Maxwell v. Stack

• Decision Date: 13 February 1945
• Citation: 246 Wis. 487,17 N.W.2d 603
• Parties: MAXWELL v. STACK et al.
• Court: Wisconsin Supreme Court

246 Wis. 487

17 N.W.2d 603

MAXWELL

v.STACK et al.

Supreme Court of Wisconsin.

Feb. 13, 1945.

Appeal from an order of the Circuit Court for Dane County; Herman W. Sachtjen, Judge.

Affirmed.

FRITZ, J., dissenting.

This action was begun on April 2, 1943, by Frank A. Maxwell, plaintiff, against Esther Stack and Aetna Casualty and Surety Company, a corporation, defendants, to recover the sum of $2,318.19 and other damages, with interest and costs. At the time or times in question, Frank A. Maxwell was treasurer of the city of Madison and the defendant, Esther Stack, was assistant treasurer of the city of Madison.

After formal allegations, it is alleged in the complaint that the plaintiff was elected treasurer of the city of Madison in the years 1932, 1934 and 1936; that during said period he furnished an official bond to the city of Madison in the sum of $100,000. The condition of the bond was that ‘If the principal (the plaintiff) shall well and faithfully perform all and singular, the duties incumbent upon him by reason of his election or appointment as aforesaid city treasurer, and honestly account for all moneys coming in to his hands as such officer, according to law, except as hereinafter limited, then this obligation shall be null and void; otherwise of full force and effect.’

The defendant, Esther Stack, nee Esther Mergen, was appointed assistant city treasurer some time prior to the 18th day of December, 1929. As of that date, the following instrument was made and executed by the defendant Stack and by the defendant surety company:

‘We, the Undersigned, Jointly and severally undertake and agree that * * * Esther Mergen, of Madison, Wisconsin, who has been appointed to the office of Assistant City Treasurer of the City of Madison, State of Wisconsin, for an indefinite term, commencing on the first day of August, 1926, will faithfully discharge the duties of his said office according to law, and will pay to the parties entitled to receive the same such damages not exceeding in the aggregate Ten Thousand and no/100 ($10,000.00) Dollars, as may be suffered by them in consequence of his failure so to discharge such duties.

Esther Mergen, (Principal).

The Aetna Casualty and Surety Company

By R. A. Boers, Resident Vice-President.

(Company Seal)

Attest:

B. T. Kent, Resident Ass't Secretary.'

It is then alleged:

‘(5) That the duties of said defendant Esther Stack as said Assistant and Deputy Treasurer consisted among other things of the following:

‘(a) The making up of all deposit slips for the deposit of the said City's cash in its several depositories.

‘(b) The making up for the City Treasurer's office a daily report of all cash receipts and amounts of cash deposited in the several City depositories with a record of each shortage or overage of cash included in such report and to furnish a copy thereof to the City Auditor.

‘(c) Having complete control of reporting to the City Treasurer and City Auditor all cash receipts and having complete control of reporting to the City Treasurer and City Auditor the disposition of all cash receipts by deposits in the several City depositories.

‘(6) That beginning on or about May 11, 1936, some person or persons, without the knowledge of this plaintiff, removed cash from the city's funds, which were in charge of this plaintiff, covering and concealing such removals from disclosure to this plaintiff and the City Auditor by failing to include in the Treasurer's Reports of receipts of city cash, the monthly payments made by certain taxpayers paying their property taxes on the monthly installment plan.

‘(7) That the first such removal of cash from the city's funds was made on or about May 11, 1936, in the amount of approximately $375.00, and that by August 12, 1936, cash removed in similar manner from time to time had increased to approximately $1,717.00, and by September 16, 1936, cash removed in such manner had increased to a figure of $1,817.00; that all of the cash so removed was without the knowledge of plaintiff and was, in fact, deliberately concealed from him by the making up of fraudulent and deceptive reports.

‘(8) That in March, 1937, routine audits of city accounts disclosed these cash removals which had then reached the sum of $2,318.19, and further disclosed that the shortages created by such repeated removals of lesser amounts of cash had been covered up and concealed from the plaintiff by the failure of the defendant Esther Stack to include in reports of city's cash receipts prepared by her, a certain check issued by Dane County to the City of Madison in the amount of $2,921.21.

‘(9) That during the period beginning on or about May 11, 1936, and continuing until early in March, 1937, the defendant Esther Stack, in the performance of her duties as above enumerated, made up the sums for deposit, the deposit slips for the several depositories, the daily reports of receipts and deposits of city's cash, and knew or should have known of the removals of cash from the city's funds as such reports and deposit slips were being prepared; that in spite of the fact that defendant Esther Stack had complete knowledge of the items included in the deposit slips and reports so prepared by her during said period, she made no mention in her daily cash reports of shortages or overages caused by such removals from cash, and failed to report the receipt of the check for $2,921.21 issued by Dane County and delivered to the City of Madison, and failed during all of said period to report any of such shortages in city funds either to this plaintiff or to the City Auditor, although the said defendant Esther Stack well knew at all times since said County check was received, the fact that it had been received, that such shortages existed, and that failure to report receipt of said check resulted in covering up and concealing said shortages.

‘(10) That upon discovery by auditors of the shortages existing in city funds as aforesaid, this plaintiff was required to pay into the City treasury, the total amount of said shortages in the sum of $2,318.19, said repayment being required because of this plaintiff's responsibility under his official bond furnished to the City of Madison for the defalcations of those employed by him in the office of the City Treasurer, although the plaintiff had no knowledge of any kind of the existence of said shortage until discovered by auditors in March, 1937, and had, in fact, neither taken nor received any part of said shortages; that said payment by the plaintiff was made on April 4, 1937, resulting in loss and damage to him of said amount, together with interest from the date of payment.’

It is then alleged that immediately upon discovery of the shortages the surety on plaintiff's official bond notified the plaintiff and the city of Madison that because of the existence of said shortages, the bond would be cancelled at the expiration of thirty days in accordance with its terms; that because of such notice the plaintiff resigned as city treasurer on April 4, 1937.

Paragraphs 12, 13 and 14 relate to the damages sustained by the plaintiff and are as follows:

‘(12) That as a result of plaintiff's resignation, made necessary by cancellation of his bond, and also by reason of the reflections upon plaintiff's integrity and character, which resulted from the situation in which he was placed by reason of the aforesaid shortages, plaintiff was unable to obtain profitable employment during the remainder of the term as City Treasurer for which he had been elected, and was deprived of the opportunity of serving the balance of his term of office; that his salary as City Treasurer was the sum of $3,000 per year, payable in equal monthly installments, and that plaintiff's total damage because of loss of his elective position, by way of salary alone, amounts to $3,125.

‘(13) That as a further result of the injury to plaintiff's reputation for honesty and integrity caused by the failure of the defendant Esther Stack faithfully to discharge the duties of her office as an employee of the plaintiff during the period here involved, the plaintiff has found it difficult, and at times impossible to obtain lucrative employment, resulting in loss and damage to him in the sum of at least $5,000, in addition to the loss of salary for his unexpired term, and the payment which plaintiff was required to make to the City of Madison of shortages as herein stated.

‘(14) That because of the said neglect of duty and failure on the part of the defendant Esther Stack faithfully to discharge the duties of her said office according to law, and because of her failure in particular to report any shortage which occurred to this plaintiff and the City Auditor at the time such shortage became known to said defendant, the said Esther Stack breached and violated the conditions of her said bond by reason of which violations and breaches this plaintiff suffered damages as above set forth.’

It is then alleged that the defendant, Aetna Casualty & Surety Company, is liable on its bond to the plaintiff in consequence of the failure of the defendant Esther Stack (Mergen) faithfully to perform her duties and that the plaintiff is entitled to have the damages suffered by him by reason of the failure of the defendant Esther Stack (Mergen) to perform her duties, reimbursed by the Aetna Casualty and Surety Company.

To this complaint the defendants demurred on the ground that the action was not commenced within the time limited by law, to-wit: within the time limited by sec. 330.20(2) (three year statute), or sec. 330.19(3) (six year statute). The trial court held with the defendants and from an order sustaining the demurrer, entered on March 7, 1944, the plaintiff appeals.James J. McDonald, Sanborn, Blake & Aberg, and Edwin Conrad, all of Madison, for appellant.

Hill, Beckwith & Harrington and Hall & Griffith, all of Madison, for respondent.

ROSENBERRY, Chief Justice.

This is an action upon the...