Leibowitz v. Hicks

• Decision Date: 03 March 1965
• Docket Number: No. 1091,D,1091
• Citation: 207 A.2d 371,42 Del.Ch. 209
• Parties: Michael LEIBOWITZ and Samuel J. Lewis, t/a Sonro Co., a partnership, Plaintiffs, v. Benjamin E. HICKS, formerly a Register in Chancery, and Massachusetts Bonding and Insurance Company, a Massachusetts corporation, and William Prickett, Jr., Receiver of Northwest Natural Gas Company in Civil Actionefendants.
• Court: Court of Chancery of Delaware

Page 371

207 A.2d 371

42 Del.Ch. 209

Michael LEIBOWITZ and Samuel J. Lewis, t/a Sonro Co., a partnership, Plaintiffs, v. Benjamin E. HICKS, formerly a Register in Chancery, and Massachusetts Bonding and Insurance Company, a Massachusetts corporation, and William Prickett, Jr., Receiver of Northwest Natural Gas Company in Civil Action No. 1091, Defendants.

Court of Chancery of Delaware, New Castle County.

March 3, 1965.

Murray M. Schwartz, of Longobardi & Schwartz, Wilmington, for plaintiffs.

E. Dickinson Griffenberg, Jr., of Killoran & Van Brunt, Wilmington, for defendants Benjamin E. Hicks and Massachusetts Bonding and Ins. Co.

SHORT, Vice Chancellor.

This is an action on the statutory bond of a former Register in Chancery for New Castle County, Delaware. Defendant Hicks and Massachusetts Bonding and Insurance Company have moved to dismiss on the ground that the action is barred by limitations. This is the decision on that motion.

The complaint, filed December 30, 1963, alleges the following facts: Hicks was Register in Chancery for New Castle County from January 1, 1957 to December 31, 1960. Before entering upon the duties of that office, Hicks filed a bond as required by 9 Del.C. § 9115(a), conditioned for the faithful performance of his duties, with Massachusetts Bonding and Insurance Company as surety. The statute requiring the bond provided that any person injury by breach of its conditions has a remedy in this court. On January 15, 1959, defendant Prickett was appointed Receiver of Northwest Natural Gas Company (Northwest), a Delaware corporation, in Civil Action No. 1091 in this court. The Receiver, on February 18, 1959, filed a report purporting to list the creditors of Northwest. The report so filed did not include the name of plaintiffs (Sonro), which was a creditor of Northwest. On March 20, 1959 an order was entered in the receivership proceedings requiring claims of creditors to be filed on or before June 1, 1959. Plaintiff Sonro filed its proof of claim in the office of the Register on April 23, 1959. On October 22, 1959 this court entered an order in the receivership action directing the Register to send notices to creditors 'who had filed claims' to produce evidence thereof on or before December 1, 1959. The Register thereafter sent notices to creditors listed on the Receiver's report of February 18, 1959 and not, as required by said order, to creditors who had filed claims. In consequence of this breach of duty, Sonro received no notice, failed to prove its claim and did not participate in the distribution ultimately made by the Receiver on December 3, 1962. The complaint further alleges that the Register breached his duty in failing to make a formal docket entry of the claim of Sonro when it was received in his office on April 23, 1959 with the result that there was no record of the claim in the office of the Register.

10 Del.C. § 8104 provides: 'No action shall be brought upon the official obligation of any * * * Register in Chancery * * *, against either the principal or sureties, after the expiration of 3 years from the accruing of the cause of such action.'

Defendants contend that Sonro's cause of action accrued no later than December 1, 1959, the last day on which Hicks could have given timely notice to enable Sonro to produce evidence in support of the claim. Plaintiff Sonro contends that the cause of action accrued on December 3, 1962, the date of distribution. Plaintiff's contention is founded upon the theory that it was not hurt and, therefore, had no cause of action capable of being sued upon until omitted as a distributee at the time of distribution.

It is generally held that an action sounding in tort accrues at the time when the tort is committed and that the statute of limitations begins to run at that time. 54 C.J.S. Limitation of Actions § 168 p. 122. So, in Mastellone v. Argo Oil Corp., 7 Terry 102, 82 A.2d 379, a case involving conversion of corporate stock, it was held that the cause of action accrued at the time of the conversion. In Glassberg v. Boyd, 35 Del.Ch. 293, 116 A.2d 711, a case of civil conspiracy, this court held that where the complaint disclosed that all of the overt acts of the conspiracy occurred more than three years prior to the filing of the action it was barred by limitations. And, in Green v. Loper, 6 Terry 117, 67 A.2d 856, an action by an administrator under the Death Act based upon negligence, it was held that the cause of action accrued on the date of death rather than on the date when letters of administration were granted. Ignorance of the tort does not toll the operation of the statute. Mastellone v. Argo Oil Corp., supra. Neither does inability to ascertain the damages flowing therefrom. Cappuci v. Barone, 266 Mass. 578, 165 N.E. 653; Wilcox v. Plummer, 4 Pet. 172, 9 U.S. 43, 7 L.Ed. 721; Howell v. Young, 5 B. & C. 259, 108 Eng.Reprint 97.

These general principles have been quite uniformly held to apply in actions against public officers for breach of their duties. Many of the authorities are cited in the leading case of McKay v. Coolidge, 218 Mass. 65, 105 N.E. 455, 52 L.R.A. (N.S.) 701, Ann.Cas.1916A, 883. To these may be added Baie v. Rook, 223 Iowa, 845, 273 N.W. 902; Bank of Spruce Pine v. McKinney, 209 N.C. 668, 184 S.E. 506. There are a few cases which have been regarded as reaching a contrary conclusion but which, on examination, are clearly distinguishable. Thus, in State ex rel. Fehnenbach v. Logan, 195 Mo.App. 171, 190 S.W. 75 it appeared that a Recorder had incorrectly certified on the margin of his records that a parcel of real estate had been released from a deed of trust. Plaintiffs thereafter purchased the land relying upon the Recorder's certification. The deed of trust was subsequently declared to be a valid lien against the property. Plaintiffs paid off the lien and brought an action against the Recorder and his surety on the bond. The court held that the statute of limitations did not begin to run as to plaintiffs until they acquired the land. It is obvious that plaintiffs in the Logan case had no cause of action prior to the time when they purchased the land. The cause did not accrue until they acquired their interest in reliance upon the certification. The court expressly recognized that the general rule would be applicable if the suit had been by the owner of the deed of trust against the Recorder. The court said: 'It...