State ex rel. v. Hardy et al. While the view advanced in the foregoing appears at first glance to be opposed to all the decided cases, yet, to my mind it is not really opposed thereto. The facts in most if not all of such cases are not like the peculiar situation here. They are cases where the principal was insolvent and where the court is deciding whether the sureties on the bond in force at the time the defalcation occurred should escape liability. The question whether or not the second set might not also be liable for the same loss though not the same breach, was not being considered. That both sets of bondsmen may be liable for the same loss though not the same breach, the first for converting the funds and the second for the guardian not replacing it when he could, see the remark of SHERWOOD, J., in State to use v. Berning, 74 Mo. 87, 1. c. 97-8 where it is said: "The doctrine distinctly asserted in the case just cited, (State v. Drury, 36 Mo. 281), is that if a conversion takes place during the time of the first bond, whereby a loss occurs, the obligors therein must be held liable, notwithstanding a breach and a liability occurred also under the second bond. It quite often may happen that a breach of a bond is a continuing breach, commencing during the period of the first bond and extending down to and through the period covered by the second bond; where the maladministration would be a breach of both bonds; and this seems to have been the case here. In such case the relator might well have judgment on both bonds but of course could have but one satisfaction." The property in that case was a note pledged by the principal, during his first bond, to secure his individual debt. He could have reclaimed the note at any time, since the pledgee knew it was the estate's property. If he could replace the property at any time it is not seen why there should be any difference in the case of a note and any other indebtedness or asset. In the case at bar, Hardy was not shown to have been insolvent at the time the new bond was executed but on the contrary appears to be sti solvent; and hence his failure under the new State ex rel. v. Hardy et al. bond to replace the money he says he had theretofore converted, that is, changed from his official to his personal hands was, it seems to me, as much a breach of his duties under the new bond as if he had failed to collect a debt from any other debtor of the estate which could have been collected had he performed his duty. In Tittman v. Green, 108 Mo. 22, the suit was against the second set of Branch's sureties, and the evidence was that he was solvent at and after the time the second bond was given, and though he had converted the fund prior to the giving of the second bond, yet the judgment against the second set of bondsmen was upheld. At page 33, the general rule, herein before mentioned, is referred to and there Judge GANTT says, "But it is conceived that these principles of law, however well settled, do not of themselves solve the difficulties of this case." Later on, at page 35, he speaks of the necessity of a "careful discrimination here" and, after fully agreeing that a fiduciary cannot by his mere naked election, (i. e. that and nothing more,) transfer his mere indebtedness to himself in one capacity to himself in another capacity so as to exhonerate his sureties in the one and throw the burden upon his sureties in the other, says "To make the transfer valid, it must consist of something more than a mere naked liability. It must be substantial assets if made by an insolvent fiduciary.' In a subsequent suit against Branch's sureties under his first bond, the decision on the first appeal thereof (State ex rel. v. Branch, 112 Mo. 661), shows there was no evidence that Branch was insolvent (see p. 668), and the court again announced the rule adopted in the Tittman case saying, in italics, that there must be a transfer of substantial assets if made by an insolvent debtor. (p. 668). Again, the court, speaking of the time when the second bond was executed and the trustee succeeded the curator, says p. 673, "If at that time he actually had her estate in his hands, or was solvent and able to turn over her estate, his election by this distinct act or declaration affected the transfer, and such election State ex rel. v. Hardy et al. will bind the sureties on his bond as trustee. [Tittman v. Green, 108 Mo. 22; Smith v. Gregory, 26 Gratt. 248; Ruffin v. Harrison, 81 N. C. 208; Ruffin v. Harrison, 86 N. C. 190; Gilmer's Adm'r. v. Baker's Adm'r., 24 W. Va. 72.] On the other hand, if he was insolvcnt when he filed the receipt, and did not have her estate in his hands, but had misappropriated it, then she had a right to show that fact to bind him and his sureties on his guardian bond, for this was a breach of their undertaking. The case was then reversed and remanded hecause the plaintiff had not been allowed to show that Branch was insolvent. Of course this seems to be a holding that if he was solvent at the time or after the new bond was given, then even if he did not actually retake the funds into his official hands as trustee, the first set of bondsmen would be released. If they were, the liability would rest alone on the second suretics. However, the decisions in the later appeals of the case do not so hold. [126 Mo. 448; 134 Mo. 592; 151 Mo. 622.] They clearly hold that, so far at least as concerns the liability of the sureties on the first bond which was in force when the conversion took place, the fact of solvency or insolvency made no difference. It required the actual transfer of substantial assets into the official hands of the trustees to release the first set of bondsmen. This is right because if the assets actually went back into his official hands as trustee, his second capacity, then the failure thereafter to pay them over was the breach and the only breach that caused the loss. And for this the second bondsmen and they alone would be liable. But even if he were solvent and therefore could have, but did not, replace the funds into his hands as trustee, nevertheless the first bondsmen ought not to be absolved because, in that event, the breach under their bond still was a cause or one of the causes of the loss. Is the holding on the aforesaid later appeals of the Branch case to be interpreted as impledly holding that, regardless of the solvency or insolvency of Branch, if no substantial assets actually went into his hands as 200 M. A.-27 State ex rel. v. Hardy et al. trustee, the second set of bondsmen would not be liable? The court was not then dealing with their liability or with the question of whether both sets may not have been liable to a judgment in favor of the estate but with the right in the estate to only one satisfaction and the right of contribution existing between the two sets of bondsmen. And in the said later appeals it was shown beyond question that Branch was insolvent and had wrecked his own and his ward's estate at the time of the change from curator to trustee. So that even if the question of whether both sets of bondsmen were liable had been before the court, yet it could have rightfully held that the second set were not liable because the only breach that caused the loss was the breach under the first bond. The principle that the sureties on Hardy's second bond ought to be held for his failure to replace the money theretofore converted, if he was solvent and able to replace it during the existence of the second bond, appears to be deducible from what MACFARLAND, J., says in the decison of the third appeal in the Branch case, 134 Mo. 592, 1. c. 602-3, where he says: "When Branch was appointed trustee, he assumed the duty of withdrawing the trust funds from his private business, and of holding and administering it as trustee, and for the performance of this duty his securities bound themselves as well and as fully as for its proper management after it came into his hands." He then goes on to say that it "does not follow" that such neglect of duty will relieve the first bondsmen for a liability that existed when their bonds was in force and then says, (p. 603): "If a third person had been appointed trustee, it would have been his duty to have collected the amount due from the curator or his securities. While a neglect to do so would create a liability on the part of the securities on his bond as trustee for the losses thereby incurred, it would not alone relieve his securities as guardian from their liability for the original default.” This would seem to mean, if it means anything at all, that if Branch had been solvent during the time of State ex rel. v. Hardy et al. the second bond (as Hardy was and, it seems, is now in the case at bar), so that he could have replaced the money but did not do it, then the second bondsmen would have been liable but this would not "alone relieve his securities as guardian (i. e. the first bondsmen) for the original default." (Italics ours). The case was reversed and remanded because the court then held that the ward was estopped. At the time the foregoing appeals of the Branch case were decided and at the time the last one was determined (151 Mo. 622), the judgment against the second set of sureties had been obtained in a case where the evidence showed that Branch was solvent. On p. 632 of said last mentioned appeal it is shown that these second bondsmen had stipulated with the estate that the latter should sue the first bondsmen and that then the second bondsmen would pay if the suit against the first was unsuccessful. This was only another way of the second bondsmen obtaining contribution from the first set of bondsmen. The decision in 151 Mo. 622 held that there was no estoppel. And on page 637 the court analyzed the former appeals, saying they "expressly decided" that the conversion of the funds by Branch while curator and under the first bond could only be excused and such bondsmen "relieved of their liability" (italics ours) by showing either that he had the cash actually in hand or had replaced it after he became trustee; and that even though Branch may have been solvent, such fact "would not relieve the sureties on his bond as curator of their liability." (Italics ours). The court further goes on to say that a fiduciary cannot, by merely signing a receipt, and without having any funds at hand, transfer his and his first bondsmen's liability to the second set of sureties, (i. e. excuse the first and saddle it on the second alone); that by filing the receipt he asserted it was his intention to hold the estate as trustee and not as guardian" but if he did not have the estate in his hands and by reason of his insolvency was unable to turn over the estate he could not, and did not come into possession of the funds as trustee" (italics ours) and |