State ex rel. Funk v. Turner
| Decision Date | 17 December 1928 |
| Docket Number | 16078 |
| Citation | 17 S.W.2d 986 |
| Parties | STATE ex rel. FUNK v. TURNER et al. |
| Court | Kansas Court of Appeals |
Appeal from Circuit Court, Adair County; L. B. Woods, Special Judge.
Action by the State, on the relation of Florence H. Funk, against Ben E. Turner and another. Judgment for plaintiff, and defendants appeal. Reversed.
Certiorari Denied.
Bryan Williams & Cave, of St. Louis, for appellants.
M. D Campbell and J. M. Campbell, both of Kirksville, for respondent.
This is an action brought by the state of Missouri at the relation of Florence H. Funk on the official bond of defendant Turner, formerly bank examiner of the state of Missouri.
Defendant American Surety Company of New York is a corporation authorized to transact business in the state of Missouri as surety upon official bonds.
From 1917 to 1921 Charles F. Enright was bank commissioner of the state of Missouri. On October 10, 1919, defendant Ben E. Turner was appointed bank examiner under said Enright, and, on the date of his appointment, he executed his statutory bond in the sum of $10,000, with defendant American Surety Company of New York as surety thereon. The bond recited that the condition therein was such that, if the said Ben E. Turner should faithfully and impartially discharge the duties of his office and pay over to the persons entitled by law to receive the same all moneys coming into his hands by virtue of his office, then the obligation should be void; otherwise to remain in full force and virtue. Thereupon Ben E. Turner entered upon the performance of his official duties and continued as such bank examiner until late in the year 1920.
The original petition charged, in substance, that Turner, as such bank examiner, examined the Kirksville Trust Company in October, 1919, and learned that it was insolvent and that moneys had been embezzled from it, or that, if he had made a reasonably careful examination, he would have discovered that it was insolvent and that more than $250,000 in money deposited with it had been embezzled; that he made a report to the bank commissioner and did not therein report that the bank was insolvent; that the trust company later was closed; and that relator, a subsequent depositor, sustained a loss on account of its closing.
At the close of all the evidence and before judgment, an amended petition was filed by leave of court, in which substantially the same allegations were made.
Defendants filed an answer consisting of a general denial, and a plea of estoppel by reason of the pendency of a prior action against C. F. Enright, bank commissioner, and the defendant American Surety Company as surety for Enright on his official bond. The petition in said latter suit charged the losses of relator involved in the suit at bar to have been due to the failure of Enright properly to perform his official duties, whereas the petition in the case at bar charges that the cause of the alleged losses, or damages, was the failure of defendant Turner, bank examiner, properly to perform his official duties; that said charges are irreconcilable; and that "plaintiff and relator have pursued said former action to judgment, and under the doctrine of election of remedies are forever estopped, barred and precluded from maintaining this action."
The answer also pleads the statute of limitations and states that the cause of action, if any ever existed, accrued more than three years prior to July 28, 1925, and is therefore barred by the provisions of section 1318, R. S. 1919.
Defendant American Surety Company of New York filed a separate amended answer consisting of a general denial and, as affirmative defense, pleads the prior filing of a suit against Enright wherein he is charged with failure properly to perform his official duties, while the petition in the present case charges Turner with such failure in the performance of his official duties; that said charges are utterly irreconcilable; and that plaintiff and relator have not dismissed said former action and are pursuing two inconsistent and irreconcilable remedies at the same time. Further the answer avers that the penalty of the bond described in the petition is $10,000 only, and that heretofore defendant became liable on said bond and paid damages on a judgment against it in the sum of $410.70, and that said sum was so paid because Ben E. Turner, the principal on said bond, had not sufficient property to satisfy the same.
Upon the issues thus made the cause was tried by the court sitting as a jury, on August 29, 1926. The cause was taken under advisement and thereafter, on May 28, 1927, on request, the court made the following finding of facts and conclusions of law:
"Finding of Facts.
Request having been made for a finding of facts separate from conclusions of law, the Court in compliance therewith doth find from the evidence that Enright was Bank Commissioner of the State of Missouri as alleged in the petition, and that defendant Turner was appointed Bank Examiner and served as such as alleged. That defendant Turner as principal and his codefendant as surety, executed their official bond as in the petition alleged; that Turner in his official capacity examined the Kirksville Trust Company in 1919 and again in 1920; that from the year 1918 until said trust company closed, in 1923, it was utterly insolvent, and that its books and records disclosed that condition; that its books and records disclosed that before the year 1919 the secretary and treasurer thereof had embezzled and made away with the sum of more than $200,000.00 of the money deposited with said trust company by its various depositors; that had said Turner made a reasonable and careful examination of the books and records of said trust company, the fact that said embezzlement had been committed would have been discovered by him, and he would have also discovered that apart from the embezzlement so committed that said trust company was insolvent and that its continuance in business would seriously jeopardize depositors. That had Turner made such reasonably careful examination and reported the result thereof, said trust company would have been closed; that after the examinations so made by Turner the relator deposited in said trust company a sum of money in excess of withdrawals in the sum of $9,256.53, which was the amount owing by said trust company to relator at the time its doors were closed and its affairs taken over by the Finance Commissioner of the State of Missouri, to wit, March 18, 1923; that said Turner negligently failed to perform his duty as bank examiner and that such negligence directly resulted in a loss to relator of all of her said deposits except the sum of eighty-five and three-tenths per cent. (85.3%); that the petition correctly sets forth the various dividends paid to plaintiff except the three-tenths (3-10) of one (1) per cent, and that plaintiff is entitled to recover the remainder of said deposits with six per cent (6%) interest thereon, to wit, the sum of $2,162.17.
Conclusions of Law.
The Court declares the law to be: That it was the duty of defendant Turner at each of the times when he examined the Kirksville Trust Company to make a reasonably careful examination thereof, and to correctly report the result of said examination to the Bank Commissioner of the State of Missouri; that if the said Ben Turner at either of the times when he examined said trust company discovered that the secretary of said trust company had theretofore embezzled more than $200,000.00 of money deposited with it by its depositors, and that said Trust Company was utterly insolvent or if the said Ben E. Turner discovered during either of said examinations that said trust company was insolvent, or that its continuance in business would seriously jeopardize depositors, or if he negligently failed to discover said embezzlement or the insolvent condition of said trust company, and negligently failed to report to said Bank Commissioner the condition of said trust company, and that such failure and negligence on his part directly resulted in a loss to relator, then relator is entitled in this action to recover the amount of such loss.
[Signed] L. B. Woods, Judge."
The recorded judgment is as follows:
Motion for a new trial was overruled, and defendants have appealed.
The first point urged is that the cause of action is barred because plaintiff previously elected, with full knowledge of the facts, to prosecute an inconsistent action against the American Surety Company of New York for the recovery of the same moneys alleged to have been lost. In this connection it is urged that the recovery in the instant case is sought against Turner and his surety, upon the theory that Turner knew that the trust company was insolvent and failed to report this fact to Enright, the bank commissioner; while the charge against Enright’s surety is that Enright knew of the insolvency of the trust company and failed to close it. They say that the effect of these charges is to assert in the first action that Enright knew that the trust company was insolvent, and in the second action that...
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State ex rel., to Use of Leatherman v. Harris
... ... Section 400, such contention is not upheld. And this seems to ... be true of the principle underlying the case of State ex ... rel. v. Turner, 17 S.W.2d 986, as well as the same case ... in the Supreme Court to which it was certified. [42 S.W.2d ... 594; see, also, 22 R. C. L., sec. 190, ... ...