Webb v. United States Fidelity & Guaranty Co.

182 S.E. 557, 165 Va. 388, 1935 Va. LEXIS 306
CourtSupreme Court of Virginia
DecidedNovember 14, 1935
StatusPublished
Cited by14 cases

This text of 182 S.E. 557 (Webb v. United States Fidelity & Guaranty Co.) is published on Counsel Stack Legal Research, covering Supreme Court of Virginia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Webb v. United States Fidelity & Guaranty Co., 182 S.E. 557, 165 Va. 388, 1935 Va. LEXIS 306 (Va. 1935).

Opinion

Eggleston, J.,

delivered the opinion of the court.

This litigation, like the companion case of E. B. Jones, Receiver, etc. v. United States Fidelity & Guaranty Company, ante, page 349, 182 S. E. 560, decided at this term, arises out of the defalcations of George B. Venable while treasurer of Bath county.

The United States Fidelity & Guaranty Company, as surety on Venable’s official bond, having settled for his shortages in his public funds, filed its petition in the receivership proceedings wherein the affairs of the Bank of Warm Springs, Inc., were being liquidated. The surety alleged, among other things, that the bank had aided and abetted Venable in diverting funds from his treasurer’s account in that bank, and that it, the surety, having made good these shortages was entitled by subrogation to all rights of the State and county against the bank for the recovery of the amounts so diverted.

In addition to the six items which were the subject of [391]*391the opinion in E. B. Jones, Receiver, etc. v. United States Fidelity & Guaranty Company, supra, the petition alleged that the bank had, by honoring checks on Venable’s treasurer’s account, aided and abetted him in paying out of his fiduciary funds two personal debts due by him to J. R. Webb. One check was for $6,079, paid on October 17, 1930, and the other for $5,853 and paid on December 7, 1931.

The answer of the bank and the receiver alleged that the obligation to reimburse the surety for the Webb payments rested on Webb, if on anyone, and not on the bank. It prayed that the answer be treated as a cross-bill against Webb, that he be made a party defendant to the proceedings, and be required to refund to the bank any amount which it might be required to pay to the surety on account of the payments to Webh.

To the bank’s cross-bill Webb filed a demurrer and answer in which he denied any legal obligation to refund to the bank, its receiver, the surety, or any other person, the money which he had received from Venable.

During the taking of the testimony before a special master, to whom the matter had been referred, it developed that the check dated December 7,1931, for $5,853, payable to Webb, had been drawn on Venable’s treasurer’s account in the Bath County National Bank and not on the Bank of Warm Springs, Inc., as alleged in the surety’s petition. Therefore, the trial court held that the Bank of Warm Springs, Inc., was not liable to the surety on this item.

For reasons which need not be stated, the lower court also disallowed the surety’s claim against the Bank of Warm Springs, Inc., for the item of $6,079 paid Webb on October 17,1930.

Thereupon, on April 16, 1934, the surety filed an amended petition against the Bank of Warm Springs, Inc., in which the allegations were made to conform to the proofs already taken. Webb was made co-defendant with the Bank of Warm Springs, Inc., to this amended petition, [392]*392and the surety prayed for judgment against him for the two items of $6,079 and $5,853 alleged to have been paid him out of the treasurer’s fiduciary funds.

To the surety’s amended petition Webb filed a demurrer and answer in which he alleged that: (1) The amended petition was bad for “misjoinder of parties” and for multifariousness; (2) the claim for the item paid him on October 17, 1930, was barred by the three year statute of limitations; and (3) he was not liable, in any event, on the merits for the return of either payment made to him.

By agreement of the parties all matters of law and fact were submitted to the court on the evidence theretofore taken.

Webb’s demurrer alleging misjoinder and multifariousness was overruled and judgment was entered against him in favor of the surety for the sum of $5,853 paid to him on December 7,1931. From this judgment Webb has been allowed an appeal by one of the justices of this court.

As to the item of $6,079 paid Webb on October 17,1930, the lower court sustained his plea of the statute of limitations and entered judgment thereon in his favor. By a cross-assignment of error the surety brings under review the action of the court with respect thereto.

We think the trial court was right in sustaining Webb’s plea of the statute of limitations with reference to the item paid him on October 17, 1930. Webb’s liability to refund these two items is based upon his implied promise to refund the money illegally paid to him by Venable out of his fiduciary funds. For as Judge Keith said in Baltimore & Ohio Railroad Co. v. Burke, 102 Va. 643, 646, 47 S. E. 824, 825: “* * * if the defendant has money in his possession which in good conscience he ought to pay to the plaintiff, the law will imply a promise upon the part of the defendant to do his duty, and to pay the money * * * .” See also, Langhorne v. McGhee, 103 Va. 281, 288, 49 S. E. 44; Schmidt v. Wallinger, 125 Va. 361, 367, 99 S. E. 680; Burks’ Pleading & Practice (3d Ed.), p. 181, sec. 93.

[393]*393This being true the three year limitation prescribed by Code, section 5810, applies, and the claim is barred unless the suit was instituted against Webb within three years of the date of payment of the check on October 17, 1930.

It will be recalled that in the original petition filed by the surety on November 21, 1932, the Bank of Warm Springs, Inc., was the sole defendant and judgment was asked against it for the items which Venable had paid to Webb. No claim was therein asserted against Webb. It is true that in the answer and cross-bill of the bank, filed on January 21, 1933, Webb was brought into the proceedings on the allegation that he should refund to the bank any amount which it might be required to pay to the surety on account of the Webb transactions. But on April 16,1934, the court entered the decree in which it held that the hank was not liable to refund to the surety the Webb items. Therefore, since the bank owed nothing to the surety, Webb owed nothing to the bank. He had won his case and was out of court. He was no longer a party to the proceedings.

In its amended petition, filed on April 16, 1934, the surety for the first time asserted a claim against Webb. It is elementary that where a new party is brought into a suit by an amended pleading, the suit must be deemed to have been commenced as to him at the time that he was so brought in. Dorr’s Adm’r v. Rohr, 82 Va. 359, 365, 366, 3 Am. St. Rep. 106; Burks’ Pleading & Practice (3d Ed.), pp. 367, 368, sec. 212; 17 Ruling Case Law, p. 824, sec. 187; 37 Corpus Juris, p. 1066, sec. 502.

It is clear, therefore, that when the surety filed its amended petition on April 16, 1934, against Webb, its claim for the item paid him on October 17,1930, had been barred by the three year statute of limitations.

We think the lower court was right in overruling Webb’s demurrer, wherein it was claimed that the surety’s amended petition was bad for “misjoinder of parties” and multifariousness.

[394]*394Under Code, section 6102, misjoinder of parties cannot be reached by demurrer. Schmidt v. Wallinger, 125 Va. 361, 366, 99 S. E. 680; Virginia Hot Springs Co. v. Hoover, 143 Va. 460, 464, 130 S. E. 408.

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182 S.E. 557, 165 Va. 388, 1935 Va. LEXIS 306, Counsel Stack Legal Research, https://law.counselstack.com/opinion/webb-v-united-states-fidelity-guaranty-co-va-1935.