Miller & Barnhardt v. Gulf & Atlantic Ins. Co.

• Decision Date: 02 September 1925
• Docket Number: 11824.
• Citation: 129 S.E. 131,132 S.C. 78
• Parties: MILLER & BARNHARDT v. GULF & ATLANTIC INS. CO.
• Court: South Carolina Supreme Court

129 S.E. 131

132 S.C. 78

MILLER & BARNHARDT v. GULF & ATLANTIC INS. CO.

No. 11824.

Supreme Court of South Carolina

September 2, 1925

Appeal from Richland County Court; M. S. Whaley, Judge.

Action by Miller & Barnhardt against the Gulf & Atlantic Insurance Company. Judgment for plaintiffs, and defendant appeals. Reversed and remanded.

W. D Barnett, of Columbia, for appellant.

Davis & Sharkey, of Florence, and Nelson & Mullins, of Columbia, for respondents.

COTHRAN J.

This is an action against the defendant insurance company, surety upon the official bond of Thomas S. Burch, sheriff of Florence county, for $1,705.63, that being the amount of a judgment recovered by the plaintiffs against one H. D. Hatch and which the plaintiffs allege could have been collected out of the proceeds of certain lumber attached in the suit against Hatch but for the neglect and mismanagement of the sheriff in connection with the custody of the attached property.

For some unexplained reason the action was brought in Richland county away from the residence of the sheriff in Florence county; it was brought against the surety company alone; and the application of both the surety company and of the sheriff himself, that he be made a party defendant, was opposed by the plaintiffs, and their objections sustained by the trial judge.

The facts of the case appear to be as follows:

In July, 1921, the plaintiffs brought an action in the court of common pleas for Florence county against one H. D. Hatch, a lumber man, to recover a balance of $1,684.23 due to them for the manufacture of certain pine timber into lumber. An attachment was issued, and under it the sheriff, by his deputy, was supposed to have levied upon some 419,000 feet of lumber stacked up in the lumber yard of Hatch. It appears that the sheriff did not take actual possession of the lumber, but assumed that he had made a sufficient levy by leaving a certified copy of the warrant of attachment with the person in charge of the property, upon the theory that it was "incapable of manual delivery," as provided in section 290 of the Code of 1912 (section 511 of the Code of 1922), manifestly as advised and directed by the attorneys for the plaintiffs.

Neither the sheriff, nor the plaintiffs, nor their attorneys, appear to have given the slightest attention to the attached lumber until after the main cause had resulted in a judgment in favor of the plaintiffs in November, 1923, nearly 2 1/2 years after the issuance of the attachment. Then it was ascertained that in the meantime Hatch had removed and disposed of all of the 419,000 feet of lumber, except about 80,000 feet, which had become so decayed that at a sale induced by a third party who claimed a lien upon it prior to that of the plaintiffs and with the consent of the plaintiffs' attorneys, it brought only $250, which was applied to that prior lien.

The plaintiffs brought the present action in April, 1924, asking for damages equal to the amount of their judgment against Hatch by reason of the negligence and mismanagement of the sheriff in connection with the attached lumber, whereby it had been removed before their judgment was obtained.

The case came on for trial before his honor, the county judge of Richland county, Hon. M. S. Whaley, and a jury on May 26, 1924. The defendant had previously given notice of a motion that the sheriff be made a party defendant to the action. This motion was refused upon the ground that it was "neither necessary or desirable" that the sheriff be made a party. The defendant also demurred to the complaint upon the ground that the sheriff was a necessary party. The demurrer was overruled.

Upon the call of the case for trial the defendant asked that the trial be postponed until the arrival of Sheriff Burch, who lived at Florence and had been subp naed. The request was denied.

The sheriff and his attorney, Mr. Arrowsmith, entered the courthouse after the trial had begun, and, after the plaintiffs had rested, Mr. Arrowsmith, as attorney for the sheriff, moved that the case be withdrawn from the jury, and that the sheriff be allowed to intervene as a party defendant. The presiding judge ruled: "You are too late now. I have already heard a motion as to that" (referring to the motion made by the defendant).

The jury returned a verdict in favor of the plaintiffs for the full amount claimed. The defendant has appealed.

The exceptions raise several questions, prominent among which are the contentions that the sheriff was a necessary party to the action, and that the presiding judge should have granted the motion of the defendant that he be made a party, and the application of the sheriff to be allowed to intervene in the action as a party defendant.

The weight of authority appears to be in favor of the proposition that in the case of a joint and several official bond the officer, the principal obligor, is not a necessary party (29 Cyc. 1464, 22 R. C. L. 518), and the action may be brought against the surety without joining the principal.

It is not considered necessary to decide that question in the present case, for, be it as it may, there is no doubt as to the proposition that the officer is a proper party.

As is declared by the Supreme Court of the United States in the case of Bank v. Seton, 1 Pet. 299, 7 L.Ed. 152, quoted with approval in Murray Drug Co. v. Harris, 77 S.C. 410, 57 S.E. 1109:

"The general rule, as to parties, undoubtedly is, that when a bill is brought for relief, all persons materially interested in the subject of the suit, ought to be made parties, either as plaintiffs or defendants; in order to prevent a multiplicity of suits, and that there may be a complete and final decree between all parties interested. But, this is a rule established for the convenient administration of justice, and is subject to many exceptions; and is, more or less, a matter of discretion in the court; and ought to be restricted to parties, whose interest is involved in the issue, and to be affected by the decree."

In commenting upon this extract, the court, in the Murray Case, declares:

"The power being discretionary, the only logical person in whom it could be placed is the circuit judge. He having dismissed the motion, therefore, this court, in the absence of abuse of discretion, will not interfere."

In the discussion of the matter of the "abuse of discretion" by the presiding judge in this case, it must be understood that the court is guided by the principle announced in Norris v. Clinkscales, 47 S.C. 488, 25 S.E. 797:

"And the appeal will lie, not because of any so-called 'abuse of discretion'--a phrase unhappily framed, because implying a bad motive or wrong purpose--but because his ruling may appear to have been made on grounds and for reasons clearly untenable."

The motion to have the sheriff made a party defendant was, under the circumstances, so just and reasonable that it should have been granted unless it appeared to the trial judge, in the exercise of his discretion that some good reason existed for refusing it. The sheriff was the principal obligor upon the bond. The plaintiffs' cause of action was based upon his alleged negligence and mismanagement; no one was better qualified to explain the doubtful circumstances of the transaction than the sheriff. The surety company, upon payment of the plaintiffs' demand, would be entitled to indemnity from the sheriff; it could not possibly be detrimental to the interests of the plaintiffs, if entitled to recover, to have a judgment against two rather than one. It would be a serious detriment to the surety company, sued alone, to have to pay the judgment and then institute an action against the sheriff for indemnity in his own county. It is in the line of public policy that all differences between interested parties be adjusted in the one litigation.

The Code provides for just such a condition. Section 597, Code Civ. Proc. 1922, provides:

"Judgment may be given for or against one or more of several plaintiffs, and for or against one or more of several defendants, and it may determine the ultimate rights of the parties on each side, as between themselves."

The fact that the action was based upon the undetermined mismanagement of the sheriff is a strong reason for requiring his presence in the litigation, a matter of which the surety company could have had no knowledge. There is an obvious distinction in cases where the obligation is fixed, and as to which the surety knows as much as the principal.

If there had been any fact in the proceedings which called for the exercise of a discretion in the trial judge--for instance, a long delay in the application--there would be sound reason to support the action of the court; but there is not one. The motion was noticed immediately upon the commencement of the action.

The plaintiffs...