remaining costs, exclusive of the referee's fee, be taxed by the Clerk and entered as a part of the judgment in favor of the plaintiff, and that the amount of the referee's fee be left open to be fixed by further order of the Court.

"C.J. RAMAGE, "Special Presiding Judge.

"At chambers, April 7, 1928."

Later, April 14, 1928, his Honor, Judge Ramage, issued a supplemental decree, as follows:

"Pursuant to notice given by the attorneys for the United States Fidelity Guaranty Company, and also given by the attorneys for the defendant, J. Weldon Anderson, further hearing was had in this proceeding by agreement at Newberry. Counsel for all parties interested were present with the exception of the attorneys for Mary G. Sledge, administratrix. After hearing the grounds of the several motions and after argument of counsel, it is on motion of Glenn Glenn, attorneys for the defendant, United States Fidelity and Guaranty Company, ordered that the decree of date March 15th, 1928, be amended in the following particulars:

"1. As to the second ground of motion the decree to read 'as guardians' and not 'as trustees' (folio 939).

"2. As to the third ground of motion the sentence in question to read:

"'Miss Mary G. Sledge, Administratrix, has shown that the estate of McFadden is insolvent.' That she is given permission to make any further showing before some other Judge as may be necessary for her protection (folio 943).

'3. As to the first ground of the motion the decree is amended as follows:

"That the Clerk insert instead of the words 'the estate' the words 'statu quo' so that it shall read: 'the Brice half is still in statu quo.' The whole sentence to read: 'The Andersons only got the one-half of the land and the other half, the Brice half, is still in statu quo' (folio 937).

"It is further ordered that amendments proposed in the notice of Glenn and Macauley, attorneys for the defendant, J. Weldon Anderson, be, and hereby are, refused.

"C.J. RAMAGE, "Special Presiding Judge.

"April 14, 1928."

It appears from the record that judgment in favor of the plaintiff, Coralie Means Andrews, was duly entered as ordered by the circuit Judge. From the original order and amended orders of the trial Judge, his Honor, Judge Ramage, the defendant, United States Fidelity Guaranty Company, the defendant, J. Weldon Anderson, and the defendant, Mary G. Sledge, administratrix, have appealed to this Court, upon exceptions which will be hereinafter adverted to.

EXCEPTIONS OF UNITED STATES FIDELITY GUARANTY

COMPANY

The United States Fidelity Guaranty Company presents 61 exceptions, several of which contain a number of subdivisions. The first 17 of the exceptions are directed to the referee's report, from which report this appellant appealed to the circuit Judge; exceptions 18 to 27, inclusive, are directed to the admission of testimony; exceptions 28 to 35, inclusive, impute error in ordering a jury trial; 36 to 39, inclusive, are directed to the charge of the circuit Judge; 40 to 48, inclusive, are with reference to the verdict; 49 to 59, inclusive, concern the decree issued by his Honor, Judge Ramage; and the remaining exceptions, 60 and 61, are with reference to release of the surety. This grouping, which we adopt, was made by the attorneys for this appellant. Counsel for this appellant have further aided the Court by a clear statement of the questions raised by the exceptions and involved in the appeal, and instead of referring to the several exceptions separately, we shall simply refer to the questions which the exceptions raise, in the order stated by counsel for this appellant, and in this connection it may be stated that, under the view we take of the case, it is not necessary to enter into a lengthy discussion of any of the questions presented.

The first question to which counsel for this appellant directs attention is stated as follows:

"1. Failure of referee to re-state the guardian account for a period of five years, 1913-1917; failure of circuit Judge to make any independent personal review of this guardian account as accepted by the referee and likewise failure on the part of the circuit Judge to make any independent personal review of any part of the referee's report and statements of account."

The referee's report, which will be incorporated in the report of the case, goes fully into this question, and the conclusion reached by him on this point, which was approved by the circuit Judge, is satisfactory to this Court. In our opinion there was no necessity for the referee to re-state the guardian account. A reading of the referee's report in connection with the testimony in the case convinces us that the referee made a careful and painstaking study of the case, that he was fair to the appellant, and that the record amply sustain his findings and conclusions.

In the next question stated, error is alleged on the part of the referee and of the circuit Judge in failing to allow the guardians or any of their representatives proper commissions.

The referee refused to allow commissions on the expenditures which were made by McFadden for the reason that McFadden failed to comply with the requirement of the law as to making returns. Code 1922, Vol. 3, § 5544, provides: "All guardians of estates appointed by the Judge of Probate shall render to him an annual account of their actings and doings, as executors or administrators are required by law to do, and upon making default shall forfeit their commissions." Epperson v. Jackson, 83 S.C. 158, 65 S.E., 217; Lay v. Lay, 10 S.C. 208; Koon v. Munro, 11 S.C. 139; Jones v. Swearingen, 42 S.C. 58, 19 S.E., 947. We do not agree with the contention that commissions should be allowed on the amount found to be owing the ward by McFadden at the time of his death, when the guardianship of McFadden was terminated. McFadden had never paid over a cent during the six years he was acting as sole guardian, but, on the other hand, during that period dissipated the estate, making it necessary for the ward to employ attorneys and institute suit on the guardian bond, resulting in a long and hotly contested litigation. Under these circumstances the ward should not be charged up with commissions. In this connection we call attention to the following statement of this Court, in the case of Smith v. Moore, 109 S.C. 196, 95 S.E., 351, 353:

"'The trustee is now confessedly due to his wards some $6,000.00 and the present issue is: When he shall have paid that recovery, may he deduct from it the usual commission allowed by law for the compensation of trustees? The circuit Court made the allowance on the authority of Gee v. Hicks (Rich. Eq., Cas. 5), and a like allowance was made in Epperson v. Jackson, 83 S.C. 164, 65 S.E., 217. But facts make the law of a case, and the facts here differ from those of the cases cited. * * * In the instant case Moore is not now guardian; he was removed from the trust by order of the probate Court in April, 1914, five months before this action was brought. If, therefore, Moore pays this recovery, he will not do so as guardian, nor will he pay it to the legatees, but to an officer of the Court. Under the very words of the statute which gives the right, Moore is not entitled to reduce the recovery by any alleged commissions due him. He does not come as a trustee executing his commission, but as a defaulter, brought to bar by another trustee,'" etc.

The third question presented by counsel is with reference to "failure to allow interest credit on annual expenditures before striking annual balance."

A reference to the report of the referee convinces us that the referee allowed every credit to which the parties were entitled.

Under the fourth question stated error is alleged as follows:

"4. Error on the part of the trial Court in transferring case from calendar two to calendar one after reference had been ordered in open court. This transfer was made after all testimony had been taken pursuant to terms of order of reference from which no appeal was made; all parties had presented evidence and cross examined adverse witnesses. That such conduct and procedure was a waiver of jury trial."

After the defendant, Sallie M. Brice, executrix, was made a party to the action, which was some time after the suit was commenced, the attorneys for this defendant made a motion to transfer the case to calendar No. 1; but this motion was denied. The defendant, United States Fidelity Guaranty Company, gave notice of motion of trial before a jury viva voce by testimony in open court. Judge Ramage, who was presiding, refused this motion, making the following ruling:

"Court: I will decide this whole case, but I am going to submit these issues here to the jury. I hold that I can set aside the verdict, if I want to, after I hear the testimony. I think that will be the best way to end this matter, if I think necessary to submit these matters to the jury when I get through and receive their verdict, and then I can take their whole record home and take such a time as I see fit; in other words, it is a matter for me entirely, but I am going to get a verdict from the jury on such matters so I will have the benefit of the very complete report of Mr. Douglas, and also the verdict of the jury. Of course, I won't be bound by either, but can decide the matter as I see it."

Thereafter a jury was impaneled and sworn, and all of the testimony taken before the referee was offered in evidence, and all of the pleadings were read to the Court and jury. The following questions were submitted to the jury:

"1. Whether or not Mr. A.G. Brice's estate has been fully discharged on the bond?

"2. Whether or not the United States Fidelity Guaranty Company waived all claims against A.G. Brice's estate?

"3. Whether or not there has been negligence and laches on the part of the United States Fidelity Guaranty Company?

"4. If there has been negligence and laches on the part of the United States Fidelity Guaranty Company, is this company barred or estopped from setting up any claim against the estate of A.G. Brice?"

These questions the jury answered in the affirmative, "Yes." These questions were submitted to the jury for the purpose of aiding the presiding Judge in deciding the issue of fact involved; but, as stated by him, he was not bound by the jury's finding, and his Honor decided the issues independently of the jury's finding. Under the order of reference the referee took the testimony on all issues, but did not report his finding on any issue except as to the amount owing the ward. It was therefore incumbent upon the Judge who heard the cause to decide the other issues raised in the case. For the purpose of aiding him he had the right under the practice of this State to frame issues for the jury, but, as stated by his Honor, he was not bound by the finding of the jury. We may add, also, that we fail to see how this defendant, the United States Fidelity Guaranty Company, was prejudiced by the procedure adopted by the circuit Judge.

This appellant states the fifth question thus:

"5. Error on the part of the trial Court in admitting certain testimony. Certain instruments admitted are contended to be privileged communications or self-serving declarations. Other letters admitted as a basis of estoppel clearly relate to acts in futuro, and not communicated to complaining party."

Under the view we take of the exceptions which raise this question, it is not necessary to refer to all of the matters objected to. It is sufficient to state that, in our opinion, all of the testimony questioned had some bearing on the issues involved. It consisted for the most part of reports filed and letters written between some of the parties to the action. Even if it should be conceded that some of these exhibits were not strictly competent, so far as this defendant is concerned, the same could not be considered prejudicial to this defendant, for the reason that the finding of the jury was not binding on the Judge and his Honor decided the questions independently of the jury's finding, and it must be assumed that in reaching his conclusion his Honor did not consider incompetent testimony.

The sixth question is as follows:

"6. Error on the part of the circuit Judge in his charge as to the importance of the jury's findings, as to burden of proof upon affirmative defenses and as to law of laches, waiver and estoppel."

In our opinion it would serve no useful purpose to discuss in detail the several errors imputed to the circuit Judge under this heading, in view of the fact that his Honor passed upon the several issues independently of the finding of the jury, and also in view of the fact that, in our opinion, the record in the case amply supports the findings of the circuit Judge and the conclusion reached by him on all of the issues involved. The questions raised under this line of the exceptions, therefore, become moot questions. We may add that in our opinion his Honor stated the law correctly.

(The charge of the Judge and this appellant's exceptions will be reported.)

The seventh question stated by this appellant is as follows:

"7. Error in refusing to set aside the verdict of the jury in that the facts were undisputed and there were only legal conclusions to be determined by the Court and that the jury's findings were contrary to the weight of testimony and to the charge of the Court."

The circuit Judge refused to set aside the verdict of the jury for the reason that he was convinced that the jury reached a proper verdict, and independently of the finding of the jury he reached the same conclusion the jury did. In our opinion the verdict is well supported by the record.

In this appellant's eighth statement of the issues raised by the exceptions it is contended that there was "error on the part of the Court in holding that in an action upon a joint guardian bond the secondary surety was primarily liable."

The bond in question, executed by the joint guardians and by the bonding company (United States Fidelity Guaranty Company), was a joint and several liability, and when settlement was not made with the ward when she became of age, she had the right to institute suit against all or either of the parties. Under this theory she instituted suit against the bonding company, making the representative of the McFadden estate a party to the action. Under the law she had a legal right to pursue this course.

The ninth and tenth questions, which will be considered together, are stated as follows:

"9. Whether the estate of the first deceased guardian could only be released by proper legal procedure or can such estate be released as principal or as primary surety on such guardian bond by the laches or waiver or estoppel on the part of the secondary surety, especially where there was both an express and implied contract on the part of the predeceased guardian to indemnify the secondary surety from all loss by reason of execution of bond.

"10. Whether a release by any means of estate of co-principal on joint guardian bond would release all subsequent sureties on such bond."

In the first place, we must bear in mind that the ward, the plaintiff, Coralie Means Andrews, has not released any party. She has simply elected to bring suit against the bonding company, making the representative of the McFadden estate a party defendant. She had good and sufficient reason for doing this, and independent of any reason, she had a right under the law to adopt this course. The question of the release of the Brice estate involved here is not a question between the plaintiff and the representative of the Brice estate, but a question between this appellant, the bonding company, and the representative of the Brice estate. The answers of the jury to the several questions submitted to the jury on this line, which finding was concurred in by the trial Judge, furnish sufficient ground for overruling appellant's contention, for in our opinion the facts in the case, viewed in the light of the law applicable thereto, are in accord with the finding of the jury and the conclusion of the trial Judge. On this question the order of the trial Judge directed: "That the estate of A.G. Brice be and the same is hereby declared discharged from all liability, unless the plaintiff should fail to collect out of the United States Fidelity Guaranty Company and in that case, plaintiff is hereby permitted to bring an action against the estate of A.G. Brice if she should be so advised, but so far as any other party to this action, any further action against the estate of A.G. Brice is hereby barred." This appellant, United States Fidelity Guaranty Company, had no right in law or equity to require the plaintiff to proceed first against the Brice estate, and under the finding of the jury, concurred in by the trial Judge, to which we have called attention, based upon the facts in the case, the Brice estate, in our opinion, is properly discharged from all liability, in so far as the United States Fidelity Guaranty Company is concerned. This release of the Brice estate as to any and all liability on account of any amount of money the United States Fidelity Guaranty Company may have to pay over to the plaintiff has no bearing on the rights of the plaintiff against the United States Fidelity Guaranty Company. The discharge of the Brice estate, so far as the United States Fidelity Guaranty Company is concerned, is due to the splendid way Mr. Brice handled the ward's money, and because of the release granted the Brice estate by Mr. McFadden, which release the United States Fidelity Guaranty Company, by its conduct, if not by its direct acts, approved. In our opinion, under no view of the case is the bonding company entitled to a release.

The eleventh statement of this appellant, as to the questions raised by the exceptions, is as follows:

"11. The joint guardians acquired title to a tract of land by deed of the mortgagor in lieu of foreclosure proceedings. The surviving guardian conveyed this tract by deed without authority of the Court. If such conveyance is held a nullity, who is now the owner of this tract of land, the attempted purchaser, the proper representative of the deceased guardian, or the ward? And if the ward, would not her corpus be charged with the amount of the debt due her when title was taken for this land, that is, $4,000.00, principal of loan on November 14, 1928."

In our opinion the deed in question, under which the defendant, J. Weldon Anderson, claims title, is not a nullity, but gives to the defendant Anderson a good and sufficient title to said land; and therefore the question suggested by the bonding company does not arise. We shall advert to this question when we consider the exceptions of the appellant Anderson.

The exceptions of the defendant United States Fidelity Guaranty Company are overruled.

EXCEPTIONS OF MARY G. SLEDGE, ADMINISTRATRIX OF

THE ESTATE OF SAMUEL E. McFADDEN

Under the first two exceptions of this appellant, Mary G. Sledge, administratrix, error is imputed on account of the Court not holding that this defendant was entitled to a jury trial and in referring the case to the referee. The record discloses that there was no appeal from the order of reference. Therefore that question is not before this Court.

The third exception of this appellant is as follows:

"3. That the Court erred in failing to hold that the administratrix of McFadden estate was not to handle the funds, disburse same to plaintiff and receive commissions, when it is undisputed that the action was founded upon returns carefully prepared by her at the expense of the estate, and when it is apparent that plaintiff will collect all she is entitled to."

The question raised by this exception is fully treated by the referee in his report, and we fully agree with his disposition of this matter. (The referee's report will be incorporated in the report of the case.)

In this appellant's fourth exception error is alleged as follows:

"That Judge Henry made the Brice estate a party defendant to this action without notice and without the knowledge or consent of the administratrix of McFadden estate."

It was not necessary that notice of making the Brice estate a party should be given to this appellant; and it does not appear that this appellant was in any way prejudiced by such order.

The fifth exception of this appellant adopts the twelfth exception of the defendant United States Fidelity Guaranty Company. The exception is therefore disposed of by what we have stated under our consideration of the exceptions of the appellant United States Fidelity Guaranty Company.

The sixth exception is as follows:

"The undisputed evidence is that on February 19th, 1913, plaintiff's guardians loaned in good faith and without negligence four thousand ($4,000.00) dollars to McCluney secured by first mortgage on real estate, and that neither of them ever received any interest from said investment. Therefore the reference and Court erred in finding plaintiff entitled to any interest whatsoever on said four thousand ($4,000.00) dollar investment after February 19th, 1913."

The question raised by this exception has been considered and answered adversely to the contention of appellant in our consideration of the exceptions of the appellant United States Fidelity Guaranty Company.

The exceptions of this defendant, Mary G. Sledge, as administratrix, are overruled.

EXCEPTIONS OF THE DEFENDANT J. WELDON ANDERSON

The exceptions of this defendant, which will be reported with the case, raise several questions, but under our view of the case, it is not necessary to consider all of them. As we view the case, upon the death of Brice, one of the guardians, McFadden, the other guardian, as surviving active trustee, took the legal estate in the entire interest in the land in question. The facts leading up to the execution of title to Anderson, briefly stated, are as follows: Brice and McFadden were originally joint guardians of the plaintiff, Coralie Means Andrews. While both of these guardians were living, as such guardians, they loaned of their ward's money to one Thomas F. McCluney the sum of $4,000.00. As security to this indebtedness they had McCluney execute to them a mortgage covering certain real estate, referred to in the record of this case as the McCluney lands, containing 103.75 acres. Later, about January, 1914, as additional security to this indebtedness, McCluney executed unto these joint guardians another mortgage, covering another tract of land, consisting of twenty-five acres. These mortgages were held by the joint guardians as security to this indebtedness. The tract of land is referred to in the record at places of 130 acres, being the two tracts combined. The mortgages were first mortgages over the land in question. Later on, when unable to pay the obligation, McCluney executed unto Brice and McFadden, as guardians of Coralie Means (she was afterwards married to one Andrews, and is named in the record as Coralie Means Andrews), their ward, a title to land in question. McCluney gave the deed in satisfaction of the said mortgage indebtedness, and it is evident that Brice and McFadden so regarded it. It appears that they carried this tract of land in their returns to the probate Judge, not as a tract of land, but as a $4,000.00 investment, to which land they held the title as guardians. Mr. Brice died in 1918. Thereafter McFadden continued to handle the funds of the ward, as her surviving guardian.

In January, 1920, McFadden arranged a sale of the land to W. DuPre Anderson and J. Weldon Anderson. In the wording of the title McFadden is referred to as surviving guardian of Coralie Means. The consideration for the sale of the land was $4,690.07. McFadden signed the title, "Samuel E. McFadden, surviving guardian of Coralie Means." In the year 1921, W. DuPre Anderson conveyed his interest in the lands to his brother, the said J. Weldon Anderson, and since that time J. Weldon Anderson has been in sole possession of the said lands, and has made improvements on the same at a very heavy expense. It appears from the evidence in the case that no person questioned his title and right of possession until he was made a party to this action.

As stated above, it is our opinion that when Brice died, McFadden, as the surviving guardian, surviving acting trustee, took the legal estate in the entire interest in these lands. In support of this holding attention is called to the general rule stated in Perry on Trusts (5th Ed.), Vol. 1, pp. 499, 500:

"Sec. 343. Trust property is generally limited to trustees, as joint-tenants; and if by the terms of the gift it is doubtful whether the trustees take as joint tenants, or tenants in common, courts will construe a joint-tenancy if possible, on account of the inconvenience of trustees holding as tenants in common; and where statutes have abolished joint-tenancy, an exception is generally made in the case of trustees. And courts will not allow a process for the partition of a trust estate. Therefore, upon the death of one of the original trustees, the whole estate, whether real or personal, devolves upon the survivors, and so on to the last survivor; and upon the death of the last survivor, if he has made no disposition of the estate by will or otherwise, it devolves upon his heirs if real estate, and upon his executors or administrators if it is personal estate. (a) The title in the surviving trustee is complete, and no breaches of trust after the death of his co-trustees can be charged upon their estate; nor can the representatives of his co-trustees interfere with his management of the trust estate, even if he is insolvent or unfit for the trust. (b) The cestui que trust alone can interfere or apply to the Court for redress or relief. So all rights of action are in the surviving trustee, and he may sue in his own name or as survivor, according as the cause of an action accrued before or after the death of his co-trustees; and, in case of his death, his executor or administrator may continue the action. The rule is that actions must be brought in the names of the parties to the contract."

In 26 R.C.L., 1339, the rule is stated thus:

"Where the trustees are invested with the legal estate, in order to enable them to discharge the various trusts declared, it is the well-settled general rule that the power conferred is a power coupled with an interest, which survives, on the death of one of them, and may be executed by the survivor. It is not necessary that the trustees should have a personal interest in the trust; it is the possession of the legal estate, as a right virtue officii in the subject over which the power is to be exercised, that makes an interest, which, when coupled with the power, the latter survives."

See also, in this connection, Dick v. Harby, 48 S.C. 529, 26 S.E., 900; Singleton v. Cuttino, 105 S.C. 49, 89 S.E., 385.

In the deed executed by McCluney to the guardians we find the following wording:

"To have and to hold, all and singular, the said premises before mentioned unto the said A.G. Brice and S.E. McFadden, as guardians of Coralie Means as aforesaid, their successors and their heirs and assigns forever."

Upon the death of Brice, McFadden became de facto and de jure successor in office to Brice as guardian, and in our opinion, under the facts of this case, had the power to execute the said title, conveying unto the Andersons the land in question, and that J. Weldon Anderson, having received from his brother a deed for his interest in the land, is now the owner of it in fee simple.

The exceptions of this defendant, J. Weldon Anderson, which raise the question we have discussed, are therefore sustained. We do not consider it necessary to pass upon the other exceptions of this defendant.

It is the judgment of this Court that the decree and judgment of the circuit Court be, and the same is hereby, modified in accordance with the view herein expressed and affirmed in all other respects.

(Note: There should be incorporated in the report of the case the report of the special referee, the Judge's charge to the jury, the decree and the several orders of his Honor, Judge Ramage, the exceptions of the defendant United States Fidelity Guaranty Company, and the exceptions of the defendant J. Weldon Anderson.)

MR. CHIEF JUSTICES WATTS concurs.

MESSRS. JUSTICES COTHRAN, BLEASE and STABLER concur in result.

MR. JUSTICE COTHRAN (concurring in result):

I concur in the general result announced in the opinion of Mr. Justice Carter as follows:

(a) That the plaintiff is entitled to judgment against the defendant United States Fidelity Guaranty Company and against the administratrix of the estate of Samuel E. McFadden, for $8,999.82, with interest at 7 per cent from January 1, 1925.

(b) I do not agree that the executrix of the Brice will had the legal right, by turning over the unadministered assets of the guardianship estate in the hands of Brice at the time of his death, ipso facto, to discharge the Brice estate from all obligations under the guardianship bond.

(c) I think that the Surety Company is estopped by its conduct from denying the validity of the transfer of the unadministered assets just referred to, and is not entitled to indemnity from the Brice estate for what it may have to pay upon the bond.

(d) I do not agree with the conclusion of Mr. Justice Carter, that from the fact that McCluney conveyed the legal title of the McCluney tract to the joint guardians, McFadden as the surviving guardian held such an absolute fee-simple title as enabled him, without an order of Court, to convey a fee-simple title to the Andersons; on the contrary, I think that both the acceptance of a deed from McCluney in satisfaction of the mortgage which he had given to the guardians, and the execution of the deed from McFadden to the Andersons, both transactions having been consummated without the authorization of the Court, were entirely irregular and could have been overthrown by the ward, but that her action is a confirmation of both, and that the surety company has no right to complain if as a fact the mortgage has been fully accounted for by Brice. For these reasons I do not think that the surety company is in a position to object or to seek indemnity from the Andersons; but that the title of Anderson is good.

This is an action upon a guardianship bond, signed by Samuel E. McFadden and A.G. Brice, guardians of the plaintiff, Coralie Means (now Andrews), a minor, as principals, and the United States Fidelity Guaranty Company (hereinafter for convenience referred to as the "Surety Company"), as surety, in the sum of $15,000.00. The bond is in the usual form, dated January 29, 1913, and was followed by the appointment and qualification of the guardians.

It appears that the guardianship estate consisted of funds derived from the sale of certain real estate, rents, a legacy, and a judgment, amounting in total to $10,295.62, and that from the time of his appointment in January, 1913, to the time of his death on January 30, 1918, the estate was handled judiciously and honestly, practically exclusively, by the guardian Brice, who made annual returns to the probate Judge of receipts and disbursements for the years 1913 to 1918, both inclusive.

Brice died, as stated, on January 30, 1918, and on September 11, 1918, the executrix of his will, Sallie M. Brice, turned over to McFadden, the surviving guardian, all of the securities constituting the estate, amounting to $10,295.62, which had been in the hands of Brice at the time of his death and took McFadden's receipt therefor. This action on the part of the executrix was without Court procedure or notice to either the ward or to the bond company, surety.

After the death of Brice no annual returns were filed by McFadden. On August 6, 1924, the ward became of age and made a demand upon McFadden for an accounting and settlement, which she was unable to obtain.

On January 6, 1925, McFadden died without having made an accounting and without having paid the ward any part of the corpus of the estate, except so far as it may have been trenched upon by the excess of disbursements over income.

The present action was instituted originally on June 2, 1926, against the Surety Company and Mary G. Sledge, administratrix of McFadden's estate; the plaintiff alleging the facts substantially as set forth above and asking judgment for $9,829.45 as the amount due her, with interest from January 1, 1925. Thereafter on July 30, 1926, upon motion of the Surety Company, the executrix of the will of Brice was made a party defendant.

The Surety Company answered taking the position:

"That this defendant is not a principal on said bond and is only a surety for the co-principals, A.G. Brice and Samuel E. McFadden. That this defendant is informed and verily believes that the estate of A.G. Brice is abundantly solvent and able to pay in full any liability arising from the breach of said bond. That each of said principals and their personal representatives are liable for the full amount due the plaintiff by reason of any breach of said bond by the terms of the application for said bond. And that by signing the application of date January 20th, 1913, the said A.G. Brice made himself liable for the entire amount due said ward by reason of said guardianship or under the terms of the bond, on account of the following agreement in the application:

"'To indemnify and save the said company harmless from any and all loss, costs, charges, suits, damages, counsel fees, and expenses of whatever kind or nature, which said company shall or may, for any cause, at any time, sustain or incur, or be put to, by reason or in consequence of said company's having executed said bond.'"

The defendant executrix answered in substance:

"(1) That A.G. Brice and S.E. McFadden, as guardians had faithfully and fully performed their duties and made annual returns each year, which were approved by the probate Court and that there was no default during the life of A.G. Brice. (2) That on the death of A.G. Brice, his duties and liabilities terminated, and that S.E. McFadden became, by law, entitled to the sole control and possession of the assets in her hands, which were turned over to him by her, and that S.E. McFadden took sole control and possession thereof and executed his receipt to her for the assets in her hands and that the estate of A.G. Brice was entitled to a discharge as a matter of law and fact by reason of the settlement in full and payment of the assets to the surviving guardian. (3) That the United States Fidelity Guaranty Company knew, or should have known, of the death of A. G. Brice, and thereafter continued its liability on the bond of S.E. McFadden as sole surviving guardian, and waived any and all claims or demands against the Estate of A.G. Brice; and continued to act as surety for S.E. McFadden as sole surviving guardian, and to collect and demand premiums on his bond, and neglected to require annual returns from S.E. McFadden, and thereby by its negligence became liable for the defaults of S.E. McFadden. (4) That the application of A.G. Brice to the United States Fidelity Guaranty Company was the personal, separate and distinct undertaking on his part for his own fidelity under the bond as surety; A.G. Brice's estate was fully released and discharged, and that his estate is not liable under the said application, which is without consideration and did not bind him as surety for S.E. McFadden and his defaults, and is barred. (5) And that the United States Fidelity Guaranty Company is estopped by reason of its laches, neglect and failure, after the death of A.G. Brice, to require S.E. McFadden to make annual returns and account; and that she was not liable in any way whatsoever."

Plaintiff's attorneys then docketed the case on Calendar 2. On call of the case in open court on November 12, 1926, Hon. W.H. Townsend, Judge presiding, ordered that the case be referred to R.L. Douglas, as special referee, "to take the testimony offered on all issues raised by the pleadings, to state the account and to report the testimony, together with the findings and conclusions thereon only as to amount due the plaintiff, to this Court with all convenient speed."

After the holding of certain references under this order and upon motion of the Surety Company, J. Weldon Anderson was by order made a party defendant; he had acquired a certain tract of land, known as the McCluney land, which McCluney had conveyed to the guardians in satisfaction of a mortgage given by him to them for borrowed money and which McFadden, after the death of Brice, as surviving guardian had conveyed to Anderson and his brother, the latter having conveyed his interest to J. Weldon Anderson.

The object of the Surety Company in bringing Anderson into the case was to secure an adjudication that McFadden had no right to convey the McCluney land to Anderson, that it was an asset of the guardianship estate and that its liability upon the bond should be credited with the value of that land; the sale having been made by McFadden without the sanction of the Court.

Anderson answered claiming that McFadden as surviving guardian had the legal title to the land and was authorized to convey it to him.

The referee held a number of references, and on May 20, 1927, filed his report within the limitation fixed, as stated by the order of reference. The report is most elaborately and carefully prepared; he found that the amount due upon the bond, to which the plaintiff was entitled, was $8,999.82, with interest from January 1, 1925.

To this report the Surety Company filed exceptions.

The case came on for trial in January, 1928, before his Honor, Judge Ramage, then acting as special Judge under appointment of the Governor, prior to his election as circuit Judge. All of the issues in the case were before his Honor at this trial, including the exceptions to the referee's report.

Over the objection of the defendants, his Honor submitted the following issues to a jury which was impaneled, as "issues out of chancery"; they were answered as indicated:

"1. Whether or not Mr. A.G. Brice's estate has been fully discharged on the bond?

"Yes.

"2. Whether or not the United States Fidelity Guaranty Company waived all claims against A.G. Brice's estate?

"Yes.

"3. Whether or not there has been negligence and laches on the part of the United States Fidelity Guaranty Company?

"Yes.

"4. If there has been negligence and laches on the part of the United States Fidelity Guaranty Company, is this company barred or estopped from setting up any claim against the estate of A.G. Brice?

"Yes."

Thereafter on March 15, 1928, his Honor, Judge Ramage, filed a decree in which he confirmed the report of the referee, as he declares "except as herein modified."

Inasmuch as the order of reference directed the referee to take and report the testimony upon all of the issues in the case, to state the account between the guardians and the estate; and to report his finding only as to the amount due to the plaintiff, it appears clearly that the only conclusion of the master reviewable by the circuit Judge was the amount ascertained to be due to the plaintiff; and he having concurred in that finding, it cannot be rightly said that there is anything in the decree which modifies the findings and conclusions of the referee. It was up to him then to decide, from the reported testimony, all of the other issues in the case.

After directing judgment against the Surety Company and the administratrix of the estate of McFadden for the sum of $8,999.82, with interest from January 1, 1925, at 7 per cent per annum, he made the following adjudications:

1. That the Brice estate be discharged from all liability, except upon its happening that the plaintiff be unable to collect the amount of the judgment against the Surety Company. No mention was made of a failure to collect against the McFadden estate, which, in view of its utter insolvency, appeared unnecessary. And in view of the known ability of the Surety Company to respond, the condition as to it appears superfluous;

2. That the McFadden estate be disallowed "any claim of any kind set up by the estate";

3. That the McCluney mortgage was discharged under the ruling of the Supreme Court in the case of Werber v. Cain, 71 S.C. 346, 51 S.E., 123;

4. That the guardians held the legal title to the McCluney land upon a conveyance of it to them by McCluney in satisfaction of the mortgage which he had given to them as guardians;

5. That the legal title to the McCluney land having been vested in McFadden and Brice, McFadden, after the death of Brice, could convey to the Andersons only one-half of it, the other half being vested in the Brice estate;

6. That upon payment by the Surety Company of the judgment rendered, it be subrogated to the rights of the plaintiff in the one-half of the McCluney land which was vested in Brice by the conveyance of McCluney;

7. That the Brice estate is released so far as the Surety Company is concerned.

From this decree the defendants, the Surety Company, J. Weldon Anderson, and the administratrix of McFadden estate, have appealed upon exceptions which present the questions hereinafter considered.

There are several very interesting questions involved in the appeal:

1. The amount due to the ward upon the guardianship account:

2. The rights of the ward against the Surety Company;

3. The rights of the Surety Company against the estate of Brice;

4. The rights of the Surety Company against Anderson.

1. The amount due to the ward upon the guardianship account:

As indicated above, I am satisfied with the conclusions of the master confirmed by the circuit Judge upon this phase of the case.

2. The rights of the ward against the Surety Company:

The plaintiff is entitled to enter up judgment against the Surety Company for the amount for which McFadden and his estate are accountable, $8,999.82, with interest at 7 per cent from January 1, 1925.

Inasmuch as the estate of McFadden is admittedly hopelessly insolvent, I apprehend that the exceptions of the executrix are negligible. The Surety Company, of course, is entitled to enter up against the estate judgment for the amount it may pay.

3. The rights of the Surety Company against the estate of Brice:

This is the vital question in the appeal; it has received scant attention in the circuit decree and in the opinion submitted by Mr. Justice Carter. The referee was not called upon to do so and did not pass upon it. His Honor, the circuit Judge, dismisses it with the adjudication simply "that the estate of A.G. Brice be and the same is hereby declared discharged from all liability, unless" the plaintiff shall fail to collect from the Surety Company, and proceeds to discuss what he considered "the main question in the case," the liability of Anderson on account of the purchase of the McCluney land from McFadden, in my opinion a comparatively insignificant and readily soluble issue. His Honor, Mr. Justice Carter, treats the matter as if it were the sole contention of the Surety Company that if it should be held that the Brice estate has been discharged the Surety Company would thereby be released. I understand that the Surety Company does make that contention, but it also makes the most serious contention in the case, that under the terms of the bond, Brice, as one of the obligors of the bond, a principal, undertook to indemnify the company from any loss which might be sustained by it upon account of the bond, and that under this obligation, both implied and express, the Brice estate is liable over to the Surety Company for any amount it may be compelled to pay as a result of the breach of the bond.

On December 5, 1912, it was clearly contemplated that Brice and McFadden should be appointed joint guardians of the estate of the minor, the plaintiff herein, for on that day J.W. Means, Sr., the father of the minor, filed a petition in the Court of Probate for their joint appointment. They were accordingly so appointed, as alleged in the complaint, upon the execution of a joint bond, signed by them as principals and the Surety Company as surety, conditioned "that if the said Samuel E. McFadden and A.G. Brice should faithfully execute the trust reposed in them as guardians of the person and estate of Coralie Means a minor * * * then the obligation of said bond was to be void otherwise to remain in full force" (quoting from the complaint).

Brice and McFadden made separate applications to the Surety Company for the bond, and while it appears more clearly in the application of McFadden than in that of Brice that a joint bond was contemplated, the application of Brice distinctly recognizes the fact of joint appointment. They both signed the same bond, with the Surety Company as surety, and it is too late now to contend that the applications being separate it was intended that separate bonds should be executed. By signing the joint bond, Brice accepted it as a compliance with his application.

Brice from the first assumed practically the exclusive management of the estate; he received the corpus, invested it prudently, collected the income, paid the expenses of the maintenance and education of the ward, and in every way sustained his reputation as an honest and capable attorney and faithful trustee.

The question naturally in order is whether the guardian Brice, through his executrix after his death, has met the obligation to account.

It appears that in September, 1918, after Brice's death in the previous January, the executrix of his will, the defendant Sallie M. Brice, turned over a listed number of collateral securities taken by Brice upon investments of the estate funds, to the surviving guardian McFadden, without an order of Court directing it to be done, and without notice to the Surety Company. She took a receipt for these securities from McFadden, and thereafter the sole management of the estate was conducted by McFadden.

Assuming that this delivery was a valid one, the inquiry is pertinent as to the value of these securities as meeting the obligation of Brice.

They were as follows:

1. Note of G.R. Dawson, $1,000, September 1, 1917, due January 1, 1918, interest 6 per cent, collateral two $500 First Liberty Loan bonds;

2. Note J.B. Westbrook, $1,200, September 1, 1917, due January 1, 1918, interest 6 per cent, collateral twelve $100 First Liberty Loan Bonds;

3. Note M.R. Clark, $400, September 1, 1917, due January 1, 1918, interest 6 per cent, collateral four $100 First Liberty Loan bonds;

4. Note City of Chester, $900, May 5, 1917, due January 1, 1918, interest, 6 per cent, collateral, none;

5. Note Mamie S. Kerr, $225, June 25, 1917, due December 1, 1917, interest 8 per cent, collateral, mortgage on 72 acres of land and chattel mortgage upon a horse;

6. Note J.L. Boyd, $3,000, February 1, 1913, due one year, interest 8 per cent, collateral, mortgage upon real estate, upon which the interest has been paid up to February 1, 1918;

7. Bond of J.H. Marion, $2,350, March 6, 1913, due February 3, 1914, interest 7 per cent, collateral, real estate mortgage, interest partially paid up to January 1, 1918;

8. Note F.M. and H.R. Hicklin, $2,950, January 29, 1913, due one year, interest 8 per cent, collateral, real estate mortgage, interest paid to January 1, 1917, and $929.05 on principal and interest May 6, 1917;

9. Deed of McCluney to the guardians of the tract hereinbefore referred to as the McCluney land and certain other papers in connection therewith, the consideration being McCluney's mortgage to the guardians.

The apparent face value of these securities was as follows:

1. ......................................... $ 1,000.00 2. .......................................... 1,200.00 3. .......................................... 400.00 4. .......................................... 900.00 5. .......................................... 225.00 6. .......................................... 3,000.00

7. .......................................... 2,350.00 8. .......................................... 2,950.00 9. .......................................... 4,000.00 ____________ Total ..................................... $16,025.00 The face value of these securities being nearly twice the balance due by Brice in January, 1918, it is fair to assume that considerable payments had been made upon them prior to the time they were turned over by the executrix to McFadden. At any rate, they appear amply sufficient to have met Brice's obligation.

Thereafter McFadden assumed complete administration of the trusts and as events have shown, so far as evidence to the contrary appears, wasted every dollar of them.

It would appear harsh in the extreme to hold that the estate of Brice, who fully and faithfully executed the trust as long as he lived, and whose executrix, upon advice of counsel, delivered the ample securities to McFadden after Brice's death, should be held responsible for the subsequent dissipation of them by McFadden.

I agree with the contention of counsel for the Surety Company that Brice was bound by the express agreement contained in his application for the bond: "To indemnify and save the said company harmless from any and all loss, costs, charges, suits, damages, counsel fees and expenses of whatever kind or nature, which said company shall or may, for any cause, at any time, sustain or incur, or be put to, for or by reason or in consequence of said company having executed said bond."

The authorities cited by counsel I think also sustain the proposition that in the absence even of such a provision either principal upon a joint bond impliedly undertakes to indemnify a surety for a loss sustained by a breach of the bond either upon his part or upon that of the other principal. (The reporter will add a note containing a list by titles of these authorities.)¹

1 The following authorities are cited in support of the contention of the Surety Company, respecting the liability of principals under a joint bond: Jones' Heirs v. Jones' Administrator, 42 Ala., 218; Hughlett v. Hughlett, 5 Humph. (Tenn.), 453; Hoell et al. v. Blanchard, etc., 4 Desaus., 21; Dobyns v. McGovern, et al., 15 Mo., 662; Stephens et al. v. Taylor et al., 62 Ala., 269; Babcock v. Hubbard, 2 Conn., 536; Eckert v. Myers et al., 45 Ohio St., 525, 15 N.E., 862, 864; Ames v. Armstrong, 106 Mass. 15; Jamison v. Lillard, 12 Lea (Tenn.), 690; Jefferies v. Lawson, 39 Miss., 791; Moore v. Wallis, 18 Ala., 458; Miller et al. v. Sligh et al., 10 Rich. Eq., 247; Hill v. Wright, 23 Ark. 530; Brandt on Suretyship, pars. 145, 205, 207, 221; Leary et al. v. Murray (C.C.A.), 178 F., 209, 21 Ann. Cas., 868; Mellette Farmers' Elevator Co. v. H. Poehler Co. (D.C.), 18 F.2d 430; Williams et al. v. U.S.F. C. Co., 236 U.S. 549, 35 S.Ct., 289, 59 L.Ed., 713.

The case of Broome v. Mordecai, 117 S.C. 195, 108 S.E., 407, 410, is not opposed, as that was a case controlled by the decision of Miller v. Sligh, 10 Rich. Eq., 247, to this effect: "When there are joint trustees, the general rule is that each is liable for his own acts alone, and not for the acts of his co-trustees, except where he has contributed to them."

Both turned upon this principle and not upon such a bond as is here presented.

But in my opinion there is this consideration which prevents the application of these principles to the case at bar:

There can be no question as to the correctness of the proposition that upon the death of a joint guardian the right to the possession of the assets of the estate, and the sole right to administer the trust, devolves upon the surviving guardian. McFadden therefore had the legal right to demand and receive of the executrix, the securities in which Brice had invested the trust funds, and the executrix had the legal right to turn them over to McFadden, without an order of Court and without notice to the Surety Company.

It must be presumed that when Brice accepted the appointment of himself and McFadden as joint guardians, and executed a joint bond as such, he knew, and must have contemplated, that if he should die pending the administration of the estate, it would become a part of the fiduciary duties of McFadden, surviving, to receive his unadministered assets, and thereafter to conduct himself in reference to them, as if he had originally received them; it was a necessary incident of his obligation, which to the extent of delivering the securities to McFadden has been fulfilled. It was just as much an incident of McFadden's obligation, that upon the death of Brice, pending the administration, he would receive such unadministered assets and faithfully execute the trust in relation to them.

While it was the duty of the executrix to turn over to McFadden the unadministered assets, and of McFadden to receive them, I find no ground for holding that this act, ipso facto, constituted a release of Brice's obligations under the bond. No one but the Court had the power to declare such a result.

If the executrix had had any justifiable reason to think that the securities on hand could not be safely trusted to McFadden, and had made that appear to the chancellor, I think that it would have been an unwarranted constriction of the great powers of a court of equity to deny to the chancellor the power to give her relief.

Or if she had no such suspicion, a court of equity, upon due notice to the Surety Company, had the power to confirm such action and discharge the estate of Brice.

Evidently the latter was the condition then presented: McFadden at that time was a lawyer of outstanding prominence by reason of his reputation and ability at the Chester bar; no one, not even the Surety Company whose attorney he was, had the slightest suspicion of his unfaithfulness. The executrix certainly had none; she acted upon the advice of a lawyer of unquestioned ability and character, and doubtless was moved by the very natural and proper desire to turn over all the affairs of the guardianship in the hands of her husband, and be quit of all responsibility in connection with it.

If upon this showing the Court would have confirmed her action, after due notice to the Surety Company, and released her from all further liability upon the bond, I think that it may now do the same thing nunc pro tunc, in the absence of evidence of prejudice to the rights of the Surety Company. Poole v. Bradham, 143 S.C. 156, 141 S.E., 267.

There is not the slightest evidence tending to show that the Surety Company would have been prejudiced by such an order. As early as September, 1919, about a year after the securities had been turned over to McFadden, the Surety Company was notified by letter of McFadden, dated September 30, 1919, of the death of Brice and that the securities which he held had been turned over to McFadden as surviving guardian, that he was in active charge of the administration and that the papers were in excellent condition and correct in every way. The company replied on October 16th: "We are greatly indebted to you for your full explanation of the matter. * * * We fully understand the entire situation at this time" and asking McFadden to give them an inventory of the property in his possession "and under your control as guardian of said ward." Later in January, 1920, the company wrote: "What we desire is to be advised that the matter of the estate of Coralie Means has been fully accounted for up to the date of the death of Mr. Brice and the estate of Mr. Brice and this company as his surety fully discharged from all liability with respect to the assets of this ward," and asking for a copy of the return of the estate of Coralie Means with an inventory of the assets in his possession and under his control as guardian. The evidence is replete with circumstances showing that the Surety Company knew of the death of Brice, knew that the executrix had turned over all the unadministered assets to McFadden, that McFadden was in possession of them, was in active charge of the administration, and that they would look solely to McFadden whom they trusted for the proper administration of the estate with no intention of looking to the Brice estate for anything connected with the management or for any claim of indemnity in the event that McFadden did not faithfully execute the trust.

The Surety Company with this knowledge must have known that the purpose of the executrix was to rid herself of any further connection with the estate; their conduct naturally induced a sense of security on her part. If the company at that time had had any objection to the delivery of the securities to McFadden and to the evident desire of the executrix to be free from further liability in the matter, they should have taken some action to disabuse her mind of such impression and to give her notice that notwithstanding the fact that she had done what she had the right to do and what McFadden had the right to demand of her, they were still looking to her in the event of a defalcation by McFadden. Their conduct throughout was calculated to create the impression on her mind that they were looking to McFadden alone.

4. The rights of the Surety Company against Anderson:

The facts bearing upon the contention of the Surety Company, affecting the land of Anderson, are as follows, possibly repeating what may already have been stated:

In February, 1913, the guardians referred to loaned $4,000 of the guardianship funds to one McCluney. The loan was secured by first mortgages upon two tracts of land, aggregating 130 acres, executed at different times but to secure the same debt.

In January, 1914, McCluney paid the first year's interest upon the loan, $320; and in November, 1914, finding himself unable to pay the debt, he conveyed the land, in satisfaction of the mortgage, estimated then to be $4,320, to the guardians.

In the return for 1914, the guardians charged themselves with $264 as interest on the mortgage and $240 income for 1915, $240 income for 1916, and $304.25 income for 1917.

In the return for 1914 the land as conveyed by McCluney was returned as $4,000 cash, the deed being held by the guardians for the benefit of the guardianship estate, of course, and in the same return the account of the guardians was credited with $4,000, the McCluney land, as an investment. It is plain, therefore, that the McCluney land thus passed out of the account for the years 1913 to 1918, which has been considered as the basis of the statement of Brice's account.

After the death of Brice in 1918, McFadden had the management of the McCluney land. In my statement of Brice's account it does not appear, and properly so, as the deed itself was turned over to McFadden along with the other securities, by the executrix, in September, 1918.

In January, 1920, McFadden advertised the McCluney land for sale at public outcry at the courthouse. As a result of this sale and private negotiations pursuant thereto, McFadden arranged a sale of the land to the defendant, J. Weldon Anderson, and his brother and executed to them a deed of conveyance for a consideration of $4,609.07. Thereafter the brother of J. Weldon Anderson conveyed his half interest to him; he has been in sole possession of the land and has made extensive improvements thereon since the date of the deed, January 26, 1920.

The contention of the surety company is that the acceptance by the guardian of the McCluney deed and that the deed from McFadden to the Andersons were both irregular without an order of Court in each instance; that as a consequence the title to the land is in the guardianship estate or in the plaintiff as she has become of age; and that upon their satisfaction of the liability which they may have incurred under the bond, they will become subrogated to the rights of the plaintiff in the land, title to which is now apparently in the defendant J. Weldon Anderson.

I do not think that there can be a doubt but that both transactions were irregular. After the guardians had made the loan to McCluney, they were not authorized to convert funds of the estate into real estate without an order of the Court, or after the conveyance from McCluney to convey the land to the Andersons.

"It was not permissible (at common law, referred to by the author), for a guardian to change real estate into personal, or personal into real, except for reasons which had been passed upon by the Court. He could not therefore sell real estate of the ward except in compliance with an order of Court; and this rule still generally exists unless altered by statute." 12 R.C.L., 1127.

"The same considerations prohibit the guardian to change the nature of his ward's estate in the contrary direction by buying real estate with the ward's money; and on arriving at the age of majority the ward has the option to accept the property so acquired and thereby ratify the unlawful act, or to repudiate it and claim his original property." 12 R.C. L. 1127.

"From this it can be seen that there is no inherent power in the guardian to sell the ward's land. Before he can sell he must have the power to do so conferred by a Court of proper jurisdiction acting under authority of the statute. A sale of an infant's real estate made by a guardian without the sanction and order of the Court properly obtained, would be void." 3 Thomp. Real Prop., § 2732.

The transactions, however, I think were voidable and not void. It was within the power of the ward to disaffirm either, and having confirmed both this this action seeking an account of the matter as cash, which has been awarded to her, her right of disaffirmance has passed away. There is nothing, therefore, to which the surety company could be subrogated. The deed from McFadden to Anderson having been ratified by the plaintiff, who has been given full benefit of it in the accounting, becomes a valid deed in fee simple.

It is true that the title vested in the guardians by the deed of McCluney, but it was in them as trustees. Upon the death of Brice it passed to McFadden as surviving guardian, but he had no right to convey it except in the execution of his trust. His deed to Anderson has been perfected, not because McFadden had the right to convey it, but because the ward has ratified what she might have disaffirmed.

I think that the reasoning and conclusions of the circuit Judge and of Mr. Justice Carter in recognizing the right of the guardian as the holder of the legal title to convey in a manner that would unquestionably constitute a breach of trust would establish a very dangerous precedent, unlimited by the right of the beneficiary to disaffirm.

MESSRS. JUSTICES BLEASE and STABLER concur.

MR. CHIEF JUSTICE WATTS concurs in part.