State ex rel. Sheel v. Ingram

• Decision Date: 06 June 1933
• Docket Number: Case Number: 20481
• Parties: STATE ex rel. SHEEL v. INGRAM
• Court: Oklahoma Supreme Court

1933 OK 373

23 P.2d 648

164 Okla. 244

STATE ex rel. SHEEL v. INGRAM

Case Number: 20481

Supreme Court of Oklahoma

Decided: June 6, 1933

Syllabus

¶0 1. Officers--Unlawful Transfer of Property or Misappropriation of Money--Taxpayer's Action.

After written demand upon the proper officers, and failure of said officers to institute proper proceedings at law or in equity, a resident taxpayer can maintain, under sections 8590 and 8591, C. O. S. 1921 [O. S. 1931, secs. 5964-5965], every action which the proper officers could maintain to recover any property unlawfully transferred, or any money misappropriated, and for the penalty provided by said sections.

2. Same--Action to Recover Property or Money Misappropriated not Penal--Joint Liability of Officers and Bondsmen.

An action to recover property unlawfully transferred, or money misappropriated, as provided by sections 8590 and 8591, C. O. S. 1921 [O. S. 1931, secs. 5964-5965], is, to that extent, not penal, and such officers whose acts come within the terms of said statute, and the sureties on their respective bonds, subject to the amount thereof, are jointly and severally liable for the value of the property unlawfully transferred or money misappropriated.

3. Same--Bondsmen not Liable for Penalty.

That portion of sections 8590 and 8591, C. O. S. 1921 [O. S. 1931, secs. 5964-5965], which provides for the recovery of double the value of the property unlawfully transferred or money misappropriated, is to such extent penal in its nature, and the sureties on the bonds of officers whose acts come within the provisions of said statute are not liable for a sum greater than the value of said property unlawfully transferred or money misappropriated.

4. Same--Action--Joint and Several Liability of Officers and Sureties--Joinder of Causes of Action.

The liability of all persons whose acts come within the provisions of sections 8590 and 8591, C. O. S. 1921 [O. S. 1931, secs. 5964-5965], is joint and several, and where the petition alleges the disbursement of various sums of money at different times under a conspiracy to defraud the municipality of said sums by the persons receiving said funds, each disbursement constitutes a cause of action "arising out of the same transaction, or transactions connected with the same subject of action," as provided for in section 266, C. O. S. 1921 [O. S. 1931, sec. 199], and said officers and their respective sureties are jointly and severally liable, and said causes of action affect all the parties to the action within the meaning of section 266, supra, and all of said causes of action may be properly united in the same petition.

5. Same--Sufficiency of Taxpayer's Petition as Against Demurrer--Statutory Notice to Proper Officers to Institute Suit.

The notice required by sections 8590 and 8591, C. O. S. 1921 [O. S. 1931, secs. 5964-5965], relates to the remedy and not to the right, and the institution of an action, and the diligent prosecution thereof after institution by the proper officers is defensive in nature, and a petition alleging that notice was given to the proper officers but not alleging the failure, neglect, or refusal of said proper officers to institute, or diligently prosecute, said action, does not render the petition of plaintiff subject to demurrer, nor does said petition show on its face that said plaintiff taxpayer has no capacity to sue.

6. Same -- Substantial Compliance With Statute as to Notice as Prerequisite to Taxpayer's Suit.

A notice demanding that an action be filed by the proper officers which is unobjected to, and which is sufficiently explicit to direct the attention of said officers to the persons against whom said suit is demanded to be filed, and to the funds unlawfully misappropriated, is sufficient compliance with the statute to authorize a resident taxpayer, conditions existing, to institute and maintain an action for the recovery of said money and for said penalty.

7. Action--Joinder of Causes of Action--Statute.

Under the express provisions of section 266, C. O. S. 1921 [O. S. 1931, sec. 199], causes of action arising out of the same transaction, or transactions connected with the same subject of action, affecting all of the parties to the action, may be united in the same petition.

Appeal from District Court, Osage County; Jesse J. Worten, Judge.

Action by the State on relation of George Sheel against Sam Ingram and others. Judgment for defendants, and plaintiff appeals. Reversed and remanded, with directions.

H. P. White and Joseph D. Mitchell, for plaintiff in error.

Leahy, Macdonald & Files, for defendants in error Sam Ingram and R. A. Correll.

Wilson & Duncan and Leahy, Macdonald & Files, for defendant in error Harry Buzan.

Owen & Looney, Paul N. Lindsey, and J. Fred Swanson, for defendants in error United States F. & G. Company and Leander Dixon.

Hamilton, Gross & Howard, for defendant in error Citizens Trust Company.

H. C. Thurman (Byrne A. Bowman, of counsel), for defendants in error Maryland Casualty Company and Aetna Casualty & Surety Company.

OSBORN, J.

¶1 This action was commenced in the district court of Osage county by the state of Oklahoma on relation of George Sheel, a citizen and taxpayer of Osage county, against Sam Ingram, Harry Buzan, R. A. Correll, Leander Dixon, the board of county commissioners of the county of Osage, Okla., composed of T. L. Lillard, Henry Adams, and Earl Gray, county commissioners, the United States Fidelity & Guaranty Company of Baltimore, Md., a corporation, the Citizens Trust Company, a corporation, of Pawhuska, Okla., the Maryland Casualty Company, a corporation, the Globe Indemnity Company, a corporation, and the Aetna Casualty & Surety Company, of Hartford, Conn., a corporation, for the recovery of the sum of $ 47,288.97, which plaintiff alleges were funds belonging to the county which had been misappropriated by the defendants to their own use and benefit. By virtue of sections 8590 and 8591, C. O. S. 1921, the plaintiff claims the right to recover as against all defendants, except the surety companies, double the amount of funds misappropriated, as a penalty, and seeks judgment in the total sum of $ 83,735.64. There are no allegations seeking to charge the county commissioners with liability, but said board is made a defendant to meet the requirements of the statute.

¶2 A demurrer filed by the board of county commissioners was overruled, and said board filed an answer alleging, in substance, that plaintiff had no authority to prosecute this action, since it, in its official capacity, had already filed suit to recover the same funds sought to be recovered by plaintiff. Thereafter plaintiff filed a reply in which he alleged that the suit filed by the board of county commissioners was not filed in good faith and that it was not prosecuting same with diligence.

¶3 Thereafter all of the defendants, except the board of county commissioners, demurred to the pleadings of plaintiff, which demurrers were sustained by the court and plaintiff's action dismissed, from which ruling plaintiff has appealed.

¶4 Plaintiff's petition, amended petition, and an amendment to the amended petition allege, in substance, that Sam Ingram, defendant, as tax ferret of Osage county, and Harry Buzan, deputy county assessor of Osage county, who was also county treasurer for a portion of the time involved herein, and R. A. Correll, as county assessor, entered into a conspiracy for the purpose of cheating and defrauding the taxpayers of Osage county. The petition sets out in full a contract entered into between Sam Ingram, tax ferret, and Harry Buzan, deputy county assessor, whereby the said Buzan was to assist Ingram in discovering property which might be ferreted on the tax rolls, and as compensation therefor, Buzan was to receive one-half of all the tax ferret fees paid to Ingram. Plaintiff charges that Correll, the county assessor, was beneficially interested in the contract, and that these three individuals entered into a conspiracy and agreement that the said Buzan and Correll were to omit various assessments of property from the tax rolls, after which Ingram would pretend to discover said property and place the same on the tax rolls, thereby receiving as tax ferret 15 per cent. of the total tax collected on said property, which would be divided with Buzan and Correll pursuant to said contract.

¶5 The plaintiff alleges that a great number of taxpayers listed their property for taxes for the various years involved and delivered said schedule of property to the tax assessor but instead of placing said property on the tax rolls, the assessor delivered the schedules to Sam Ingram, who pretended to discover the property and, as tax ferret, placed the same on the tax rolls, thereby defrauding the county of 15 per cent. of the money received in payment of such taxes, which funds were divided between the three defendants above named. In other words, the plaintiff has charged the three defendants with malfeasance in office and a course of conduct of the most reprehensible nature. The several surety companies named as defendants herein are sureties on the official bonds of the various defendants. The pleadings are voluminous and involve 64 transactions, which are set forth in 64 separate counts. The petition also alleges that a notice and demand was served upon the board more than 25 days before the filing of the petition in this cause, but there is no allegation of failure to institute said action.

¶6 Demurrers were sustained by the court for various assigned reasons: (1) That the petition and amended petition and amendment to amended petition do not state facts sufficient to constitute a cause of action against any of the defendants; (2) that all of the various causes of action, except certain specified causes of action, are barred by the statute of limitations; (3) that plaintiff is without legal capacity to maintain this action; (4) that several causes of action are improperly...