Hannah v. Hyatt

• Court: North Carolina Supreme Court
• Writing for the Court: WALKER, J. (after stating the facts as above).
• Citation: Hannah v. Hyatt, 170 N.C. 634, 87 S.E. 517 (N.C. 1916)
• Decision Date: 12 January 1916
• Docket Number: 599.
• Parties: HANNAH v. HYATT ET AL.

87 S.E. 517

170 N.C. 634

HANNAH v. HYATT ET AL.

No. 599.

Supreme Court of North Carolina

January 12, 1916

Appeal from Superior Court, Haywood County; Cline, Judge.

Action by W. J. Hannah, trustee, against R. A. Hyatt and the sureties on his bond as clerk of court. From the judgment for plaintiff on defendants' exceptions to the referee's report, defendants appeal. Modified, and remanded for further proceedings.

The defendant R. A. L. Hyatt was elected clerk of the superior court of Haywood county, in November, 1906, and in the next month he duly qualified as such by giving his official bond with W. T. Lee, R. Osborne, Allen Howell, Jr., and S. C Welch, defendants, as sureties. S. C. Welch died on December 18, 1912, and the other defendants, I. H. Way and J. C Welch, are his executors. R. A. L. Hyatt continued in office with the same bond and sureties until June 21, 1909, when he resigned, and R. E. Osborne was appointed his successor, and was duly qualified, and J. R. Leatherwood became his successor by election of the people in 1910, and duly qualified. At July term, 1907, the court, in regular proceedings, ordered that part of the "Love speculative land" known as "Cold Mountain tract" to be sold, and further ordered that "R. A. L. Hyatt, clerk of Haywood county superior court, be, and he is hereby appointed a commissioner of the court to make the sale," but there was no direction that he give a bond. The appointee was directed to pay to Hugh A. Love the sum of $1,034.83 from the proceeds and deposit the balance ($3,224.01) in the Bank of Waynesville, and "take for the same a certificate of deposit, payable to said Hyatt, commissioner of the court, obtaining the best rate of interest for the same that can be obtained." This tract of land was conveyed by Hyatt, at the request of the purchaser, Hugh A. Love, by deed to J. F. Abel for the consideration mentioned therein. The deed was drawn and executed in the name of "R. A. L. Hyatt, Clerk of the Superior Court of Haywood County and Commissioner of the Court," and the mortgage from Abel to secure the notes for deferred payments described him as "R. A. L. Hyatt, Commissioner of the Court." At the February term, 1908, the court ordered a sale of another portion of said lands, known as the "Martin tract," and appointed R. A. L. Hyatt to make the sale in the following language:

"It is considered, ordered, adjudged, and decreed by the court that R. A. L. Hyatt be, and he is hereby, constituted and appointed a commissioner of the court to make sale," etc.

And the order required him to give bond in the sum of $1,500, conditioned to pay the proceeds of sale ($1,020) to such party or parties as he, the said R. A. L. Hyatt, may be directed, under and by orders of the court; and it was further directed that:

"The said sum be deposited in the bank and removed therefrom only by order of the court."

That the bond for $1,500 was given and the land sold by Hyatt on March 5, 1908, and a deed executed to James A. Martin, the purchaser, for the consideration of $1,020, the amount of his bid. This deed described Hyatt as follows:

"R. A. L. Hyatt, commissioner of the court under a judgment of the superior court of Haywood county."

On July 16, 1907, he deposited the amount paid to him by J. F. Abel ($4,258.83) in the Bank of Waynesville on open account, subject to check, in the name of "R. A. L. Hyatt, Commissioner," and, by special contract with the bank, the deposit drew 4 per cent. interest, and on March 5, 1908, he deposited the amount received by him from James A. Martin, in the Commercial Bank, on open account, subject to check, and without interest, the deposit having been made in the name of "R. A. L. Hyatt, Commissioner." He collected interest to the amount of $123.57 from the Bank of Waynesville, on the deposit in that bank. He checked out of the bank deposits divers sums under orders of the court, and among others he was directed to pay to one, W. W. Stringfield, $50 each month, for services to be rendered, "as agent for the Love estate," and gave checks to Stringfield for the said amount each month from August 1, 1907, to July 1, 1908; it being $550 in all. At July term, 1908, the presiding judge signed an order, in chambers, directing R. A. L. Hyatt to pay, until further ordered, from the funds of the Love estate to W. W. Stringfield the sum of $50 each month and every month thereafter, for services rendered to said estate. This order was not entered on the minutes of the court, nor was there any entry referring thereto, and the order has been lost. There has been no action of the court revoking said order. That pursuant to said order, and acting in good faith thereunder, R. A. L. Hyatt paid to W. W. Stringfield by checks on the bank $50 each month from August 4, 1908, to and including June 1, 1909, making $550 in all, and on and after July 29, 1911, he paid to W. J. Hannah, trustee, and administrator of the Love estate, and plaintiff in this case, the $1,020 received by him from the sale of the Martin lands, and $980 received from the sale of the Cold Mountain tract.

On March 16, 1911, plaintiff demanded of R. A. L. Hyatt all funds in his possession, or which should be in his possession, belonging to the Love estate, and Hyatt failed to comply with the demand. The case was referred to Mr. J. S. Bohannon to take evidence and state an account with his conclusions of law, and he reported the same to the court. The material part of his findings are substantially stated above. As a conclusion of law he held that the defendant acted under the orders of the court in respect to the sale of the Cold Mountain tract, and the proceeds of the sale thereof, not simply as commissioner, but as clerk of the superior court, and that the sureties on his bond are liable for any default by him, but as to the Martin land, he was acting solely in the capacity of commissioner, and his sureties were not liable for any default by him in respect thereto, and the court, in passing upon the exceptions, affirmed these rulings. The referee concluded that the defendant R. A. L. Hyatt and his codefendants, his sureties, were indebted to the plaintiff, W. J. Hannah, as trustee and administrator of the Love estate, in the sum of $1,553.16 with interest at the rate of 12 per cent. on $1,110.72 from said date until paid, which principal sum included the last payments to W. W. Stringfield, under order of July term, 1908, amounting in all to $550, and interest thereon. This ruling the court modified by striking from the conclusion of the referee the said amount of $550 and incidental items, and reduced the amount due to the sum of $682.46, with interest on $488.05 from January 18, 1915, until paid, and adjudged that the costs of the suit be paid by the defendants. The referee charged defendants with 5 per cent. interest to March 16, 1911, on the clear deposit in the Bank of Waynesville, being $3,225.01, that is, $4,258.83, less $1,034.82, amount paid by Hyatt to Hugh A. Love, and 12 per cent. interest on the same from March 16, 1911, until it is paid, and this ruling was sustained by the judge subject to a proper deduction of the Stringfield payments. The referee charged no interest on the $1,020 derived from a sale of the Martin tract, and this was approved by the judge. Defendants duly excepted, and from the judgment appealed. During the years 1907, 1908, and 1909, the Bank of Waynesville paid 5 per cent. interest annually on all money deposited with it "on time certificates or certificates of deposit, and paid to R. A. L. Hyatt 4 per cent. on his deposit of $4,258.83, and from March 5, 1908, to January 1, 1911, the Commercial Bank of Waynesville paid 5 per cent. interest per annum on all money left with it" on time deposit or certificate of deposit, and which was allowed to remain in the bank for six months. That R. A. L. Hyatt attempted to deposit the fund of $1,020 received from the Martin land with both banks at 4 per cent., but they refused to receive it and pay interest on it if it was subject to check, as in the case of the $4,258.83 deposited with the Bank of Waynesville.

M. Silver, of Waynesville, and J. W. Ferguson, of Laurens, S. C., for appellant Hyatt.

John M. Queens and W. J. Hannah, both of Waynesville, for appellee.

WALKER, J. (after stating the facts as above).

There are five questions presented by the defendants' exceptions to the report of the referee and to the rulings of the judge thereon.

First. The referee held that the money derived from the sale of that part of the Love speculation land which is known in the case as the "Cold Mountain tract," it being $4,258.83 was received by the defendant R. A. L. Hyatt by virtue and under color of his office, and therefore his sureties were liable with him for any default in respect to that fund. The judge confirmed this ruling of the referee, and we concur therein. The clerk was appointed, in his official capacity, to make the sale and receive, invest, and disburse the proceeds of the sale made by him, and this court has often adjudged that, in such a case, as he acts officially, he is necessarily liable in the same way for any failure to properly discharge the duties of his trust. The Judges...