Gray v. Back

111 N.Y.S. 718

• Court: New York Supreme Court
• Decided: March 8, 1908
• Status: Published

Opinion

LYON, J.

The judgment demanded in each of these actions is for an accounting against all the defendants, and that upon such accounting the plaintiff have judgment against the defendants King and Back, as county treasurer and county custodian, respectively, for specified sums alleged to have been misappropriated of county moneys, and against the defendant surety company for the penalty of the bond.

The principal ground of demurrer of each surety company relates to the form of the action; the surety company claiming that an action in equity for an accounting cannot be maintained against it upon the facts pleaded, and that the action must be one at law. The liability of the surety company being primarily to the county, and a taxpayer’s right to bring the action being a substituted one, the form of the action must be the same as one brought by the company against the, surety upon such an obligation, where the complaint alleges malfeasance and the conversion of moneys by the official. While this question raised by the demurrer does not seem to have been passed upon by the courts in a taxpayer’s action, yet in an action very analogous, brought by the receivers of a banking corporation against defaulting directors, the law is settled that the action must be one at law, and that an action in equity will not lie. O’Brien, Receiver, v. Fitzgerald, 150 N. Y. 572, 44 N. E. 1126; Dykman, Receiver, v. Keeney, 154 N. Y. 483, 48 N. E. 894.

The contention of the surety company that the facts pleaded constitute the action one at law, entitling it to a jury trial, seems to be well founded, and the demurrers must be sustained, but with leave to the plaintiff to serve amended complaint within 20 days after the entry of interlocutory judgments.