State ex rel. Funk v. Turner

• Decision Date: 01 October 1931
• Docket Number: No. 29563.,29563.
• Citation: 42 S.W.2d 594
• Parties: THE STATE EX REL. FLORENCE H. FUNK v. BEN H. TURNER and AMERICAN SURETY COMPANY OF NEW YORK, Appellants.
• Court: Missouri Supreme Court

42 S.W.2d 594

THE STATE EX REL. FLORENCE H. FUNK v. BEN H. TURNER and AMERICAN SURETY COMPANY OF NEW YORK, Appellants.

No. 29563.

Supreme Court of Missouri.

Division Two, October 1, 1931.^*

Transferred from Kansas City Court of Appeals.

REVERSED.

Bryan, Williams, Cave & McPheeters for appellants.

(1) The court erred in rendering judgment for the plaintiff on her amended petition, for the reason that the alleged facts in it are stated alternatively, and neither of the alternatives pleaded makes out a good cause of action. One of the charges is that Turner knew that the Kirksville Trust Company was insolvent and reported it to be solvent. The alternative charge is that if Turner had made a reasonably careful examination he would have discovered that the trust company was insolvent. (a) In pleading statements in the alternative each of the alternatives must state a legal cause of action or defense, and if either statement is insufficient in law the entire pleading is defective. Hewitt v. Truitt, 23 Mo. App. 443; Beall v. January, 62 Mo. 434; Berry v. Coal Co., 253 S.W. 459. (b) The failure to charge that the examiner's acts or his omissions were due to malice, corruption or fraud is a fatal defect. The charge of negligence is not sufficient to warrant a recovery for the plaintiff. Reed v. Conway, 20 Mo. 22, 44; Pike v. Megouin, 44 Mo. 491; Schoetten v. Wilson, 48 Mo. 253; Dritt v. Snodgrass, 66 Mo. 286; Edwards v. Ferguson, 73 Mo. 686; State ex rel. v. Diemer, 255 Mo. 336; Smith v. Berryman, 272 Mo. 372; Schooler v. Arrington, 106 Mo. App. 607; Kroger v. Garkie, 274 S.W. 481; Deatsch v. Fairfield, 233 Pac. 887; Sanders State Bank v. Hawkins, 142 S.W. (Tex.) 84; Breese v. Bramwell, 110 Ore. 105; Fusz v. Spaunhorst, 67 Mo. 256; Duffy v. Byrne, 7 Mo. App. 417; Sharp v. Hurth, 246 S.W. 636; St. Joseph v. McCabe, 58 Mo. App. 542; Carter v. George, 216 Mo. App. 308. (c) Sec. 9171, R.S. 1919, relied upon by appellant, never applied to a state officer, never gave a right of action for negligence and was repealed by the revision of 1889. Laws 1841, p. 31; Sec. 28, Art. IV, Constitution; McCurdy v. Brown, 8 Mo. 549; R.S. 1845, p. 520; State ex rel. Jones v. Smiley, 317 Mo. 1283; R.S. 1845, pp. 250 to 258; Ex parte Carey, 306 Mo. 287; R.S. 1855, pp. 734 to 752; G.S. 1865, p. 648, sec. 65; 2404, R.S. 1879; Enrolled Bills of the General Assembly of 1889. (d) The whole petition is defective in not alleging that relator made her deposits in reliance on the examiner having done his duty. State ex rel. v. Webber, 177 Mo. App. 60; State ex rel. v. Am. Surety Co., 187 Mo. App. 39; State ex rel. v. Packard, 199 Mo. App. 53; State ex rel. v. Farmer, 201 S.W. 957. (e) The dates on which the amended petition alleges that relator left all of her moneys on deposit and on which she deposited much of it were many months after the examiner had retired from office, and was more than two years from the date he is charged with having made an examination of the company. It thus shows that no act of the examiner was the proximate cause of the relator's loss. (2) The declaration of law in the nature of a demurrer to the evidence offered by defendants at the close of plaintiff's case and again at the close of the whole case should have been given. Their refusal was error because the evidence was insufficient to authorize a finding for the plaintiff in the following particulars: (a) It was not shown that the examiner knew that the Kirksville Trust Company was insolvent or in such a condition as to jeopardize its creditors and depositors. Barrie v. United Railways Co., 138 Mo. App. 557; Banta v. Hubbell, 167 Mo. App. 38; State v. Lively, 311 Mo. 432; State v. Meininger, 312 Mo. 539; State v. Lewis, 20 S.W. (2d) 537; State v. Myers, 54 Kan. 206. (b) Relator testified on direct examination that she did not rely upon the examiner's performance of his duties, but that she relied solely upon the officers of the Trust Company. For the defendant to be liable the relator must have relied upon its principal. Her testimony to the contrary without explanation on redirect examination cannot be considered. Steele v. Railroad, 265 Mo. 110; Authorities under Point 1 (c). (c) The proof also shows that no act or omission of the examiner was the proximate cause of the relator's losses, for it shows that her entire deposits were made months after the examiner had retired from the examiner's office, and that all of them were left on deposit for more than two years after his retirement therefrom. (d) The evidence shows there was no proof whatever that the examiner acted fraudulently, corruptly or maliciously in anything that he did or that he failed to do. Without some evidence of fraud or corruption or malice on his part there could be no recovery by the plaintiff. Authorities under Point 1 (b). (e) The evidence conclusively shows that the plaintiff had elected to pursue an inconsistent remedy with knowledge of all the facts. Brown v. Howard, 264 Mo. 468; Johnson Brinkman Co. v. Railroad, 52 Mo. App. 407; Hargardine-McKittrick Dry Goods Co. v. Warden, 151 Mo. 578; Nalle v. Thompson, 173 Mo. 616; Walker v. Charlot, 197 Mo. App. 536; Skinner v. Davis, 287 S.W. 41; Horigan Realty Co. v. Bank, 273 S.W. 772; 20 C.J. 373.

Higbee & Mills, J.M. Campbell and M.D. Campbell for respondent.

(1) Turner examined the Trust Company in the latter part of 1919, and again in 1920. In 1919 he reported the bank in splendid condition. His report is that there was no past due paper, and that its officers did not owe it anything. Not only his oral evidence, but the note register disclosed that there was at that time a large amount of overdue paper, and that the officers were indebted in large sums, all of which facts he failed to report or rather reported did not exist. Why did not he discover that situation? Why did he not discover the embezzlement? He was a witness and attempted no explanation, nor have his counsel attempted an explanation. Did he examine the card index? We of course do not know. But he did know, and knowing, chose to remain silent. (2) We understand counsel in oral argument to tacitly concede Turner was guilty of negligence — that he made a false report, but that relator could not complain because she had elected to pursue an inconsistent remedy, that is, to prosecute the other suit now in this court. Relator contends that Turner was a wrongdoer and liable, and also that Enright was a wrongdoer and liable, and that the evidence disclosed another person was a wrongdoer and liable. It has long been the rule that tortfeasors, either joint or otherwise, may be sued in one or more actions; that all bound by contract may be sued for breach thereof in one or separate actions; and it has never been seriously contended that the doctrine of election is applicable or the remedies inconsistent. True, payment by one would preclude collection of the judgment against the others, but that has nothing to do with the doctrine of the election of remedies. Easton v. Bank, 246 S.W. 991; Eades v. Orcutt, 79 Mo. App. 511; Welsh v. Carter, 95 Mo. App. 44; Brown v. Essig, 1 S.W. (2d) 855. (3) Appellants contend an action cannot be maintained upon an official bond unless it is shown the officer acted wilfully, maliciously or corruptly. No effort has been made by counsel to show why Sec. 9171, R.S. 1919, is not applicable. They rely principally upon Reed v. Conway, 20 Mo. 22. That suit was not upon an official bond, and the section of the statute above quoted was not then in force as we shall presently show. Moreover, that case is out of harmony, if counsel's construction is correct, with later decisions, to the effect that an official is liable on his bond for damages resulting from mere negligence. Section 9171, so far as we are able to find, first appeared in the statute of 1889 as Section 7124 in the chapter relating to officials. Prior to that time it had been what is now Sec. 1674, R.S. 1919. While the two sections above referred to are in exactly the same language, Section 9171 was first made applicable to officers generally in the law of 1889. Section 1674 has been on the statute books for many years, but always under the title of execution and exemptions, and therefore, applied only to officers charged with the service of an execution. Since the enactment of Section 9171, and the making of the same applicable to officers generally, said statute has apparently not been called to the attention of an appellate court. We suggest however, that if the common law rules regarding the liability of officials was as contended by counsel, it has been abrogated by the enactment of said statute. In this regard, counsel say Sec. 11680, R.S. 1919 is exclusive, and that Section 9171 has no application. It will be observed that Section 11680 provides the Commissioner or examiner shall be liable for wrongfully reporting a bank to be insolvent when it is solvent or reporting such bank to be solvent, knowing it is insolvent. Said section does not provide liability for any other malfeasance or neglect to well and faithfully perform the duties of the office nor that there shall be no liability for failure to perform any other duty. Attention is called to the fact that the reports just referred to are not seen by the public, but are known only to the commissioner, his deputies and the officers of the bank, and it is therefore unthinkable that the legislature intended to exempt the commissioner and his deputies from wrongful or negligent conduct except as the same relates to the making of a report — a report that the creditors of the bank have no opportunity to see. It is a well known rule of statutory construction that a statute should not be construed as if it stood alone and complete in itself. Glaser v. Rothschild, 120 S.W. 1. Where two statutes are susceptible of a construction that will give force to both, they must be so construed. State ex rel. v. Clayton, 126 S.W. 506. Attention is now called...