Oconto County v. Carey

198 N.W. 590, 183 Wis. 420, 1924 Wisc. LEXIS 201

• Court: Wisconsin Supreme Court
• Decided: April 8, 1924
• Status: Published

Opinions

Owen, J.

These appeals appeared upon the calendar, were briefed and argued, and in every way treated as separate and distinct causes in this court. Two cases identical in subject matter were printed. This was not proper practice. Although there were two appeals, the circumstances did not give rise to two cases in this court. No matter how many appeals there are from a judgment or order of a lower court the case remains an entity in this as well as in the lower court. See sec. 3049a, Stats. For the purposes of this opinion the appeals will be treated together and disposed of as a single case.

The contentions of the appellants are identical and the same questions are presented by each appeal. The gist of their contentions is that there is a misjoinder of causes of action. It is claimed that the liability of the surety companies arises from different instruments, that neither is interested in the issues affecting the other, that proper practice requires that the complaint state a definite amount of defalcation occurring in each term, and that separate suits should be brought by the county against the county treasurer and his surety for the amount of the defalcation occurring during each separate term. That the complaint, therefore, improperly joins two causes of action, and, since it does not allege the amount of the defalcation occurring in each term, it fails to state a cause of action as to either of the sureties.

Though the prayer of the complaint does not ask for equitable relief the complaint nevertheless sets forth an equitable cause of action. It is alleged that the county treasurer kept his accounts in such a negligent manner as to render it impossible to determine the exact amount of the defalcation committed by the treasurer under each of his official bonds, and that it is impossible for the plaintiff to determine in which term the defalcation occurred, and that it is impossible, with due diligence used for that purpose by the plaintiff herein, to determine in which of the terms, of office the shortage occurred and in what amount. The plain inference from this is that an -accounting is necessary in order to fix the liability of the sureties. The complaint sets forth the existence of a fiduciary and trust relation between the plaintiff and the principal defendant and the necessity of - a discovery. These constitute special grounds of equity jurisdiction (Walter Diehnelt, Inc. v. Root, post, p. 535, 198 N. W. 388), and the complaint should be treated as one in equity for an accounting for the purpose of ascertaining the amount of the defalcation occurring in each term of office so as to fix the liability of the respective sureties on the treasurer’s bond for each separate term. Sec. 2649a, Stats. It is manifest that the appellants are interested in that accounting, and that they are proper, if indeed not necessary, parties to the action. Winslow v. Dousman, 18 Wis. 456, 463; Blake v. Van Tilborg, 21 Wis. 672, 673; Bassett v. Warner, 23 Wis. 673, 685; Douglas Co. v. Walbridge, 38 Wis. 179, 189; Grady v. Maloso, 92 Wis. 666, 66 N. W. 808.

Equitable actions of this nature against successive sets of sureties upon administrators’ bonds have frequently been sanctioned and held sufficient against the attack of multifariousness. Siebern v. Meyer, 11 Ohio Dec. Reprint, 344; Alexander v. Mercer, 7 Ga. 549, 554; Love v. Keowne, 58 Tex. 191. Those cases involve the exact principle that is applicable to the instant case. In each of those cases the sureties were liable only for misapplications occurring during the period covered by their bonds. But the cases of Skipwith v. Hurt, 94 Tex. 322, 60 S. W. 423, and Adams v. Conner, 73 Miss. 425, 19 South. 198, involved facts identical with-those here presented. In each of those cases a public officer had been elected to succeed himself. Separate bonds with different sureties had been given for each succeeding term. Defalcations were discovered, but it was impossible to tell how much of the defalcations had occurred in each tenm In each case it was held that a bill in equity making the officer and all of his sureties parties for the purpose of ascertaining the amount of the defalcations in each term and fixing the liability of the sureties was immune to the objection of multifariousness. In all of the above cases the conclusion is fortified by what we regard as sound reasoning.

It seems perfectly apparent that so far as the treasurer is concerned the complaint states but a single cause of action.. That cause of action arises upon his failure to'account to his principal for the moneys belonging to the principal which have come into his hands. In order to fix the liability of the respective sureties it is necessary to determine just how much of the defalcation occurred in each term of office. The knowledge respecting this matter rests with the treasurer, who is the principal, and between whom and the sureties there is a privity of contract upon which the liability of the sureties is predicated. This presents a situation for an equitable accounting in order to determine the amount of the defalcations occurring in each term, in which the sureties have a direct though not a joint or common interest. Because of this situation the county has no adequate remedy at law. If it be relegated to several actions at law, and the amount of the defalcations occurring in each term be made jury issues in each action, it well may result that the sureties in each action may be able to win a verdict of the jury that certain border-line and disputed items were converted in the term for which it was not surety, thereby leaving the county without any recovery against either surety and denying it the protection which official bonds are' supposed to provide. Such practice would in many instances result in a denial of justice, and its sanction would be a taunt to our much vaunted progress in judicial procedure.

Neither does the joinder work any hardship upon'the sureties. The amount of the defalcations occurring during the term for which they were sureties constitutes an issue which they must face sometime. It imposes no additional burden upon them to try out that issue in the same action; and even if it did, such considerations would not Justify a rule relegating the county to its uncertain remedy at law. This is pre-eminently a case that should be disposed of in a single action, where the rights of all the parties can be determined under circumstances fhat will assure the public the full protection of its official bonds and enable it to recover against the sureties a sum which will equal the total of the defalcations of the officer whose official fidelity'the sureties for a consideration undertook to guaranty.

That this case is not ruled by Midland T. C. Co. v. Illinois S. Co. 163 Wis. 190, 157 N. W. 785, is apparent. That was a legal action, pure and simple, while this is an equitable action and governed by principles of equity jurisprudence.

It follows that the complaint does not improperly unite several causes of action, and that it does state a cause of action against all of the defendants.

By the Court.- — The orders appealed from are affirmed.