Barth v. Graf

76 N.W. 1100, 101 Wis. 27, 1898 Wisc. LEXIS 282

Opinion

Cassoday, C. J.

1. As indicated, the defendants claim a lien upon the land in question under and by virtue of an attachment levied thereon July 26, 1893; and the plaintiff claims title to the same land under and by virtue of an attachment levied thereon August 10,1893, and the subsequent judgment, execution, sale, and sheriff’s deed of the same. The defendants contend, however, that the plaintiff’s attachment was issued in an action sounding in tort, without the statutory' ground for the same being alleged. Although, as. indicated, it is alleged, in effect, that Koetting fraudulently drew the money from the bank, yet it is further alleged, in effect, that he thereby “ became, and now is, indebted ” to the bank, and hence to the plaintiff, in the amount stated, with interest from July 1, 1893, and judgment is prayed for that amount. In other words, the manifest purpose of that complaint was and is to waive the tortious taking, and sue for the exact amount of the money taken, as due upon an implied contract, — the same as stated in the affidavit for the attachment. If it was competent for the plaintiff thus to waive the tort and sue upon such implied contract, then the record shows that the plaintiff made a case for an attachment, as prescribed by the statute. R. S. 1818, sec. 2731. This court has repeatedly held that, where money or property has been wrongfully converted, the owner may waive the tort and recover the amount of the money or the value of the property so converted upon an implied contract. Norden v. Jones, 33 Wis. 600; Smith v. Schulenberg, 34 Wis. 41; Walker v. Duncan, 68 Wis. 624; Lee v. Campbell, 77 Wis. 340; Van Oss v. Synon, 85 Wis. 661. So, it has been expressly held by this court that, where money has been obtained by false representations, the party defrauded may waive the. tort and recover upon an implied contract to repay the money so obtained, and may properly have an attachment in such action to enforce such repayment. Western Ass. Co. v. Towle, 65 Wis. 247, 254. That case has been expressly approved in other states, Hart v. Barnes, 24 Neb. 782; Farmers’ Nat. Bank v. Fonda, 65 Mich. 533. In this last case, it was held, under a statute like ours, that “ a suit in attachment lies upon the implied assumpsit arising out of the embezzlement by a clerk of the money of his employer, such a case falling within the language of the attachment act.” We must hold that the plaintiff obtained a valid lien upon the land in question by virtue of his attachment, August 10, 1893.

2. This being so, it is very obvious that the plaintiff is in a position to contest the validity of the prior attachment procured by the defendants. This is virtually conceded by their counsel, and has been repeatedly held by this court. Elliott v. Jackson, 3 Wis. 649; Hawes v. Clement, 64 Wis. 152; James v. Davidson, 81 Wis. 324. In the first of these cases, it was, in effect, held that although the affidavit may be in the words of the statute, and so authorize the issuing 'of the writ, yet whenever it appeared, either by the declaration or proof, that the real cause of action was not “ an indebtedness due upon a contract, express or implied,” the suit would be dismissed.

3. Of course, when the defendants signed Koetting’s bond as sureties, July 11,1893, and the same was filed, they thereby at once became bound to the estate, according to the precise terms of the bond, as absolutely and irrevocably as Koetting himself. That bond, in effect, required Koetting, as such trustee, to pay to the widow a certain annuity out of the rents, issues, and profits of the real and personal estate, for the period of ten years, and thereafter to pay the net income of the estate to two certain other persons named, during their natural lives, respectively; and, upon the death of each, one half of the estate was to be assigned, transferred, and delivered by Koetting, as such trustee, to the several persons therein named; and, in case of the death of one, then her share was to go to her heirs. The bond contains these conditions, in effect: That if Koetting, as such trustee, should make and return to the county court, within such time as the court should direct, a true inventory of all the goods, chattels, rights, credits, and estate so devised or bequeathed, and annually render an account to such court of the trust in his hands, of the management, disposition, and annual income thereof, faithfully execute such trust under the direction of the court, according to the true intent and meaning thereof, adjust and settle his accounts with such court at the expira tion of Ms trust, and pay and deliver to the persons entitled thereto all balances, money, and property in his possession, and for which he was liable, as such trustee, then such obligation was to be void; otherwise, to remain in full force and virtue.

The questions recur whether, on the day when the defendants so attached, to wit, fifteen days after the execution of the bond, the estate had a right of action against Koetting and the defendants, as his sureties, on that bond, for a breach thereof, merely because in the meantime Koetting had deposited in the bank of which he was cashier $38,275.62, and the bank had suspended and Koetting had absconded. We are clearly of the opinion that these things did not constitute a breach of the bond, so as to authorize an action thereon against Koetting and his sureties. Thus, it is said by a learned author on the subject that, “although there is a conflict among the cases, the weight of authority seems to be that, in the • absence of a statute on the subject, the sureties on the official bond of an executor or administrator are not' liable to suit thereon until a judgment has been recovered against the executor or administrator in his official capacity, and also another judgment against him personally establishing a devastavit. The reason given for these decisions is that the liability of such sureties is contingent, and not direct; and it would be unjust to allow them to be called upon until it is established that their principal has beenguilty of wrongdoing in his office.” 2 Brandt, Suretyship & G-. (2d ed.), § 578, and authorities there cited. As there indicated, the rule is, necessarily, less stringent where the executor or trustee has died, or has absconded and remained outside of the jurisdiction of the court. Id. § 579. And yet in all such cases, it would seem, the breach of the bond must be fixed by the judgment, decree, or finding of the court having jurisdiction, before an action will lie against the sureties on the bond. Comm. v. Wenrick, 8 Watts, 159; Boyd v. Comm. 36 Pa. St. 355; Comm. v. Raser, 62 Pa. St. 436; Comm. v. McDonald, 170 Pa. St. 221. The first of these cases, perhaps, goes as far toward sustaining such, action as any case that can be found; and yet there the executor, after having received the assets of the estate, absconded, and took up his residence in another state, and, while there, was cited by the court in which he had filed his bond to appear and settle his account, but he failed to do so, and died insolvent; and such facts appear to have been judicially determined. In the case at bar the county court took no action, whatever, and no proceeding had been instituted therein to establish default on the part of Koetting, and no demand had been made upon him, and no authority or permission had been obtained by the sureties from that court to commence the action against Koetting prior to the-commencement of the same. We must hold that there was no default in the bond which would have authorized an action thereon in favor of the estate and against the sureties at the time the defendants levied their attachment.

4. True, the action of the defendants was not in favor of the estate, nor upon the bond, but was brought by the sureties against their principal, by reason of having signed Koet-ting’s bond as such sureties. Upon signing the bond as such sureties, in the absence of any express agreement, the law would have implied a promise on the part of Koetting to indemnify and save them harmless from any loss or damage by reason of having signed the bond. But it is well settled that no action could have been maintained by the sureties upon such' implied promise, even had Koetting been adjudged in default, without first making payment; and then only to recover back the amount so paid, with interest. This is well settled. 1 Brandt, Suretyship & G. (2d ed.), § 205; 3 Parsons, Cont. (8th ed.), *186, *187; Pigou v. French, 1 Wash. C. C. 278; Lane v. Westmoreland, 79 Ala. 372; Stone v. Hammell, 83 Cal. 547; Romine v. Romine, 59 Ind. 346; Stearns v. Irwin, 62 Ind. 558; Covey v. Neff, 63 Ind. 392; Hearne v. Keath, 63 Mo. 84; Huse v. Ames, 104 Mo. 91; Ellis v. Harrison, 104 Mo. 270; Kimmel v. Lowe, 28 Minn. 265. Courts go so far as to bold, in suob a case, that “ after the death of the principal, a judgment obtained against the sureties cannot be enforced by them as a claim against his estate until they have paid it.” In re Hill’s Estate, 67 Cal. 238. So, it has been held that in an action upon a promissory note given by a principal to his surety to indemnify the latter for his liability, the measure of damages is the amount paid by the surety on account of such liability before the trial, with interest from the time of payment. Child v. Eureka Powder Works, 44 N. H. 354.

5. But it is contended that such implied promise on the part of Koetting to his sureties was enlarged at the time he requested them to become sureties, and in consideration of their signing the bond as such sureties, to the effect that he would indemnify and save them and every of them harmless “ from and against any liability upon said bond or growing out of their signing thereof.” ¥e have no doubt that such an agreement, if made, though not in writing, was binding upon the parties. It did not contradict the bond, and Avas an original undertaking,— not within the statute of frauds. Barry v. Ransom, 12 N. Y. 462; Tighe v. Morrison, 116 N. Y. 263. The question recurs whether there was any breach of such oral agreement whereby the sureties were authorized to maintain an action thereon against Koetting, and attach his property, July 26, 1893. Liability on the bond thus mentioned in such oral agreement manifestly meant something more than the liability incurred by signing the bond; otherwise, the right of action of the sureties thereon against Koetting would have accrued immediately upon filing the bond. In other words, the oral promise was to indemnify and save the sureties harmless from subsequent liability to the immediate right of action against them in favor of the estate on the bond by reason of Koetting’s failure to perform the conditions of the bond, or some of them. As indicated, Koetting had made no such default .when the attachment in favor of the defendants was levied, July 26, 1893. Although there are some expressions in the books which may tend to a different conclusion, yet the prevailing opinion is to the effect that sureties cannot, upon such an agreement, maintain an action against their principal, without first making payment, except where the principal has broken his promise to do or refrain from doing some particular act or thing, or to save the sureties from some particular charge or liability. Thus, where the maker of a note agreed with his surety to pay the amount of the note to the payee on a given day, but made default, it was held that the surety could recover of his principal without first making payment. Loosemore v. Radford, 9 Mees. & W. 657. So, where A. and B. dissolved partnership with debts outstanding, and the new firm agreed with B., upon his withdrawal, to pay all 'debts of the old firm and save B. “ harmless from any cost, trouble, or liability on account of the same,” upon the default of the new firm it was held that B. could recover against them without first paying such debts. Lathrop v. Atwood, 21 Conn. 117. The case of Kohler v. Matlage, 72 N. Y. 259, is quite similar in its facts, and the same rule was sanctioned; but on page 266, Chuboh, O. J., speaking for the whole court, said: “ It is settled that upon an obligation to do a particular thing, or to pay a debt for which the covenantee is liable, or to indemnify against liability, the right of action is complete on the defendant’s failure to do the particular thing he agreed to perform, or to pay the debt, or discharge the liability.” To the same effect: Belloni v. Freeborn, 63 N. Y. 383; National Bank v. Bigler, 83 N. Y. 51; Merchants’ & M. Nat. Bernik v. Cumings, 149 N. Y. 360. In Gilbert v. Wiman, 1 N. Y. 550, the sheriff brought, suit on a bond given to him by his deputy and his sureties, whereby they agreed, that the sheriff should not sustain any damage or molestation whatever by reason of' any act or liability incurred by and through the deputy; and, although judgments were recovered against the sheriff by reason of the acts of the deputy to the amount of $2,948.41, yet it was held that, as the sheriff had not paid any part of the judgment, he could not recover anything. In that case it was held that, “ in contracts of indemnity, where the obligation is to perform some specific thing, or to save the-obligee from a'charge or liability, it seems the contract is broken when there is a failure to do the specific act, or when such charge or liability is incurred.” So, it has been held that a covenant for indemnity against the recovery of a judgment is broken when the judgment is recovered. Conner v. Reeves, 103 N. Y. 527. The rules mentioned have been recognized and followed by this court. Smith v. C. & N. W. R. Co. 18 Wis. 21; Thompson v. Taylor, 30 Wis. 68; Selleck v. Griswold, 57 Wis. 291. The. cases cited sufficiently indicate the distinction between the two classes of cases; and they moreover show that the oral agreement of Koetting to save the defendants harmless from liability, even if made as claimed, was not broken when-their attachment was levied, July 26,1893. The mere fact that, subsequently to the plaintiff’s attachment, the defendants were compelled to pay, and did pay, a large amount by reason of having signed the bond as such sureties, did not make their attachment any better. “ An attachment must stand or fall according to the state-of facts existing at the date of its issuing, and cannot be cured by a subsequent event.” Todd v. Shouse, 14 La. Ann. 426; Dennison v. Soper, 33 Iowa, 183.

6. The statute authorizing an attachment is in derogation of the common law, and must be substantially pursued in-order to give validity to the attachment. Whitney v. Brunette, 15 Wis. 67; Steen v. Norton, 45 Wis. 412; Wiley v. C. Aultman & Co. 53 Wis. 560; Goodyear Rubber Co. v. Knapp, 61 Wis. 103; Streissguth v. Reigelman, 75 Wis. 214; 3 Am. & Eng. Ency. of Law (2d ed.), 184.

For the reasons given, and upon the undisputed facts appearing of record, we must hold that, at the time the defendants levied their attachment, Koetting was not indebted to them in any sum “ due upon contract, express or implied,” within the meaning of the statute; and hence they had no right of action against him,— much less any ground for an .attachment. R. S. 1878, sec. 2731; Homes v. Clement, 64 Wis. 152.

By the Cov/rt.— The judgment of the circuit court is reversed, and the cause is remanded with direction to enter judgment in favor of the plaintiff according to the prayer of his complaint, and for further proceedings accqrding to law.