New Amsterdam Casualty Co. v. Hyde

• Citation: 34 P.2d 930,148 Or. 229
• Parties: NEW AMSTERDAM CASUALTY CO. et al. v. HYDE et al. [*]
• Decision Date: 24 July 1934
• Court: Supreme Court of Oregon

34 P.2d 930

148 Or. 229

NEW AMSTERDAM CASUALTY CO. et al. v. HYDE et al. ^[*]

Supreme Court of Oregon

July 24, 1934

En Banc.

Appeal from Circuit Court, Multnomah County; James P. Stapleton Judge.

Suit by the New Amsterdam Casualty Company and another for a declaratory judgment against Ida J. Hyde, Alice F. Hyde, and Sarah M. Hewitt. From an adverse decree, the plaintiffs and the first and second named defendants appeal, and the third-named defendant cross-appeals.

Modified.

BAILEY J., dissenting in part.

Harry J. De Francq, of Portland (J. S. Moltzner, of Portland, on the brief), for appellants.

A. G Fletcher, of Portland, for Ida J. Hyde and others.

I. N. Smith and Richard Talboy, both of Portland (Platt, Platt, Smith & Black, of Portland, on the brief), for Sarah M. Hewitt.

CAMPBELL Justice.

A. E. Peirce & Co., the predecessor in interest of plaintiff, Jackson & Michigan Securities Corporation, during the year 1930, obtained a permit as a broker of securities in Oregon, and plaintiff, New Amsterdam Casualty Company, executed with said broker, its bond in the sum of $5,000 to secure said permit. Ida J. Hyde and Alice F. Hyde brought an action in the circuit court of Multnomah county (hereafter referred to as case No. 105-446), based on fraud, on said bond against said broker and its surety. The defendants therein denied all liability, and contested said action on its merits, and after hearing, including an appeal to this court, judgment was entered thereon in favor of plaintiffs therein for the sum of $2,850, and the further sum of $247.99, and attorney's fees in the sum of $1,200, and costs. Without filing a supersedeas bond, appeal was taken by defendants therein to this court, and after due hearing on the merits the judgment was affirmed. Hyde v. Peirce & Co., 146 Or. ---, 31 P.2d 755. After the judgment had been entered in the circuit court, and pending its appeal in this court, plaintiffs herein, who were defendants therein, brought this suit making defendants all persons who had made claims against said surety on said bond, including said Ida J. Hyde and Alice F. Hyde.

Defendant Sarah M. Hewitt, prior to the institution of this suit, had obtained judgment against A. E. Peirce & Co., the principal in the bond, in the approximate sum of $3,000, based on its fraudulent transaction as broker.

The instant case is brought for the purpose of obtaining a declaratory judgment fixing the extent of plaintiff's liability on said bond generally, and to each of said defendants specially, and asking that defendants Hyde be restrained from issuing execution on their judgment until this cause be heard and determined. A temporary injunction was issued upon filing the complaint, thus preventing defendants Hyde from issuing execution on their judgment. Plaintiffs made settlement with, and the suit was dismissed against, all defendants except Ida J. Hyde and Alice F. Hyde, and Sarah Hewitt.

Plaintiffs allege that their total liability on the bond is the sum of $5,000, and that the aggregate claims filed against them on said bond greatly exceed that amount, and that said sum should be paid on the several judgments obtained against them in the order in which said judgment shall have been obtained until the total sum is exhausted. They ask in the prayer of their complaint, among other things, to have these questions determined: (1) What is the total extent of their liability under the bond? (2) To what claims the sum, obtained from the bond, should be applied?

To plaintiffs' complaint, many dilatory pleas and counter pleas were filed, and the cause was handed around from one department to another of the circuit court of Multnomah county. Upon the demurrer and motions of defendants Hyde being overruled, they filed their answer consisting of a general denial and five further and separate answers and defenses.

The first separate answer and defense plead res adjudicata by reason of plaintiff New Amsterdam Casualty Company having answered in the cause brought by these answering defendants against the plaintiffs herein, and denying in that case any liability whatever upon the bond and not having had all the other claimants against the fund interpleaded therein; that plaintiffs herein knew at the time they answered in that action that many others were making claims against the bond.

For a second separate answer and defense these answering defendants alleged in effect that because in the case above referred to as case No. 105-446, defendants denied liability, and at the time knew of the claims that the other defendants herein were making against the bond, and did not have said claimants interpleaded, or plead, or of not knowing how the bond money should be applied and to whom paid, and that the joint tort-feasors have since become insolvent and plaintiff should now be estopped from asking for a prorating of the fund among the several claimants as far as the judgment of these answering defendants is concerned.

For a third separate answer and defense they alleged in effect that if plaintiff pays the judgment obtained by these defendants, such payment would operate as a pro tanto application in the fund named in the bond as to any future judgments obtained by other parties.

For a fourth separate answer and defense they allege that plaintiffs are not coming into court offering to do equity, in as much as they have only made such parties defendants hereto as have commenced suit or action against either of said plaintiffs, and that they know that there are many others who are potential claimants to a part of the sum secured by the bond, if such sum is prorated.

For a fifth separate answer and defense, they alleged, in effect, that plaintiff New Amsterdam Casualty Company, the surety, is amply protected by plaintiff Jackson & Michigan Securities Corporation, the successor to A. E. Peirce & Co., the principal on the bond.

They pray for a dismissal of the suit and a dissolution of the injunction.

Defendant Hewitt demurred to the complaint on the ground that it did not state facts sufficient to constitute a cause of suit, and lack of jurisdiction of the court over the subject-matter. This demurrer was overruled, and no answer filed by defendant Hewitt.

Defendants Hyde also moved to perpetuate testimony of certain witnesses.

Plaintiffs moved to strike from defendants Hyde's answer their fifth separate answer and defense, which motion was heard by the court, and on this state of the record the trial court entered the following order:

"The motion of plaintiffs to strike from the second amended and supplemental answer of the defendants Ida J. Hyde and Alice F. Hyde the entire Fifth further and separate answer thereof, and the petition of the defendants Ida J. Hyde and Alice F. Hyde to take conditionally and perpetuate certain testimony now coming on for hearing, and the plaintiffs appearing by Harry J. De-Francq, of attorneys for plaintiffs, and the defendants Ida J. and Alice F. Hyde appearing by A. G. Fletcher, their attorney, and arguments being had and the court being fully advised in the premises and having before it the records and the files in this suit, and believing that the only issue in this suit has been fully settled as between the existing parties hereto and by a ruling of another department of this same court, and, further, that this suit was brought under the declaratory judgment law of the State of Oregon of 1927 and the amendments thereto, and that by such ruling of the other department of this court the purpose of this suit was and has been fully accomplished, and the court being of the opinion that the full liability under the terms of the bond in question is the sum of Five Thousand Dollars, so finds, and

"It is therefore, ordered that the judgment of this court is that the liability of New Amsterdam Casualty Company, a corporation, on said bond is the sum and amount of Five Thousand Dollars, that such liability is a net liability and exclusive of any interest after demand costs or attorney's fees that may be allowed against the said New Amsterdam Casualty Company and over and above and in addition to any such interest, costs and attorney's fees; that said suit and cause as to all other matters and things and questions than as above determined be and the same is hereby dismissed; and

"It is further ordered that the injunction order issued out of this court on the 8th day of July, 1933, enjoining the issuance and levying of execution on the said judgment be and the same is hereby vacated and dismissed."

From this decree plaintiffs appeal, assigning as error that the court erred in dismissing plaintiffs' complaint without adjudicating how the fund from the bond should be applied.

Defendant Hewitt filed a cross-appeal from that part of the decree holding that the extent of the liability of plaintiff, New Amsterdam Casualty Company, on the bond, is the sum of $5,000, the amount named therein, and in failing to determine that the funds should be prorated among the different claimants.

Defendants Hyde appeal from that part of the decree adjudicating plaintiffs' total liability to be the sum of $5,000.

These are the only questions that are presented by the briefs or argued before the court.

The first question to be determined is, What is the extent of the liability of the plaintiff New Amsterdam Casualty Company under the bond? The bond reads as follows:

"That we, Albert E. Peirce & Co., Chicago Illinois, as principal and New Amsterdam Casualty Company, a corporation organized existing under and by virtue of the laws of the State of New York, and duly authorized to do a surety business within the State of Oregon, as surety, are held and firmly bound unto the State of Oregon, in the...